From 2027 (with the possibility of a delay to 2028), a second ETS II emissions trading scheme will start in the European Union, targeting sectors not yet covered by the emissions market, mainly road transport and building heating. What does this mean for households that heat with wood?
Good news: Wood will not be burdened by emission allowances
Unlike coal, gas and oil products, wood and other biomass will not be included in ETS II as they are considered carbon neutral. This means that their combustion is not subject to emission allowance charges as long as they meet sustainable standards.
In practice, this means that if you use a stove, fireplace or wood boiler, ETS II does not directly affect you. However, changes in energy prices may have an indirect impact.
Bad news: Fossil fuels will become more expensive, affecting the wood market
Coal, gas and fuel oil suppliers will have to buy emission allowances, which will increase their price. This may lead to more households looking for alternatives such as wood and pellets, which in turn will affect their availability and price.
Already today it is evident that the growing demand for wood and pellets is increasing their prices. If households start to move away from gas and coal in large numbers, this trend may continue.
The Social Climate Fund: help or illusion?
ETS II also includes a Social Climate Fund to help households adapt to new conditions. The money from the fund would go towards subsidies for boiler replacements, home insulation and other measures to reduce the energy intensity of buildings.
However, it is not yet clear exactly how the fund will work and what specific support households will be able to use.
What do we recommend?
If you heat with wood, ETS II doesn't directly affect you, but keep an eye on price developments. Consider upgrading your heaters, for example by using subsidies. If you plan to buy wood or pellets, don't wait - demand may increase.
