The European Commission has unveiled its carbon market reform, which is the cornerstone of its climate policy. It aims to balance decarbonization with competitiveness, but its impact on emissions is already a matter of debate.
On July 17, the European Commission unveiled its long-awaited proposal to reform the EU’s main climate policy, the Emissions Trading System (ETS).
The reform came after a fierce tug-of-war between those who insisted on softening emissions reduction measures and those who wanted to keep legally binding climate change targets within reach.
These goals include a goal to reduce 90% of net emissions in the EU by 2040 and a goal to reduce emissions to zero by 2050.
Since 2005, the ETS has been setting an annual limit on carbon emissions in sectors such as heavy industry, aits for every ton of carbon emissions. It also sets an annual limit on the maximum allowable emissions
Presenting the proposal, which EU countries and MEPs will now have to discuss, Climate Commissioner Vopke Hoekstra said that the revised law allows the EU to firmly adhere to the climate target for 2040.
However, just a few hours after the Commission’s plan was presented, it provoked the fury of environmental NGOs, who condemn the weakening of climate ambitions in the name of competitiveness.
Is it 90% suitable or not?
A Commission representative said it was “not easy” to determine exactly how much the ETS would contribute to achieving the 2040 climate target.
A company representative estimated that between its launch in 2005 and 2040, the ETS system will reduce emissions by 85-87%, taking into account how carbon sequestration technologies can contribute to this.
According to these estimates, the ETS should provide approximately 45% of the total emissions reductions required in all sectors between 1990 and 2040 in order for the EU to meet its commitments. The goal is for 2040.
However, based on its own modelling, consulting firm Climact stated that the EU may not achieve its 2040 target, as the proposed revision would only reduce emissions from ETS sectors by 80% by 2040 compared to 2005.
Emission reduction forecasts are difficult to make because they are based on carbon prices, which themselves depend on a changing market. Prices vary depending on factors such as the number of emission permits in circulation, the number of those held in reserve or issued free of charge.,
