Cyprus petrol price hike to pay for €40 mln eco-fine

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Motorists will be digging further into their pockets when they visit their local petrol station, as pump prices are expected to shoot up by 2-5 cents a litre, to pay for a hefty fine as Cyprus missed EU emission targets for 2020.

A Finance Ministry source told the Financial Mirror that petrol prices are expected to rise as Cyprus failed to increase the contribution of renewable energy sources in the energy mix used for transport by 10% by the end of 2020.

“This was the target that was agreed with the EU back in 2013, which unfortunately we did not meet. This is expected to cost the state several million euros as we will have to turn to the emissions trading scheme (ETS) to buy emission rights to cover the missing amount,” the source said.

The ministry source could not reveal what percentage was left for Cyprus to meet its target, but Finance Minister Constantinos Petrides recently revealed week that the government plans to introduce a form of “green tax” on liquid fuels.

In an interview with the online Brief, Petrides said that the government had plans for reforms which foresee the introduction of a green tax, which will be incorporated into petrol prices at the pump.

“In particular, green taxation means nothing more than an increase in excise duty on fuel, emphasising that it is also our European obligation. He who pollutes the environment will pay,” Petrides told the news outlet.

Confirming the ministry source that motorists will be needing more cash to fill up their tanks, Greens leader and MP Charalampos Theopemptou told the Financial Mirror that the government is expected to dish out some €40 mln to pay for ‘the right to pollute’.

Theopemptou argued that we reached this point as the government has practically done nothing to increase the contribution of RES in transport.

“This government knew from the day they took office in 2013 that, as of January 2020, Cyprus would be obliged to cover 10% of its energy needs for transport from RES,” he said.

“From what the Energy Ministry officials have told us in parliament from time to time, we estimate that we are now at 5% of that target.”

Theopemptou said that all the government has done so far was to increase the use of biodiesel in the fuel mix, twice, but this was not enough to reach the target.

“Cyprus needs to reach 10%. So, what will they do? They will have to cover the remaining percentage by buying rights to pollute from other countries that have conformed to the directives,” he said.

“At today’s prices, the government should be paying some €40 mln, but could be more if prices go up in the mean time,” he argued.


No interest to promote public transport

He said that the government has done nothing to increase the use of RES or reduce emissions in transport or exhibited any interest in promoting public transport.

Instead of incentivising the use of electric cars and public transport, Cyprus has been encouraging the use of conventional petrol-fuelled cars by abolishing import duties on new and luxury cars.

“We have a responsibility towards the EU to prepare sustainable mobility plans for our cities. In 2010, we completed the planning for Nicosia, but apart from some huge buses we have not seen anything of essence being done,” Theopemptou argued.

He added that no administration so far has worked towards setting up an infrastructure that would allow Cyprus to adopt alternatives.

“There are practically no charging points for electrical cars and no incentives that would push people to scrap their old gas-guzzlers with an electric one.”

“All governments in Cyprus have pushed the issue of reducing CO2 emissions for later, with the present administration rushing to adopt last-minute policies such as dishing out licenses to friends and acquaintances for solar energy parks,” said Theopemptou.

He argued that what the state should be doing is subsidising people to install photovoltaic systems on the rooftops of their houses and helping to upgrade their homes’ energy efficiency.


Energy efficient homes

“Making homes more energy efficient is the way forward, as the benefits are instant. Consumers’ homes will be essentially self-sufficient, and will benefit as they will see their bills drop to something like 35 euros for a two month period,” said Theopemptou.

The Greens’ MP further argued that building a solar park is not the most environmentally friendly way to go about increasing the RES contribution to the energy mix, nor the most efficient one.

“Building a photovoltaic park would mean that large areas of land will need to be cleared from wildlife and fauna, while procedures involving licensing are long as there needs to be public consultation with people who may not be willing to give up their land or see roads going through it,” he concluded.

Meanwhile, Cyprus will be launching schemes in a bid to meet its EU 2030 environmental targets set in its national Climate Plan 2021-2030 which includes subsidies for making homes more energy-efficient.

The EU has committed itself to a clean energy transition, which will contribute to fulfilling the Paris Agreement targets on climate change and provide clean energy to all its citizens.

By 2030, Cyprus should reduce greenhouse gas emissions by at least 40%, increasing energy efficiency by at least 32.5%.

In a bid to meet its energy efficiency goal, the Energy Ministry has presented EU co-financed plans to upgrade homes, making them more energy-efficient.

Speaking at an online conference earlier this week, Energy Minister Natasa Pilides announced plans to subsidise Home upgrading projects with €30 mln in 2021 and €70 mln over a seven-year period 2027.