EU ministers seek fossil fuel subsidy exit, adjust ETS2 to limit price spikes
EU finance ministers called for phasing out fossil fuel subsidies ahead of COP31 and approved changes to the bloc's planned carbon market for road transport and heating fuels. The revisions are intended to reduce price volatility before the ETS2 launches in 2028.
The EU’s 27 finance ministers took two related steps on Friday. They urged governments to wind down support for fossil fuels before the COP31 climate talks, signaling a push to align fiscal policy with climate goals.
They also signed off on revisions to the planned carbon market covering road transport and heating fuels. The changes aim to smooth price swings before the system begins in 2028, according to the report.
The measures could affect households and businesses that rely on road transport and heating, as carbon pricing may gradually raise costs for fossil-based fuels. Finance ministries may also face pressure to redirect subsidy savings toward climate or social measures. The timing before COP31 could shape expectations for international cooperation, though implementation details remain uncertain.