On Tuesday 14 January, in line with the European Green Deal and the target of making Europe the world's first climate-neutral economy by 2050, the European Commission launched a public consultation on the amended version of the state aid guidelines for the EU emission trading system in the context of the system for greenhouse gas emission allowance trading post 2021 (the ‘ETS guidelines').
Executive Vice President Margrethe Vestager believes that the draft guidelines “fully reflect the objectives of the Green Deal and focus state support on the sectors most at risk of carbon leakage”.
The draft revised ETS state aid guidelines would allow member states to compensate companies for indirect costs under stricter conditions than before.
The proposals aim to: - reduce the number of sectors eligible for compensation from fourteen to eight, to focus on those most at risks of carbon leakage (sectors highly dependent on international trade, sectors heavily affected by energy costs, etc.); - lower the compensation rate from 85% at the start of the previous ETS trading period (2013-2020) to 75% in the new period and to exclude compensation for inefficient technologies; - make compensation conditional upon decarbonisation efforts by the companies concerned (energy audits, reduction of carbon footprint, etc.) Stakeholders are invited to submit comments on this consultation by 10 March 2020.
The ETS guidelines aim to reduce the risk of 'carbon leakage' when companies relocate production to non-member states with less ambitious climate policies. The current guidelines expire at the end of 2020. The ETS provides incentives for companies to reduce emissions that contribute to climate change. The draft guidelines can be found at: http://bit.ly/3aa5EJ9 (Original version in French by Lionel Changeur)