Significant price increases for fuel are expected from January 1, 2027, with the implementation of new charges that will affect households and businesses across Greece. The new European Union regulation for decarbonization brings an additional cost of 800 million euros annually, burdening all fossil fuels with a pollution tax.
What the new ETS 2 regulation provides
The new EU regulation for decarbonization in buildings, road transport and small industries comes into force from 1/1/2027 under the codename ETS 2 (Emissions Trading System). Fossil fuels such as gasoline, diesel, natural gas and any other fuel that emits pollutants will be burdened with a pollution tax. The goal is to reduce emissions by 42% by 2030 compared to 2005.
Total charges and price impacts
The total burden on consumers based on current CO2 prices (45 euros per ton) is calculated by the Association of Petroleum Trading Companies at 800 million euros annually. Fuel increases will be significant, with gasoline burdened by 10.2 cents per liter, diesel by 11.3 cents per liter and heating oil by 14 cents per liter.
Only the energy-vulnerable households of the country, 1.15 to 1.17 million (26.5%) and a number of 448,000 to 475,000 transport-vulnerable households (13.9%), will be burdened with costs ranging from 833 million to 1.6 billion euros during 2027-2032.
Social Climate Fund to support citizens
The EU has established the Social Climate Fund to mitigate the impacts of fuel cost increases. The total budget amounts to 65 billion euros, with the minimum participation of member states set at 25%. For Greece, the SCF resources amount to 5.52% of the total.
Reactions and concerns about competitiveness
The new regulation has strengthened voices within Europe for the need for a realistic energy transition. The CEO of Hellin and president of SEEPE G. Aligizakis emphasizes that the implementation of ETS 2 means that fuels that are already burdened with the highest taxes in the EU will be burdened with another high amount that will pass to the Greek consumer.
Proposals to mitigate the impacts
To mitigate the impacts on vulnerable households, the Green Tank research proposes a combination of immediate and long-term measures totaling 11.9 to 15.5 billion euros. The proposed measures include:
· Direct payments to vulnerable households
· Strengthening social housing
· Radical or mild building renovations
· Replacement of oil heating systems
· Installation of photovoltaic systems
· Subsidizing electric vehicle leasing
The cost of implementing immediate measures ranges between 742 million and 1.42 billion euros and corresponds to 15.5% to 29.7% of SCF resources. Structural measures are estimated to have a total cost of 6.8 to 8.4 billion euros for the period 2026-2032 and will eliminate energy vulnerability in 276,000 to 348,000 households.
