Position Paper – ERCST’s feedback on the Commission’s Inception Impact Assessment for the review of the EU Emissions Trading System

This position paper was submitted in response to the feedback opportunity to the European Commission’s inception impact assessment (IIA) for the Revision of the EU Emissions Trading System (EU ETS).

In this paper, ERCST puts forward 6 issues that should be assessed in the Impact Assessment and addressed through the review:

1. Write a story for the decarbonisation of industry, incl. carbon leakage protection;
2. Address EU ETS policy overlap and supply-demand imbalance, incl. through the MSR and cap review;
3. Assess how to price carbon in other sectors and assess the articulation between ETS, ETD, CBAM and other instruments;
4. Assess the use of flexibility mechanisms such as domestic and international offsets;
5. Assess division and use of auctioning revenues; and
6. Ensure long-term visibility and predictability for market participants.