Carbon pricing through the EU Emissions Trading System (EU ETS) is a key tool pushing Europe toward cleaner energy. The system now covers aviation and maritime, and a new ETS2 will target buildings and road transport starting in 2028. A Social Climate Fund with EUR 86.7 billion aims to offset higher costs for households and small businesses during the transition. The article also covers the Carbon Border Adjustment Mechanism (CBAM), which applies carbon costs to imports of steel, cement, aluminium, fertilisers, and electricity. CBAM is meant to prevent carbon leakage and encourage other countries to set up their own carbon pricing systems. Rising CO2 prices are also creating new business models, such as sustainable aviation fuel production and biomethane from waste facilities.
