ETS revision - Stakeholder Consultation

On 14 January 2016 the COMMISSION STAFF published its WORKING DOCUMENT on STAKEHOLDER FEEDBACK on the revision of the Directive 2003/87/EC to enhance cost-effective emission reductions and low-carbon investments.

The Commission proposal contains the main three objectives:

  • Increasing the pace of emission reduction: the cap (overall number of emission allowances) will decline at an annual rate of 2.2% from 2021 onwards, compared to the current 1.74%.
  • Making carbon leakage rules more targeted: revising the system to focus on the approximately 50 sectors at highest risk of relocating their production outside the EU due to climate policies (carbon leakage), setting aside a considerable number of free allowances for new and growing installations, ensuring better alignment between free allocation and production figures, updating benchmarks to reflect technological advances since 2008.
  • Funding for low-carbon innovation and energy sector modernisation: support mechanisms will be established to help the industry and power sectors meet the innovation and investment challenges of the transition to a low-carbon economy. The Innovation Fund will extend existing support for the demonstration of innovative technologies in renewable energies and carbon capture and storage (CCS) to innovation in industry. The Modernisation Fund will facilitate investments in modernising the power sector and wider energy systems and boosting energy efficiency in 10 lower-income Member States. The derogation from full auctioning allowing the optional handing out of free allowances to modernise the power sector in these lower-income Member States will also continue to be available.[1]

[1] COMMISSION STAFF WORKING DOCUMENT STAKEHOLDER FEEDBACK on the Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directive 2003/87/EC to enhance cost-effective emission reductions and low-carbon investments {COM(2015)337 final}, Page 1