The Green Tank co-signs an open letter on the EU ETS revision ahead of European Parliament’s Committee on Industry, Research and Energy meeting (April, 20-21 2022). Civil society organizations call on ITRE to vote for an ambitious revision to make the EU’s carbon market an effective tool driving industrial transformation to contribute to EU 2030 climate target and European Green Deal objectives.
As they point out, to achieve this objective, the ETS directive must provide a strong price signal. Thus, the hand out of free allocation of EU ETS allowances to industry must be gradually phased out. Instead, all ETS allowances must be auctioned and the substantial amounts of additional revenues raised must be recycled into more effective climate action.
In the wake of the latest IPCC report urging us to act now to keep temperature rise to 1.5°C as well as the tragedy of the ongoing war in Ukraine further underlining the need to accelerate Europe’s shift towards ending dependence on fossil fuels, the Organizations highlight five points that will lead to an ETS that promotes climate goals and industry needs in equal measure:
- Phase out free allocation of ETS allowances as soon as possible.
- Reinvest additional auctioned EU ETS allowances to support the green transition and address investment gaps.
- No free allocation to sectors covered by CBAM, and no Carbon Leakage Protection Reserve.
- Support strengthened benchmarks and earlier revision.
- Create a comprehensive and holistic policy framework.
The letter is available here.