SPD parliamentary group questions price formation via EU emissions trading

Berlin – SPD parliamentary group leader Matthias Miersch has questioned the free market pricing of CO2 certificates through the European Emissions Trading System for buildings and transport. "No one can currently predict how expensive the expansion of CO2 pricing will make fuel and heating from 2027 onwards," Miersch told the "Neue Osnabrücker Zeitung" (Friday edition). "We must not destroy social cohesion for the sake of climate protection." Chancellor Friedrich Merz has repeatedly cited European Emissions Trading as a key lever for reducing CO2 emissions. "The CO2 market makes sense once the conditions are in place. But we're not there yet," Miersch said. "We must be extremely careful that large segments of the population are not overwhelmed by CO2 pricing. And we absolutely must ensure social balance. The federal government would be well advised to conduct this discussion openly, otherwise a train will be heading our way that we can no longer stop." Specifically, the SPD parliamentary group leader called for "tools to curb market developments, such as a price cap or price corridors." Otherwise, "people, not just in Eastern European countries with poorly insulated houses, would take to the barricades." In the European emissions trading system for buildings and transport, the number of CO2 certificates is limited—and thus also the amount of CO2 released into the atmosphere. The certificates are auctioned via an auction platform. A price cap could lead to demand for certificates at the maximum price exceeding supply, resulting in a shortage of certificates. Then politicians would have to intervene through rationing or other coercive measures. Alternatively, they could respond by increasing the quantity of CO2 certificates. However, this would weaken climate policy and thus lead to greater global warming. Miersch insisted on reliable support for citizens in switching to climate-friendly alternatives. The "traffic light" coalition had, after painstaking negotiations, established a subsidy for climate-neutral heating systems, with reimbursements of up to 70 percent. "The new government must very quickly provide clarity on the continued funding of climate-neutral heating systems such as heat pumps," demanded the SPD parliamentary group leader. "There can be no compromises; legal certainty must be quickly created for consumers. Without maintaining the subsidy, the heating transition will hit a wall." The government has the option of providing money for the heating transition and climate-neutral public and private mobility through the Climate Transformation Fund, he explained. The instruments are on the table: social leasing, purchase incentives for electric cars, and the expansion of public transport. "The responsible ministries must really quickly provide clarity on how the instruments will be used. But until they take effect, we cannot allow the European emissions trading system to run wild," he said. The long-time climate politician expressed caution about climate money. "For many experts, climate money is a one-size-fits-all solution. But no one can buy a heat pump or an electric car with a few hundred euros at the end of the year," Miersch said. "On the other hand, there are quite a few people who don't need a refund of the CO2 price. I therefore see climate money as one element among others, and it shouldn't be distributed across the board, per capita."