- The EU Emissions Trading System for buildings, road transport, and small industry (ETS2) will be fully operational in 2027.
- ETS2 aims to reduce emissions by 42% by 2030 compared to 2005 levels.
- All ETS2 allowances will be auctioned, with revenues funding climate and social measures.
- The Social Climate Fund will allocate over €87 billion to support vulnerable households and micro-enterprises.
Introduction
The European Commission has released a study to assist Member States in preparing for the EU Emissions Trading System for buildings, road transport, and small industry (ETS2), set to be fully operational in 2027.
Case Studies and Measures
The study presents 21 case studies from various Member States, focusing on early decarbonisation through cost-effective, scalable, and replicable measures. These initiatives aim to benefit low- and middle-income households and include recommendations like reduced VAT rates on electricity for heat pumps.
ETS2 Objectives
ETS2 is designed to reduce CO₂ emissions in the covered sectors by 42% by 2030 compared to 2005 levels. It will operate on a cap-and-trade system, similar to the existing EU ETS, with all allowances auctioned to fund climate and social measures.
Social Climate Fund
A dedicated Social Climate Fund will distribute over €87 billion to support vulnerable households and micro-enterprises, ensuring a fair transition as ETS2 is implemented. The remaining revenues will be used by Member States for climate action.
