EU-wide CO2 Price to Impact Heating Costs for 100 Million Households
Gütersloh, January 22, 2026 – The European Union’s plan to implement a uniform CO2 price for the building and transport sectors by 2028 will have a significant impact on the heating costs of 100 million households. A recent study conducted by the Bertelsmann Stiftung reveals that while some countries, including Germany, may experience limited additional burdens, others, particularly in Central and Eastern Europe, could see a noticeable increase in heating costs. However, the study also highlights that with proper utilization of the funds generated from CO2 pricing, the burden on households can be alleviated.
Residential buildings in the EU currently account for approximately one-third of greenhouse gas emissions. The expansion of the European Emissions Trading System (ETS2) to include the building sector aims to incentivize the modernization of heating systems, energy-efficient renovations, and long-term emission reduction.
The implementation of a CO2 price will have varying effects across the EU. In countries like Germany and other western and northern member states where a CO2 price already exists, the average increase in heating costs is estimated to be €17 per household per year, with an expected entry price of €60 per ton of CO2. However, in countries such as Portugal, Ireland, Denmark, and Sweden, where the CO2 price is already above €60 per ton, households may actually see a decrease in heating costs. On the other hand, in countries like Poland, Hungary, Slovakia, and other Eastern European nations where there is currently no CO2 price and lower household incomes, the introduction of an EU-wide price would have a more significant impact. In fact, the study estimates that a household in these countries could see an increase in heating costs of €100 to €400 per year with a CO2 price of €60 per ton.
“Our study shows that the majority of European households can easily handle the introduction of a CO2 price in the building sector. However, it is important to provide support for those households that will be particularly affected. The good news is that the revenue generated from CO2 pricing is sufficient to provide this support, as long as member states allocate the funds wisely,” says Thomas Schwab, an expert on European economics at the Bertelsmann Stiftung.
Aside from compensating households facing significant burdens, it is crucial for governments to subsidize the transition to climate-friendly heating systems. “The key to achieving both climate protection and social justice is making sure that subsidies and relief measures reach those who need them,” explains Sara Hagemann, an economic expert at the Bertelsmann Stiftung. “While the revenue from CO2 pricing can help alleviate the burden on affected households, it will not be enough to support a large-scale switch to climate-friendly alternatives.”
The Bertelsmann Stiftung is a non-profit organization committed to promoting social participation for all, politically, economically, and culturally. Their programs include topics such as education, democracy, digitalization, and sustainable social market economies. The foundation was established in 1977 by Reinhard Mohn.
For more information, please contact:
Thomas Schwab
Phone: +49 (30) 275788-132
E-mail: thomas.schwab@bertelsmann-stiftung.de
Sara Hagemann
Phone: +49 (5241) 8181-143
E-mail: sara.hagemann@bertelsmann-stiftung.de.