The European Union Emissions Trading System 2 (ETS2) is set to launch in 2027, expanding carbon pricing to fuel suppliers for buildings and road transport, sectors responsible for nearly 40% of EU CO₂ emissions previously outside regulation. ETS2 presents both challenges and opportunities for fuel suppliers in Europe adapting to new compliance demands.

The EU’s Carbon Border Adjustment Mechanism (CBAM) represents a landmark policy to safeguard EU climate ambitions and industry competitiveness by addressing carbon leakage. CBAM imposes a carbon price on imports of energy-intensive goods, reflecting the price paid under the ETS.

The inclusion of shipping under the EU ETS from January 1, 2024 obliges operators to adhere to carbon monitoring, reporting, and surrender allowances for CO₂ emissions. This represents a paradigm shift for maritime emissions, traditionally exempt from carbon markets. Compliance obligations will rise progressively: 40% in 2024, 70% in 2025, aiming for 100% by 2026.