Sweden, Denmark, Finland and Luxembourg have pushed back against renewed efforts by some European Union (EU) member states to delay or amend the rollout of the bloc’s new carbon market, highlighting political divisions over how to balance climate commitments with economic concerns.
The initiative in question, known as Emissions Trading System 2 (ETS2), is designed to extend carbon pricing to emissions from heating and transport fuels and is currently scheduled to begin in 2028.
Although the start date has already been pushed back by one year from an initial 2027 timetable, politicians from Slovakia and the Czech Republic have continued to call for further postponement, arguing that the policy could drive up energy costs for households and businesses.
But a joint paper circulated among EU governments and seen by Reuters shows that the four opposing countries are urging colleagues to stick with the timeline and resist additional changes to the market’s core structure.
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They argue that further delay or revisions to ETS2’s market-based pricing mechanisms would weaken the effectiveness of EU climate policy and damp investor confidence.
The opposing bloc also signaled support for recently proposed price control measures that aim to moderate excessive permit costs without altering the system’s fundamental design.
While the European Commission and EU countries are advancing plans to implement tools that could release additional allowances if carbon prices rise sharply, the core ETS2 mechanism remains on track for its 2028 launch.
ETS2 is part of the EU’s wider carbon market, which caps and trades carbon permits to encourage emissions cuts.
Earlier political contention around carbon pricing has already contributed to volatility in EU allowance prices, reflecting investor nerves over the regulatory direction.
The dispute underscores broader tensions within the EU over climate policy and economic competitiveness, as governments seek to balance decarbonization goals with public concern over energy affordability and industrial costs.
Read more: EU Considers Phasing Out Free Carbon Permits In ETS Overhaul
