A letter from a group of energy companies is urging the European Council to improve the Emissions Trading System (ETS).
The organisations say since 2005, emissions in ETS sectors have fallen by around 50%, while the EU economy has grown by around 30%. The companies claim that this shows carbon pricing can drive emissions reductions cost-effectively, while supporting economic growth.
The group are calling for a predictable cap trajectory and rules-based market stability reserve which will stimulate demand for homegrown, clean energy sources and support industrial transformation.
The letter also says that at least 50% of ETS1 revenues should be reinvested into the decarbonisation of ETS1 sectors. It welcomes the Investment Booster, Industrial Decarbonisation and the Innovation Fund which can help turn the carbon price signal into concrete projects in Europe.
They suggest that there should be a better balancing on climate action and competitiveness alongside keeping decarbonisation and investment on “EU soil”.
This means that International carbon credits should not substitute for EU emissions reductions within the ETS or divert ETS resources away from Europe’s industrial transformation.
The letter says that getting the review right will allow for “opportunity and growth” for European energy.
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