Sustainability Requirements: EU ETS 2 and Emission Reduction in Logistics

The logistics industry is entering a new phase of climate regulation. Rising sustainability requirements, carbon pricing, and reporting obligations are changing how transport costs are calculated across Europe. For logistics providers, freight forwarders, and e-commerce companies, emissions are no longer only a reporting topic. They are becoming a direct financial factor.

For many years, transport companies in Germany mainly dealt with the national emissions trading system (nEHS) and increasing CO₂ tolls. With EU-ETS 2, the regulatory framework becomes broader and more complex. Businesses now need to prepare for additional carbon-related costs, stronger reporting requirements, and growing pressure from customers regarding sustainability transparency.

At the same time, the topic is often misunderstood. Many companies assume that only large fuel suppliers are affected. In reality, EU ETS 2 logistics regulations will influence the entire supply chain. Higher fuel prices, changing carrier surcharges, reporting obligations, and procurement decisions will affect shippers, carriers, freight forwarders, and online retailers alike.

Companies that prepare early gain an advantage. They can improve cost transparency, optimize transport structures, and reduce long-term carbon cost exposure before ETS2 becomes fully operational.

What Is ETS2 and Who Is Affected?

What is ETS2 in practical terms? As part of the 2023 revisions of the ETS Directive, the European Union Emissions Trading System 2 was created as a separate carbon pricing mechanism for sectors that were previously outside the original EU ETS framework. 

The existing EU ETS mainly covers energy-intensive industries, aviation, and power generation. Emissions Trading System 2 expands carbon pricing to additional sectors, especially road transport and buildings.

The European Union Emissions Trading System 2 introduces a separate emissions market focused primarily on fuel consumption. Fuel suppliers must purchase emissions allowances based on the carbon emissions generated by fuels placed on the market.

This means that ETS2 road transport costs will gradually become embedded in diesel and fuel prices across Europe.

Although logistics companies do not directly purchase allowances in most cases, they will still experience the financial effects through:

• rising fuel prices
• higher carrier surcharges
• increased transport procurement costs
• stricter sustainability requirements
• growing reporting expectations from customers

EU ETS 2 logistics rules therefore affect the entire transportation ecosystem, not only regulated fuel distributors.

The Upstream System: Fuel Suppliers vs. Logistics Companies

One important detail is that EU-ETS 2 operates as an upstream system.

This means the primary compliance obligation falls on fuel suppliers and distributors rather than individual transport companies.

For fuel suppliers, ETS2 responsibilities include: 

• monitoring fuel volumes
• reporting emissions data
• purchasing emissions allowances
• participating in verification procedures
• complying with regulatory reporting deadlines

For fuel suppliers, ETS2 therefore creates direct compliance obligations, while for logistics companies, it is mainly a cost, procurement, and reporting issue. 

However, logistics companies still face indirect financial pressure because fuel costs are transferred through the supply chain.

For freight forwarders and carriers, this creates a new operational reality. Transport procurement, contract negotiations and customer pricing models must increasingly account for carbon-related costs.

This is why the EU Emissions Trading System is becoming a strategic logistics topic for both providers and shippers.

From nEHS to EU ETS 2: The Transition in Germany

Germany already introduced national carbon pricing through the nEHS system. Businesses operating transport fleets have therefore experienced rising carbon-related fuel costs for several years.

EU-ETS 2 does not replace this transition overnight. Instead, Germany will gradually move from the national framework toward the broader European system.

For logistics companies, the challenge is not only the regulatory change itself, but also overlapping pricing mechanisms during the transition period.

Businesses must monitor:

• national CO₂ pricing developments
• ETS2 road transport implementation timelines
• CO₂ toll increases
• carrier surcharge structures
• fuel-related procurement risks

The transition also creates uncertainty regarding long-term price development.

Under the national model, Germany used fixed carbon prices during the early phases. EU-ETS 2 introduces a market-based mechanism where allowance prices may fluctuate depending on supply and demand.

This makes forecasting future transport costs significantly more difficult.

EU ETS 2 logistics planning, therefore, requires more dynamic budgeting models and stronger transport cost monitoring processes.

The ETS2 Timeline: Key Deadlines and Transition Phases

The implementation of EU-ETS 2 will happen gradually rather than immediately.

For logistics companies, understanding the timeline is essential for operational planning and contract preparation.

