The European Union has agreed to stronger price controls for its upcoming carbon market, ETS2, which is set to launch in 2028 and cover CO2 emissions from heating and transport. Under the new rules, if carbon permit prices exceed 45 euros per tonne, up to 80 million additional permits can be released annually from a stability reserve to prevent price spikes. This is a shift from earlier plans and aims to address concerns from member states like France and the Czech Republic about rising fuel costs for consumers. The ETS2 system will require fuel suppliers to buy permits for emissions from heating and road transport. Revenue from the market will fund consumer relief, electric vehicle adoption, and energy efficiency upgrades in homes. The changes are designed to stagger permit releases and avoid market volatility while still pushing the energy transition forward. Formal approval by EU states and the European Parliament is still pending but is expected to follow pre-agreed terms.
