Despite EU legislation applicable since 2010 and the transport sector being included in Member States’ targets under the Effort Sharing Regulation, emission reductions have not been fast enough in this sector. How will applying emissions trading in road transport work?

While CO2 emissions standards bring new and cleaner cars to the market, it is essential to decarbonise transport fuels that serve the existing fleet. The Commission, therefore, proposes to create a new EU-wide emissions trading system for the fuel supply industry, which will put a price on carbon emissions from road transport (and heating) fuels. This system will not apply at the level of the individual transport user but at the level of the fuel supplier as the entity with control over the fossil carbon content of the fuel (see Memo on the ETS proposal here).

Source: European Commission