Climate KIC recently joined over 70 companies and organizations in urging EU leaders to uphold the Emissions Trading System 2 (ETS2). This renewal aims to boost climate action across Europe, especially in the building and transport sectors, which are notorious for high carbon emissions.
On March 10, 2026, an open letter was sent to key EU figures, emphasizing that delaying or weakening ETS2 would be a costly mistake. The system is not just a pricing tool; it plays a vital role in helping Europe move towards a greener future by encouraging investments in energy-efficient technologies like heat pumps and electric vehicles.
The revenue generated by ETS2, estimated to reach hundreds of billions of euros, isn’t just for show. It can support vulnerable households and businesses through initiatives like the Social Climate Fund. This fund can help those who might struggle with the costs of the energy transition, thereby lessening financial burdens.
A potential delay in implementing ETS2 could lead to a staggering loss of around €50 billion for Member States from auctioning revenues. Weakening the system could also diminish the trust businesses have in making the necessary investments, stalling progress in cleaner technologies.
Kirsten Dunlop, CEO of Climate KIC, cautions against any rollback. She emphasizes that the stakes are high. Delaying ETS2 means thousands of heat pumps may not get installed, and households could remain reliant on costly fossil fuels. The ongoing cost of living crisis links directly to climate challenges, making it even more critical to pursue effective climate policies.
As the geopolitical landscape shifts, it’s crucial for Europe to stick to ambitious climate goals. While some sectors may find it challenging to adapt, the transition to renewables is an opportunity for growth and innovation.
To make this transition successful, Climate KIC and its partners call for specific actions, including:
- Timely implementation of ETS2 by 2028, without further delays.
- Support for complementary policies, such as enhancing electric mobility and promoting renewable energy.
- Transparency in how ETS2 revenues are used, ensuring public trust and participation.
The energy transition offers a chance for a fair and sustainable future. With strong commitment, ETS2 could be pivotal in achieving that goal.
For more details, you can read the full open letter here.
