The European Parliament and the Council of Europe agreed on 9 December 2025 to delay by one year the launch of the ETS 2 system for construction and road transport as part of the provisional deal on climate targets for 2040. The decision shifts the mechanism’s entry into force to 2028, with the aim of reducing the risk of abrupt fuel price impacts and ensuring a more orderly transition phase. According to the negotiations on the new target of a 90 per cent cut in emissions by 2040, this flexibility was deemed compatible with the overall decarbonisation trajectory and useful for coordinating the implementation of the Social Climate Fund, which is intended to support households and businesses with adaptation costs.
The agreement incorporates the technical framework prepared by the European Commission at the end of November, which proposed adjustments to the market stability reserve of the ETS dedicated to fuels for buildings and transport. When presenting these changes, the Commission stressed the need to avoid excessive volatility in the system’s early stages and to ensure a proper balance between the availability of allowances and the gradual reduction of emissions. The postponement does not affect the obligation to collect and verify data, which began in 2025 under the monitoring, reporting and verification system that will remain in place to prepare for the full launch of the market in 2028.
ETS 2 is a cap-and-trade system separate from the ETS that has been in place since 2005 for industry and power generation. The legislation approved in 2023 extends carbon pricing to fuels used in buildings, road transport and small industry not covered by the existing ETS. It operates upstream: the obligation to purchase and surrender CO₂ allowances applies to fuel suppliers, who will pass the cost through to final prices. The aim is to introduce a uniform price signal in segments where emissions reductions have been slower, supporting investment in energy efficiency and lower-carbon technologies.
The institutional process leading to publication in the Official Journal now requires a final vote in the European Parliament’s plenary and ratification by the Council. The framework defined by the co-legislators sets the operational phase for 2028, while the collection of emissions data from distributors will continue to form the reference basis for determining allowances and assessing impacts on the construction sector, road mobility and related logistics activities. Market stability and the gradual management of allowances remain central to controlling CO₂ price trends, a condition deemed essential for a smooth transition in sectors marked by high energy consumption and a widespread presence of small and medium-sized operators.
