Implementation pathways ETS2 for road transport and buildings

On 14 July 2021, the European Commission proposed a new Emissions Trading System for road transport and buildings (hereafter: ETS2). Suppliers of fuels that deliver energy to end-consumers are required to purchase emissions allowances on the new ETS market. In June 2022, the European parliament proposed several amendments to the Directive, including a new provision in Amendment 182, Article 30f (EP, 2015), which stipulates that suppliers should not pass on more than 50% of the costs related to the surrender of allowances for end-consumers. The Article 30f provision includes a requirement for regulated entities to report on the breakdown of costs reflected in the retail price from one year before the start of ETS2.

A key question regarding the new Article 30f provision was how execution and implementation could work. Transport & Environment has asked CE Delft to conduct a study to give Member States and the European Commission a perspective on feasible implementation options. In this study, we conducted an initial exploration of the possible implementation options of the provision by limiting passing on the costs to final consumers.

The Directive was negotiated by Member States, the European Parliament and the European Commission in autumn 2022. Transport & Environment used our study to provide input for the negotiations. The report is not publicly available.