ETS2: what must I arrange in my contracts?

Short answer: Set out in your transport and procurement contracts how the additional ETS2 fuel costs are allocated and indexed, because the system applies upstream at fuel suppliers and the costs feed through into the pump price. Do this well before the 2028 start.

Why contracts matter now

ETS2 was established under Directive (EU) 2023/959 and is a separate emissions trading system for fuels used in road transport and buildings. Unlike the existing ETS, ETS2 does not apply at the end user but upstream, at the fuel suppliers. They pass their allowance costs through into the pump price, structurally raising the diesel price for road hauliers.

The start has been postponed to 2028 (originally 2027), but monitoring and reporting are already running. The emissions cap falls by 5.15% per year, and the system contributes to the goal of cutting emissions by 42% in 2030 relative to 2005. The fuel component of your cost base will therefore rise over the years.

What to arrange contractually

• Pass-through or indexation clause. Agree that demonstrable ETS2-related fuel cost increases can be passed on, linked to a transparent index or the official fuel price.
• Renegotiation and review points. Build in checkpoints around the 2028 start and at material price movements, so that rates can track the falling cap.
• Data sharing. Specify who supplies consumption and trip data, so the pass-through stays verifiable and proportionate.

Account for price stabilisation

The system includes a price stabilisation mechanism that releases extra allowances to the market above roughly 45 euro per tonne. This dampens spikes but does not remove the structural cost increase. Choose flexible, reviewable terms rather than fixed multi-year rates without an escape clause.

Read the main file: ETS2 and carbon pricing for road transport. Or take the Transport & Logistics scan.