Nordic Countries Advocate for Swift EU Emissions Trading Launch

Sweden, Denmark, Finland, and Luxembourg are pushing back against calls from other EU nations to delay the launch of the new carbon market for heating and transport, known as ETS2. In a joint position paper, these countries warn against succumbing to political pressure due to current energy costs. They argue that further delays or changes to the market-based pricing mechanism could significantly undermine the effectiveness of EU climate policy, as reported by Reuters. The EU ambassadors are set to meet on Wednesday to approve stricter price controls for ETS2. This follows a proposal from Brussels in response to demands made by 19 member states last year. While countries like Slovakia and the Czech Republic are advocating for more delays due to rising fuel costs, the Nordic countries insist on urgency. They argue that once the current changes are agreed upon, the EU should refrain from further meddling with the system. Any ongoing debates about additional adjustments could erode credibility and increase uncertainty for investment decisions by businesses and households. German Chancellor Friedrich Merz recently entered the discussion, causing market unrest. Speaking at an industry summit in Antwerp, the CDU politician expressed openness to revising or postponing the emissions trading scheme if it becomes too burdensome for companies. Merz emphasized that the system should not merely serve as a revenue generator for the state but should facilitate the transition to CO-free production. His remarks led to the price of pollution rights hitting their lowest level since August 2025.

ETS2 Implementation by 2028

The ETS2 is slated to commence in 2028, imposing a price on carbon dioxide emissions from heating and transport. The start date has already been delayed by a year. The scheme aims to incentivize the switch to electric vehicles and cleaner heating systems. Part of the revenues will be used to support poorer households and small businesses in making these investments. Meanwhile, the classic emissions trading system (ETS) for power plants and industrial facilities remains in place, with the EU Commission planning reforms later this year. Intense lobbying from all sides is expected ahead of the discussions.