Set up in 2005, the
is the world's first international emissions trading system. It works on
the 'cap and trade' principle. Today's dialogue focused on the benefits and
pitfalls of the current system and the prosed revisions, presented by the
European Commission on 14 July 2021 as part of the
Fit for 55 package.
The impact of the revised ETS would vary greatly in each Member State and
EU region. The dialogue pointed out at some of the weaknesses of the EU
ETS, such as market volatility, hampering external competitiveness and
increasing the risk to citizens of energy and mobility poverty. It also
underlined its potency as a driver for promoting investments in innovative
and low-carbon technologies.
Opening the dialogue, the First Vice-President of the European Committee of
the Regions and Member of the Azores Regional Parliament,
Vasco Alves Cordeiro
"It is more urgent than ever that our climate ambitions and commitment
are rooted in multilevel cooperation and active subsidiarity. The ETS
must not damage territorial cohesion and must not put at risk the most
vulnerable citizens and territories. Europe’s regions and cities have
key competences and expertise in the energy and transport sector and
must hold an integral role on the EU's path towards climate neutrality.
The ETS is a powerful tool to reduce greenhouse gas emissions yet it
must balance climate goals with social protection and economic
The Slovenian Minister of the Environment and Spatial Planning
, emphasized that the EU ETS is a key policy instrument for mitigating
climate change and for moving towards a carbon-neutral economy, and
"Today’s event is a forum where the message of the relevance of the ETS
for EU’s pathway towards the green transition must be put across.
Keeping in mind that this transition must be a just one, it is
important for the representatives of local and regional authorities to
be informed and engaged in the process of setting out the implementing
legislation that will deliver on our climate goals."
The mayor of Mannheim,
(DE/PES), the CoR rapporteur of the opinion
'Making ETS and CBAM work for EU cities and regions', said:
"The Emissions Trading System is a driving force behind the ‘Fit for
55’ package. The best way to ensure that this package works in Europe’s
cities and regions is by involving local and regional authorities in
the introduction of the new emission trading scheme. To ensure that no
one and no region is left behind, I proposed to include a regional
dimension in the distribution of the Modernisation Fund. Moving towards
a low-carbon economy should not be seen as limiting economic growth.
The accelerated transformation will also offer economic opportunities,
as climate-neutral products and production methods will be a
From the European Commission,
Stefanie Hiesinger, from the private office of Executive Vice-President Frans Timmermans, insisted on the urgent
need to include maritime transport in the new ETS and to target buildings
and transport in particular, as emissions from these sectors are still
increasing. The EC representative stressed that costs would fall on fuel
distributors and not citizens, with the social climate fund targeting
energy poverty and the EC to increase solidarity allowances and innovation
On 14 July 2021, the European Commission put forward the 'Fit for 55'
package as a response to the heightened ambitions within the EU on climate
action. The package, consisting of 14 proposals for new and revised pieces
of legislation on climate, environment and energy, revolves around a
revitalized approach on carbon pricing as its central element.
The proposal for the revision of the Emissions Trading System underlines
the approach that all sectors should contribute to the transition towards
climate neutrality and reaffirms the EU 2030 and 2050 climate targets
through a stricter curve in carbon prices.
The main questions tackled at the 4th Multilevel Climate and
Energy Dialogue on the Emissions Trading System were:
· Is carbon pricing an adequate instrument to drive the European Union
towards its medium and long-term climate goals?
· Is the proposed revision of the ETS consistent and coherent with the rest
of the 'Fit for 55' package and other EU priorities, such as ensuring a
just transition, preserving the European natural capital and promoting
· What are the main challenges of the reinforced ETS and how can they be
· Are the principles of active subsidiarity and multi-level governance
adequately represented within the revision of the ETS?
The Multilevel Climate and Energy Dialogue is part of the
Green Deal Going Local
initiative. This dialogue is the CoR contribution to the implementation of
the "Multilevel Climate and Energy Dialogue" as can be found in the
Regulation on the Governance of the Energy Union and Climate Action (EU)
The next meeting of the CoR's Green Deal Going Local working will
take place on Thursday 9 December 2021.
Tel.: +32 (0) 470 88 10 37