03 June 2025 14:00 – 17:00
Interoffices, Avenue des Arts 56, 1000 Brussels
“Ensuring the Success of ETS 2: The Role of Direct Payments” took place on June 3 at Interoffices, in Brussels, featuring diverse perspectives from Director Beatriz Yordi (DG CLIMA, European Commission), MEP Peter Liese, Monica Berg (ADAC), Zofia Wetmanksa (Reform Institute) and Luke Haywood (European Environmental Bureau). The panel discussion was moderated by EPICO CEO and Founder Bernd Weber.
The event centred around the question of the implementation and future of ETS 2, the extension of the EU Emissions Trading System to buildings and road transport. As a central pillar of the Fit for 55 package, ETS 2 is due to take effect in 2027, yet it faces growing political resistance from some Member States, which are calling to delay or even dismantle the system. Speakers reaffirmed the importance of ETS 2 as a tool to decarbonise two of the most challenging sectors—buildings heating and mobility—and emphasised the need to strengthen its social legitimacy. The introduction of direct payments to citizens was presented as a key solution to ease the transition away from fossil fuel-based heating and mobility, and help make ETS 2 more socially inclusive.
Throughout the discussions, the principle of social fairness and cohesion featured prominently. Direct payments, if designed with transparency and attention to national differences, were seen as essential to secure public trust. The Social Climate Fund, which will channel ETS 2 revenues to households and small businesses, was highlighted as a critical enabler of this effort, despite some concerns about its funding sufficiency. Experts pointed out that such payments should be tailored to reflect differences in income levels, fossil fuel dependence, and existing climate policies across Member States. This tailoring is not only a matter of equity, but also a strategic necessity for building support in countries where ETS 2 may otherwise face resistance.
While the climate case for ETS 2 was widely acknowledged, panelists also raised concerns about implementation and communication. There was agreement that the revenues generated by the system must be clearly earmarked for climate and social purposes, rather than absorbed into general budgets. Without visible and fair compensation mechanisms, the risk of public backlash could threaten the credibility of the EU’s climate strategy. Additionally, the discussion highlighted that any design of the direct payment mechanism should be as transparent and simple as possible, to not risk delays or failure to implement social redistribution mechanisms overall.
Ultimately, the conversation made clear that ensuring the success of ETS 2 will require political commitment, public engagement, and a coherent additional policy-mix that leaves no one behind.
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Photos by Javier Bernal Revert