To date, the ETS finds itself facing several challenges, i.a. in the form of a growing surplus of allowances. In the short term this surplus risks undermining the orderly functioning of the carbon market; in the longer term it could affect the ability of the EU ETS to meet more demanding emission reduction targets cost-effectively.
Therefore, structural reform measures, such as the Market Stability Reserve or the inclusion of further sectors, e.g. transport into the scope of the ETS are being discussed.
From an economic point of view it will be crucial to provide a stable framework that enables predictability for investments.
At the roundtable representatives from EU institutions as well as from industry and academia will exchange on the envisaged ETS reforms.
Dominik H. Enste / Jennifer Potthoff IW-Analyse No. 146 30. December 2021
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