Rising Fuel Prices Loom Post-2026 Elections Due to EU Emissions Trading System
Fuel prices in Sweden are projected to rise significantly due to the EU emissions trading system, impacting consumers post-2026 elections.
Key Points
- • Fuel prices expected to rise by approx. 2.5 kronor per liter post-2026 elections.
- • The EU's emissions trading system (ETS 2) will require fuel companies to purchase emission permits starting in 2027.
- • Current price for a ton of CO2 emissions is 74 euros, impacting fuel price forecasts.
- • ETS 2 could yield around 10 billion kronor for the Swedish government annually.
In Sweden, rising fuel prices are expected irrespective of the political landscape following the 2026 elections. This surge is primarily driven by the implementation of the EU's emissions trading system (ETS 2), which will require fuel companies to purchase emission permits starting in 2027.
Economists anticipate that the cost of gasoline and diesel could increase by approximately 2.5 kronor per liter as a result of these measures. Current market conditions reveal that the price for a ton of carbon dioxide emissions stands at 74 euros, influencing these projections. John Hassler, a professor of economics and former climate investigator, acknowledged that the transition to ETS 2 could create significant fiscal benefits for the Swedish government, potentially generating around 10 billion kronor annually.
This funding could direct climate bonuses towards households or assist residents in rural areas who may not have as many alternatives to car travel. Interestingly, Sweden currently enjoys one of the lowest fuel prices in Europe, which can be attributed in part to the government's recent reductions in fuel taxes. However, Hassler warns that this situation may require further scrutiny, as the country approaches minimum legal tax rates for fuel.
With the ETS 2 on the horizon, the Swedish government faces a dual challenge of managing fuel prices while striving to meet climate action targets. The dynamics of the upcoming elections will likely play a crucial role in shaping the policies that will address these impending cost increases.