Emissions trading in the building sector: analysis shows risk of massive cost increases for Berlin property owners

Berlin, July 24, 2025 - Berlin's state-owned housing companies plan to invest around 3.5 billion euros over the next eight years to renovate their buildings to make them more energy efficient. The investments will enable them to save several thousand euros in future: From 2027, ETS-2 will gradually replace national emissions trading (nEHS), meaning that CO₂ pricing in the building sector and other areas will be regulated uniformly at EU level in future. In order to quantify the financial impact, the Berlin-based energy efficiency experts at Purpose Green(www.purpose-green.com) calculated the expected costs of over 500 properties in Berlin using different CO₂ price scenarios.
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ETS-2: Rising CO₂ costs for owners from 2027

The CO₂ price is expected to rise significantly in the coming years. Purpose Green has calculated four scenarios to illustrate the range of possible additional costs and thus create a sound basis for financial planning. While 55 euros per tonne are currently still due (Scenario I, 2025), this could rise to 100 euros (Scenario II) or even 250 euros per tonne (Scenario III) by 2030. In the long term, an increase to 400 euros per tonne is even conceivable (scenario IV). 

CO₂ costs could rise by more than 600 percent

In Purpose Green's four scenarios, the CO₂ price would increase by around 82 percent (Scenario II), around 355 percent (Scenario III) or around 627 percent (Scenario IV). In order to calculate the average annual CO₂ costs for homeowners, Purpose Green analyzed the living space, energy sources and energy requirements of over 500 properties in the capital. 

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An example from Berlin shows that unrenovated buildings can be associated with considerably higher costs: an apartment building with around 4,800 square meters of total living space and 60 residential units has an exceptionally high energy consumption of 1,300 kWh/(m²-a). It is heated with gas and therefore produces around 220 tons of CO₂ per year. While in 2026, the owner will have to pay approx. 12,000 euros, in the second scenario it would be approx. 22,000 euros, in the third approx. 55,000 euros and in the fourth scenario even almost 88,000 euros per year. 

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The energy status determines the allocation of costs to tenants
The allocation of CO₂ costs between tenants and landlords depends on the energy status of a property: If the energy balance is very poor (CO₂ emissions over 52 kg/m²), landlords must bear 95 percent of the CO₂ costs. If a building has already undergone energy-efficient refurbishment and the emissions are only up to 12 kg/m², the (low) costs remain entirely with the tenants. If CO₂ emissions are between 32 and 37 kg/m², tenants and landlords share the costs equally. 

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In the above-mentioned example in Berlin, the owner would have to bear 70 percent of these costs themselves if they were to rent out the property in accordance with the applicable 10-stage model - i.e. between around EUR 8,400 and EUR 62,000 per year, depending on the scenario. The larger a property and the poorer the energy efficiency of a building, the higher the costs - and in the case of buildings with very poor energy efficiency, the additional costs can hardly be passed on to tenants.

Renovation pays off - financially and for future viability
"The good news: owners can actively take countermeasures. The energy efficiency of a property not only influences CO₂ emissions, but also the distribution of costs with tenants. It is important to note that the aforementioned charges already apply to single-family homes or smaller apartment buildings. The costs increase noticeably for larger properties. Owners of existing buildings with very poor energy efficiency are particularly affected - they may have to bear up to 95% of the CO₂ costs themselves, as these can hardly be passed on to the tenants.

Those who renovate now benefit twice: through lower operating costs and more planning security. Even with older buildings, the right package of measures can significantly reduce costs. Owners are supported by a variety of funding programs, such as BEG funding or KfW grants. Which measures make sense depends on the type of building, location and current energy status. Purpose Green helps you to take the right steps: With digital analyses, individual renovation plans and specific funding advice - all from a single source," explains Jenny Jürgens, ESG Manager at Purpose Green.

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You can also find all the test results in this blog post:
https://www.purpose-green.com/article/ets-2-co2-kosten-unsanierte-gebaeude

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