The countdown to ETS2: projections vs reality. Where do we currently stand?

We are pleased to present our latest briefing on the European Union’s new Emissions Trading System for buildings and road transport — commonly referred to as ETS2.

Carbon pricing remains at the heart of the EU’s climate policy. Initially applied to the industrial and energy sectors, this instrument has proven effective in driving emissions reductions. With the introduction of ETS2, the focus is now expanding to include housing and transport — bringing private households and small businesses directly into the scope of carbon pricing. This shift raises concerns about the potential financial burden on vulnerable groups in particular.

As the scheduled launch date draws closer, debates about the future of ETS2 are becoming more intense. Some are calling for a postponement; others advocate for abandoning the system altogether.

Our briefing examines the key questions surrounding ETS2:

• What are the strongest arguments both in favor of and against its implementation?

• What do the latest projections indicate about its likely impact?

• How can the associated social risks be addressed, and which best practices from EU member states might serve as models?

• Who are the main political voices opposing the system?

• And most importantly: if ETS2 were to be delayed or abandoned, what alternative approaches remain to meet the EU’s climate targets?

The full briefing explores what is at stake — and outlines the steps that may be required in the coming months.

Please read the briefing here.

Written by by Reghina Dimitrisina, Policy Advisor at FES JustClimate