EU greenhouse gas emission trading scheme

The Committee considers the European Union's Emissions Trading System (EU ETS) to be a key instrument in EU climate and energy policy for reducing the EU's industrial emissions, and, therefore, calls for its genuine reform aimed at achieving both the EU's climate objectives for 2020 and 2030 while safeguarding our industrial competitiveness and avoiding investment leakage. The EESC supports the proposal to establish a market stability reserve at the beginning of the next ETS trading period in 2021, as a possible measure to deal with post-2020 ETS price volatility.

The EESC calls for:

• predefined automatic adjustment mechanisms able to withstand serious shocks with no margin for discretion or interference;
• system transparency, predictability and simplicity;
• limited transition costs;
• predictable investment prospects;
• certainty of stable objectives over the long term;
• use of the proceeds of auctions to support businesses during the transition towards a CO2-free economy and the development and application of clean technologies;
• appropriate and innovative support measures for energy-intensive manufacturing sectors;
• greater strategic clarity at European and world level.

The Committee points out that industry is constantly engaged in an on-going process of innovation to reduce energy consumption and increase energy efficiency, although it is clear that the distortions of the ETS market, with excessive reductions in the price of carbon, may make it more difficult to boost sustainable scientific and technological innovation.

The Committee believes that revision of the ETS from 2021, forming a part of the new 2030 framework for climate and energy should be closely linked to use of the Horizon 2020 programme and coordination of national programmes, in order to speed up a relaunch of sustainable technological innovation. The aim would be to safeguard industrial competitiveness in Europe by promoting new and better industrial locations.