Decision in 6 Weeks That Could Hike Your Bills
EU ETS reform will shape Polish energy, heating and fuel prices; Poland has six weeks to influence outcomes.
The EU is finalising a major change that could raise energy costs for every household. The EU ETS reform will reach a near-final form in six weeks, and Poland has limited time to influence it.
EU ETS reform: what’s at stake for your bills
Poland faces two distinct schemes in Brussels. Moreover, the original ETS covers industry, power plants and aviation. Consequently, higher permit prices already push up electricity bills. However, ETS2 would extend the same logic to road transport and building heating. In practice, suppliers of gas, coal, heating oil and fuels will buy emission permits. Therefore, suppliers will pass costs to consumers like a tax. In addition, the European Commission will close internal work by early June. As a result, a draft will appear in July. Thus Poland has less than two months to lobby its demands effectively.
Two systems, two different risks
ETS began in 2005 as a market for CO2 permits. Moreover, industry firms buy allowances to emit. Consequently, utilities include those costs in the power price. ETS2 is a separate mechanism. However, it hits households more directly. In practice, ETS2 forces fuel suppliers to cover emission costs. Therefore, your heating or petrol cost will rise if Poland fails to obtain concessions. Poland won a one-year delay to 2028 after a vote in the European Parliament. In addition, Warsaw now asks for more delays and voluntary early opt-outs until 2030. The government also wants longer free allowances for energy-intensive industry. Moreover, it seeks recognition of defence-related production. Therefore, Poland aims to protect steel, cement and chemical plants from higher bills for consumers.
How much could households pay?
Independent energy institutes estimate steep rises. For example, at 60 euros per tonne of CO2, an average household could pay about 1,600 zł more yearly for heating. Moreover, older homes and those without insulation face multiples of that cost. In addition, many Polish single-family houses still burn coal or oil. Consequently, Poland has structural exposure to price shocks. The EU created the Social Climate Fund to soften this impact. Therefore, Poland may receive about 17.6% of the fund. However, that equals roughly 15.2 billion euros only if Warsaw prepares a functional national plan. In addition, the money will not reach citizens automatically. Thus local governments must apply and disburse funds well. Otherwise, households will still bear the brunt.
Meanwhile, bills already rise for other reasons. For instance, the so-called capacity fee increased for households. Moreover, that fee funds standby power plants. Consequently, even renewable expansion does not lower consumer prices as expected.
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