ERCST-CEEP paper: the role of the EU ETS funding mechanisms in financing the European Green Deal

Date: 16 November 2020

Author(s): Andrei Marcu, Mariusz Kawnik, Domien Vangenechten and Angelina Bartosik

The ERCST in cooperation with Central Europe Energy Partners (CEEP) have been working together on the topic of the EU ETS funding mechanisms for the last few years, aimed at facilitating a debate within and between Member States on how to successfully operationalise and utilise the EU ETS funding mechanisms, deepen the common understanding of the regional financing needs and priorities and provide regular updates to stakeholders through papers and workshops.

Following up to the event organised at the end of October, this paper seeks to provide an overview of developments and regulatory decisions made in 2020 for the four EU ETS funding mechanisms, i.e. the Solidarity Provision, Article 10c Derogation, the Modernisation Fund, and the Innovation Fund.

In addition, this paper assesses how the size of the EU ETS funding mechanisms will be impacted under different scenarios. It shows how developments like a recalculation of the cap following Brexit, or an increase in the 2030 target, would affect the amount of allowances available under the EU ETS in phase 4, and under the individual funding mechanisms in each Member State.


Previous papers
(2018) Funding Mechanisms in the fourth phase of the EU ETS: Exploring what is known and identifying issues for clarification and discussion;
Implementation of the funding mechanisms in the fourth phase of the EU ETS: state of play