彭博新能源财经：2026年欧盟碳排放交易体系现状报告-英文版

BloombergNEF

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2026StateoftheEUETSReport

AntwerpStockExchange(1898)

AndreiMarcu,FlorianBourcier,Jean-YvesCaneill,EmmaCoker,Rosy

Finlayson,AlexandraMaratou,CeciliaMeinardi,TommasoPaperini,Marco

Sangiovanni

2026StateoftheEUETSReport

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Disclaimer

TheviewsexpressedinthisReportareattributableonlytotheauthorsinapersonalcapacity,andnottoanyinstitutiontheymaybeassociatedwith,nortothefundersoftheReport.

ThisReporthasbeenthesubjectofstakeholderconsultations,includingaworkshopconvenedbytheauthorswithstakeholdersincludingNGOs,thinktanks,academia,policymakers,marketparticipants,andindustryrepresentatives.

TheauthorsthankthemfortheircontinuedsupportforthisReport.

TheEuropeanRoundtableonClimateChangeandSustainableTransition(ERCST)isaBrussels-basedthink-tankincorporatedasnon-profitorganisationunderBelgianlaw.ERCSTprovidesrigorousintellectualanalysisofEUandinternationalclimatechangedevelopmentsandpolicies,drawingontheexperienceandresearchofitsstaffaswellinputfromstakeholderswhoparticipateinitsactivities.ERCSTprovidesoriginalideasandresearchintoEuropeanandinternationaldebatesonclimatechangepolicy.Itrepresentsitsownviewsandstrivestostrictlyensureitsindependenceandintegrity.

BloombergNEF(BNEF)isastrategicresearchprovidercoveringglobalcommoditymarketsandthedisruptivetechnologiesdrivingthetransitiontoalow-carboneconomy.Itsexpertcoverageassessespathwaysforthepower,transport,industry,buildings,andagriculturesectorstoadapttotheenergytransition.Theorganisationhelpscommoditytrading,corporatestrategy,finance,andpolicyprofessionalsnavigatechangeandgenerateopportunities.

Oneoftheworld’sleadingeconomicconsultingfirms,CompassLexeconprovideslawfirms,corporations,andgovernmentclientswithclearanalysisofcomplexissues.CompassLexeconisinternationallyrecognisedasaleadingeconomicconsultingfirmwithpreeminentcompetition,finance,intellectualproperty,internationalarbitration,andenergypractices.Withmorethan425professionalsin20officesaroundtheworld,CompassLexeconoffersaglobalperspectiveoneconomicmatters,includingenergyandclimateissues

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2026StateoftheEUETSReport

TableofContents

Takeaways 7

1.Background 9

2.AnEUETS“fitforpurpose” 10

2.1.Long-termcompetitiveness 10

2.2.Promotecarbonpricing 11

3.Regulatorydevelopments 12

3.1.Secondarylegislation 12

3.2.OtherpoliciesimpactingtheEUETS 13

3.2.1.CISAF 13

3.2.2.2040ClimateTarget 14

3.2.3.CBAM—OmnibusISimplification 14

3.2.4.CBAM—December2025LegislativePackage 14

3.2.5.OmnibusIPackage—CSRD 14

3.2.6.OmnibusIPackage—CSDDD 14

3.2.7.AmendmenttotheETSStateAidGuidelines 15

3.2.8.MemberStatePolicies 15

3.3.Internationalcarbonpricedevelopments 16

3.3.1.ImpactsoftheUKETSontheEUETS 16

3.3.2.Linkingwithothermarkets 17

3.3.3.Article6oftheParisAgreement 18

4.Environmentaldelivery 18

4.1.DeliveryagainstPhase4target 18

4.1.1.KPIsondatafor2025 18

4.1.2.ImpactonPhase4 20

4.2.DeliveryagainstEUlong-termdomesticenvironmentalcommitments 22

4.3.Evolutionofpowersectoremissions 22

5.Competitivenessandsocio-economicdelivery 24

5.1.Economicimpacts 24

5.1.1.KPI:Balanceofallowances 24

5.1.2.Emissionintensitiesinselectedindustrialsectors 26

5.1.3.LevelofcarbonpriceofEUETScomparedtootherjurisdictions 28

5.1.4.ETScompliancecosts,trade&productionvolumes 30

5.1.5.Carboncompliancecostinunitproductioncosts 34

5.2Auctionrevenueincome 35

5.3Measurestoaddresscompetitiveness 37

5.3.1.MemberStateauctionrevenuesanduse 37

5.3.2.ModernisationFund 39

5.3.3.InnovationFund 41

5.3.4.Indirectcostcompensation 44

6.Marketfunctioning 45

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6.1.Marketfunctioningtrackers 45

