Overview

• The European Commission is drafting a carbon tax on domestic heating and automobile fuels set to begin in 2027 to help finance the 2027–2035 multiannual budget.
• Under the plan, fuel suppliers would purchase emission permits through an expanded ETS mechanism and pass permit costs on to consumers.
• BloombergNEF estimates the tax could generate about €705 billion between 2027 and 2035 while driving carbon permit prices to €149 per ton by 2030.
• The Commission proposes an €86.7 billion Social Climate Fund to offset up to 41 percent higher heating bills for vulnerable households and fund efficiency upgrades.
• Several EU governments have requested a delay over social equity concerns ahead of the official proposal’s scheduled mid-July release.