Briefing - EU emissions trading system for buildings, road transport and additional sectors (ETS2): Status and concerns - 21-05-2025
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The EU aims to become the first climate-neutral continent in the world by 2050. Since the announcement of the European Green Deal and following the adoption of the European Climate Law in 2021, the EU's climate agenda has been built even more around the princBriefing - EU emissions trading system for buildings, road transport and additional sectors (ETS2): Status and concerns - 21-05-2025
The EU aims to become the first climate-neutral continent in the world by 2050. Since the announcement of the European Green Deal and following the adoption of the European Climate Law in 2021, the EU's climate agenda has been built even more around the principle of carbon pricing. The EU emissions trading system (ETS) is, today, the cornerstone of the EU's strategy to achieve this vision, complemented by a mix of industrial, energy and climate policies. Currently, the EU ETS covers stationary (power and industrial) installations, domestic aviation and maritime transport. Following the revision of the EU ETS Directive, greenhouse gas (GHG) emissions from buildings, road transport and additional sectors not covered by the existing EU ETS will be covered under a new ETS2. Carbon pricing is expected to regulate around 75 % of EU GHG emissions from 2027. Following the adoption of the revised ETS Directive in 2023, Member States had to transpose the ETS2 into national law. The ETS2 will target GHG emissions from fuel for the sectors covered. Fuel suppliers have to buy and surrender emissions allowances and are likely to pass on the cost of this new instrument to final consumers. Consumers are likely to face higher energy bills if they do not switch to low-carbon technologies, which is why the ETS2, while aiming to achieve climate objectives, has become a social concern. A new Social Climate Fund will support the switch to low-carbon technologies in the building and transport sectors, including but not only through direct payments for vulnerable households impacted by the new ETS2. However, some stakeholders have claimed that the Social Climate Fund will not be enough and are asking for the ETS2 to be delayed or modified. This briefing looks at the recent issues and concerns that have been raised regarding the ETS2. Source : © European Union, 2025 - EP