Post-2020 reform of the EU Emissions Trading System

28-11-2017

In July 2015, the European Commission proposed a reform of the EU Emissions Trading System (ETS) for the period 2021-2030, following the guidance set by the October 2014 European Council. The proposed directive introduces a new limit on greenhouse gas (GHG) emissions in the ETS sector to achieve the EU climate targets for 2030, new rules for addressing carbon leakage, and provisions for funding innovation and modernisation in the energy sector. It encourages Member States to compensate for indirect carbon costs. In combination with the Market Stability Reserve agreed in May 2015, the proposed reform sets out the EU ETS rules for the period up to 2030, giving greater certainty to industry and to investors. In the European Parliament, the ENVI Committee took the lead on the proposal, while it shared competence with the ITRE Committee on some aspects. After the European Parliament and the Council adopted their respective positions in February 2017, interinstitutional trilogue negotiations were concluded in November 2017. This briefing updates an earlier edition, of April 2017: PE 599.398.

In July 2015, the European Commission proposed a reform of the EU Emissions Trading System (ETS) for the period 2021-2030, following the guidance set by the October 2014 European Council. The proposed directive introduces a new limit on greenhouse gas (GHG) emissions in the ETS sector to achieve the EU climate targets for 2030, new rules for addressing carbon leakage, and provisions for funding innovation and modernisation in the energy sector. It encourages Member States to compensate for indirect carbon costs. In combination with the Market Stability Reserve agreed in May 2015, the proposed reform sets out the EU ETS rules for the period up to 2030, giving greater certainty to industry and to investors. In the European Parliament, the ENVI Committee took the lead on the proposal, while it shared competence with the ITRE Committee on some aspects. After the European Parliament and the Council adopted their respective positions in February 2017, interinstitutional trilogue negotiations were concluded in November 2017. This briefing updates an earlier edition, of April 2017: PE 599.398.