Legal Problems of the ETS-2 Postponement

In 2023, the EU had stipulated in the ETS Directive that the ETS-2 would be introduced at the start of 2027. “EU legislators were aware from the outset that a further increase in fuel and heating costs could be highly problematic in view of the economic and social impact on businesses and the general public,” says Götz Reichert, cep climate law expert and author of the study. Consequently, to avoid very sharp price rises, the ETS-2 provisions provided for an automatic one-year postponement of the ETS-2 launch to 2028 should precisely defined price thresholds for oil and gas be exceeded in the first half of 2026.

In contrast, however, the Council and the European Parliament agreed as early as November 2025 to postpone the launch of the ETS-2 to 2028 without any conditions. This did not take place on the initiative of the European Commission through an amendment to the existing provisions of the ETS Directive. Rather, the postponement of the ETS-2 was decided on an ad hoc basis by the Council and the European Parliament as part of a legislative procedure to amend the European Climate Law, which was actually intended to set the EU’s 2040 climate target.

“This approach, which runs counter to EU legislative practice, contravenes EU law in several respects,” explains Reichert. On the one hand, it disregards the Commission’s exclusive right of initiative. On the other hand, it violates the principle of legal certainty by knowingly creating a contradiction between formally applicable EU provisions. As current discussions regarding significant interventions in EU legal acts adopted long ago – for example, the ETS-1 – demonstrate, this precedent also potentially jeopardizes the legality of future EU legislation.

When amending legal acts, EU legislators should be obliged to amend the exact wording of the existing legal text. Furthermore, they should not introduce independent substantive provisions in an amending act. “In the present case, the EU institutions should make use of the revision of the ETS Directive, which is due in the summer of 2026 anyway, to remedy these breaches of EU law,” demands Reichert.