EU ETS2 for road freight: 2028 carbon price on diesel

EU ETS2 is a separate emissions trading system that puts a carbon price on the fuels burned in road transport and buildings, and from 2028 it will raise the wholesale cost of every litre of diesel sold in the EU. The start date moved from 2027 to 2028 after EU co-legislators agreed the postponement on 2025-12-10, and in June 2026 the Council and Parliament provisionally agreed to reinforce the price-stabilising reserve that sits behind the system. That matters because more than 90% of the European heavy-duty vehicle fleet still runs on diesel (IRU, 2026), so this is an operating-cost event, not a distant policy debate. This guide covers what ETS2 charges, who actually pays it, what it plausibly adds per litre and per truck, how it stacks on top of national carbon taxes already in force, and what to do before 2028.

What is EU ETS2 and how does it apply to road freight?

ETS2 is a cap-and-trade market. Under an emissions trading system (ETS), a regulator sets a declining ceiling on total emissions, issues allowances up to that ceiling, and requires covered companies to surrender one allowance per tonne of CO2 they are responsible for. ETS2 was created by the 2023 revision of the ETS Directive and runs separately from the original EU ETS, which covers power, heavy industry, aviation, and maritime.

The design choice that matters for carriers is that ETS2 regulates emissions upstream . The regulated entities are fuel suppliers, not the operators who burn the fuel. A haulier with 40 trucks holds no ETS2 permit, files no annual emissions report, and buys no allowances. The supplier does all of that, then prices the allowance cost into the diesel it sells.

So ETS2 is best understood as a fuel-cost line item rather than a compliance obligation. There is no ETS2 paperwork to file and no ETS2 audit to fail, only a higher net price at the rack and at the pump that has to be recovered through rates. Carriers that already monitor country-by-country diesel prices across the EU will see the effect show up in the same place they track excise and currency movements today.

The cap is not decorative. ETS2 volumes are set to cut emissions in the covered sectors by 42% by 2030 compared with 2005 levels, and every allowance is auctioned rather than handed out free. That combination is what makes the price signal real.

When does ETS2 start for road transport fuel, and what changed?

ETS2 becomes fully operational in 2028. It was originally legislated to start in 2027, but the Parliament and Council agreed to postpone it by one year during the trilogue on the EU 2040 climate target, concluded on 2025-12-10 . CLECAT, the European forwarding and logistics association, confirmed the postponement two days later and framed the extra year as a window for member states to put support measures in place before fuel costs rise.

The machinery has been running for some time. Fuel suppliers have needed a greenhouse gas emissions permit since 2025-01-01, monitoring and reporting began in 2025, and verified emissions data has been required from 2026. What 2028 adds is the money: auctioning, and the obligation to surrender allowances.

Could ETS2 slip again?

It slipped once, so the question is fair. The direction of travel through 2026 was the opposite, though: rather than delaying further, the co-legislators worked on making the price behave. On 2026-06-18 the IRU reported a provisional agreement to strengthen the ETS2 Market Stability Reserve, the buffer that releases extra allowances when prices spike. The agreement removes the reserve's automatic post-2030 expiry, keeps its full 600 million allowance capacity available, doubles the release triggered by prices above EUR 45 per tonne from 20 million to 40 million allowances each time the trigger fires, which can happen up to twice a year for up to 80 million allowances released annually, and raises the low-circulation trigger from 210 million to 260 million. The IRU is clear about what this is not: the reserve remains a soft price-correction tool, not a hard cap. Plan for a range, not a ceiling.

How much could ETS2 add to diesel costs for carriers?

Start with the chemistry, because it is the only part that does not move. Burning one litre of diesel releases roughly 2.67 kg of CO2, so the per-litre cost of ETS2 is simply the carbon price multiplied by 0.00267.

