With EU ETS 2 set to introduce carbon pricing for road transport fuels, transport emissions will increasingly become a cost consideration for shippers. Understanding this exposure is becoming an important part of freight procurement and decarbonization planning.
In this case study, we convert shipment-level Well-to-Wheel (WtW) emissions into Tank-to-Wheel (TtW) emissions and estimate the resulting ETS2 exposure in euros. The results provide a practical view of how carbon pricing may affect freight spending and where opportunities exist to reduce exposure.
Key Findings
The analysis reveals several important insights:
- On our client's Spain transport network, total ETS2 exposure exceeded €215,000 in Q2, equivalent to approximately €139 per shipment.
- ETS2 introduces a new transport cost that is expected to be passed through the value chain, ultimately increasing costs for shippers.
- While ETS2 costs are relatively small on a per-ton basis, they become material when applied across large shipment volumes and transport networks.
- Rail presents an opportunity to reduce freight cost ETS2 exposure, as it is not subject to ETS2
What Is ETS2 and Who Does It Apply To?
ETS2 is the European Union's new emissions trading system covering fuels used in road transport, buildings, and certain smaller industrial sectors. Unlike the existing EU ETS, which regulates emissions from large emitters, ETS2 places the compliance obligation on fuel suppliers. These suppliers must purchase and surrender emission allowances corresponding to the carbon emissions generated when their fuels are consumed. The resulting carbon cost is expected to be reflected in fuel prices and ultimately passed through the supply chain.
How the EU is Capping ETS2 Carbon Prices
To limit the impact on fuel prices, the EU has introduced a series of safeguards within ETS2. Most notably, additional allowances can be released into the market when carbon prices exceed €45/tCO₂ in 2020 prices, equivalent to roughly €55–60/tCO₂ in today's prices. Recent reforms strengthened this mechanism and extended it beyond 2030, reflecting the EU's intention to keep ETS2 prices predictable while maintaining a meaningful incentive to reduce emissions.
Client Overview: Q2 Road Freight Network in Spain
Our client ships perishable goods across Spain as part of its extensive worldwide logistics network. During the second quarter of 2026, 1,554 shipments took place:
- Total cargo transported reached 129.5 million tons
- Total distance traveled reached 519,833 km
- Total Well-to-Wheel emissions reached 4.84 million kg CO2e.
Calculate ETS2 Exposure
Step 1: Calculate Tank-to-Wheel Emissions
We use the diesel conversion factor to calculate Tank-to-Wheel emissions from Well-to-Wheel emissions. Overall, across the 1,554 shipments, total TtW emissions reached 3.72 million kg of CO2e in Q2.
The monthly distribution across Well-to-Tank and Tank-to-Wheel emissions is available in Figure 1.
Figure 1: Distribution of Well-to-Wheel emissions for the client's shipments to Well-to-Tank and Tank-to-Wheel emissions.
Step 2: Account for allowance cost
For this step, we assume that the EU’s initiatives to keep the prices close to €45, in 2020 prices, will be successful, and therefore prices will range between €55 and €60 per ton of emissions. For the ensuing calculations, we assume an allowance cost of €58 per ton.
|
Tank-to-Wheel Emissions (CO2e kg) |
ETS2 Exposure (€) |
|
|
April |
1,529,280 |
88,698.26 |
|
May |
928,696 |
53,864.36 |
|
June |
1,261,604 |
73,173.05 |
|
Q2 |
3,719,580 kg |
€215,736 |
Figure 2 Tank-to-Wheel Emissions and subsequent ETS2 exposure, assuming an allowance cost of €58 per ton emitted.
Passed down cost assumptions
The €215,736 cost exposure directly affects the fuel suppliers that will need to surrender those allowances. The cost is expected to be passed down to carriers at the pump and, thereafter, to shippers through higher transportation costs.
The actual costs shippers will face due to ETS2 can’t be calculated at this point, but, as with fuel-related surcharges in the shipping industry, the passed-down cost in many cases exceeds the nominal exposure.
How Shippers Can Reduce ETS2 Exposure
1. Shipment execution data
Shippers need access to shipment execution data to perform accurate emissions and cost calculations based on actual transport activity rather than carrier averages. Carrier-applied surcharges are often calculated using standardized assumptions, which may not reflect a shipper’s true emissions footprint. Detailed execution data enables companies to determine their actual cost exposure under emissions-related regulations and accurately assess emissions per ton of cargo transported.
2. Capitalizing on mode shift opportunities
Shippers can reduce both emissions and regulatory cost exposure by identifying opportunities to shift freight from road to rail. Rail freight transport typically generates a fraction of the emissions associated with road freight and is not subject to ETS2-related costs. Leveraging rail freight where operationally feasible can therefore support decarbonization objectives while lowering overall transportation costs.
3. Shipment consolidation and load optimization
Increasing vehicle utilization through shipment consolidation can significantly reduce both transportation emissions and ETS2-related costs. By analyzing shipment-level execution data, shippers can identify opportunities to combine loads, improve load factors, and eliminate unnecessary truck movements across their network. Fewer trips mean lower fuel consumption, lower emissions, and ultimately lower ETS2 costs passed through by transport providers, while maintaining required service levels.
ETS2 and the Shift to Data-Driven Freight Procurement
ETS2 marks a significant shift in how transport emissions are accounted for within supply chains. While the carbon cost per shipment may appear modest in isolation, this case study demonstrates how ETS2 exposure can quickly accumulate across large freight networks, creating a meaningful new cost component for shippers. For our client, ETS2 exposure exceeded €215,000 in a single quarter, highlighting the financial implications of transport emissions beyond traditional sustainability reporting.
