ETS2 Reform Will Limit Price Spikes and Make Redistribution Easier, Says T&E - CleanTechnica

The European Commission has confirmed measures to stabilize prices under the upcoming ETS2 carbon pricing scheme, which targets road and heating fuels. To prevent price spikes, a price cap mechanism will allow additional emission allowances to be released if the carbon price exceeds €45 per ton of CO₂. This approach aims to provide price certainty for households and businesses while keeping prices aligned with current carbon prices in countries like Germany and France. Additionally, a frontloading mechanism will enable member states to auction emission allowances as early as 2026, generating revenues ahead of the ETS2’s 2027 launch. Transport & Environment (T&E) welcomes these reforms, emphasizing that the early revenue generation can help governments fund support measures for low and middle-income families. Such measures include making greener alternatives like public transport and electric vehicle leasing more affordable, facilitating a just transition away from fossil fuels. T&E urges governments to act decisively to implement redistribution policies and complementary actions to assist vulnerable households and small businesses as the carbon price takes effect. The