ETS revision: key issues addressed, but overall impact raises concerns

Commenting on the EU Emissions Trading System (EU ETS) revision announced by the European Commission today, BusinessEurope Director General Markus J. Beyrer said:

“It is important that the European Commission has recognised the urgent need to reform the EU ETS. The system needs to be adapted to reflect changing market realities and incentivise investments in decarbonisation without putting businesses at a competitive disadvantage. Decarbonisation has to happen in a way that acknowledges the competitive needs of companies and must not lead to further deindustrialisation.

The proposal announced by the European Commission today addresses key elements such as the pace of emission reduction and the phase-out of free allocations. However, as it presents concrete figures and details for these parameters for the first time, we now need to assess their implications together with our members in order to gauge the overall impact of the proposal.

Some aspects of the proposal already raise concerns. For example, new conditionalities for free allocations risk increasing bureaucratic complexity and the uncertain role for international carbon credits is unsatisfactory.”