ETS: EU makes the reduction in free emission allowances after 2030 more gradual
(Il Sole 24 Ore Radiocor) - The European Commission is proposing to make the reduction in free emission allowances more gradual after 2030, in an effort to support the competitiveness of industry without altering the EU’s climate targets. The review of the European emissions trading scheme provides for a linear reduction factor of 3.7 per cent between 2031 and 2035 and 1.7 per cent between 2036 and 2040, as well as the option to use up to 2 per cent of high-quality international credits in the final phase of the process.
Brussels also proposes to continue free allocation of allowances beyond 2030, subject, however, to investments in decarbonisation carried out in Europe, and to slow down the phase-out of free allowances for sectors covered by the Carbon Border Adjustment Mechanism by extending it until 2038.
The European Commissioner for Climate Action, Wopke Hoekstra, has rejected accusations that climate policy is being watered down. “Our climate ambition will increase over the next decade, not decrease,” he said, emphasising that the new trajectory is “fully consistent” with the EU’s target of reducing emissions by 90 per cent by 2040. According to Hoekstra, the difference compared with the current system is that “we are allowing for greater flexibility, but the money will have to be invested in Europe”, transforming the ETS into a driver of investment for industrial decarbonisation.
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