Trilogue Triangulation: Mapping the positions of the EU institutions on carbon market reform

The briefing maps the diverging positions of three EU institutions on the reform of the EU ETS, focusing on emissions reduction targets, the phase-out of free allowances via the Carbon Border Adjustment Mechanism (CBAM), and the funding of the Innovation and Modernisation Funds. While the European Parliament proposes a higher emissions reduction target of roughly 64% by 2030, the Environment Council maintains a more conservative approach to free allowances and fund sizes. Carbon Market Watch recommends a minimum 64% reduction target, a CBAM implementation by 2026, and the exclusion of fossil fuels and nuclear energy from the Modernisation Fund.

• The EU institutions diverge on the 2030 emissions reduction target for ETS sectors: the European Commission proposed 61%, the Environment Council backed this figure, and the European Parliament proposed a "roughly 64% reduction in emissions for the ETS sectors by 2030".
• There is disagreement over the phase-out of free allowances and the implementation of the Carbon Border Adjustment Mechanism (CBAM). The Commission proposed a 10-year transition reaching zero free allowances in 2035; the Parliament suggests a phase-out by 2032 but starting later in 2027; the Environment Council proposes a slower phase-out reaching zero in 2036, with sectors still receiving "70% of the current free allowances in 2030".
• The size of the Innovation Fund varies by institutional position. The Commission's proposal totals 899 million allowances between 2021 and 2030. The Environment Council's position would reduce this to "only 670 million allowances between 2021 and 2030" due to a slower phase-out of free allowances and redistribution to the Social Climate Fund.
• Regarding the Modernisation Fund, the Commission proposed increasing the fund's size and adding Greece and Portugal as beneficiaries. The European Parliament supported this and sought to exclude "funding to fossil fuel projects", whereas the Environment Council agreed to extra funds and more beneficiary countries but did not support the exclusion of fossil fuel projects.
• The European Commission and European Parliament both support making it "mandatory that 100% of ETS auctioning revenue is used for climate mitigation and adaptation", a position Carbon Market Watch argues should be reflected in the revised directive.

APA

Ruggiero, A. (2022). Trilogue Triangulation: Mapping the positions of the EU institutions on carbon market reform. Carbon Market Watch. https://carbonmarketwatch.org/2022/09/19/trilogue-triangulation-mapping-the-positions-of-the-eu-institutions-on-carbon-market-reform/

Chicago

Ruggiero, Agnese. Trilogue Triangulation: Mapping the positions of the EU institutions on carbon market reform. Carbon Market Watch, 2022. https://carbonmarketwatch.org/2022/09/19/trilogue-triangulation-mapping-the-positions-of-the-eu-institutions-on-carbon-market-reform/.

Wikipedia

{{cite report |last1=Ruggiero |first1=Agnese |title=Trilogue Triangulation: Mapping the positions of the EU institutions on carbon market reform |publisher=Carbon Market Watch |date=19 September 2022 |url=https://carbonmarketwatch.org/2022/09/19/trilogue-triangulation-mapping-the-positions-of-the-eu-institutions-on-carbon-market-reform/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{ruggiero2022trilogue, author = {Ruggiero, Agnese}, title = {{Trilogue Triangulation: Mapping the positions of the EU institutions on carbon market reform}}, institution = {Carbon Market Watch}, year = {2022}, month = sep, url = {https://carbonmarketwatch.org/2022/09/19/trilogue-triangulation-mapping-the-positions-of-the-eu-institutions-on-carbon-market-reform/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }