EU summit: leaders say, ‘The Commission should assess the impact of the ETS 2 system’. Zelensky in Brussels today
The final statement from the EU summit ‘reiterates the need to urgently ensure a well-functioning, transparent and predictable carbon market, to reduce the volatility of carbon prices and to mitigate their impact on electricity prices, whilst preserving the essential role of the ETS’
from our correspondent Beda Romano
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BRUSSELS – Gathered for a two-day meeting here in Brussels, the heads of state and government of the European Union are set to welcome Ukrainian President Volodymyr Zelensky today, Friday 16 October, against one of the most uncertain international backdrops. Yesterday, Thursday, the leaders held a heated debate on the energy crisis, highlighting deep-seated philosophical differences over how to tackle the current economic challenges.
Italia, along with some Eastern European countries, has fought against the ETS, the carbon emissions trading scheme. We are familiar with the principle behind this scheme: polluters must purchase emissions allowances. The aim is to encourage decarbonisation. The Meloni government considers the scheme too costly, particularly in the current economic climate. There are two markets. ETS 1 covers industrial activities and has been in place for over twenty years.
The ETS 2, on the other hand, will cover road transport and the property sector. Following an initial one-year postponement, it is now set to come into force in 2028. Italia and its allies have called for a postponement until 2030. Many countries have opposed this, particularly those in Northern Europe, which have made substantial investments to adapt to climate change and the energy transition. In particular, Sweden, Denmark and Finland. France and Germany are also reluctant to make changes to the existing framework.
Yesterday’s diplomatic negotiations led to the addition of a paragraph to the European Council’s conclusions: ‘The European Council calls on the Commission to update its assessment of all the impacts of the ETS 2 system, in particular with regard to its structure and the associated safeguard measures’. For the time being, therefore, there will be no postponement of its entry into force. In practice, Brussels will have to update its impact assessment, taking all factors into account.
The ETS 1 is currently undergoing reform following a proposal from the European Commission tabled before the summer recess. In this regard, the 27 Member States state: ‘The European Council calls on the co-legislators to speed up the ongoing legislative process concerning the market stability reserve, with a view to mitigating excessive price volatility’. Yesterday’s discussion also confirmed short-term measures, such as the extension of any state aid for companies hardest hit by the energy crisis.