6.1.1.Volume 46

6.1.2.Openinterest 46

6.1.3.Auctionparticipation 47

6.1.4.Auctioncoverage 48

6.1.5.Auction-spotdifferential 48

6.1.6.Costofcarry 49

6.1.7.Ask-bidspread 49

6.1.8.Volatility 50

6.1.9.Utilitieshedgedholdings 50

6.2.Supply-demandbalanceandevolutionofTNAC 51

6.3.Priceforecasts 52

6.4.Historicalpriceandpolicydevelopment 53

6.5.Marketparticipation 53

6.6.REPowerEU 53

7.Lookingforward 54

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ListofFigures

FIGURE1:EUETSANDUKETSALLOWANCEPRICEEVOLUTION 16

FIGURE2:KPI1AEUETSVERIFIEDEMISSIONSVSADOPTEDTARGETS–UK/RESTSPLIT 19

FIGURE3:KPI1DVERIFIEDEMISSIONSVSTARGETCAPANDSECTORCOMPOSITION 19

FIGURE4:KPI2INDEXEDEMISSIONSANDSECTORCOMPOSITION 19

FIGURE5:KPI3LRFVSACTUALCHANGEINVERIFIEDEMISSIONSTARGET 20

FIGURE6:KPI1B(LEFT)ANDKPI1C(RIGHT)EUETSVERIFIEDEMISSIONSVSADOPTEDTARGET 21

FIGURE7:ADOPTEDVSEFFECTIVEEMISSIONSCAP 21

FIGURE8:KPI4POSSIBLELONG-TERMTARGETPATHSFOREUETSAFTER2030 22

FIGURE9:DRIVERSOFVARIATIONINEUPOWERSECTORGHGEMISSIONS(2013-2024) 23

FIGURE10:ENERGYSOURCEVSANNUALDRIVERSOFVARIATIONINEUPOWERSECTORGHGEMISSIONS(2013-2024) 23

FIGURE11:KPI5NETSUPPLYVOLUMEOFFREEALLOWANCES-ALLSTATIONARYINSTALLATIONS 25

FIGURE12:NETSUPPLYVOLUMEOFFREEALLOWANCES-ELECTRICPOWER,STEAM&AC(KPI5A),EIINDUSTRY(KPI5B) 25

FIGURE13:KPI6NETSUPPLYVALUEOFFREEALLOWANCES 26

FIGURE14:NETSUPPLYVOLUMEOFFREEALLOWANCESFORSELECTEDSECTORS 26

FIGURE15:KPI8AEMISSIONSINTENSITYFORSELECTEDACTIVITIES 27

FIGURE16:EMISSIONSINDEX(KPI8B)ANDPRODUCTIONINDEX(KPI8C) 27

FIGURE17:EVOLUTIONOFALLOWANCEPRICESACROSSINTERNATIONALETSSINUSD/TCO2E(2013-2025) 28

FIGURE18:ETSPRICEVSAVERAGECOSTSBYCOVEREDENTITIES(2023) 30

FIGURE19:KPI9INDUSTRIALPRODUCTION,TRADE,UNITARYENERGYANDDIRECTETSCOSTS2013-2024 32

FIGURE20:KPI10PRODUCTIONCOSTSFORFOSSIL-BASEDANDGREEN(A)AMMONIAAND(B)STEELBYCOSTCOMPONENTUNDER

DIFFERENTSCENARIOS(2030) 34

FIGURE21:TOTALEUETSGENERATEDINCOMEINPHASEIVANDDISTRIBUTIONBETWEENBUDGETS(2021-2024) 36

FIGURE22:EUETSREPORTEDMSAUCTIONREVENUESEU27PERCATEGORY(2025REPORTING,2024DATA)(%) 37

FIGURE23:EUETSREPORTEDMSAUCTIONREVENUESEU27PERMS 38

FIGURE24:KPI11PERCENTAGEOFTOTALMSAUCTIONREVENUESSPENTONCLIMATE,RENEWABLEENERGYANDENERGYEFFICIENCY

(2013-2024) 39

FIGURE25:TOTALFUNDINGRECEIVEDFROMTHEMODERNISATIONFUNDPERMEMBERSTATE(2021-2025) 40

FIGURE26:MODERNISATIONFUNDINVESTMENTSBYAREA,ASREPORTEDBYMS(2021-2025) 41

FIGURE27:INNOVATIONFUNDFUNDINGBYSECTORANDCALLYEAR(2021-2025) 42

FIGURE28:INNOVATIONFUNDFUNDINGBYEUETSCOUNTRYANDGEOGRAPHICALDIVISION,CUMULATIVE2021-2025 43

FIGURE29:KPI12PERCENTAGEOFAUCTIONREVENUESSPENTONINDIRECTCOSTCOMPENSATION,EU27(2017-2024) 44

FIGURE30:KPI13TRADEDEUAVOLUMES 46

FIGURE31:KPI14AGGREGATEOPENINTERESTSEASONALITY 47

FIGURE32:KPI15MONTHLYAVERAGEAUCTIONPARTICIPATION 47

FIGURE33:KPI16EUETSAUCTIONCOVERAGERATIO 48

FIGURE34:KPI17MONTHLYAVERAGEDIFFERENCEBETWEENAUCTIONANDSPOTPRICE 48

