Climate action|The transport emissions trading will start in 2027. According to employers in the service sectors, it will increase the price of fuel much more than the EU has estimated.
Traffic emissions trading can increase the price of gasoline by more than 60 cents per liter and the price of diesel by more than 40 cents per liter, estimates Palta, which represents employers in the service sectors. This is clearly more than what the EU Commission has proposed.
The Finnish government decided that Finland will join the EU’s traffic emissions trading system starting in 2027 without seeking a postponement. The biggest price increase would possibly be until 2030.
Emission trading is carried out through fuel distributors. Distributors buy emission rights for the fuel they sell.
The EU has estimated that those new traffic emission rights would cost around 50 euros per ton.
Even the traffic industry climate policy expert of representative Palta Mikko Paloneva is of the opinion, based on recent analyses, that the 50 euros per ton of emissions used by the EU Commission is too low a figure.
The price is affected by traffic emissions and the supply of emission rights throughout the EU.
The average of the basic scenarios of the five recent calculations of Paloneva’s readings is over 200 euros per ton.
That would mean that the price of a liter of gasoline would be subject to an upward pressure of 64 cents and a liter of diesel by 44 cents in 2030.
Behind the assessments are, for example Potsdam Institute for Climate Impact Research and Kiel Institute for World Economy.
“In general, these calculations estimate that the price increase will be moderate in 2027 and 2028, because emission rights are sold preferentially, but in 2029 the price will start to rise rapidly”, Paloneva sums up.
“Two analyzes had estimated that [päästöoikeuden] the price will reach a peak in the early 2030s, after which changes in consumer behavior and, for example, the energy efficiency of buildings will start to lower the price.”
The buildings are related, because the separate heating of the buildings comes under the same emissions trade.
The impact of the prices of different emission rights on the pump price of fuel was calculated by Paloneva for the Ministry of Transport and Communications based on the commissioned impact assessment.
Any price estimates should not be thought of as preached at this point.
For example, in a study by the Potsdam Institute, the price range for a ton of emissions varies from 71 to 261 euros, depending on how much traffic emissions can be reduced by other means in the next few years.
The law of supply and demand regulates the prices of emission rights as well.
The more people switch to electric cars or use public transport, the less demand there is for fuel emission rights and the less the rights cost fuel distributors.
In other words, the price can still be influenced by politics and the behavior of Europeans.
Heavier electric vehicles were also on display at the event of the British automotive industry’s interest organization in London in September 2023. In heavy traffic, electrification is only at the beginning.
Flammable and Palta are most concerned about the possible costs for heavy commercial transport, even though the government’s decision to refund the tax on commercial diesel will moderate the price increase experienced by transport companies.
“In heavy traffic, electrification is only now starting,” says Paloneva.
In Paloneva’s opinion, the conclusion of the price analysis is that traffic emission reductions must be accelerated in order to keep the need and price of emission rights as low as possible.
“We need to put even more speed and effort into reducing traffic emissions.”
As examples, he cites the development of a charging network for electric trucks and procurement support for clean vehicles.
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