Time to accelerate: Early action and early auctions for ETS2

IETA members call for a timely start to the new market and early auctions of ETS2 emission allowances. The statement comes after a group of 16 Member States issued a non-paper in June raising social concerns and recommendations for the design of the ETS2 before its expected start date in 1 January 2027.

With little over a year until the anticipated start date of ETS2, IETA urges policymakers to ensure regulatory certainty and avoid any delays to the start of the new market. “The integrity of ETS2 depends on a timely launch in 2027”, said Svea Nyberg, EU Policy Officer at IETA. “Clarity and stability are essential for companies to prepare in time for the new system, which is why we oppose any revision of ETS2 provisions in next year’s revision of the EU ETS Directive.”

To support a smooth launch, IETA members call for the early auctioning of 310 million ETS2 allowances to be launched by mid-2026. “Early ETS2 auctions would improve market functioning by boosting liquidity, reducing price uncertainty, and facilitating long-term hedging”, Nyberg added. 

Additionally, the statement voices support for better access to market information to strengthen predictability for stakeholders, and calls for future adjustments to the ETS2 Market Stability Reserve (MSR) to be addressed through a targeted review of the MSR Decision or in the scheduled ETS2 review in 2028.