Transport & Environment's Making ETS2 work briefing put price projections in a band from below EUR 40 to EUR 63 per tonne at launch, rising towards roughly EUR 126 per tonne by 2031. The table applies that band to a 40-tonne articulated unit consuming 30 L per 100 km over 120,000 km a year, which is 36,000 L. Figures are net of VAT, which carriers reclaim.

These are arithmetic, not forecasts. Two adjustments matter in practice. Suppliers will add margin and hedging cost on top of the raw allowance price, so the pump effect tends to run slightly ahead of the theoretical figure. And the effect scales with consumption, not turnover, so long-haul operators on the Rotterdam to Milan or Hamburg to Warsaw corridors absorb far more per vehicle than urban distribution fleets.

For a 50-truck long-haul fleet, the middle of that table is roughly EUR 310,000 a year in new fuel cost. That is large enough to justify pulling per-vehicle consumption data now and modelling the pass-through inside your TMS rather than discovering it in the 2028 accounts.

How is ETS2 different from ETS1 and national carbon taxes?

Against the original EU ETS, the differences are scope and mechanics. ETS1 covers power, industry, aviation, and maritime, has run since 2005, and still allocates some allowances free to protect trade-exposed industry. ETS2 covers road transport, buildings, and small industry, starts in 2028, auctions 100% of allowances, and regulates the fuel supplier rather than the emitter. The two markets do not share allowances, so the ETS1 price does not set the ETS2 price.

Against national carbon pricing, the picture is more interesting, and it is where carriers in different member states will see very different outcomes. Several countries already charge a carbon price on road fuel, so for those operators ETS2 largely replaces a cost they pay today. Where there is no national carbon price on diesel, ETS2 is entirely new money.

German figures come from DEHSt, the national emissions trading authority , the Swedish rate from Tax Foundation Europe's 2026 carbon tax comparison , and the French carbon component from the Transport & Environment briefing. Diesel effects are calculated at 2.67 kg CO2 per litre.

The competitive read is straightforward. ETS2 narrows one of the fuel-cost gaps between Western and Central European operators, because Germany and France already carry part of this cost while Poland and Romania do not. Cross-border carriers should compare their national baseline against live diesel prices in the countries they buy in before assuming a uniform increase across the network.

Can carriers pass ETS2 costs on to shippers?

Mechanically, yes, and the tooling already exists. ETS2 arrives inside the diesel price, so any contract with an index-linked fuel surcharge clause picks it up automatically once the higher price flows into the reference index. Carriers using the European Commission Weekly Oil Bulletin or a national diesel index need no new clause at all.

The exposure sits with fixed-price contracts and with clauses built on a stale base price. Two checks are worth running well before 2028. Confirm that every contract running into 2028 has a fuel adjustment mechanism with a defined trigger and recalculation frequency, ideally monthly. Then confirm that the base price in each clause is recent, because a clause anchored to a 2024 diesel price will under-recover badly by 2028.

One point is often missed: the surcharge only recovers ETS2 for the share of the rate that is genuinely fuel. If your surcharge covers 30% of the linehaul rate but fuel is 35% of your cost base, you are already under-recovering, and ETS2 widens that gap. Rebuild the calculation from current cost data rather than inherited percentages. Our guide to building a fuel surcharge formula that tracks real cost walks through the arithmetic.

Commercially, the conversation is easier framed as a regulated cost rather than a rate increase. The mechanism is public, the start date is fixed, and the arithmetic is identical for every carrier bidding the lane. That is a different negotiation from a general rate rise, and the same logic worked when operators explained driver-cost increases under the EU Mobility Package rules on posting and return obligations .

What does the Social Climate Fund do for road transport?

The Social Climate Fund was created alongside ETS2 to cushion its distributional effect. It is financed from ETS2 auction revenues plus 50 million allowances from the original EU ETS, and with 25% co-financing from member states it is expected to mobilise at least EUR 86.7 billion between 2026 and 2032. Member states access the money by submitting Social Climate Plans to the European Commission, which releases payments against agreed milestones.

