The planned 2028 rollout of the ETS2 carbon market, expanding emission allowances to fuels used in buildings and road transport, is set to redefine energy expenses for nearly 100 million households across Europe. Findings from the Bertelsmann Institute reveal a sharp disparity between member states. Scandinavian residents are expected to withstand the shift smoothly—or even see cost reductions—thanks to early adoption of sustainable heating technologies in their homes.
In contrast, Central and Eastern Europe faces a significantly harder transition due to its lingering reliance on fossil fuels for home heating. At a baseline carbon price of €60 per ton, annual heating costs for residential buildings in the region will rise by €100 to €372 per household. Should carbon allowances reach €180 per ton, the average Polish household could pay an extra €1,029 (roughly PLN 4,455) annually, with peak cases for some residential properties in central regions reaching up to €1,600 (around PLN 6,928).
Because energy expenses absorb a larger percentage of income for low-income families, targeted financial buffers for households are critical. According to economic expert Thomas Schwab, revenue generated from emission allowances can cover these compensations if managed wisely by member states. However, analysts stress that direct financial relief must be paired with public subsidies for green heating upgrades in private homes to permanently eliminate reliance on fossil fuels.
