Evaluation and further development of the EU emissions trading scheme from an economic perspective for the period after 2020 (EU-ETS-7)

The research project served to advise the German Federal Environment Agency and the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety on the design of emissions trading from the fourth trading period onwards. The present analyses examine various options for the further development of allocation and the perspective distribution of the emission cap, in particular

• various dynamic allocation rules and the temporal adjustment of allocation parameters,
• approaches for the determination and possible differentiation of the carbon leakage risk as well as a tiered free allocation based on this,
• reduction potentials in the industry as an information basis with regard to the medium to long-term determination of the cap, and
• recommendations for allocation to electricity generation installations in selected countries (article 10c), based on experience gained in the 3rd trading period.

Finally, central influencing factors on actual emissions in important EU Member States were examined with the aim of better understanding the 26% reduction in emissions achieved so far in the emissions trading sector compared to 2005 and yearly variations, especially since the beginning of the 3rd trading period. The focus is on methodological insights; two countries with a high share of emissions and high reductions (Great Britain and Spain) and two emission- intensive sectors (refineries and iron and steel) are examined as examples.

Publication: https://www.umweltbundesamt.de/publikationen/evaluierung-weiterentwicklung-des-eu-0