The European Parliament and the Council of Ministers have agreed to create a new separate system for trading CO2 allowances in the buildings and road transport sectors starting from 2027. The Emissions Trading System for road transport and buildings (ETS2) will apply to distributors who supply fuel for road transport and includes both private and commercial road transport. For Nordic hauliers it is important that road transport operators have access to green alternatives to avoid getting penalised from increased prices on fossil-based fuels.
The new ETS2 will not directly apply to hauliers who will not participate in the auctioning and trade of CO2 quotas. Instead, the distributors of fuel for road transport will be the ones who will be targeted. However, hauliers and road users are expected to carry the additional costs following the implementation of ETS2 through an increase in fossil fuel prices.
Keep watch whether ETS will be an additional cost
The Nordic Logistics Association (NLA), representing more than 16.000 hauliers in the Nordic countries in Brussels, underline that green alternatives must be made available to hauliers. “As things stand today, road freight transport, which operates with heavy-duty vehicles, do not have the option to change their vehicle fleets to for example electric or hydrogen-fuelled vehicles in the short or medium term. There is simply no recharging and hydrogen refuelling infrastructure available. Nor are there affordable vehicles available on market. The alternatives must be available before ETS2 is implemented fully” says Torsten Laksafoss Holbek, CEO of NLA and adds:
“Moreover this system will come as an additional cost for the transport industry on top of other measures introduced by the Fit for 55 package and associated legislation. This puts transport operators under pressure, and we encourage policymakers to take into the full picture into account.”
The regulation must make sense
“We naturally support any proposal aimed at levelling the playing field in terms of climate policy. The ETS2 can be a good instrument to achieve this while also boosting the green performance of all EU Member States. But there needs to be a balance, and if there is not, it will simply be perceived as an additional burden on the transport industry.”
The ETS trading system is intended to be implemented in the beginning of 2027. In case the energy prices will be exceptionally high the start of the new ETS will be postponed until 2028.
Once the system has started if the price of allowances exceeds € 45 over a certain period of time, additional allowances will be released increasing the supply on the market
The agreement between the European Parliament and the Council is now pending formal approval. After the legislation is adopted it will be published in the Official Journal of the EU and enter into force.