EU carbon market expansion to raise diesel prices

illuminem summarizes for you the essential news of the day. Read the full piece on the Financial Times or enjoy below:

🗞️ Driving the news: EU motorists are expected to pay an additional 50 cents per litre on diesel by 2031 due to the expansion of the carbon market under the new ETS2 system
• Fuel suppliers must buy carbon emission allowances from 2027 and will likely pass these costs to consumers

🔭 The context: The ETS2, agreed upon in 2022, aims to reduce EU greenhouse gas emissions by 55% by 2030, covering transport and housing emissions
• A “social climate fund” will be established to aid lower-income households and small businesses in adopting energy-efficient solutions

🌍 Why it matters for the planet: The expanded carbon market is part of the EU's broader strategy to combat climate change by reducing carbon emissions, thus promoting cleaner energy alternatives and sustainable practices

⏭️ What's next: As carbon pricing increases, there may be significant public resistance, mirroring past protests
• Measures from the social climate fund will be crucial in mitigating these impacts and ensuring a smoother transition

💬 One quote: “I think it has been a very political choice to set up this fund,” said Marcus Ferdinand, chief analytics officer of Veyt

📈 One stat: The scheme is expected to add 14 cents per litre of diesel in 2027, rising to 54 cents by 2031

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