Rising CO2 Prices: Will Fuel Costs Surge by a Euro Soon?

Tue 18th Feb, 2025

As discussions around fuel prices intensify, projections suggest that by 2027, the cost of gasoline and diesel could increase significantly, potentially by as much as one euro. This assertion, made during the ongoing electoral campaign by a notable political figure, highlights concerns regarding future fuel affordability.

The backdrop to these discussions is the recent shift in CO2 pricing mechanisms. As of the beginning of this year, the CO2 price is no longer regulated by the state and currently stands at 55 euros per ton. Starting in 2027, however, the pricing will be determined through a European Union-wide emissions trading system, implying that the price will fluctuate based on market dynamics.

What does this mean for consumers? The exact implications remain uncertain, but it is evident that drivers should brace for potential price hikes. According to industry experts, the trend indicates a likely increase in CO2 prices, which are expected to stabilize around 100 euros per ton.

Over the past four years, the introduction of the CO2 pricing system has already contributed to a notable increase in fuel prices: gasoline has risen by approximately 15.7 cents per liter, while diesel has seen an increase of about 17.3 cents per liter.

The origins of the current CO2 pricing structure can be traced back to late 2019 when the previous government instituted the fuel emissions trading law in response to significant climate protests. The system commenced in 2021 with an initial price of 25 euros per ton, which led to immediate price increases at the pump, making gasoline and diesel more expensive by seven and eight cents respectively. The price has since been progressively elevated, with forecasts anticipating it to reach 65 euros per ton by the end of 2026. However, this increment is expected to result in a relatively modest consumer price rise of approximately three cents.

The more pressing concern arises from the anticipated market-driven adjustments to CO2 pricing beginning in 2027. Current market trends suggest that CO2 emission rights are trading at around 80 euros per ton, which raises questions about the future trajectory of fuel prices.

Experts from the automotive sector express skepticism regarding the possibility of a one euro increase in fuel costs. Long-term projections from industry analysts indicate a potential doubling of the CO2 price, which could lead to an additional rise of up to 19 cents per liter for both gasoline and diesel.

In conclusion, while an increase in fuel prices appears inevitable, the extent of the rise may not align with the most extreme forecasts. Expert analyses suggest that while fuel costs will rise, the dramatic increases predicted by some may not materialize.


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