CAN Europe Letter to Heads of Cabinets of the European Commission on the revision of the Emissions Trading System (ETS) Directive
As the European Commission enters the final stages of preparing a revision of the Emissions Trading System (ETS) Directive, Climate Action Network Europe shares its recommendations with the Heads of Cabinets of the European Commission.
Europe is already experiencing the growing costs of climate change and continued fossil fuel dependence. The recent heatwave – the most severe and widespread ever recorded in Western Europe – has already been linked to more than 1,300 excess deaths, while geopolitical tensions in the Middle East have added an estimated €62 billion to the EU’s energy bill. A strong and credible ETS is therefore not only a climate instrument, but also a cornerstone of Europe’s industrial competitiveness, energy security and citizens’ wellbeing.
Our main concern is to maintain the Linear Reduction Factor (LRF) at 4.4% until at least 2036. Lowering the LRF after 2031 would significantly increase ETS emissions and shift an unfair share of the remaining mitigation effort onto sectors outside the ETS. Under a 2.4% LRF scenario, ETS emissions alone would consume around one third of the emissions space otherwise available to non-ETS sectors to meet the EU’s 2040 climate target, making the transition substantially more difficult and costly. Maintaining the current LRF avoids this crowding-out effect and preserves a more balanced pathway to achieve our 2040 and 2050 objectives.
A robust ETS also enjoys broad support. Many industrial frontrunners recognise that a strong carbon price provides the long-term investment certainty needed for industrial decarbonisation, while public opinion consistently supports the principle that major polluters should pay for their emissions. Weakening the ETS would therefore undermine both Europe’s clean industrial transition and public confidence in climate policy.
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