Poland is seeking to postpone the expansion of the EU’s ETS emissions trading system, which aims to encompass transport and construction, by three years, as reported by an EU source. This proposed delay will not impact the initiation of the Social Climate Fund, which is designed to finance initiatives such as building insulation during the transition period.
The reformed emissions trading system is set to be introduced in the EU starting in 2027, targeting sectors including transport and construction. However, several member states are advocating for a delay due to concerns over increased costs related to heating and fuel. Czech Prime Minister Petr Fiala has stated that the Czech Republic intends to request a one-year postponement for the transport and construction sectors.
According to an EU source speaking to a small group of journalists, Poland has suggested a more significant delay, proposing to defer the new system’s implementation until 2030. Poland aims for the Social Climate Fund to launch in 2027 as originally intended, intending to assist citizens and businesses that would be most impacted by the inclusion of buildings and transport in the ETS.
The Fund is ultimately expected to be financed through the auctioning of emissions allowances. During the proposed three-year deferral, Poland is considering funding the Social Climate Fund from alternative sources, such as loans from the European Investment Bank. This period would allow beneficiaries to invest in building insulation and decarbonizing transportation.
Officials indicated that the delay would provide additional time to alleviate price pressures on consumers and businesses.
The ETS directive permits a one-year deferral of the new system’s implementation if the average gas price in the first half of 2026 exceeds levels from February and March 2022, or if the average oil price during that timeframe is double the average price over the preceding five years. However, this scenario would necessitate a return to the price levels observed during the crisis following Russia’s invasion of Ukraine in 2022, which is considered unlikely.
Any adjustments to the existing directive would require an amendment. It has been suggested that such amendments can be expedited, as demonstrated by the recent changes made concerning deforestation regulations. These changes, which impose obligations on importers and producers of various commodities to verify that their products are not sourced from deforested areas, were proposed by the European Commission in October, approved by the European Parliament and EU Council in November, and are set to take effect in early 2026, with extended timelines for micro- and small enterprises to comply.
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