EU approves ETS 2 changes: what it means for Czech heating costs

EU countries have given final approval to a change to the ETS 2 emissions system. EU finance ministers backed the decision on Friday at a meeting in Luxembourg. ETS 2 will fully start in 2028 — after a one-year delay.

The change strengthens the so-called market stability reserve. It balances supply and demand by automatically adjusting the number of allowances in circulation. According to the Council of the EU, this “contributes to a stable and predictable allowance market” ahead of the system’s launch.

What worries politicians

The system is meant to push producers to cut carbon dioxide emissions. However, many politicians fear that high allowance prices will hit residents — including through building heating bills. The European Parliament approved the amendment back in mid-September. Czech Prime Minister Andrej Babiš, one of the system’s main critics, said at the time that the change was better than nothing, but would not fundamentally help anything.

How the ETS works

Companies must buy allowances for every tonne of CO₂ they emit: the more emissions, the higher the costs, which makes clean technologies more attractive. The current ETS 1 covers energy, heavy industry and aviation. ETS 2 will affect road transport and building heating. The new system will include a social climate fund to ease the impact on low-income households.

The decision will be published in the Official Journal of the EU and will enter into force on the twentieth day after publication.

Around Prague, based on reporting by novinky.cz