What this means for companies
Originally, the new Emissions Trading System II (ETS II) was supposed to start in 2027. Now a postponement to 2028 is on the cards. For many German companies that are already covered by the national emissions trading system (nEHS), this raises questions about competitive fairness and planning security.
In this article you will find all the important information about ETS II.
The new European emissions trading system ETS II extends CO₂ trading to buildings, transportation and small industrial facilities. The aim is to also include those sectors in the pricing of emissions that are not yet covered by EU emissions trading (ETS I). This is intended to further expand climate protection in Europe and regulate CO₂ emissions more comprehensively.
In 18 hours of marathon negotiations on November 5, 2025, the EU member states reached a political agreement to postpone the start of ETS II until 2028.
This option was already included in the ETS II Directive: the European Commission may postpone the start if gas or crude oil prices remain above a defined threshold until mid-2026. What is therefore new is not the option itself, but the decision to actually make use of it.
Formal confirmation from the Commission is still pending. The postponement will only become legally binding once it officially implements the decision.
The postponement of ETS II is linked to the ongoing negotiations on the European climate targets for 2040. The EU has agreed to set the target slightly lower than originally planned.
Germany, represented by Environment Minister Carsten Schneider, agreed to make the agreement possible. An important topic in the talks was how much of the planned emission reductions could be achieved by purchasing international climate certificates – i.e. through projects outside the EU. Germany wanted to set strict limits here: a maximum of three percentage points of the reduction should be achieved in this way.
Until it is finally clear when ETS II will start, Germany is planning a transitional solution: an auction-based CO₂ levy will continue to apply in 2026. This is intended to ensure that there is a price effect for emissions in the meantime.
For many German companies that are already active in the national emissions trading system (nEHS), the postponement primarily brings uncertainty.
Austria also operates a national emissions trading system. Other countries such as Ireland or Norway will probably not participate in the initial phase due to high national energy taxes or existing regulations.
Even if the start of ETS II is likely to be postponed, companies should not lose sight of the issue. The political decision does not change the fact that CO₂ emissions will be increasingly priced in the coming years – the only question is when and at what speed.
We would be happy to advise you on the subject of ETS II.