The European Energy-Intensive Industries (EIIs), including the European glass sector, have published a joint position paper outlining their vision for a realistic and competitive post-2030 EU Emissions Trading System (ETS). While fully supporting the EU’s climate neutrality goal by 2050 and the interim target of at least a 55% reduction in greenhouse gas emissions by 2030, the industries stress that success hinges on more than just ETS reforms.
The position paper highlights the urgent need for enabling conditions – including affordable low-carbon energy, robust infrastructure, and global competitiveness safeguards – to ensure that the EU’s decarbonisation ambitions remain realistic and achievable.
Key recommendations include:
- Strengthened Carbon Leakage Protection: ensure robust protection to all exposed sectors from direct and indirect carbon costs, both for domestic sales and extra EU exports. Conditional free allocation and punitive Cross-Sectoral Correction Factors (CSCFs) must be avoided. Indirect cost compensation remains crucial.
- Adjusted Decarbonisation Pace: The current Linear Reduction Factor (LRF) of 4.3% should be reviewed post-2030. The current trajectory, leading to a near-zero cap already by 2040, is deemed unrealistic as it would mean that industry has to be carbon-neutral by that date or stop production. More time is needed to deploy nascent low-carbon technologies and secure energy infrastructure. The overall ETS cap trajectory must be fundamentally reviewed.
- Realistic Benchmarks: Benchmarks for free allocation must be representative, technologically achievable, and economically viable, based on resources available across Europe.
- Free Allocation Share: increase the free allocation share of the ETS cap (currently 43%) to adequately reflect the different rates at which the industrial and power sectors are decarbonising.
- Adapt the MSR Functioning: stop the invalidation of allowances in the Market Stability Reserve (MSR) and allow them to be used to prevent CSCF or fund decarbonisation efforts. MSR intake/release rates should be reviewed to increase market liquidity.
- Competitive Energy Prices: develop a comprehensive energy strategy to ensure affordable, secure, and low-carbon energy for industry, including accelerated renewable deployment and robust infrastructure. The ETS impact on (direct and indirect) energy costs should be investigated.
- Financial and Permitting Support: drastically reduce bureaucratic hurdles for decarbonisation projects and redirect a greater portion of ETS auction revenues directly to support industrial decarbonisation (both CAPEX and OPEX).
- Leveraging New Technologies: explore the strategic use of high-integrity international credits and develop robust frameworks for carbon removals (DACCS, BECCS) and Carbon Capture and Utilisation (CCU), ensuring their recognition in the ETS.
Read the full joint position paper below