EU's ETS2 Delay and CO2 Standards Impact on Carbon Pricing and Low-Income Households
The European Union's Emissions Trading System 2 (ETS2) is facing a delay of one year, as agreed upon by the Council and the European Parliament. This delay is significant because ETS2 is designed to put a price on carbon emissions, thereby incentivizing greener alternatives in sectors like transport. The delay comes amidst concerns that weakening car and truck CO2 standards could lead to higher carbon prices, as more combustion engine vehicles remain on the road longer. This situation could hinder the rollout of affordable electric vehicles (EVs), disproportionately affecting poorer households. The delay also means a potential loss of €50 billion in revenues for 2027, which could have been used for social leasing, charging infrastructure, and public transport improvements, or redistributed to citizens. The EU aims to reduce demand for ETS allowances by adopting zero-emission technologies and efficiency measures to ensure the long-term success of ETS2. 
