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EU Moves to Curb ETS2 Price Spikes as 2027 Carbon Market Nears

The Commission will table a legislative proposal for market‑supply controls in the coming weeks.

Overview

  • EU Climate Commissioner Wopke Hoekstra outlined steps to moderate prices, including faster certificate releases, a €45 top‑up trigger that doubles volumes, and holding unused allowances in a reserve through 2030.
  • From 2027 the ETS2 will cover building heating and road transport across the EU, shifting CO2 pricing to a single market and replacing Germany’s national system.
  • Economic analyses foresee significant household cost increases under strict caps, with scenarios up to €200 per tonne CO2 and the ADAC projecting as much as €0.19 per liter for petrol and diesel.
  • Germany and roughly a dozen countries pressed for pre‑launch adjustments, while several Central and Eastern European states have argued for postponing ETS2 to at least 2030.
  • President Ursula von der Leyen signaled strengthening the market stability reserve and exploring frontloading ETS2 revenues to support a climate‑social fund, with discussions reported with the European Investment Bank.