Brussels: The ETS2 delay pushes the start of carbon pricing for road transport and buildings back by a year, and that choice now shapes how the European Union reaches its 2040 climate target. Parliament endorsed the one-year postponement on 13 November 2025 after governments proposed it, as part of the compromise on the 2040 goal.

What the ETS2 delay actually changes

ETS2 is a separate emissions trading system for fuels burned in buildings and road transport. Unlike the original market, which targets power plants and heavy industry, it prices the fuel that suppliers sell to households and small firms. The ETS2 delay moves its launch from 2027 to 2028, so petrol, diesel and heating fuel suppliers will wait a further year before they must buy allowances.

Supporters of the postponement argue that voters need more time to adjust. Energy bills have stayed high since 2022, and several governments feared a visible price on heating and driving. The delay gives them a year to prepare support schemes and national plans.

Why the Social Climate Fund is exposed

The Social Climate Fund was designed to cushion the impact of ETS2 on vulnerable households. Civil society groups, including the European Environmental Bureau, warn that the postponement shrinks the money available for that purpose and weakens the link between the carbon price and its social safeguards. The ETS2 delay therefore creates a timing question: what happens to measures that were built for a start date that no longer applies?

Governments can still use the fund for insulation, public transport and clean heating. The risk is that projects slip, because member states have less revenue certainty while the market waits to open. National social climate plans will show whether capitals treat the extra year as breathing space or as a reason to slow down.

What the ETS2 delay means for the 2040 target

The 2040 compromise set a 90% emissions reduction goal, with limited use of international credits. Transport and buildings are among the hardest sectors to cut, so a later carbon price puts more weight on other policies. Environmental groups say the postponement weakens the Union’s ability to cut emissions this decade, while governments say a realistic start protects public support for the whole system.

Both sides have a point. A price that arrives too early can trigger a political backlash, but a price that keeps slipping removes the signal that drivers and landlords need to invest in cleaner options. The test is whether the extra year is used to deploy heat pumps, charging points and rail capacity.

What happens next

The Commission and member states must now finish the details of ETS2 before 2028, including price stability tools and the final shape of national support plans. Anyone following the ETS2 delay should watch three signals: the pace of Social Climate Fund spending, the design of price safeguards, and whether any capital pushes for a further postponement. If governments use the extra year well, the delay will look like prudence; if not, it will look like the first step in an endless retreat.