The carbon cost for buildings and road transport will likely surpass that of allowances in the existing ETS 1. Carbon pricing will spread to buildings and road transport when the ETS 2 is launched in 2027.
The new system will cover approximately the same volume of emissions as the existing ETS 1 (which targets fossil power generators, heavy industry, aviation and maritime transport). Our modelling of supply and demand suggests the ETS 2 market balance will be tight, and we expect prices above €200/t.
