EU Lawmaker seeks to direct 75% of ETS revenue to industry

A senior European Parliament lawmaker has proposed directing a larger share of revenue from the European Union’s carbon market toward industrial decarbonization, as lawmakers seek to balance climate targets with pressure on companies facing high energy and carbon costs, Reuters has reported.

Peter Liese, the European Parliament’s lead negotiator on changes to the EU Emissions Trading System, has proposed that member states allocate 75% of ETS revenues to decarbonizing local industries. The European Commission had proposed a 50% share.

The EU ETS requires industries and power plants to purchase permits covering their carbon dioxide (CO2) emissions. The system is central to the EU’s efforts to cut greenhouse gas emissions, but rising carbon costs have increased pressure on energy-intensive industries.

Draft would alter the pace of emissions cuts

Liese, a member of the European People’s Party, is seeking changes that would provide greater flexibility for companies while maintaining the EU’s climate ambitions.

His proposal would also change the trajectory for reducing the ETS emissions cap.

Under the draft, the cap would decline by 3.4% annually from 2031 and by 2.3% from 2036.

That differs from the Commission’s proposal, which envisages a 3.7% annual reduction from 2031 followed by a slower 1.7% reduction from 2036.

“It is possible to adapt a current ​scheme and give industry more breathing space without endangering the climate targets,” Liese was quoted as saying in a statement.

The proposal comes as the European Parliament and EU member states prepare their positions on the ETS revision. Formal negotiations on the legislation are expected to begin in December.

The outcome will determine how the EU adjusts its carbon market while trying to protect industrial competitiveness and maintain its broader emissions reduction goals.

source: carbon herald