For road freight, the word to watch in the regulation is micro-enterprises. The fund targets vulnerable households and micro-enterprises facing energy or transport poverty, which in some national plans can include very small transport businesses. Eligible measures include access to low-emission and zero-emission vehicles. The European Environment Agency's analysis of ETS2 and the Social Climate Fund sets out how the two instruments are meant to work together in road transport.

The open question is whether road transport gets its money back. Member states must spend ETS2 revenues on climate and social measures and report that spending, but no rule requires revenue raised from diesel to be reinvested in decarbonising road freight. The IRU has pressed the Commission for guidance encouraging member states to earmark a meaningful share for the sector, warning that without it ETS2 will read as punitive rather than transitional. The document that matters for any operator is therefore their own country's Social Climate Plan, not the EU-level total.

How should carriers prepare for ETS2 before 2028?

Nothing here requires a compliance department. It is contract and data work.

• Pull per-vehicle annual fuel consumption in litres. That number, multiplied by the per-litre figures above, is your exposure.
• Model EUR 45, EUR 65, and EUR 90 per tonne. The reinforced reserve softens spikes but does not cap the price.
• Subtract your national baseline. German and French operators already pay part of this, so do not double-count.
• Audit every contract running into 2028 for a fuel adjustment clause, its trigger, and its recalculation frequency.
• Refresh the base diesel price in each clause and tie it to a public index rather than a negotiated number.
• Recalculate the fuel share of your cost base against the share your surcharge actually covers.
• Read your member state's Social Climate Plan to see whether transport micro-enterprises are eligible.
• Add the ETS2 line to total cost of ownership models for battery-electric and renewable-fuel vehicles, where it improves the payback case.
• Brief your sales team now, so the 2027 tender round prices 2028 correctly.

Frequently asked questions

What is ETS2?

ETS2 is a separate EU emissions trading system covering CO2 from fuel combustion in road transport, buildings, and small industry. It was created by the 2023 revision of the ETS Directive and works as a cap-and-trade market with 100% auctioned allowances. It is distinct from the original EU ETS, which covers power, industry, aviation, and maritime.

When does ETS2 start?

ETS2 becomes fully operational in 2028, one year later than originally legislated. The Parliament and Council agreed the postponement from 2027 on 2025-12-10, as part of the EU 2040 climate target negotiation. The first allowance surrender falls due on 2029-05-31.

Who pays for ETS2?

Fuel suppliers are the regulated entities and buy the allowances. Carriers, fleets, and drivers pay indirectly through a higher diesel price. That means no ETS2 permit, report, or audit for a transport operator, but a real and recurring increase in fuel cost from 2028.

Will ETS2 increase fuel prices?

Yes. At a carbon price of EUR 45 per tonne, ETS2 adds roughly 12 cents per litre of diesel before supplier margin; at EUR 126 per tonne it adds roughly 34 cents. The actual increase depends on the auction price, which analysts currently expect to sit in the tens of euros per tonne at launch and rise through the 2030s.

Does ETS2 apply outside the EU?

ETS2 applies to fuel released for consumption in EU member states, so place of purchase matters, not the nationality of the carrier. A non-EU operator fuelling inside the EU pays it; an EU operator fuelling outside the EU on the same trip does not. That makes fuelling strategy on eastern and Balkan corridors worth reviewing before 2028.

Does ETS2 replace national carbon taxes on diesel?

Partly, and it depends on the country. Germany's national fuel emissions trading scheme was designed to transition into ETS2, so German operators face a swap rather than a pure addition. Countries with no national carbon price on road fuel, such as Poland and Romania, will see the full ETS2 cost as new.

How should a fuel surcharge clause handle ETS2?

An index-linked clause tied to a public diesel index will absorb ETS2 automatically, because the cost arrives inside the fuel price. Fixed-price contracts and clauses anchored to an outdated base price are the exposure. Refresh the base price and confirm the recalculation frequency before any contract term crosses into 2028.

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