Implementation of the funding mechanisms in the fourth phase of the EU ETS: state of play 

18 October 2019

Author(s): Andrei Marcu, Maciej Jakubik, Domien Vangenechten and Michal Dlugosz

The revision for the fourth phase of the EU Emission Trading System (ETS), covering the period 2021 - 2030, introduced a number of changes concerning the funding mechanisms for climate and transition purposes in the system. Last year, ERCST and CEEP produced a paper on these funding mechanisms, which discussed their respective functioning, eligibility, size, explained how they are related to each other, and highlighted a number of issues and questions that should be addressed during the implementation phase. Since then, a number of new developments have taken place that are worth discussing.This paper:

  • provides an update on the state of play of the implementation process of the four funding mechanisms;
  • highlights some of the main takeaways from the stakeholder sentiment analysis; and
  • sheds light on the decisions made by eligible Member States regarding the use of Article 10c Derogation and the flexibility mechanism.