The new EU Emissions Trading System, ETS 2, covers emissions from buildings, road transport, and additional sectors such as fuel use in small industrial installations. It’s designed to reduce emissions by 42% by 2030 compared to 2005 levels. Florian Schlennert, Simon Göss and Hendrik Schuldt at carboneer describe how it works, and what firms must do to comply. Comprehensive monitoring, reporting, and verification (MRV) must be implemented at the … [Read more...]
EU ETS: what happens when rising Carbon Prices start to hurt low income groups?
The main purpose of the EU Emissions Trading System (EU ETS) is to put a price on emissions and generate revenues from companies buying allowances for creating those emissions. Right now energy, manufacturing and aviation are covered. From 2027, maritime transport will be added to the existing EU ETS, while buildings and road transport will be regulated in the upcoming ETS2. From then, nearly 80% of total EU emissions will be under the ETS and … [Read more...]
EU ETS2 for Buildings, Road Transport in 2027: why we need auctions to start early
The EU has established a second emissions trading system (ETS) to put a carbon price on buildings and road transport, the “EU ETS2”. The ETS2 starts in 2027, but monitoring and reporting of ETS2 emissions will begin in 2025. One issue is that an ETS means prices for long-term fuel supply contracts will be affected, so a crucial question for firms is how to hedge their potential exposure, says Ingo Ramming at BBVA writing for the Florence School … [Read more...]
Why we need a European Central Carbon Bank within the EU ETS framework
The EU Emissions Trading System (EU ETS) is at a critical juncture as it navigates a path towards achieving a net-zero Europe by 2050. Amidst this transformation, the proposal to create the European Central Carbon Bank (ECCB) has sparked a range of criticisms. Some critics have raised valid concerns about the feasibility, necessity, governance, and potential drawbacks of such an institution. Robert Jeszke and Sebastian Lizak at the Centre for … [Read more...]
The EU’s “Fit for 55” package: a primer on the EU ETS and other main policy levers
On July 14 the European Commission will present the much awaited “Fit for 55” legislative package. Lara Dombrowski and Simon Göss at Energy Brainpool have written a very useful primer on what’s at stake for the EU ETS, along with a summary of the other main policy levers that will be decided upon. The authors describe the EU ETS as the central instrument for reducing greenhouse gas emissions. It caps emissions for 10,000 power sector, industrial … [Read more...]
California learns even flexible Emissions Markets won’t guarantee price stability
In May, emissions allowance prices hit rock bottom in California. How can cap-and-trade work properly when prices are so volatile and difficult to predict? It makes life very difficult for businesses and investors, not to mention the state. Changes to the rules are being proposed to introduce more flexibility into the effective price floors, ceilings and the availability of allowances. But Severin Borenstein at the Energy Institute at Haas … [Read more...]
![](https://energypost.eu/wp-content/themes/dynamik-gen/images/content-filler.png)