The Polish Undersecretary of State at the Ministry of Climate, Adam Guibourgé-Czetwertyński, presented his country’s proposal to reform the European Union’s Emissions Trading Scheme (ETS) on Friday 23 October at the meeting of the Environment Ministers of the Member States (see other news).
“The problem with the current system is that Member States that do not need quotas receive them anyway”, Mr Guibourgé-Czetwertyński said, while the European Commission plans to present a review of the ETS in the second quarter of 2021.
According to Warsaw, this leads some Member States to consistently receive far more allowances than they need for their greenhouse gas emissions, leaving some economies “with substantial costs to cover”.
According to Polish estimates, the total quantity of allowances (distributed free of charge to industry and auctioned by a Member State) may thus exceed that Member State’s verified emissions by 35-55%.
Poland is therefore calling for a review of the quota distribution key to ensure that the ETS supports investment in regions and sectors in less wealthy Member States, while opposing the idea of the system becoming a source of EU own resources.
In addition, the country proposes to increase the Modernisation Fund and/or to create an Energy Solidarity Fund.
This fund would aim to help states with a per capita GDP below the EU average to eliminate the negative social effects of rising energy prices and to minimise the increase in energy poverty, which Warsaw believes will worsen with investment in renewable energy.
Stressing that the ETS is “a Union wide market-based policy tool”, Swedish Minister for Environment and Climate Isabelle Lövin said that any adjustments to the free allocation system should be made on a fair basis, comparing installations operating in the same sector. (Original version in French by Damien Genicot)