Climate KIC joins calls for ambitious implementation of ETS2
Climate KIC has added its voice to a coalition of more than 70 companies, industry associations, and civil society organisations urging EU policymakers to protect and fully implement the Emissions Trading System 2 (ETS2) without further delay or dilution.
The open letter sent on March 10, 2026 and addressed to Commission President Ursula Von Der Leyen, key Commissioners, EU Heads of State and Government, and European Parliament political group leaders, sends a clear message: rolling back or postponing ETS2 is not an option Europe can afford.
Why ETS2 matters
ETS2 is far more than a carbon pricing mechanism. It is a cornerstone of Europe’s strategy to decarbonise buildings and road transport — two of the most challenging and carbon-intensive sectors of our economy. By putting a price on emissions in these sectors, ETS2 creates the investment signals needed to accelerate the uptake of heat pumps, building renovations, electric vehicles, and clean public transport.
Crucially, ETS2 is also a revenue engine. The hundreds of billions of euros it is expected to generate can be channelled directly to vulnerable households and businesses, helping them navigate the energy transition rather than bear its costs. The Social Climate Fund and the EIB Frontloading Facility stand ready to deploy these resources where they are needed most.
The cost of delay
Recent discussions about postponing ETS2’s launch and weakening its Market Stability Reserve (MSR2) are deeply concerning. A one-year delay alone would cost Member States an estimated €50 billion in lost auctioning revenues. Weakening the MSR2 would expand the system’s carbon budget and undermine the very investment certainty that businesses and households depend on.
In an era of geopolitical volatility and energy insecurity, now is the wrong time to retreat from ambitious climate policy. ETS2 accelerates the phase-out of imported fossil fuels, directly contributing to Europe’s strategic autonomy and energy resilience.
“The stakes in 2026 are too high for regulatory backsliding. ETS2 is a cornerstone of Europe’s mission to cut emissions and enhance competitiveness without leaving our most vulnerable citizens behind. Every delay sends a more confusing signal to the businesses, innovators and communities we work with every day and are committed to supporting in their climate transition. €50 billion in lost revenues from a one-year postponement would result in thousands of heat pumps not installed, buildings that remain inefficient, households that stay locked into expensive fossil fuels, leading edge innovations in future growth markets, like sustainable aviation fuels, disrupted and losing ground to global competitors. The cost of living crisis and the climate crisis are interconnected. We cannot afford to weaken the very instruments designed to solve both. Europe’s competitiveness, energy security and social fairness all depend on giving businesses and citizens the certainty they need to invest in the transition. That is precisely why Climate KIC signed this letter and what we exist to support.”
– Kirsten Dunlop, CEO of Climate KIC.
Our call to action
Together with our co-signatories, Climate KIC calls on the European Commission, Parliament, and Member States to:
- Operationalise ETS2 in 2028, with no further delays or expanded carbon budget
- Implement strong complementary policies — from heat pump rollout and building renovations to electric mobility and renewable energy communities
- Ensure transparency and public participation in how ETS2 revenues are invested, building social buy-in and business confidence
The energy transition is an opportunity. ETS2, implemented with ambition and integrity, is one of the most powerful tools we have to make that transition fair, fast, and lasting.
Read the full open letter and the list of signatories here.
Contact our EU team for more information.