Under the European Green Deal, Croatia is aligning with EU-wide climate goals. The Green Deal is the EU’s roadmap to becoming climate-neutral by 2050, and one of its main tools for reducing emissions from buildings and road transport is ETS2 (Emissions Trading System 2). ETS2 can be thought of as a market-based carbon tax.
ETS2 is the EU’s carbon pricing system for heating fuels and road transport fuels. It extends the existing EU Emissions Trading System (ETS), which already covers large industrial emitters.
As of 2026. 2026,fuel suppliers only need to monitor and report how much CO₂ is emitted from the fuels they sell. 2028. Starting in 2028, they are expected to buy ETS2 allowances at EU auctions. Each allowance gives the right to emit 1 tonne of CO₂. Because these allowances can be traded and their price fluctuates, they are considered a financial instrument, similar to stocks or bonds.
Suppliers will pass the cost of allowances on to consumers, so eventually the price of heating and transport fuels will increase. In 2026, ETS2 does not yet affect household bills for heating or transport fuel, but by 2028 it is expected to add hundreds of euros per year on respective bills per household.
The goal of carbon pricing is to encourage the transition to clean energy and reduce emissions. To support this, incentives and funding will be available for households and businesses that invest in renewable energy systems.
Krešimir Jelaković
