Carbon market reform enters final stretch

Climate action

The reform of the EU Emissions Trading Scheme (ETS) for the coming decade enters the final stretch today, with representatives of the European Parliament, the Council of Ministers and the European Commission meeting for the first informal ‘trialogue’ to negotiate an agreement on the redesign of the ETS.

Positions adopted by both the Council and the Parliament fall dramatically short of delivering the reform needed to align the ETS with the Paris Agreement. Therefore, as a bare minimum, the final compromise needs to include all the more ambitious reform elements on the table, in particular:

  • an annual cancellation mechanism for allowances in the Market Stability Reserve (MSR) adopted by the Council;
  • a provision granting Member States the option to cancel allowances unilaterally adopted by the Parliament;
  • provisions excluding investments in the modernization of coal-powered electricity plants from the ETS transition funds adopted by the Parliament.

Isabella Lövin, Minister for International Development Cooperation and Climate, and Deputy Prime Minister of Sweden said: “A further strengthening of the ETS is necessary for the EU to live up to the Paris Agreement. Finding ways to continuously cancel surplus from stability reserve will be a key component of stable and more ambitious ETS.”

Bas Eickhout, shadow rapporteur on the ETS reform in the European Parliament said: “The ETS needs a complete overhaul if we want to make it the climate policy flagship it is claimed to be and honour the Paris Agreement. What came out of the European Parliament is miles away from being sufficient. Only if we manage to combine the good parts from the European Parliament’s deal with good parts of the European Council’s agreement, we avert the ETS from becoming a mere accounting tool and subsidy scheme for industry.”

Wendel Trio, Director of CAN Europe said: “Both the Parliament’s and the Council’s positions are a far cry from what is needed to make the ETS a functioning tool. But some amendments put the EU on the right track for a real reform and are worth defending. Within the next few years, the EU lawmakers will have to come back to the table and ensure the ETS finally serves its purpose.”



Martin Kling, press secretary for Isabella Lövin,, +46 70-5395729

Reinhard den Toom, assistant of Bas Eickhout,

Wendel Trio, CAN Europe Director,, +32 473 170 887

Ania Drazkiewicz, CAN Europe Communications Coordinator,, +32 494 525 738


Climate Action Network (CAN) Europe is Europe’s largest coalition working on climate and energy issues. With over 130 member organisations in more than 30 European countries – representing over 44 million citizens – CAN Europe works to prevent dangerous climate change and promote sustainable climate and energy policy in Europe.


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