The European Union has agreed to stronger price controls for its new carbon market, known as ETS2, which will start in 2028. This market targets CO2 emissions from heating and transportation. Under the agreement, if permit prices exceed 45 euros per tonne, up to 80 million additional permits can be released annually from a stability reserve to prevent fuel cost spikes. The ETS2 system requires fuel suppliers to buy permits for the emissions their products cause. Revenue from the market will fund consumer bill relief, electric vehicle purchases, and energy efficiency upgrades for homes. This move addresses concerns from countries like France and the Czech Republic about potential consumer backlash from higher fuel prices tied to climate policy.
