New Emissions Trading System (ETS) for road transport

The European Commission proposed to implement a separate EU Emissions Trading Scheme (ETS) for the road transport sector and buildings. 

The proposal to amend Directive 2003/87/EC concerns the ongoing phase 4 of the ETS (2021-2030). One of the several key points in this amendment is a separate, self-standing ETS for buildings and road transport. 

This new ETS is set out to regulate the fuel suppliers, for whom a monitoring and reporting system already exists under the excise duty system of Council Directive (EU) 2020/262. Starting from 2024 the regulated entities would be required to have a greenhouse gas emissions permit and report the amount of fuel placed on the market. In 2026, they would then have to surrender a corresponding amount of certificates depending on the carbon intensity of the fuels. The emissions cap would be set in 2026 based on data from the Effort-sharing regulation. 

To mitigate the social impact of passing on carbon costs to households, micro-businesses, and transport users, the Commission has put forward a proposal for a social climate fund that would use 25% of revenues from the new ETS for road transport and buildings.