ETS2 from 2028. How should businesses prepare their pricing, contracts and liquidity?

ETS2 will become fully operational in 2028, rather than in 2027 as originally planned. Most small and medium-sized businesses will not purchase or surrender emission allowances directly. They may, however, feel the effects of the system through the prices of fuel, heating, transport, subcontractor services and materials.

The final cost for an individual company is not yet known. The price of allowances will be determined by the market, while the extent to which the cost is passed on will depend on the supplier, type of fuel, contract terms and competitive conditions in a particular sector.

A business should therefore not try to predict one exact increase in the price of a litre of fuel. It is much more important to determine where the company depends on fossil fuels and whether its prices and contracts allow it to respond when costs change.

What will ETS2 actually change?

ETS2 is a new emissions trading system, separate from the existing EU Emissions Trading System.

It will cover CO2 emissions from the combustion of fuels in buildings, road transport and additional sectors, mainly smaller industrial activities that are not covered by the existing EU ETS.

The system will operate upstream. This means that the obligation to monitor emissions and surrender the corresponding number of allowances will apply to entities supplying fuels to the market, rather than to drivers refuelling vehicles or typical businesses heating their warehouses.

This does not mean that the end customer will avoid the cost.

A fuel supplier may include the cost of allowances in its prices. A transport company may then pass higher costs on through its rates, while a servicing company may increase its travel charges. The change can therefore move through several stages of the supply chain before appearing on the final customer's invoice.

ETS2 will start in 2028, but preparation begins earlier

In March 2026, the Council of the European Union formally adopted an amendment postponing the full operation of ETS2 by one year, from 2027 to 2028. This is no longer only a political declaration or a proposal under negotiation.

The postponement does not mean that the entire process has stopped.

Monitoring and reporting of emissions by regulated entities began in 2025. From 2026, annual emissions data must also be verified by an accredited verifier. In June 2026, the Council and the European Parliament reached a provisional agreement on strengthening the market stability reserve before the full launch of ETS2.

For businesses, the additional year should therefore mean more time for analysis and preparation, rather than a reason to postpone the subject until the end of 2027.

Where might a company feel the cost of ETS2?

The impact will not be the same for every business. A company with a large vehicle fleet and a gas-heated warehouse has a different exposure than a service business operating from rented office space.

The most important step is to examine three areas.

Company transport and field work

The most visible impact may appear in businesses using delivery vehicles, lorries, servicing fleets or company cars for sales teams.

The issue is not limited to the monthly refuelling bill.

A higher cost per journey may change the profitability of small deliveries, free transport, frequent customer visits and assignments completed far from the company's base. The problem may therefore affect not only costs, but also the company's entire customer service model.

Externally purchased transport and services

A company does not need its own fleet to bear fuel-related costs.

A carrier, courier, installer, servicing company, materials supplier or subcontractor may increase its rate or introduce a fuel surcharge. Some contracts already contain such mechanisms. In others, the higher cost may simply be included in the new total price.

Businesses should therefore review not only fuel receipts, but also supplier agreements and price lists in which transport is hidden within the overall charge.

Heating and use of buildings

ETS2 will also cover fuels used in buildings.

The method used to heat a production facility, warehouse, workshop, service location or office may therefore become relevant. The cost may appear directly on a fuel invoice or indirectly through rent and service charges passed on by the property owner.

A tenant should know how the building is heated and how the lease allows the owner to allocate increases in operating costs.

Production and purchases from other businesses

The additional sectors covered by ETS2 include some industrial activities that are not part of the existing EU ETS.

Even when a particular company is not among the entities required to surrender allowances, it may purchase goods from businesses that use fuels in manufacturing, drying, heating or transport.

The additional cost may then appear in the price of a material, component, packaging product or service.

ETS2 does not have one fixed price added to every litre of fuel

Various estimates have been published showing how ETS2 could affect the prices of petrol, diesel, gas or coal.

Such calculations may be useful as scenarios, but they are not an official price list that will apply from 2028.

Allowance prices will change according to market conditions. The final effect on customers will also depend on how suppliers pass the cost on. Some may transfer it in full, others only partially, while some companies may temporarily absorb part of the increase because of competition.

The system includes stabilisation mechanisms. During the first two years of ETS2 operation, additional allowances may be released if the carbon price exceeds EUR 45 per tonne in 2020 prices, adjusted for inflation, or if prices increase too rapidly. This is not, however, a fixed guarantee that the cost borne by fuel users will remain below a specific amount.

