Germany will lift the cost of carbon dioxide pollution rights for the housing and transportation sectors to €40 per ton in 2024 and to €50 per ton in 2025, according to people familiar with the matter.
Increasing the price — currently at €30 per ton — will translate to consumers paying roughly 3 cents more per year for each liter of gasoline or diesel, said the people.
The decision on the carbon price ends weeks of wrangling between senior officials in Chancellor Olaf Scholz’s ruling coalition. Finance Minister Christian Lindner from the business-friendly Free Democrats sought to limit the increase as persistently high inflation strains consumers in Europe’s largest economy. Meanwhile, Economy Minister Robert Habeck, a member of the Greens, faced pressure from his party base to push for a larger increase next year to €45.
To help reach its goal of climate neutrality by 2045, Germany introduced the carbon price in 2021 at €25 per ton and raised it the following year to €30. It was initially meant to rise to €35 this year, but after Russia attacked Ukraine and the Kremlin halted gas deliveries to Germany, Scholz’s ruling coalition decided to postpone the increase to shield households and companies from even higher energy costs.
