Post-2020 reform of the EU Emissions Trading System

Briefing 27-06-2016

In July 2015, the European Commission proposed a reform of the EU Emissions Trading System (ETS) for the period 2021-30, 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 takes the lead on the proposal, while it shares competence with the ITRE Committee on some aspects. The draft report was presented on 31 May 2016, the deadline for amendments has been set to 28 June 2016, and both Committee votes are expected by December. This briefing updates an earlier edition, of March 2016: PE 579.092. A more recent edition of this document is available. Find it by searching by the document title at this address: