ETS2 and carbon reserve: real costs for construction, transport and fuels

Key data

If your company consumes fuels for heating, operates road vehicle fleets or distributes fuels, this decision affects you directly. Decision (EU) 2026/2402, published on 28 October 2026, amends Decision (EU) 2015/1814 to incorporate the sectors of buildings, road transport and other new areas into the Market Stability Reserve (MSR) system of the EU emissions trading scheme, known as ETS2.

Until now, the MSR only operated in the original ETS (heavy industry and aviation). With this expansion, the same automatic adjustment mechanism for the supply of emission allowances applies to sectors that were previously not under this control. The result: carbon prices in heating, transport fuels and other uses will be subject to greater regulation and stabilization by the EU.

What does this regulation establish?

The Market Stability Reserve (MSR) is the automatic mechanism that adjusts the volume of emission allowances in circulation to prevent imbalances between supply and demand. When there are too many allowances on the market, the MSR withdraws them; when they are scarce, it releases them. This stabilizes the carbon price and prevents both collapse and extreme price volatility.

This Decision extends that mechanism to ETS2, the new emissions trading system created for diffuse sectors: buildings (heating and cooling), road transport (fuels) and other sectors not covered by the original ETS.

In practice, the MSR acts as an automatic stabilizer: if the ETS2 market generates excess allowances (which would collapse the carbon price and reduce the incentive to decarbonize), the reserve absorbs them. If there is scarcity, it releases them. The objective is to maintain a carbon price high enough to incentivize energy transition without generating unaffordable spikes.

Economic and operational impact

The incorporation of the MSR into ETS2 has direct consequences on the costs of affected companies:

• Greater stability, but higher carbon prices: The MSR prevents the carbon price from falling, which means that ETS2 emission allowances will tend to maintain or increase their value. For companies required to purchase them, this translates into higher operating costs on a sustained basis.
• New compliance obligations: Companies in affected sectors must manage emission allowances under ETS2, with the administrative and monitoring costs that this entails.
• Impact on cost structure: Fuel distributors will pass on the cost of emission allowances to the final price, affecting transporters, construction companies and end consumers of energy.
• SMEs and self-employed particularly exposed: Small construction, road transport and fuel distribution companies must anticipate the impact on their cost structures as ETS2 enters full implementation.

Who does it affect?

• Construction sector companies: Affected by the cost of carbon in building heating and air conditioning.
• Road transport companies: Fleets of trucks, vans and delivery vehicles that consume fossil fuels.
• Fuel distributors: Directly obligated to participate in ETS2 and to acquire emission allowances for the fuels they market.
• End consumers of energy: Companies and individuals that consume natural gas, heating oil or other fossil fuels for heating or industrial processes.
• SMEs and self-employed in the above sectors, who must anticipate the impact on their operating margins.

Practical example

Imagine a road transport company with a fleet of 20 trucks that consumes diesel for its daily routes. Until now, the price of fuel did not explicitly include the cost of ETS2 emission allowances. With full implementation of ETS2 and the MSR, the fuel distributor must acquire emission allowances for each ton of CO₂ generated by the combustion of the diesel it sells. That cost will be passed on to the final fuel price.

The effect of the MSR is that this carbon price cannot collapse even if there is excess allowances on the market: the reserve will automatically withdraw them to maintain the price. For this transport company, this means that the carbon surcharge on its fuel bill will be structural and growing, not temporary. Financial planning must incorporate this variable on a permanent basis.

The same applies to a real estate developer that manages buildings with centralized gas heating: the natural gas distributor will be obligated to purchase ETS2 allowances, and that cost will reach the developer's gas bill.

What should companies do now?

1. Identify if your company falls within the scope of ETS2: Check if you operate in construction, road transport or fuel distribution. If so, this regulation affects you directly.
2. Evaluate the impact on your cost structure: Calculate what percentage of your operating costs corresponds to fossil fuels (diesel, natural gas, heating oil). This is the main vector of ETS2 impact.
3. Anticipate financial planning: Incorporate in your annual budgets an increasing carbon cost item. The MSR guarantees that the carbon price will not fall below certain levels.
4. Consult with your advisor on ETS2 compliance obligations: Fuel distributors will have direct obligations for registration and acquisition of allowances. Construction and transport companies must understand how the cost reaches them indirectly.
5. Explore energy efficiency measures: Reducing fossil fuel consumption is the only way to reduce exposure to carbon costs. Evaluate fleet electrification, building insulation improvements or heating system replacement.
6. Monitor the date of entry into force of ETS2: Decision 2026/2402 does not specify a specific date for full implementation. Keep track of official communications from the European Commission so you don't miss adaptation deadlines.

Official source

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Disclaimer: This article is for informational purposes only and does not constitute legal advice. For specific decisions, consult a qualified professional. Source: https://eur-lex.europa.eu/./legal-content/AUTO/?uri=OJ:L_202602402