ETS2: what road transport companies need to know before 2027

What is ETS2?

ETS2 (Emissions Trading System 2) extends the European carbon market to road transport and building heating. Until now, this market only covered heavy industry, electricity and aviation. Under ETS2, fossil fuel suppliers will need to buy emission allowances in proportion to the CO2 released by the fuels they place on the market.

In practice, it is not transport operators who buy allowances directly, but fuel distributors. That cost will nonetheless be passed down the chain, ultimately landing on the price paid at the pump. The mechanism mirrors the one already applied to heavy industry, but this time it reaches a diffuse sector: road fleets.

The key date: 2027

The European Commission has set 2027 as the effective start date for ETS2 in road transport. This is not a distant, theoretical deadline: it is approaching at a pace that leaves little room to improvise a transition plan. Vehicle purchase decisions and fuel contracts signed today will already commit fleets through that period.

ETS2 is not a distant tax: it is a regulatory deadline set for 2027 that needs to be prepared for today, starting with fuel choices.

The concrete impact on TCO

The mechanism will produce a gradual increase in the price of fossil diesel at the pump for professional users. This will not be a one-off shock but a steady trajectory, which makes it all the more important to factor into financial forecasts. For fleets, this means a direct rise in total cost of ownership (TCO), line by line.

• Fuel costs rising steadily over the vehicle depreciation period
• Operating margins squeezed if customer contracts lack a carbon clause
• Widening competitiveness gap between early movers and companies that wait
• Growing pressure on CO2 reporting demanded by clients and regulators

Anticipating with sustainable fuels

The best protection against a structural rise in carbon costs is to reduce dependence on fossil diesel before the deadline. Gradually integrating fuels such as HVO or bio-CNG makes it possible to ease into the transition rather than absorb it abruptly in 2027. It is also a concrete way to cut carbon footprint, a topic now closely tracked by clients and investors alike.

This choice is not merely defensive. A fleet that has already reduced its share of fossil diesel absorbs the rising carbon cost more easily and protects its competitiveness against slower-moving rivals. It is a commercial advantage as much as a regulatory safeguard.

Taking action

Preparing for ETS2 starts with a precise assessment of current exposure: the share of fossil diesel in the fleet, existing contracts, and available room to manoeuvre. Heeding's Flash Audit estimates this regulatory and financial impact and identifies the most cost-effective reduction levers for your fleet.

Rather than waiting until 2027 to feel the increase, transport directors can start turning a regulatory constraint into a lasting competitive advantage today.