Joint letter calling upon EU Member States to implement ETS2

Efficient Buildings Europe and other 49 undersigned companies, industry associations and civil society organisations urge governments to finalise the transposition of ETS2 and start using the early revenues available to help the most vulnerable consumers make the transition to clean local energy sources.

ETS2 and the use of its revenues, including the Social Climate Fund (SCF), are essential to accelerating the decarbonisation of the road transport and buildings sectors, strengthening Europe’s energy security, through increased electrification and energy efficiency, and creating the demand needed for European industry to invest in and scale clean technologies across the Union.

ETS2 should be implemented as planned and any further reform of the ETS2 should await the scheduled review in 2029. The priority should now be to ensure predictable implementation, effective use of ETS2 and SCF revenues and timely deployment of accompanying social and investment measures. Eroding a framework before its implementation hampers predictability and weakens investment signals.

Many businesses, SMEs, clean-tech investors, and consumers across Europe have already committed significant capital and prepared for regulatory compliance based on the stability, clarity, and timelines of the EU’s agreed regulatory framework. European companies rely on regulatory certainty and predictability, thus reopening or delaying ETS2 would send a concerning signal that undermines investment signals and erodes European competitiveness just when dynamic market leadership is needed most. Flipping the rules mid-game rewards inaction and penalises frontrunner companies that have invested significantly based on the stability and predictability of the EU’s regulatory framework.

Member States must use the remaining pre-launch window constructively to build confidence.

Moreover, the adoption of Social Climate Plans (SCPs), the deployment of the SCF and of the EIB’s Frontloading Facility, would help ensure public acceptance of ETS2, while strengthening households’ and businesses’ resilience to energy price volatility.

ETS2 implementation is key to reducing Europe’s reliance on fossil fuel imports from volatile regions and thereby improving European competitiveness, sovereignty and resilience in the long term.

In light of these observations, we also call upon all governments to:

• Implement ETS2 in 2028 with no further delay;
• Present robust SCPs to use all ETS2 revenues to shield consumers,
• Make the most of the Frontloading Facility mechanism to leverage private investments, ensuring companies can invest in clean technologies and accelerate the transition to a zero emission economy, which would further cushion the impact on consumers in the long term and
• Accelerate the deployment of energy efficiency measures, clean heat, and sustainable transport technologies and infrastructure.