An incoming EU levy on fuels for heating and road transport has become a central issue in the political debate ahead of next month’s parliamentary elections in Czechia.

Under a new emissions trading system, dubbed ETS2, suppliers of natural gas, other heating fuels, petrol, and diesel will have to purchase permits for every tonne of CO₂ released when they are burned. The idea is to reduce emissions by encouraging a switch to cleaner alternatives like heat pumps and electric cars.

The growing importance of the issue in the Czech election campaign was evident on Wednesday when government ministers emerged from a cabinet meeting and used the press conference to underline Czechia’s resistance to ETS2 and other European climate initiatives.

“We think it would be best to abolish the system, but we don’t have support for that yet, we are looking for allies,” Czechia’s conservative Prime Minister Petr Fiala said.

His main opponent, populist frontrunner Andrej Babiš, has also made ETS2 a campaign priority and pledged to block its implementation in Czechia and seek allies in the EU to renegotiate the rules.

“If people elect us, at the very first government meeting we will adopt a negative position on the new emission allowances,” Babiš told news site Echo24 on Tuesday. “We will immediately send letters to the European Council and the Commission.”

Leading polls with over 30% backing, the right-wing former prime minister said his first foreign trip would be to Poland, which is also critical of ETS2. Both Babiš and other politicians have cited studies, disputed by some, claiming Czech households could see fuel bills rise as much as €3,300 annually.

Further to the right of Babiš’s ANO party, Tomio Okamura’s nationalist SPD has also vowed to use “all legal means” to reject ETS2.

Government pushes for price cap

While aware of the potential financial penalties if Prague were to refuse to implement EU legislation – not to mention the loss of ETS2 revenues, which governments are supposed to use partly to shield vulnerable citizens from higher bills – Fiala’s government says it will not implement the system until safeguards are in place to prevent spikes in the price of emissions allowances.

Environment Minister Petr Hladík presented a non-paper in June, backed by 19 member states, calling for a €45 cap on the price of a one-tonne emissions allowance. That price would add roughly €0.10 to the cost of a litre of motor fuel.

“We are pressing the European Commission to present a proposal to revise ETS2 as soon as possible,” Hladík said on Wednesday, with changes adopted “ideally by the end of this year”.

Ironically, the political deal that created ETS2 was finalised while the Czech Republic held the rotating EU Council presidency. This legacy is now colliding with an election campaign in which almost all of the major parties are promising either to scrap the scheme, or at least push Brussels to tighten safeguards.

Even the Czech Pirate Party – who sit with the Greens in the European Parliament – supports a €45 cap, but stresses that part of ETS2 revenue goes into a Social Climate Fund that governments can use channel back to poorer households.

While party leaders are vowing not to implement the ETS2, the Czech authorities doing just that, by drawing up the required social climate plans that set out how the money would be used.

(cs, rh)