FIGURE35:KPI18COSTOFCARRYOFEUASVSAAAEUTHREE-YEARBONDYIELDS 49

FIGURE36:KPI19ASK-BIDSPREADONICE 49

FIGURE37:KPI20VOLATILITY 50

FIGURE38:KPI21UTILITIESHEDGEDHOLDINGS 51

FIGURE39:KPI22DRIVERSANDCONTROLSOFTHEMARKETSTRINGENCY 51

FIGURE40:EUAPRICEFORECAST 52

FIGURE41:NETPOSITIONHOLDERS(KPI23)VIS-A-VISINVESTMENTFUNDS'NETPOSITIONS(KPI24) 53

FIGURE42:KPI25OTHEREUPOLICIESIMPACTINGCARBON:REPOWEREUVOLUMESIN2026 54

ListofTables

TABLE1:LEGISLATIVEDEVELOPMENTSIN2025 13

TABLE2:MEMBERSTATESPOLICIES 15

TABLE3:ALLOWANCESUSEDFOR2024COMPLIANCE(%OFTOTALSURRENDERUNITS) 18

TABLE4:YEAR-ON-YEARCHANGEINEMISSIONS(%),2023-2024AND2024-2025 20

TABLE5:POWERGENERATIONDATAIN2024AND2025 20

TABLE6:DRIVERSOFVARIATIONINEUPOWERSECTORGHGEMISSIONS(2013-2024) 28

TABLE7:SECTORALEVOLUTIONOFPRODUCTION,TRADE,ENERGYCOSTS&CARBONCOSTS 33

TABLE8:MARKETFUNCTIONINGTRACKERSIN2025 45

TABLE9:OVERVIEWOFFORTHCOMINGLEGISLATIVEDEVELOPMENTS 54

Listofabbreviations

CBAMCarbonBorderAdjustmentMechanism

CCfDsCarboncontractsfordifference

CCUCarboncaptureandutilisation

CCSCarboncaptureandstorage

CommissionEuropeanCommission

COP29The29thUnitedNationsClimateChangeConferenceoftheParties

CRCFCarbonRemovalCertificationFramework

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EEAEuropeanEconomicArea

EEDEnergyEfficiencyDirective

ESMAEuropeanSecuritiesandMarketsAuthority

ETSEmissionsTradingSystem

EUAEUemissionallowances

EUTLEuropeanUnionTransactionLog

GHGGreenhouseGas

IMOInternationalMaritimeOrganisation

KPIKeyPerformanceIndicator

LRFLinearreductionfactor

MRVMonitoring,ReportingandVerification

MSRMarketStabilityReserve

NDCNationallyDeterminedContributions

RCFRecycledCarbonFuels

REDRenewableEnergyDirective

RFNBORenewableFuelsofNon-BiologicalOrigin

RRFRecoveryandResilienceFacility

TNACTotalnumberofallowancesincirculation

UKAUKemissionallowances

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2026StateoftheEUETSReport

Takeaways

Overview

The2026StateoftheEUETSReportassesseswhethertheEuropeanUnionEmissionsTradingSystem(EUETS)remains“fitforpurpose”indeliveringemissionsreductions,supportingindustrialcompetitiveness,andmaintainingeffectivemarketfunctioning.ThereportconcludesthattheEUETScontinuestomeetitscoreenvironmentalobjectives,butisenteringamorecomplexphaseshapedbygeopoliticaluncertainty,industrialcompetitivenessconcerns,evolvingclimatepolicy,andincreasingpressuretosupportlong-termindustrialtransformation.

KeyFindings

1.EnvironmentalDeliveryRemainsStrong

TheEUETScontinuestoreduceemissionseffectively,withverifiedemissionsremainingbelowthecapandmorethanhalfofthesystem’s2030targetalreadyachieved.EUETSemissionsdeclinedbyapproximately1.3%in2025followingstrongerreductionsinprioryears.Whilethepaceofreductionhasslowed,thisappearslinkedprimarilytoenergysystemdynamics—particularlyhigherrelianceongasgenerationtobalanceincreasingrenewablepenetration—ratherthanafailureoftheETSframeworkitself.

