What is Needed in the EU’s 2030 Climate and Energy Framework

The document argues that the EU's 2030 framework must combine price-based instruments with structural and behavioural policies to drive decarbonisation. It suggests reforming the EU ETS to better signal long-term scarcity and phase out coal, introducing new auctioning and project-based mechanisms for non-ETS sectors to ensure liquidity and transformation resources, and establishing a streamlined governance mechanism for Member State coordination through national decarbonisation plans.

• The EU ETS is essential for decarbonising power and heavy industry by providing an economic case for low-carbon operations, a long-term scarcity signal for innovation, and auction revenues for complementary policies.
• The EU ETS is not a 'technology neutral' instrument because different technologies have different risk profiles; for example, renewable electricity is capital intensive with low operating costs, requiring complementary policies beyond carbon pricing.
• To effectively phase out coal and lignite in the power sector, the EU ETS requires a carbon price that makes fuel switching to gas economically viable, which is currently hindered by an excessive surplus of allowances.
• The proposed Market Stability Reserve (MSR) is deemed fundamentally incoherent in its current design because it begins too late (2021) and removes allowances too slowly (12% per year), meaning the optimal surplus size would not be reached until around 2026.
• To strengthen strategic decarbonisation, the document recommends increasing the ETS linear reduction factor from 1.74% to 2.2% per annum to align with a 40% GHG reduction target.
• Current anti-leakage measures are criticized for including sectors not at risk and for preventing carbon cost pass-through to consumers, which inhibits downstream innovation and investment in breakthrough technologies.
• For non-ETS sectors, the authors propose ex-ante auctioning of a small share of allowances (e.g., 2%) to Member States, which could raise 10-12 billion Euro between 2021 and 2030 and force strategic policy thinking.
• A project-based market mechanism is proposed for non-ETS sectors to allow the sale of emissions reductions to a central fund, increasing market liquidity and providing resources for Member States with lower financial capacity.
• EU structural funds should be leveraged to support national policies in non-ETS sectors facing market failures, specifically for transport infrastructure and deep building retrofitting programs.
• The document proposes a Governance Mechanism based on 'national deep decarbonisation plans' that are short (30 pages), updated every two years, and assessed by the Commission for internal and external coherence.

APA

Sartor, O., Spencer, T., Bart, I., Cochran, I., Colombier, M., Neuhoff, K., Szpor, A., Tuerk, A., & Wyns, T. (n.d.). What is Needed in the EU’s 2030 Climate and Energy Framework. Climate Strategies. https://climatestrategies.org/wp-content/uploads/2016/01/cs-iddri-eu-2030-framework.pdf

Chicago

Sartor, Oliver, Thomas Spencer, Istvan Bart, Ian Cochran, Michel Colombier, Karsten Neuhoff, Aleksander Szpor, Andreas Tuerk, and Tomas Wyns. What is Needed in the EU’s 2030 Climate and Energy Framework. Climate Strategies, n.d. https://climatestrategies.org/wp-content/uploads/2016/01/cs-iddri-eu-2030-framework.pdf.

Wikipedia

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BibTeX

@techreport{sartorndwhat, author = {Sartor, Oliver and Spencer, Thomas and Bart, Istvan and Cochran, Ian and Colombier, Michel and Neuhoff, Karsten and Szpor, Aleksander and Tuerk, Andreas and Wyns, Tomas}, title = {{What is Needed in the EU’s 2030 Climate and Energy Framework}}, institution = {Climate Strategies}, url = {https://climatestrategies.org/wp-content/uploads/2016/01/cs-iddri-eu-2030-framework.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }