Warsaw: The ETS2 delay to 2028 has changed the timetable for Europe’s second emissions trading system, but it has not settled the political argument about who pays for heating and driving. The Council adopted the amended European Climate Law on 5 March 2026, moving the start of ETS2 by one year to 1 January 2028.

With about fourteen months left before the system starts, governments, fuel suppliers and households are using the extra time very differently.

Why the ETS2 delay was agreed

ETS2 puts a price on emissions from buildings and road transport, sectors that cannot rely on large industrial emitters to absorb the cost. Fuel suppliers, not households, hold the compliance obligations, but the cost passes through to pump and heating bills.

Poland, Czechia and several other member states argued that a 2027 start risked a public backlash while energy prices remained high. The one-year postponement was the compromise attached to the new 2040 climate target.

Supporters of the delay argue it gives national governments time to finish Social Climate Fund plans. Critics reply that the ETS2 delay rewards slow preparation and weakens the signal to investors in heat pumps and electric vehicles.

What the 2040 package does

The amended Climate Law sets an economy-wide cut of 90% in greenhouse gas emissions by 2040, compared with 1990. From 2036, limited high-quality international credits can count toward the goal, capped at 5% of the EU’s 1990 net emissions.

Those credits cannot be used for ETS compliance. Domestic permanent removals such as bioenergy with carbon capture may be allowed, and the rules are due in the 2026 ETS revision.

What the 2028 start means for households and suppliers

Auctioning still begins in 2027, so suppliers must register, set up monitoring and buy allowances before the obligation bites. Mandatory third-party verification of emissions reports applies from 2026. The ETS2 delay therefore shifts the price signal, not the administrative workload.

The design also keeps its price-stability safeguards. The scheme was built around a target of keeping allowance prices near 45 euros in 2020 money in its early years, and the Social Climate Fund is meant to cushion vulnerable households with money drawn from ETS revenues.

Where the risks sit

The first risk is political, and the ETS2 delay has already made it sharper. Every year of delay gives opponents another election cycle in which to ask for a further postponement, and the biennial review clause in the Climate Law invites that debate.

The second risk is financial. If national Social Climate Fund plans are slow to deliver insulation grants, heat pumps and public transport, the ETS2 start date in 2028 will arrive before the support does.

The third risk is credibility. Investors in building renovation need a stable carbon price to justify long-term projects, and uncertainty over the ETS2 delay makes that case harder. Lenders will also ask whether a second postponement is possible before they commit to multi-year renovation finance.

What to watch next

The 2026 ETS revision will show how removals are treated, and national plans will show how seriously governments take the Social Climate Fund. Until both are visible, the ETS2 delay to 2028 looks like a pause in a debate rather than an end to it.