A company should therefore not build its budget around one headline predicting the exact increase in the price of fuel.

A better approach is to prepare several cost scenarios.

The greatest risk may be hidden in contracts signed today

A company may enter 2028 with contracts concluded much earlier.

This is particularly relevant to long-term construction projects, transport agreements, servicing contracts, logistics arrangements, manufacturing orders and contracts with fixed prices lasting several years.

When a business commits today to delivering a service in 2028 or 2029, it should establish who will bear the risk of rising fuel, heating and transport costs.

The absence of a suitable contractual mechanism does not mean that the cost will disappear. It only means that the contractor may have to absorb it through a lower margin.

Contracts become particularly risky when:

• the price remains unchanged throughout the entire cooperation period
• the scope of work may increase without a new quotation
• the company is responsible for transport but cannot adjust its rate
• the customer may postpone the schedule while the contractor continues to reserve resources
• penalties for non-performance are high, but all additional delivery costs remain with the supplier

Not every contract needs a separate clause referring directly to ETS2. In some cases, a properly constructed fuel, energy or transport cost adjustment mechanism may be sufficient.

The most important point is to define the method of updating the price before a dispute arises.

How should companies prepare their pricing and contracts before 2028?

A company does not need to know the future allowance price to organise the way it calculates its services.

New quotations should also clearly specify how long they remain valid. A price calculated in 2026 may not be safe for a project beginning two years later.

For existing contracts, companies should check whether an increase in costs genuinely creates a right to renegotiate. The introduction of a new system does not automatically allow a contractor to increase the agreed price unilaterally.

How can a company prepare its liquidity without knowing the final cost?

Planning does not require choosing one forecast and treating it as certain.

A company can prepare three scenarios.

1. The base scenario assumes a limited increase in costs and the ability to pass most of it on through prices.
2. The higher-cost scenario shows what happens to the margin when part of the increase remains with the company.
3. The stress scenario combines more expensive transport, delayed price adjustments and late customer payments.

Only then can the company determine whether the problem affects profitability alone or also creates an additional need for cash.

A contract may still generate a positive margin while requiring more working capital. Fuel, transport and heating are paid on an ongoing basis, while the customer may pay only after 30, 60 or 90 days.

This mechanism is similar to the one described in our article about where higher fuel prices really affect a company. The difference is that ETS2 may create a more permanent cost change than a temporary increase in commodity prices.

Should companies invest in changing their heating systems or fleets now?

Information about ETS2 should not automatically lead a company to purchase new vehicles, replace its entire fleet or carry out an expensive building modernisation.

The first step should be to calculate:

• current fuel or energy consumption
• the realistic period of use of the vehicle, machine or building
• the investment cost and potential savings
• infrastructure availability
• servicing and maintenance costs
• the effect of the investment on liquidity
• whether the equipment fits the company's current operating model

Replacement may make sense when it permanently reduces operating costs and pays back within a reasonable period.

A much weaker justification is an investment made solely because the company has read a forecast concerning the future allowance price.

When can financing help a company prepare for ETS2?

Financing may make sense when it supports a specific change whose effect can be calculated.

This may include purchasing more efficient equipment, modernising facilities, changing the heating system, adjusting the fleet or obtaining the working capital needed to deliver contracts during a period when costs increase faster than cash inflows.

Financing should not, however, be used to cover permanently unprofitable services.

When a company is unable to include transport or heating costs in its prices over a longer period, additional capital may only postpone the problem.

Well-matched financing can help a business complete an investment or bridge a temporary liquidity gap. It does not replace updated pricing and margin control.

ETS2 does not begin with the first invoice in 2028

The full launch of the system has been postponed until 2028. This does not mean that companies have nothing to do until then.

Contracts covering 2028 may already be signed today. Decisions concerning fleets, heating systems, warehouses, locations and delivery models may also affect the company for several years.

The best preparation is therefore not an attempt to predict one exact fuel price.

The company should understand:

• where it uses fuels covered by the system
• which costs are purchased indirectly from suppliers
• whether it can update its rates
• how long its quotations remain valid
• how much margin remains under higher-cost scenarios
• whether it has enough cash to implement the required changes

ETS2 may affect the cost of operating a business. Whether it also changes the company's profitability and liquidity will largely depend on decisions made before 2028.