Four member states resist further delay of ETS2
Sweden, Denmark, Finland and Luxembourg have opposed a further delay of ETS2, according to a joint document seen by Reuters. The paper responds to several European governments that had called for postponing once again the introduction of the EU’s new emissions trading system.
The European Union’s second carbon market, known as ETS2, will from 2028 apply a price on CO₂ emissions generated by heating and transport fuels. The EU has already agreed to postpone the start of ETS2 by one year, from 2027 to 2028, following requests from some member states during negotiations on amendments to the EU Climate Law.
A one-year postponement already agreed
To secure agreement on the EU’s 2040 climate target, the European Commission accepted the one-year delay of the new carbon pricing mechanism, particularly to address concerns raised by Poland, Italy and Romania.
Brussels also decided to advance the distribution of revenues generated by the system in order to ease energy costs. The European Investment Bank agreed with the Commission on a frontloading facility for ETS2, making €3 billion available to member states to help prepare citizens for higher fuel costs once the carbon price for heating and transport takes effect in 2028.
Climate policy credibility at stake
Despite these reassurances, resistance from countries such as Slovakia and the Czech Republic has continued, driven by concerns over potential increases in household bills and fuel prices. However, the four governments behind the joint document argue that any further delay of ETS2 or additional changes would weaken the effectiveness of EU climate policy.
EU ambassadors met on 18 February to discuss stricter price control mechanisms for ETS2, as requested by 19 countries. Strengthening these safeguards is intended to prevent excessive price increases. Sweden, Denmark, Finland and Luxembourg maintain that once these corrective tools are agreed, the EU should refrain from reopening the system. In their view, broadening the debate to further structural changes would undermine EU credibility, weaken the system’s authority and increase uncertainty for businesses and households.
Economic implications of postponement
The European Commission faces a delicate balance between preserving the Green Deal and addressing mounting public concern over energy costs. The joint document from the four countries seeks to counter calls for scaling back or further delaying ETS2.
The one-year postponement of the EU carbon price for emissions from buildings and road transport will carry fiscal consequences. Denmark estimates it will lose around €500 million in future revenues. Christian Stenberg, senior official at Denmark’s Ministry of Climate, told POLITICO: “The delay will cost us a significant share of revenues we could have obtained, almost €0.5 billion. For the Danish economy, that is not insignificant.”