The obligation to pay for emissions from burning fossil fuels in buildings and transportation, known as ETS 2, will most significantly impact coal heating. According to Karel Kotoun, founder of the consulting startup Green0meter, households still dependent on coal should prepare for change, or they will be strongly affected by price increases when the new emission allowance system begins in 2027.
Coal is considered the dirtiest heat source, with readily available alternatives including pellets, wood, heat pumps, or natural gas. European countries remain committed to fighting climate change by reducing greenhouse gases, and emission allowances are a proven tool that drives innovation and transition to cleaner sources, though it also leads to higher energy prices.
According to Ministry of Environment calculations, even a lower carbon price (45 euros per ton of CO2) increases coal costs by half—about 300 crowns per 100 kilograms. Kotoun notes that coal-dependent households may already face problems with banks when seeking loans for building renovations. “It definitely makes sense to look for alternatives, whether it’s heat pumps, pellets, or gas. The climate social fund will finance the transition for low-income households,” he added.
The emission allowance system is often compared to a carbon tax, but the European Union opted for a market approach to give companies more flexibility. “A major advantage of emission allowances is that companies can choose whether to buy allowances or invest in emission reductions. This ensures that reduction happens where it’s cheapest,” explained Tomáš Protivínský from CERGE-EI for the Bilance CT podcast.
The allowance system has a dual effect: it pushes companies toward innovation while reinvesting all collected money into innovations and clean technologies—including insulation and reconstruction of homes, photovoltaic power plants, or factory savings. In 2024 alone, 43 billion euros were collected from allowances in the EU, with hundreds of billions of crowns flowing to the Czech Republic to fund municipal and household projects through programs like New Green Savings.