As ETS2 implementation progresses, emissions data will increasingly become a procurement and cost-management tool rather than solely a reporting requirement. Companies that can accurately measure shipment-level emissions and understand their exposure will be better positioned to evaluate carrier surcharges, forecast future transport costs, and identify effective decarbonization strategies.
The findings also reinforce the value of modal optimization. By leveraging detailed shipment execution data and exploring opportunities to shift freight from road to rail, shippers can simultaneously reduce emissions, limit ETS2-related cost exposure, and build more resilient transportation networks. In an environment where carbon carries an increasingly tangible price, emissions visibility is becoming a key driver of both sustainability performance and commercial competitiveness.
Is VesselBot Right for your ETS2 Exposure?
ETS2 is adding a new layer of complexity to freight management, making emissions visibility and transport data more valuable than ever. VesselBot’s Logistics Intelligence Platform is designed for shippers and logistics teams that need to understand, quantify, and manage the financial impact of transport emissions across their supply chains.
VesselBot’s platform is particularly valuable for:
- Large shippers with extensive road transport networks seeking to quantify ETS2 exposure and understand how carbon costs may affect freight budgets.
- Procurement and logistics teams looking to evaluate carrier surcharges against actual shipment activity and emissions performance.
- Sustainability and decarbonization leaders who need accurate, shipment-level emissions data to support reporting, target setting, and emissions reduction initiatives.
- Companies exploring modal shift opportunities and requiring data-driven insights to identify routes where rail can reduce both emissions and ETS2-related costs.
- Organizations preparing for future carbon regulations and aiming to build greater transparency, resilience, and cost control into their transportation operations.
By combining shipment execution data, emissions calculations, and actionable analytics, VesselBot helps organizations move beyond estimates and gain a clear understanding of both their environmental footprint and their growing exposure to carbon-related transportation costs. As emissions increasingly translate into direct financial impact, data-driven decision-making becomes a competitive advantage.
ETS2 FAQ
What is ETS2 and how does it differ from the existing EU ETS?
ETS2 is the European Union’s new emissions trading system covering fuels used in road transport, buildings, and certain smaller industrial sectors. Unlike the existing EU ETS, which regulates emissions directly from large emitters, ETS2 places the compliance obligation on fuel suppliers, who must purchase emissions allowances for the fuels they sell.
Will shippers have to purchase ETS2 allowances directly?
No. The obligation to purchase allowances rests with fuel suppliers. However, the associated carbon costs are expected to be reflected in fuel prices and passed down through carriers to shippers, increasing transportation costs across the supply chain.
How can a shipper estimate its ETS2 exposure?
ETS2 exposure can be estimated by calculating the tank-to-wheel (TtW) emissions associated with transport activity and applying an assumed carbon allowance price. Accurate shipment execution data is essential to determine actual emissions and avoid relying solely on industry averages.
Why are Tank-to-Wheel (TtW) emissions used for ETS2 calculations instead of Well-to-Wheel (WtW) emissions?
ETS2 applies to the emissions generated when fuel is consumed. Therefore, only Tank-to-Wheel (TtW) emissions are relevant for calculating allowance obligations and associated carbon costs. Well-to-Tank (WtT) emissions are not included within the ETS2 framework.
How significant will ETS2 costs be for shippers?
The impact will vary depending on shipment volumes, transport distances, and modal mix. While the cost per shipment may appear relatively small, it can become substantial when aggregated across thousands of shipments and large transport networks, as demonstrated in this case study.
Can ETS2 costs be reduced?
Yes. Reducing transport emissions directly lowers ETS2 exposure. Companies can achieve this through route optimization, improved load utilization, collaboration with lower-emission carriers, alternative fuels, and shifting suitable freight from road to rail.
Is rail transport subject to ETS2?
No. Rail transport is not covered by ETS2 in the same way as road transport fuels. As a result, rail can provide both emissions reductions and protection from ETS2-related fuel costs where operationally feasible.
How can VesselBot help companies prepare for ETS2?
VesselBot provides shipment-level transport emissions data and analytics that enable companies to quantify ETS2 exposure, validate carrier surcharges, identify emissions reduction opportunities, evaluate modal shift scenarios, and make more informed freight procurement decisions.
Why is shipment execution data important for ETS2 planning?
Carrier surcharges and emissions estimates are often based on standardized assumptions. Shipment execution data allows companies to calculate emissions and cost exposure based on actual transport activity, creating greater transparency and supporting more effective cost management and decarbonization strategies.
What should companies do now to prepare for ETS2?
Organizations should begin measuring transport emissions at a granular level, assess their potential ETS2 exposure, engage with carriers regarding future surcharge mechanisms, and identify opportunities to reduce road freight dependency through operational improvements and modal optimization.
Sources
- ETS2: Buildings, road transport and additional sectors
- EU Emissions Trading System
- International Carbon Action Partnership/ EU ETS2
About the author Manos Charitos is Data Analyst at VesselBot, where he works with AIS-tracked voyage data, digital twin models, and shipment-level execution records to measure and interpret maritime emissions across global supply chains. The analysis in this article is his own work, drawn from 2025 voyage data across all major carriers. His background combines Mathematics and Shipping, giving him both the quantitative foundation to model emissions at the voyage level and the operational context to understand what those numbers mean for shippers making carrier and routing decisions.