Clean Air Task Force and CONCITO collaborate on new frontiers of emissions trading in the European Union
“Emissions trading remains at the heart of the EU’s climate agenda, but to-date has been primarily focused on 2030 targets – important, but ultimately only interim goals on the route to neutrality,” said Eadbhard Pernot, Policy Manager, Carbon Capture at CATF. “We’re aiming to explore the ‘endgame’ of emissions trading in the EU, exploring new frontiers for emissions trading such as integration of carbon removals and the climate impact of biomass use.”
The EU is not currently on track to deliver on its ambition to become climate neutral by 2050 at the latest. Despite several sets of climate and energy proposals from the European Commission for 2030, including Fitfor55 and REPowerEU, new policies and perhaps even a revamp of the climate architecture at large is needed to get the EU all the way to net-zero and ultimately net-negative. It will also have to quickly present proposals that accelerate the EU’s efforts to reach upcoming climate targets post-2030.
Emissions trading has proven its worth as a key climate policy instrument, fostering green innovation and applying the polluter pays principle. As emissions trading plays a pivotal role in achieving climate neutrality, a discussion on its 'endgame' has emerged, addressing issues such as price volatility, policy uncertainty, and new frontiers like the integration of carbon removals and the climate impact of biomass use.
"Making emissions trading fit for net-zero and net-negative thereafter is a big task with many unsolved questions,” said Martin Birk Rasmussen, Project Manager at CONCITO. “It is critical that the policy design ensures the environmental integrity of the system and delivers strong and credible incentives for emissions reductions.”
The collaborative project aims to address these critical issues and recommend solutions for a climate-proof, effective, and environmentally sound EU ETS. The focus will include topics such as the integration of industrial carbon removals, carbon pricing of biomass, and the management of carbon capture and utilization. The activities and outputs are planned and timed to support the next proposal to revise the EU ETS. Topics of the collaboration will include:
- Possible integration of industrial carbon removals in the ETS
- Management of carbon capture and utilization
- Management and carbon pricing of biomass use
The findings of the project will not only impact EU policies but will also provide insights for designing emissions trading systems outside the EU. Engagement with key international stakeholders and participation in international fora will ensure a global perspective.
The project will be officially launched with organized physical workshops, roundtables, and trips to Brussels for stakeholder engagement. An advisory board featuring leading NGOs, think tanks, and academics will provide valuable insights, ensuring the relevance and credibility of policy recommendations.
CATF and CONCITO are committed to delivering meaningful contributions to the EU's climate objectives and look forward to shaping the future of emissions trading through this collaborative effort.
CONCITO's part of the work is funded by the VELUX Foundations.
