Structural development of the EU-ETS after 2020

Emissions trading is valued as an effective and cost-efficient policy instrument for avoiding greenhouse gas emissions. For the EU, its emissions trading system, the EU ETS, represents an important building block of the climate policy mix. This policy mix includes a whole range of other climate and energy policies that interact with emissions trading both at the EU and the national level. A structural reform of the EU ETS needs to take into account interactions between these policy instruments and the EU ETS, in order to strengthen its effectiveness and long-term efficiency. The aim of this research project was to provide scientific support to DEHSt/UBA as the implementing authority and to the Federal Ministry for the Environment throughout the reform process. Within the research project, methods for quantifying the impact of interacting policies and measures were developed and examined in two case studies: One on the British carbon price floor and one on the German coal-fired power generation phase-out law. Furthermore, the Market Stability Reserve (MSR), which was introduced by the EU to manage supply and reduce the market surplus that has accumulated in the past, was examined in detail and reform proposals were made. Finally, the contribution of the EU ETS to long-term decarbonization in the EU was analyzed. Research results were presented in several publications, as well as two workshops with an international audience and a technical roundtable discussion.

Publication: https://www.umweltbundesamt.de/publikationen/strukturelle-weiterentwicklung-des-eu-ets-nach-2020