2024–2026: The Preparation and Monitoring Phase

During the preparation phase, businesses across the transport sector must strengthen their monitoring and reporting capabilities.

Although the full carbon trading mechanism is not yet active, companies are already preparing for:

• emissions data collection
• fuel consumption tracking
• supplier reporting structures
• sustainability audits
• transport emissions calculations

This period is especially important because many logistics companies still lack centralized emissions data.

ETS2 monitoring, reporting, and verification processes require reliable operational information across multiple systems and transport partners.

Businesses that continue relying on fragmented spreadsheets may struggle to meet future compliance expectations efficiently.

The preparation phase also gives companies time to evaluate operational weaknesses and identify potential savings opportunities before carbon pricing becomes fully active.

2028: Full operation and price development 

According to the European Commission, EU-ETS 2 is now expected to become fully operational in 2028. The system was initially designed to start in 2027, but full emissions trading for buildings, road transport and additional sectors has been postponed by one year. This gives companies more time to prepare their data, contracts, and transport cost models.

For logistics companies, this does not mean that preparation can wait. Monitoring and reporting obligations for regulated fuel suppliers start before the full pricing mechanism becomes active, with emissions monitoring beginning in 2025 and verified reporting following in 2026. Fuel suppliers and distributors need to prepare emissions data, while logistics providers, freight forwarders, and shippers need to understand how these costs may move through the supply chain.

This will affect ETS2 for road transport and buildings mainly through fuel prices. In logistics operations, the impact may include:

• increasing diesel prices
• new carrier surcharges
• higher inbound and outbound logistics costs
• stronger pressure to optimize transport efficiency
• greater customer focus on emissions transparency

For EU ETS 2 logistics planning, 2028 should therefore be treated not only as a regulatory date but also as a pricing and procurement milestone. Companies should review fuel clauses, carrier surcharge models, contract terms, and transport budgets before the system becomes fully active.

The exact price development remains uncertain because EU-ETS 2 is market-based. Allowance prices may fluctuate depending on:

• energy market conditions
• political decisions
• allowance supply volumes
• economic growth
• fuel demand

This uncertainty is one of the major ETS2 risks for transport companies and supply chain operators. It also means that EU ETS 2 logistics teams need flexible cost models rather than one-time estimates. Transport budgets should include scenarios for different fuel and allowance price levels, especially for road freight with high diesel exposure.

At this stage, ETS2 compliance requirements apply primarily to regulated fuel suppliers and distributors. Still, logistics companies should prepare the data they need for contract negotiations, customer reporting and Scope 3 transparency. Without this visibility, ETS2-related costs may be difficult to separate from ordinary fuel, toll, and carrier surcharges.

This is also where EU Emissions Trading System logistics work becomes practical. Teams need to connect regulatory cost drivers with operational decisions such as routing, shipment consolidation, carrier selection, and customer pricing.

ETS2 Impact on Supply Chains and the Transport Sector

ETS2 impact on supply chains will extend far beyond fuel procurement.

Transport costs influence nearly every part of the supply chain, including warehousing, procurement, inventory management, and customer delivery pricing.

As carbon costs increase, companies may need to rethink:

• transport network structures
• warehouse locations
• supplier selection
• delivery frequency
• shipment consolidation strategies
• modal transport choices

ETS2 and its impact on European supply chains and industry will likely accelerate broader sustainability initiatives across logistics operations.

Businesses that already optimize transport efficiency may gain competitive advantages because they are less exposed to rising carbon-related expenses.

Companies with fragmented networks, low vehicle utilization, or inefficient routing structures may face significantly higher carbon cost exposure.

Focus on HGVs: The New Reality for Road Freight

Heavy goods vehicles will play a central role in ETS2 road transport discussions.

ETS2 trucks and long-haul freight operations rely heavily on diesel consumption, making them especially sensitive to carbon pricing.

ETS2 for HGVs creates several operational challenges:

• rising fuel-related operating costs
• increasing pressure to improve vehicle utilization
• stronger customer expectations regarding emissions reporting
• growing demand for lower-emission transport options

Large logistics providers are already investing in:

• electric trucks
• HVO100 fuels
• LNG and bio-LNG fleets
• route optimization technologies
• telematics and fuel monitoring systems

However, fleet transformation requires major investments and cannot happen immediately.

This means ETS2 trucks will continue facing increasing cost pressure during the transition phase.

