Higlighting the importance of including LRAs into the distribution of ETS revenues and ETS-related funds;
Supporting an all-sector approach towards achieving the 2030 climate targets;
Addressing carbon leakage issues with the CBAM proposal;
Addressing social aspects of the ETS revision.
The opinion on ETS and CBAM has provided the main messages of LRAs on ETS and CBAM. These namely include the need to involve LRAs in managing ETS revenues, as well as the inclusion of LRAs in the Modernisation Fund. Some of these proposals have been taken up by the EP rapporteur for his draft report - however, as the trilogue process for both ETS and CBAM has been very volatile, these proposals are not in the current report.
The opinion was also a strong vehicle for relation building with both the Council and EP, as it was a topic for a Multilevel Climate and Energy Dialogue where EP, EC and Council all participated. Also, both EP rapporteurs participated in a discussion with the GDGL working group.
THE EUROPEAN COMMITTEE OF THE REGIONS
- Supports an all-sector approach towards reaching the 2030 and 2050 climate targets and highlights that the road transport and buildings sectors should contribute to the EU's heightened climate ambitions regardless of whether the ETS is expanded to them;
- Recognizes that the ETS has become the main driver of the Fit for 55 package, with carbon prices rising to unprecedented heights since the announcement of the revisions;
- Calls for the 20% of ETS auction revenues to be directly managed by local and regional authorities;
- Calls for the Modernisation Fund to be opened to NUTS 3 regions in Member States with clear internal imbalances, in order to boost the revitalisation and modernisation of the energy sector;
- Underlines that the whole of the Modernisation Fund should be directed to priority investments that support the EU's climate ambitions;
- Highlights that ETS II revenues should directly support the Social Climate Fund as the main protection mechanism of the most vulnerable households, micro-and-small enterprises and mobility users; calls for 35% of these funds to be made managed directly by local and regional authorities. In case the carbon price leads to higher revenues than expected, the financial envelope of the Social Climate Fund shall be increased accordingly;
- Stresses that the Innovation Fund should also be open to proven technologies, circularity measures and processes that can greatly support reaching the EU's climate targets;
- Welcomes the CBAM as a means to stimulate global climate action and to tackle carbon leakage from the five industry sectors concerned and supports the phase-out of free ETS allocation;
- Believes that in order to cope with technological, regulatory and market change, the CBAM should be dynamic and its sectoral scope and emission coverage should be regularly reviewed, taking into account the local and regional impact of the mechanism.