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Tricky trade-offs: challenges for the future of the EU ETS

On 15 September 2020 the College of Commissions of the European Union (EU)预计将宣布加强欧盟的2030年脱碳目标– potentially to as much as 55% emission cuts relative to 1990.



  • Should the scope of activities covered by the ETS be expanded and, if so, how? How the EU will do this will have the most direct impact on the future carbon prices. Integrating new demand into the European carbon market has traditionally involved the expansion of supply as well – but questions remain about what volume of allowances to issue, or even if they should be issued at all.

  • Will the Market Stability Reserve still be required in its present form to address concerns over the strength of carbon price signals?创造了这种机制,以遏制2013 - 8年度碳价格抑郁的供过于求。然而,目前尚不清楚,在更雄心勃勃的ETS中,这是最担心的问题,许多人更关心未来的价格将升级。
  • 欧洲是否需要边境调整机制来保护其行业的竞争力?So far European industry has been protected against competition from importers not exposed to the carbon price through the allocation of free allowances. However, under a tighter cap not all industries can expect to receive the same level of protection as before. Can we expect an alternative mechanism to function better, while also not fundamentally affecting the supply-demand in the carbon market?


As we show in the table below, we assess that, all other things being equal, radical design revisions are more likely to deliver uniform progress across all sectors towards the EU’s wider decarbonisation objectives. However, bold changes are difficult to implement, so regulators and market participants must engage with each other urgently to deliver robust solutions that will be acceptable to all.

Potential impact of future ETS options
Potential impact of future ETS options



  • The debate around how to weave these issues into a more ambitious EU ETS is likely to last at least three more years. The decision by the EU’s College of Commissioners will be accompanied by the launch of the impact assessment for raising the 2030 climate target. This document will help inform the debate that will commence in the European Parliament and the Council once the Commission produces its formal Proposal to reform the ETS in the summer of 2021. This inter-institutional debate will likely last two years, during which period stakeholders will be able to inform their decision-makers how effects will emerge in European energy market and beyond as a result of the various possible permutations. We foresee that the resulting political compromise will be implemented from 2024 onward.

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主任,Afry Managem万博电竞竞猜ent Consulting

Alex Luta.