For many companies, operational efficiency improvements may therefore deliver faster short-term savings than full fleet electrification.

ETS2 Risks: Financial burdens and carbon costs in transport

One of the biggest challenges of EU-ETS 2 logistics is uncertainty. Many companies know that transport costs will increase, but they still underestimate how quickly carbon pricing can affect daily operations and long-term profitability.

The financial impact will not be limited to fuel alone. ETS2 road transport costs will influence the entire supply chain. Fuel suppliers and carriers are expected to pass additional costs down the chain, which means manufacturers, wholesalers, and online retailers will eventually face higher inbound and outbound logistics expenses.

For logistics-intensive businesses, even small increases per kilometer can become significant over thousands of shipments.

The main ETS2 risks for transport companies include:

• rising diesel and fuel prices
• higher subcontractor and carrier rates
• increased volatility in transport budgeting
• pressure on margins in fixed-price contracts
• growing customer expectations regarding sustainability reporting
• additional reporting and compliance workloads

A major challenge is that carbon costs in transport will not remain stable. Unlike fixed toll systems, allowance prices under the European Union Emissions Trading System 2 can fluctuate depending on market conditions, political decisions, and energy demand.

This makes long-term planning more difficult. Companies that negotiate annual freight contracts without considering ETS2 exposure may suddenly face substantial cost gaps several months later.

Businesses should therefore avoid treating ETS2 as a purely environmental topic. In practice, it becomes a financial and operational management issue.

ETS2 cost calculation and its interplay with the CO₂ toll

For many companies, ETS2 cost calculation will become one of the most important new tasks in transport control.

The total impact usually includes several components:

This is especially relevant for ETS2 trucks and HGV fleets operating across Germany and neighboring EU markets.

Many businesses already pay the German CO₂ toll for heavy goods vehicles. With EU-ETS 2, companies may effectively face two parallel carbon-related cost mechanisms at the same time. One affects road toll pricing. The other affects fuel-related emissions pricing through suppliers.

As a result, companies should avoid analyzing each surcharge separately. A combined transport cost view is necessary.

Example:

A carrier may continue offering the same base freight rate, while simultaneously adding:

• fuel adjustment factors
• ETS2-related surcharges
• CO₂ toll surcharges
• peak season surcharges

Without transparent freight control, the total increase can remain hidden until costs become structurally higher.

This is why many companies now integrate ETS2 cost calculation into broader transport analytics and procurement planning. The goal is not only to estimate future expenses but also to identify where emissions and costs can realistically be reduced.

ETS2 regulations and compliance: The MRV cycle in practice

The ETS2 regulations introduce new monitoring and reporting obligations across the fuel and transport ecosystem. Although the formal compliance responsibility mainly applies to fuel suppliers and distributors, logistics companies still need reliable transport and emissions data to manage contracts, costs, and customer reporting requirements.

For many businesses, this creates a new operational reality: sustainability data becomes part of everyday logistics management.

A central element of the regulatory framework is the MRV cycle — monitoring, reporting and verification.

In practice, ETS2 monitoring reporting verification means that emissions-related data must be:

1. collected consistently
2. documented transparently
3. verified according to regulatory standards
4. stored in an auditable format

Even companies without direct allowance obligations may still need emissions transparency for:

• carrier negotiations
• customer reporting
• CSRD and Scope 3 reporting
• procurement processes
• sustainability audits

This is why ETS2 compliance requirements increasingly affect freight forwarders, logistics providers, and shippers throughout the supply chain.

Monitoring plan, verification, and allowance management

The monitoring process starts with structured data collection.

Typical data sources include:

• fuel consumption records
• shipment volumes
• route and mileage data
• telematics systems
• carrier invoices
• transport management systems (TMS)

Companies then use this information to estimate emissions exposure and monitor how carbon-related costs develop over time.

Under the European Union Emissions Trading System 2, allowance management becomes especially important for fuel suppliers that are ETS2 participants. However, logistics companies also need visibility into how these costs influence freight pricing structures.

Verification is another critical step.

Incorrect or inconsistent emissions data may create:

• reporting errors
• disputes with customers or carriers
• Inaccurate Scope 3 calculations
• budgeting problems
• compliance risks

Manual spreadsheets are rarely sufficient once transport volumes increase. Data often becomes fragmented across ERP systems, carrier portals, and external spreadsheets.

