Delaying ETS2 would leave Europe unprepared for future price shocks, say industry and NGOs

Over 50 companies and NGOs are calling on governments to start using ETS2 revenues to support vulnerable households' transition to clean energy. Using frontloaded revenues from the EU’s new ETS2 now to support lower-income households' shift to greener alternatives, can shield Europe’s citizens from future crises, says T&E.

The letter signed by the likes of ABB, Danfoss, Iberdrola, Ørsted and the European Consumer group (BEUC) calls on member states to finalise the transposition of ETS2 and start using the early revenues to help the most vulnerable consumers make the transition. For example, ETS2 revenues could be used for installing heat pumps, social EV leasing schemes, improved public transport or to simply shield poorer drivers from price increases.

Federico Terreni, Climate Policy Manager at T&E, said: “High prices aren't caused by ETS2, they're caused by Europe's reliance on imported fossil fuels. Delaying the policy is a costly mistake that starves governments of the funds required to transition drivers off fossil fuels for good.”

Ioana Petcu, Public Affairs Director at E-Mobility Europe, said: "ETS2 is essential to creating a level playing field for road transport across Europe. Consistent implementation, combined with effective use of the Frontloading Facility, can provide the certainty and investment conditions businesses need to accelerate the transition to zero-emission mobility and reduce transition costs for consumers over the long term.”

Sweden is the first member state to have started using ETS2 revenues to help people switch to electric vehicles. With diesel prices at a record high, the Swedish government is the first mover among EU governments to mobilise this existing instrument and support its citizens in the face of exorbitant diesel prices. Other countries should follow Sweden’s lead, says T&E.

ETS2 is set to kick in at the beginning of 2028.