EU ETS2 emissions trading system threatens to raise fuel prices

Fuel prices in Finland may rise significantly following the implementation of the European Union’s new ETS2 emissions trading system for road transport at the beginning of next year. Estimates suggest that the new carbon pricing mechanism could increase fuel costs for motorists by approximately 60 to 320 euros annually.

Pasi Nieminen, CEO of the Autoliitto (Automobile Association), has criticized the move, noting that drivers are already burdened by high fuel taxes, vehicle taxes, and other levies. Nieminen estimates that the ETS2 could lead to a price increase of roughly 20 to 30 cents per liter, though the final impact will depend on the market price of emission allowances.

The government's draft plan for social support regarding climate actions includes these projections, which model price increases based on carbon prices of 30 and 60 euros per tonne of CO2. Nieminen suggested that any increase in transport tax burdens should be balanced by adjustments in other vehicle-related taxation to account for the economic reality of everyday commuters.