The European Commission has introduced a proposed reform of the Emissions Trading System to align with the 2040 climate goal, sparking debate over industrial competitiveness and the future of carbon markets. <\/p>\n
On July 17, the European Commission presented a proposal to reform the EU’s Emissions Trading System (ETS). The system requires participants to surrender one allowance for every ton of greenhouse gases emitted. These changes are essential to meeting the 2040 climate target, which aims to reduce emissions by 90 percent compared to 1990 levels.<\/p>\n
The reform covers power generation, industry, and the maritime and aviation sectors. A separate framework, ETS2, governs light industry, land transport, and construction. Critics, however, express concerns regarding the potential loss of European industrial competitiveness.<\/p>\n
Expert Jakub Bednarek of Kancelaria Maruszkin notes that the Commission proposes softening the reduction factor from 4.3 percent to 3.7 percent starting in 2031, further decreasing to 1.7 percent by 2036. This will be balanced by allowing companies to purchase carbon removal credits and international reduction units.<\/p>\n
The use of international units under Article 6 of the Paris Agreement is controversial. While it eases decarbonization pressure in Europe and supports developing nations, there are significant concerns regarding the environmental integrity and human rights standards of these global projects.<\/p>\n
The proposal introduces new sectors to the ETS, including private aviation, which will now be subject to emission pricing regardless of the flight destination within a 5,000km radius. Small ships with a gross tonnage between 400 and 5,000 will also be brought into the system.<\/p>\n
Municipal waste incineration plants are also set to be included between 2031 and 2034. While these inclusions increase the carbon market’s scope, they impose additional administrative burdens and costs on the affected entities.<\/p>\n
Free emission allowances for industry will remain until at least 2040, but will be conditional. Starting in 2031, 80 percent of the allocation will depend on approved decarbonization investment plans, with the remaining 20 percent contingent on verified progress.<\/p>\n
The Commission also proposes extending the phase-out of free allowances for sectors covered by the Carbon Border Adjustment Mechanism (CBAM) until 2038. Additionally, the proposal aims to establish an Industrial Decarbonization Bank and strengthen the Innovation Fund to support low-emission technologies.<\/p>\n
Technical adjustments to the Market Stability Reserve (MSR) are planned, with the reserve threshold set to drop from 24 percent to 12 percent after 2028. This move aims to maintain market liquidity as the volume of available allowances shrinks.<\/p>\n
The proposal now moves to inter-institutional negotiations between the European Parliament and the Council. Industry representatives and environmental organizations have both voiced criticism, suggesting that the current draft serves as a delicate regulatory compromise.<\/p>\n","protected":false},"excerpt":{"rendered":"
The European Commission has introduced a proposed reform of the Emissions Trading System to align with the 2040 climate goal, sparking debate over industrial competitiveness and the future of carbon markets. Proposed ETS Reforms and Climate Targets On July 17, the European Commission presented a proposal to reform the EU’s Emissions Trading System (ETS). The […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"wpai_generated_summary":"","footnotes":""},"categories":[41],"tags":[],"class_list":["post-14633","post","type-post","status-publish","format-standard","hentry","category-expat-life"],"_links":{"self":[{"href":"https:\/\/bizonews.com\/pl\/wp-json\/wp\/v2\/posts\/14633","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bizonews.com\/pl\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bizonews.com\/pl\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bizonews.com\/pl\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/bizonews.com\/pl\/wp-json\/wp\/v2\/comments?post=14633"}],"version-history":[{"count":0,"href":"https:\/\/bizonews.com\/pl\/wp-json\/wp\/v2\/posts\/14633\/revisions"}],"wp:attachment":[{"href":"https:\/\/bizonews.com\/pl\/wp-json\/wp\/v2\/media?parent=14633"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bizonews.com\/pl\/wp-json\/wp\/v2\/categories?post=14633"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bizonews.com\/pl\/wp-json\/wp\/v2\/tags?post=14633"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}