The European Commission has been running a public consultation and call for evidence on the design of the EU ETS and the Innovation Fund. Both are open until 8 July 2025. Questions include the treatment of aviation, shipping, indirect cost compensation, the CBAM, extension to municipal waste, carbon removals and carbon utilisation.
Our main messages:
-
Simplify the EU ETS by phasing out free allocation
-
Aviation: put a seat belt on EUA supply
-
Free allocation: switch from process to products
-
Link indirect cost compensation to carbon-free electricity only
-
Reform the Innovation Fund to:
– Better assess the carbon footprint of electricity use
– Reserve grants to technology risk
– Reserve scale-up subsidies to poorly capitalised sectors -
Market Stability Reserve: reduce the reinjection rate as well as thresholds
-
Keep carbon removals out of the ETS
-
Do not shift CCU carbon accounting down value chains
-
Limit linking with other ETS
Read More:
Feedback on the inclusion of permanent CCU in the EU ETS
Supply and demand in the EU ETS: It’s the hydrogen, stupid!
Learn about the supply and demand balance of the EU ETS through the end of its fourth phase in 2030, based on the latest market data and policy parameters. Are the results aligned with the EU’s target of a 55% reduction in emissions?