How are we going to fix the EU’s Emissions Trading System?

The EU’s Emissions Trading System must be become much more effective.

This is what we need to fix:

  • The number of CO2 emission permits to be annually put in circulation should be reduced in an accelerated pace;
  •  The price of pollution permits needs to go up to meet the Paris goals;
  • We should phase out the free allocation of CO2 emission permits to industries whose international competitiveness is not jeopardised.

Europe can improve EU’s Emissions Trading Scheme by: 

  • Increasing the Linear Reduction Factor (annual amounts of allocation of emission permits) in accordance with our stricter obligations pursuant to the Paris agreement;
  • Phasing out free allocation from the EU ETS and replace it with a so-called carbon border tax, which dictates companies to pay a tax for importing products from countries with less stringent climate regulations.

Member states can improve EU’s Emissions Trading System by:

  • Implementing a national carbon floor price for all industries that deal with emissions;
  • Cancelling permits when the production capacity of renewable energy increases to avoid a further increase in the oversupply of permits.
  • Closing coal-fired power stations in an accelerated pace and cancelling the corresponding permits to offset the indirect waterbed effects.


Emission trading