EU Emissions Trading System

FuelsEurope supports the EU ETS as a cost-effective market mechanism for emissions reduction in the power and industry sector.

Given the absence of global climate policies with a comparable ambition level to the EU ETS, and the strong exposure of the refining industry to international competition, FuelsEurope welcome protection measures against the risk of carbon leakage that ensure that:

  • The most efficient installations are granted free allowances up to the benchmark to cover their direct emissions;
  • Electro-intensive sectors see their indirect related emissions costs being compensated.

FuelsEurope furthermore welcomed the provision regarding the adjustments to free allocation of emission allowances as a result of activity level changes. However, the only relative threshold of 15% activity level change is, in our view, not sufficient to ensure the alignment of allocation level for large installations with their actual activity level.

Read our Fit for 55 recommendations here.