Last updated: 24.08.2026
ETS2 is a new emissions trading system that will extend the EU emissions trading system to road transport and buildings. Rather than imposing obligations directly on drivers, it will regulate fuel suppliers and indirectly affect final consumer prices through the cost of emission allowances.
For transport companies, fleet managers, EV dealers and charging infrastructure investors, the key issues are the resulting carbon price, higher operating costs for internal combustion vehicles, contractual risks and the growing economic advantage of electric vehicles.
| Category | Scope |
| Scope of regulation | Emissions trading system for road transport and buildings |
| Legal bases | Directive 2023/959 (amendment of the ETS Directive, introduction of ETS2) · Directive 2003/87/EC (as amended) · Act on the greenhouse gas emissions trading system (national law to be amended) |
| Supervisory authorities | European Commission · National administrator of the emissions trading system (KOBiZE) · Tax authorities |
| Market participants | Fuel distributors and energy suppliers to transport · Carriers · Fleet managers · Users of internal combustion vehicles |
| Entry date | Will become fully operational in 2028, following a one-year postponement from its original 2027 target |
What is ETS2 and How Does the New Emissions Trading System Work?
The existing EU ETS, also referred to as EU ETS or ETS1, has been functioning since 2005 and covers heavy industry, energy and aviation. Under this cap-and-trade system, enterprises purchase CO₂ emission allowances at auctions or on the secondary market.
ETS2 is a separate, new system that will extend the emissions trading mechanism to the buildings and road transport sector.
ETS2 vs the Existing EU ETS – Key Differences
The key difference is that ETS2 will not impose obligations directly on drivers or vehicle users. The obligation to purchase allowances will rest on regulated entities, primarily fuel suppliers and distributors supplying fuel to gas stations.
The mechanism is straightforward: the fuel distributor must acquire allowances corresponding to the CO₂ emissions generated through fuel combustion by its customers.
The cost of allowances will be factored into the fuel price at the gas station—exactly like an excise tax, but dependent on the price of allowances on the market.
ETS2 is entirely separated from ETS1. Both systems operate using independent allowance pools, and it is not possible to transfer allowances between them. ETS2 will therefore function as a separate carbon market alongside the existing EU ETS.
ETS2 Upstream Mechanism – How Emissions Trading Will Affect Fuel Prices
Unlike ETS1, which has covered heavy industry and energy since 2005, the mechanism established by ETS2 for transport in Poland is based on the upstream settlement method.
The system is designed to cover emissions upstream, meaning that the obligation to purchase emission allowances will not fall directly on drivers or road carriers. Instead, it will apply to entities introducing liquid fossil fuels onto the market, namely fuel distributors and oil companies supplying fuel to gas stations.
Fuel Suppliers and the Cost of ETS2 Allowances
Fuel distributors have a statutory mandate to acquire allowances at EU ETS auctions corresponding to the mass of CO₂ generated by the fuel burned by their customers.
This cost will be automatically factored into the price per liter of gasoline, diesel, and LPG at stations, functioning similarly to an excise tax.
Is ETS2 an Energy Tax on Gasoline, Diesel and LPG?
ETS2 will not formally impose an energy tax directly on drivers or transport companies. However, fuel suppliers may transfer the cost of allowances to customers through higher prices at the pump.
When analyzing the key relationship between emissions trading and fuel prices, the European Commission’s forecasts indicate that at rates ranging from 45 to 65 EUR per ton of CO₂, the price of a liter of fuel will rise directly by 10–15 groszy within the first years of the system’s operation.
The long-term, gradual reduction of the EU allowance pool up to 2035 will increase internal combustion fuel prices by as much as 25–40 groszy per liter (with allowance prices at 100-150 EUR/ton).
Financial Impact on Vehicle Fleets
For logistics managers, the correlation concerning vehicle fleets is critical.
With an annual mileage of 30,000 km for a single passenger car, the carbon cost will amount to approximately 1,500–2,000 PLN per year, which for a fleet of 100 traditional vehicles will generate nearly 150,000–200,000 PLN in additional, unrecoverable operational costs starting from 2027.
Since electricity used to power BEVs is not subject to ETS2, the mechanism will significantly improve the competitiveness of the TCO of electric vehicles and become an important tool supporting the decarbonisation of transport in Poland.
ETS2 and Electric Vehicles – How the Carbon Price May Accelerate Electrification
ETS2 is designed as a market instrument rather than a prescriptive requirement.
Its purpose is not to ban the use of internal combustion vehicles, but to make their operation increasingly expensive, which will naturally drive companies and consumers to opt for EVs.
This effect will intensify over time – the higher the price of allowances, the greater the economic advantage of EVs. This is a deliberate mechanism of EU climate policy.
This is a deliberate element of EU climate action intended to support emission reduction in the covered sectors.
Impact on EV Dealers
ETS2 serves as a powerful sales argument that will become highly relevant starting in 2027. A TCO analysis that factors in the projected increase in fuel prices is a tool that dealers should prepare and implement when conducting sales consultations with fleet and individual clients.
Impact on Transport Companies and Fleet Managers
ETS2 represents a strict cost risk that must be incorporated into current financial models and fleet deployment plans. Long-term transport service contracts signed today may fail to account for this additional cost burden starting in 2027.
ETS2 Contractual Risks for the Logistics Industry
ETS2 introduces immediate risks for transport companies operating under long-term contracts with fixed prices per vehicle-kilometer or per freight shipment.
A transport company bound by a 3–5 year fixed-price contract will face severe financial losses starting in 2027 due to rising fuel costs.
All new long-term contracts must include indexation clauses that precisely link the service price to the official stock index of ETS2 carbon emission allowance costs.
Although the directive includes an emergency mechanism to delay the system’s rollout until 2028 in the event of an extreme spike in energy prices, a complete cancellation of the regime is politically out of the question, forcing businesses to revise their financial models immediately.
Even a temporary delay intended to address excessive price increases would not remove the need for businesses to revise their financial models and contractual safeguards.
How to Prepare for ETS2 – Registration, Contracts and Compliance
- Audit of long-term contracts – Identifying transport, leasing, and supply contracts that currently lack protective clauses shielding the business from fuel and ETS2 cost increases.
- Indexation clauses in new contracts – Implementing mechanisms to adjust service pricing based on fuel cost fluctuations caused by ETS2. The clause must clearly specify the pricing index and the triggering mechanism for renegotiation.
- Vehicle swapping clauses in leasing – Negotiating the right to prematurely swap an internal combustion vehicle for an electric one with the lessor without incurring penalties for early contract termination (or under highly preferential terms).
- Registration and compliance – Fuel distributors are legally required to register within the ETS2 system by January 1, 2027. Operating without registration means acting outside the legal framework, which carries severe financial penalties.
- Monitoring allowance prices – Companies managing substantial fleets should actively track the ETS2 allowance market ahead of its launch (as a secondary market is likely to emerge before 2027) to evaluate price risk management options.
ETS2 Legal Support for Transport and Fuel Market Businesses
ETS2 may affect fuel pricing, long-term transport contracts, fleet strategies and, for regulated fuel suppliers, monitoring plans and other reporting obligations. Businesses operating in road transport and other covered sectors should assess how the new emissions cap may influence their costs and compliance framework.
Contact us to discuss the contractual, regulatory and reporting risks that ETS2 may create for your business.
FAQ – ETS2 and Transport in the European Union
Does ETS2 apply to private drivers?
Indirectly—through higher fuel prices. The fuel suppliers will pay for the emission allowances and passes this cost onto the price at the pump. Private drivers do not purchase allowances directly.
Are EVs entirely exempt from ETS2?
Not completely. In Poland, electricity used to charge EVs still partially originates from coal-fired power plants, which are covered by the ETS1 system. Indirectly, the cost of CO₂ emissions from power generation can influence energy prices. However, this cost remains significantly lower than the direct impact of ETS2 on liquid fuels—meaning EVs remain substantially cheaper to operate.
Can ETS2 be delayed or canceled?
The directive contains an emergency mechanism allowing for a delay until 2028 if there is an extreme escalation in energy prices. However, completely abolishing the system would require a full amendment to the directive, necessitating a joint decision by the European Parliament and the Council of the EU, which is politically highly improbable.
How will ETS2 affect the profitability of investments in charging stations?
Positively—any increase in conventional fuel prices boosts the attractiveness of electric charging as an alternative, which should translate directly into higher utilization volumes at charging stations. Investors planning charging networks should incorporate the projected impact of ETS2 on fuel costs into their revenue modeling.
How will ETS2 Address Insufficient or Excessive Supply of Allowances?
ETS2 will have a dedicated Market Stability Reserve designed to mitigate insufficient or excessive supply of allowances and improve market liquidity. The mechanism may adjust the number of allowances available on the market when supply and demand become unbalanced.
A higher volume of allowances is expected to be auctioned at the launch of ETS2, while additional allowances may be released if the carbon price increases beyond specified levels. These safeguards are intended to limit excessive price volatility without removing the system’s emissions cap or its environmental objectives.
Can the Social Climate Fund Support Low-Emission Transport?
Yes. The Social Climate Fund was established alongside ETS2 to help Member States address its social and economic effects. The SCF is expected to mobilize at least EUR 86.7 billion by 2032.
In the transport sector, EU Member States may use the Fund to support access to low- and zero-emission vehicles, charging infrastructure, public transport and other sustainable mobility solutions.
Support may be directed to vulnerable transport users, micro-enterprises and other vulnerable groups affected by higher road-fuel prices. Member States may also provide temporary direct income support, provided that their Social Climate Plans include longer-term investments supporting the transition towards climate neutrality.
