Introduction of an emissions trading system for buildings, road transport, and additional sectors in the EU: Overview of the design of the new EU ETS 2

On 14/07/2021, the European Commission presented a series of legislative proposals as part of the 'Fit for 55' package, which is intended to align the EU’s energy and climate policy instruments with the new climate target of reducing emissions by 2030 (minus 55% compared to 1990 levels). The Fit for 55 package is largely characterized by a strengthening of the European Emissions Trading Scheme (EU ETS). In addition to extensive changes to the existing emissions trading system (EU ETS 1), a new emissions trading system for buildings, road transport and additional sectors in the EU will also be introduced (EU ETS 2). In terms of the sectors included, this represents a significant decision in climate policy. In December 2022, a political agreement was reached between EU member states, the EU Commission, and the EU Parliament on the proposed amendments to the Emissions Trading Directive (ETD). The amended Emissions Trading Directive entered into force on May 10, 2023. This fact sheet outlines key aspects of the EU ETS 2.