On the 5th of February, EFIEES has submitted its answers to the European Commission’s questionnaire on updating the EU ETS.

We welcome the objective of this initiative, which aims to revise and possibly extend the EU ETS, in order to meet the renewed climate ambition for 2030 and the long-term goal of climate neutrality by 2050, while considering the need for a just transition and ensuring that all sectors contribute to the EU climate efforts in a fair and coordinated manner.

In particular, we support the introduction of a carbon price in the sectors that are currently not covered by emissions trading, notably the building sector, provided that such a scheme is properly designed and implemented, and that monitoring rules are reliable, while avoiding double-counting and heavy additional administrative burden.

In our answers to the questionnaire we stressed, among others, the following elements:

  • The main priority of this and related initiatives should be to establish a coherent carbon price across different sectors, to allow for a fair “burden sharing” and a real level playing field. Whether emissions trading for buildings were to be integrated into the existing EU ETS or into a new separate ETS, it would remain vital to have a level playing field among all the different heating and cooling solutions.
  • To achieve this, the synergies between available policy instruments (the ETS, the ESR, the ETD and the CBAM, for the external dimension) should be fully exploited and coherence between the different tools should be imperatively ensured. The future mechanism should, as much as possible, lead to a stable, predictable and progressive carbon price.
  • Hence, the review of the ETS and the review of the ESR need to be addressed in a coordinated and coherent manner, especially if we want both instruments to effectively contribute to the EU updated climate targets. The ESR is a tool of utmost importance when it comes to ensuring that Member States pursue committed national climate policies and thus ambitious energy efficiency measures. Its key role should not be overlooked when revising, and potentially extending the EU ETS (to building and transport sectors). A carbon pricing, in order to be effective, has indeed to be accompanied by the right regulatory tools.
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