Carbon Market Watch’s feedback to the European Commission’s consultation on “Climate change - updating the EU Emissions Trading System”

Carbon Market Watch argues that the European Commission's proposal to update the EU ETS is insufficient, specifically citing an inadequate emission reduction target and the failure to implement the polluter pays principle through continued free allowances. The organization advocates for a 70% emission reduction target by 2030, a more aggressive Market Stability Reserve (MSR) intake rate of 36%, and the immediate phase-out of free emission allowances. Further recommendations include expanding the ETS to cover all international shipping voyages and waste incineration, excluding Carbon Capture and Utilization (CCU) due to potential loopholes, and deleting Article 26 of the ETS Directive to allow binding greenhouse gas limits in industrial permits.

• The proposed EU-wide 55% emission reduction target is considered inadequate for the goals of the Paris Agreement and the EU Green Deal; Carbon Market Watch recommends upgrading this to 65%, and specifically suggests a "70% target for current ETS sectors (compared to 2005)" to address the climate crisis.
• The current proposal is criticized for neglecting the polluter pays principle by continuing "free handouts of emission allowances to large polluting industries," which the author claims leads to "windfall profits" and slows industrial decarbonisation.
• To improve the Market Stability Reserve (MSR), the document proposes increasing the intake rate to "36% from 2024 onwards," cancelling all allowances held in the MSR for more than 3 years, and ensuring MSR thresholds "decline to zero by 2030."
• The document argues against the inclusion of Carbon Capture and Utilisation (CCU) in the ETS, stating that the current language is "ambiguous" and could create "damaging loopholes" if products release carbon after their normal use.
• Regarding the shipping sector, the author recommends that companies surrender allowances for "100% of their verified emissions as of 2023" and that the geographic scope be expanded to "cover all international shipping emissions."
• The document calls for the deletion of Article 26 of the ETS Directive to enable the setting of "binding emission limits and energy efficiency standards in industrial permits" under the Industrial Emissions Directive.
• Carbon Market Watch suggests including Municipal Solid Waste incineration plants in the ETS, citing a study that estimates this would reduce CO2 emissions by "2.8 to 5.4 Mt per year in 2022 and 4.3 to 8.8 Mt per year in 2030."

APA

Carbon Market Watch (2021). Carbon Market Watch’s feedback to the European Commission’s consultation on “Climate change - updating the EU Emissions Trading System”. https://carbonmarketwatch.org/wp-content/uploads/2022/01/CMWs-feedback-on-the-EUs-revision-of-the-ETS.pdf

Chicago

Carbon Market Watch. Carbon Market Watch’s feedback to the European Commission’s consultation on “Climate change - updating the EU Emissions Trading System”. 2021. https://carbonmarketwatch.org/wp-content/uploads/2022/01/CMWs-feedback-on-the-EUs-revision-of-the-ETS.pdf.

Wikipedia

{{cite press release |author=Carbon Market Watch |title=Carbon Market Watch’s feedback to the European Commission’s consultation on “Climate change - updating the EU Emissions Trading System” |date=November 2021 |url=https://carbonmarketwatch.org/wp-content/uploads/2022/01/CMWs-feedback-on-the-EUs-revision-of-the-ETS.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{carbonmarketwatch2021carbon, author = {{Carbon Market Watch}}, title = {{Carbon Market Watch’s feedback to the European Commission’s consultation on “Climate change - updating the EU Emissions Trading System”}}, publisher = {Carbon Market Watch}, year = {2021}, month = nov, url = {https://carbonmarketwatch.org/wp-content/uploads/2022/01/CMWs-feedback-on-the-EUs-revision-of-the-ETS.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }