EU Emissions Trading System (EU ETS)

ERCST has been working on the EU ETS for the last few years and its work can be subdivided into four different strands:

  1. 2021 State of the EU ETS Report
  2. Preparing the review of the EU ETS Market Stability Reserve
  3. Funding Mechanisms in Phase 4 of the EU ETS

The Report is intended as a “snapshot”, and independent contribution to the policy debate, providing policymakers and stakeholders with an overview of how the EU ETS is doing by April of each year, based on previous year data.

In 2021, the sixth annual report will be produced produced together with the Wegener Centre on Climate and Global Change, BloombergNEF and EcoAct. In addition to the report, the project aims to bring together small groups of stakeholders deeply involved in EU ETS discussions, through meetings held in Brussels and in other EU Member States.

The following sub-work stream is aimed at bringing together stakeholders on a regular basis to discuss the most important issues on the table for the EU ETS revision.

During this first stage of the revision process (leading up to the Commission’s proposal expected in June), ERCST’s approach to the EU ETS revision will involve a number of strands, including:

  • Accompanying the Commission’s process by organising stakeholder meetings on the different feedback opportunities
  • Organise activities on some of the core topics of the ETS revisions
    • Carbon pricing in other sectors;
    • Policy overlap and supply-demand balance, including MSR review
    • The story for industry and carbon leakage protection;
    • Flexibility mechanisms;
    • Division and use of revenues; and
    • Long-term visibility and predictability

The revision for the fourth phase of EU Emissions Trading System (2021-2030) introduced a number of important changes concerning funding mechanisms in the system.

ERCST, together with CEEP, have been working together on this topic 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.

In 2021, ERCST will continue to monitor the implementation process of these funding mechanisms, and timely contribute to the process and ongoing debate. Some key developments in 2021 that will be analysed include: how the revision of the EU ETS will impact the funding mechanisms; the results of the Innovation Funds’ calls for proposals; and the results from the Modernisation Funds’ Investment Committee’s biannual meetings.

CONTACT

Stefano Cabras (scabras@ercst.org)

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