EU study guides Member States for ETS2 launch

The European Commission published a new study to support Member States in preparing for the launch of the EU Emissions Trading System for buildings, road transport and small industry (ETS2), which will become fully operational in 2027.

• Main announcement / action: The study presents 21 case studies and recommends scalable, cost-effective measures (plus 3 further measures with strong future potential) to promote early decarbonisation in sectors covered by ETS2; concrete recommendations include reduced VAT on electricity used in heat pumps or on the purchase of heat pumps to make clean heating more attractive. The report targets short-term impact and benefits for low- and middle-income households, and it is timed ahead of ETS2 start in 2027.
• Background and details: ETS2 was created under the 2023 revision of the EU ETS Directive, will cover CO₂ emissions from fossil fuel use in buildings, road transport and small industry, operate as a cap-and-trade system with all allowances auctioned, and is designed to cut emissions by 42% by 2030 (vs 2005); a dedicated Social Climate Fund will channel over €87 billion to support vulnerable households and micro-enterprises, and Member States must spend remaining revenues on climate action. Publication date: 9 September 2025; Author: Directorate-General for Climate Action.