Although countries will be able to compensate five percent of the climate commitment with financial support for projects to reduce emissions elsewhere in the world, it is still a new commitment beyond the current ones.
Czech Minister of the Environment Petr Hladík (KDU-ČSL) called the agreement a success. According to the likely next Minister of Industry and Trade, Karel Havlíček (ANO), it is the other way around. He claims that this will make future emission allowances for households more expensive.
“What the Council of Ministers accepted is a complete disaster. It is, in the end, a fundamental tightening of the green cocks,” Havlíček told Novinkám.
According to him, it means more pressure on decarbonization and further tightening of targets at a time when even the current ones are difficult to meet. The Union has not yet had any goal for 2040. The plan was to reduce emissions by 55 percent by 2030 and achieve carbon neutrality by 2050.
Experts agree with Havlíček
The matter will still be discussed by the European Parliament. However, if the new target were to be approved, it would drive the prices of allowances up, experts agree with Havlíček.
BH Securities Chief Economist Štěpán Křeček stated that in order to meet stricter targets, it will be necessary for the allowance price to rise. “If it doesn’t hurt the residents, they won’t change their behavior and the goal won’t be achieved. If the system is supposed to cause a change in people’s behavior so that they produce less emissions, it must necessarily hurt significantly,” Novinkám said.
According to him, there is a contradiction in the communication between politicians. “On the one hand, they say that they want to meet the goal of an emission-free economy by 2050, but on the other hand, they claim that it won’t hurt the citizens, they will be compensated for it and practically they won’t even notice it. But it’s just politicians’ consolation and then everyone will be surprised that it’s worse,” he added.
The new commitment threatens to increase the price of allowances, according to XTB’s chief analyst Jiří Tyleček. He pointed out that, in contrast to the European Commission’s idea of a maximum allowance price of 45 euros (1,100 crowns), future contracts are once again selling for almost 70 euros, i.e. 1,700 crowns, after a slight drop last week.
Permits will be purchased by energy and fuel suppliers, and they will be reflected in prices for people, including those at gas stations. According to analysts, the impacts for some families may amount to tens of thousands of crowns per year.
At a permit price of EUR 45, a liter of gasoline would become more expensive by CZK 3.27 and diesel by CZK 3.55 per liter. Gas would become more expensive by 272 crowns per megawatt hour, and a meter of coal by about four hundred. At a price of around 80 euros, the price of gasoline would increase by 5.88 CZK, diesel by 6.38 crowns, megawatt hours of gas by five hundred crowns, and the price of a meter of coal would rise by more than 700 crowns.
And the fact that the ministers recently agreed to postpone the launch of the system by a year, i.e. from January 2028, does not help much either.
“The fact that it is being postponed is good news from the point of view that we will have more time for preparation and further negotiations that could lead to the system being eased. But it is true that we will have to meet the goals a year earlier, and that will continue to push and increase the price of allowances,” Křeček pointed out.
The nascent government refuses the permits
Havlíček claims that the emerging government will not introduce allowances in the Czech Republic, and representatives of the SPD and the Motorists also expressed similar views.
