ETS2: buildings, road transport and additional sectors

The ETS2, which will become fully operational in 2027, has been designed to start in an orderly, smooth and efficient manner. As a first step, the monitoring and reporting of emissions will begin in 2025. Over the course of 2027, a 30% higher volume of allowances will be auctioned to provide market liquidity.

As in the existing EU ETS, the ETS2 will operate with a dedicated, rule-based market stability reserve to mitigate insufficient or excessive supply of allowances to the market. During the first three years the ETS2 is operational, if the price of allowances exceeds EUR45 (in 2020 prices, i.e. adjusted for inflation), additional allowances may be released from the ETS2 market stability reserve to address excessive price increases. Allowances may also be released from this reserve if the price of allowances increases too rapidly.

The rules and conditions for such a release are specified in the ETS Directive[1].

In case of exceptionally high gas or oil prices in 2026, the start of the ETS2 system could be postponed to 2028 to ensure a smooth implementation.

References

1. ^ ETS Directive (eur-lex.europa.eu)