This is one reason why EU Emissions Trading System logistics processes increasingly rely on centralized digital platforms. Automated data collection and standardized reporting help reduce errors and improve transparency across all transport flows.

For many logistics teams, the biggest challenge is not only regulatory compliance itself. The real challenge is creating a consistent data structure that supports operational decisions, procurement strategy, and sustainability reporting at the same time.

How can logistics companies reduce ETS2 costs?

Many companies cannot fully avoid ETS2-related cost increases. However, they can significantly reduce their exposure through better planning, smarter procurement, and more efficient transport operations.

The key objective is not simply to react to rising costs after they appear. Companies should actively prepare and reduce exposure to ETS2 before surcharges become structurally embedded in freight rates.

This is especially important in EU ETS 2 logistics environments where margins are already tight, and transport costs fluctuate heavily.

The most effective reduction strategies usually combine:

• operational efficiency
• carrier management
• fuel optimization
• data transparency
• network redesign

Businesses that already analyze emissions and transport performance systematically will generally adapt faster than companies still relying on manual spreadsheets and fragmented data.

Alternative fuels, fleet optimization, and IT platforms

One important lever is fuel strategy.

Alternative fuels such as HVO100, bio-LNG or electric mobility can help lower emissions exposure in certain transport scenarios. Their economic viability depends on route structure, infrastructure availability, and vehicle type, but many companies already test them for regional or recurring transport routes.

Fleet optimization also becomes increasingly important for ETS2 trucks and HGV operations.

Companies can reduce emissions and fuel consumption by:

• improving route planning
• reducing empty miles
• increasing load utilization
• consolidating partial shipments
• avoiding unnecessary express deliveries
• using regional distribution hubs more efficiently

Even relatively small efficiency gains can noticeably reduce long-term carbon cost exposure.

Carrier selection also plays a growing role.

Businesses increasingly compare carriers not only by price and transit time, but also by:

• fuel efficiency
• fleet age
• emissions reporting quality
• alternative fuel usage
• sustainability targets

This shifts procurement discussions away from pure rate competition toward total transport performance.

Technology platforms are becoming essential in this process.

Modern TMS, BI systems, and logistics platforms help companies:

• monitor transport emissions
• compare carrier performance
• estimate ETS2-related surcharges
• automate reporting workflows
• centralize shipment and fuel data
• Identify inefficient transport patterns

Shipstage supports this transition by helping businesses manage carrier data, shipment flows, tracking information, and transport processes within one environment. Instead of collecting information manually from multiple systems, companies gain better visibility into operational costs and carrier performance across their logistics network.

This is increasingly important because EU-ETS 2 is not a short-term market fluctuation. It represents a structural shift in how transport costs are calculated and managed across Europe.

FAQ

When does ETS2 apply to transport companies exactly?

EU-ETS 2 is now expected to become fully operational in 2028. However, many preparation, monitoring, and reporting activities start earlier. For logistics companies, the direct allowance obligation usually remains with fuel suppliers and distributors, but the cost impact can appear through fuel prices, carrier surcharges, and contract adjustments. Logistics businesses should therefore prepare their data, procurement models, and customer communication before the first full pricing effects appear. 

Are there exemptions for small logistics enterprises (SMEs)?

The direct compliance obligations mainly apply to fuel suppliers and distributors. Smaller logistics companies may not participate directly in allowance trading, but they will still experience indirect cost increases through fuel pricing and carrier surcharges.

How is cross-border transport (EU to non-EU) treated under ETS2?

Cross-border transport rules depend on the regulatory scope and fuel consumption within EU territories. Companies involved in international transport should monitor future regulatory guidance carefully because implementation details may evolve further.

Can freight forwarders add ETS2 costs to existing contracts?

Many logistics providers are already discussing carbon-related surcharges and adjustment clauses. Whether costs can be transferred depends on contract structures, customer agreements, and pricing conditions.

Do ETS2 data help freight forwarders with Scope 3 reporting (CSRD)?

Yes. ETS2 monitoring, reporting, and verification processes often improve emissions transparency overall. This can support broader sustainability reporting requirements, including Scope 3 emissions calculations under CSRD frameworks.

Are biofuels (e.g., HVO100) also subject to the ETS2 surcharge?

The treatment of biofuels depends on the specific regulatory framework and emissions classification. Certain lower-emission fuels may reduce carbon exposure compared with conventional diesel, but businesses should verify the exact regulatory treatment and sustainability certification requirements.