EU Member States Push to Delay ETS2 Carbon Market Over Economic Fears

A coalition of European Union member states, led by Cyprus and backed mainly by Central and Eastern European countries, is seeking to postpone the launch of the EU’s new carbon market (ETS2) for road transport and buildings, citing serious social and economic concerns, according to a research analysis by Votonomics.

The group plans to send a letter to European Commission President Ursula von der Leyen, urging a delay in the start of ETS2 from 2027 to 2030. “We are compelled to convey our deep concern regarding the current design and implementation timetable,” the draft letter reads. “The 2027 launch of ETS2 risks triggering unintended social, economic, and political disruptions.”

The call for delay comes ahead of an EU leaders’ summit in Brussels this week, where climate targets through 2040 are set to be discussed. The European Commission has proposed a 90% reduction in greenhouse gas emissions by 2040 compared to 1990 levels. However, implementation has faced increasing resistance amid political pressures and a growing cost-of-living crisis across the bloc.

Notably, the draft letter does not reference the Social Climate Fund, designed to cushion the impact of ETS2 on low-income households. The fund, financed through ETS2 revenues, is expected to launch in 2026.

Concerns over rising costs have been escalating. In June, 19 EU member states called for stronger price-control mechanisms, warning that ETS2 could significantly raise energy and transport expenses for consumers.

According to Votonomics, which tracks Sustainability and ESG for 20,0000 companies worldwide, carbon prices under ETS2 could surge to $174 (€149) per metric ton by 2029, representing an 80% increase from the current rates applied to industry and power producers under the existing EU Emissions Trading System (EU ETS), which already covers manufacturing, aviation, and maritime sectors.