Recommendations for the Revision of the EU Emissions Trading System (ETS)

The upcoming review of the EU Emissions Trading System (ETS) is a critical moment for Europe’s climate policy. While the system has successfully driven emissions reductions and investment over the past two decades, a series of proposed adjustments risk severely undermining this key pillar of Europe’s climate architecture if taken together. if taken together.

This briefing sets out recommendations to preserve the integrity of the ETS as the EU’s core carbon pricing instrument. It calls for maintaining cap ambition, phasing out free allocation by 2034 with strong conditionality, ensuring transparent use of revenues for climate action and a just transition, expanding coverage to aviation and waste incineration, and keeping international credits and carbon removals outside the system to avoid undermining price signals and market stability.