Agreement overnight: EU strengthens price protection for ETS2
In a night session on the evening of June 12, 2026, negotiators from the EU Parliament and member states agreed on revised rules for the market stability reserve of the new ETS2 carbon emissions trading system. The goal: to cushion extreme price spikes in heating and fuel costs before the system fully takes effect in 2028.
The ETS2 is independent of the existing emissions trading system for industry and power plants. Starting in 2028, it will oblige fuel suppliers to purchase pollution rights—with a direct impact on the energy costs of private households, commuters, and small businesses.
The most important changes at a glance
Doubling of the certificate approval from 45 euros
The core point of the agreement: If the CO₂ price exceeds the threshold of 45 euros per ton, can in the future up to 40 million certificates from the Market stability reserve be released – previously it was merely 20 million. Since this mechanism semiannually takes effect, a maximum of 80 million additional units are available per year.
Earlier, phased release
The threshold for a gradual release has also been lowered: it takes effect even when fewer than 260 million certificates are in circulation – previously the value was 210 million. This is intended to prevent sudden market reactions related to individual threshold values.
Market stability reserve is here to stay permanently
Originally, the Market Stability Reserve was scheduled to expire at the end of 2030 – precisely when ETS2 is set to launch fully. Now it will remain in place permanently. Around 600 million certificates are thus available in the long term as a management tool.
Background: Why stricter price controls for ETS2 now?
The adjustments are a direct response to concerns from 19 EU member states, including France, Poland, and the Czech Republic. These countries warned that rising heating and fuel costs could stoke political resistance against climate policy.
A recent 2026 study highlights the risk: with a CO₂ price of 57.50 euros, the cost of living could rise by an average of around 1.18 percent without accompanying efficiency measures.
What does that mean for Germany?
The The EU had postponed the launch of the EU ETS2, originally planned for 2027, by one year.. Accordingly, the European emissions trading system will replace the national German CO₂ price starting in 2028. This currently ranges between 55 and 65 euros per ton—and thus is already above the new ETS2 intervention threshold of 45 euros.
CDU Member of the European Parliament Peter Liese expects prices between for the initial phase of the ETS2 45 and 50 euros – also below the current German level. For comparison: At a CO₂ price of 60 euros, that corresponds to around 17 cents per liter of petrol and 19 cents per liter of diesel.
However, an independent panel of experts warns that without further policy measures, Germany could exceed its emissions budget by 60 to 100 million metric tons by 2030.
Revenue from ETS2 is intended to ease the burden on consumers
The revenues from the ETS2 auctions are earmarked: they are intended to support consumers with energy bills, the purchase of electric cars, and energy-efficient home renovations. Via the Social Climate Fund lower-income households in particular should be targeted for support in decarbonization.
Investors & Climate Activists Demand Reliability
While politicians focus on social stability, financial actors are urging steadfastness. 46 institutional investors – including Allianz SE and L&G Asset Management – together manage around 12 trillion euros and are calling for a robust system with clear, transparent rules to ensure planning certainty.
Civil society organizations such as Carbon Market Watch, on the other hand, warn of further weakening: the ETS2 has already been postponed by a year, and ambitious and timely implementation is urgently needed.
What is the future of the ETS2 and the Market Stability Reserve?
The agreement is provisional for now. The European Parliament and the Council still have to formally approve it, followed by legal-linguistic revisions. EU officials expect that the amended reserve will be in place in time before ETS2 fully enters into force in 2028.
At the same time, the European Commission is currently fundamentally reviewing the ETS2. A concrete revision proposal is expected for Mid-July 2026 expected. Among other things, the coupling of free certificates to investment commitments and a possible expansion to international flights are under discussion.