Thepowersectorremainsthemaindriverofemissionsreductions,accountingforroughly75%oftotalstationaryinstallationreductionssince2008,supportedbyrapidrenewabledeploymentandcoal-to-gasswitching.Industrialsectorsarenowbeginningtoshowmoremeasurabledecarbonisationprogress,althoughreductionsarestillgradualandunevenacrosssectors.Whiledifficulttoquantify,anecdotalevidencesuggeststhatapercentageoftheabsoluteemissionreductionsareduetoclosureoffacilities.

2.CompetitivenessHasBecomeCentral

CompetitivenessconcernsnowsitatthecoreofEUclimatepolicydiscussions.TheEUhasaverydifficultbalancingact,ofcontinuingonitsdecarbonizationpathwhileensuringthatitmaintainsaviableindustry.“Industrialcrisis”isnotahyperbole,ifwelookatkeyEUindustrialsectorperformance.RisingEUAprices,tighteningfreeallocationrules,andthegradualphase-outoffreeallowancesunderCBAMareincreasingcompliancecostsforenergy-intensiveindustries.

Thereportfinds:

●Thepowersectornowfacesveryhighexposuretoauctioning,withlessthan10%ofemissionseffectivelycoveredbyfreeallocation.

●Energy-intensiveindustrieshaveshiftedfromhistoricalallowancesurplusestostructuraldeficits.

●AverageannualcompliancecostsinPhaseIVexceeded€35billionforthepowersectorand€7.6billionforenergy-intensiveindustries.

AlthoughETS-relatedcostsremainmateriallysmallerthanenergycostsinmostsectors,industrialproductiontrendsshowincreasingpressurefromhighenergyprices,globalcompetition,andcarboncostscombined.

Importantly,thereportstressesthatcarbonleakageandcompetitivenesscannotbeseparated.WhileCBAMisintendedtoreplacefreeallocationandprotectEUindustryfromunfaircompetition,thereportwarnsthatfreeallocationphase-outalonedoesnotyetcreateasufficientbusinesscaseforlarge-scaleindustrial

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decarbonisationwithoutsubstantialpublicsupport,technologicalcostreductions,oradditionalpolicymeasures.

3.CarbonPricesRemainGloballyHigh

TheEUETScontinuestooperateatsubstantiallyhighercarbonpricesthanotherglobalcarbonmarkets.In2025,EUETSpricesaveragedapproximatelyUSD85/tCO2e,significantlyabovesystemsinChina,California,Korea,andNewZealand.

Thereportarguesthatcomparisonsshouldfocusnotonlyonvisiblecarbonpricesbutalsoontheeffectivecarboncostsbornebyindustryafterfreeallocationandcompensationmechanisms.Evenafteradjustment,theEUremainsamongthehighest-costjurisdictionsforcoveredentities.

4.MarketFunctioningRemainsRobust

Despitemajorreformsandmarketshocks,theEUETSmarketcontinuestofunctioneffectively.Liquidity,pricediscovery,auctionparticipation,andsupply-demandbalancingmechanismsremainbroadlystable.

TheMarketStabilityReserve(MSR)continuestoplayacentralroleintighteningsupplyandsupportingmarketstability.Thereportalsonotesthatinternationaldevelopments—includingeffortstolinktheEUETSandUKETS,Swisslinkagearrangements,andbroaderArticle6carbonmarketdiscussions—willincreasinglyshapefuturemarketevolution.

5.ComplexandIntertwinedPolicyArchitecture

2026isayearthatseeanumberofimportantpiecesoflegislationunderreview,whichareclearlyimpactingtheoperationandimpactoftheEUETS.TheseincludearevisiontoCBAMDirectiveaswellasthepost2030climatechangeframeworkandtheEnergyUnionGovernance.Thetimingofthislegislativeagendaisnotnecessarilysynchronized.

StrategicConclusion

ThereportconcludesthattheEUETSremainsoneoftheworld’smosteffectivecarbonmarketsandcontinuestodeliveronitsenvironmentalmandate.However,thesystemistransitioningfrombeingprimarilyapower-sectordecarbonisationtoolintoacentralpillarofEurope’sindustrialtransformationstrategy.

Futurereformswillneedtobalancethreeobjectivessimultaneously:

1.Maintainingenvironmentalintegrityandemissionsreductions;

2.Preservingindustrialcompetitivenessandlimitingcarbonleakage;

3.Providinglong-termregulatorypredictabilitytosupportinvestmentinlow-carbontechnologies.

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1.Background

TheStateoftheEUETSReportisanindependenteffortwhichfocusesonassessingtheperformanceoftheEUETSatthetimewhenthereportisproduced.ItnisnotintendedtoduplicateorreplacemandatedworkundertakenbytheEuropeanCommission.

Thisreportisintendedasa"snapshot",providingpolicymakersandstakeholderswithanoverviewoftheEUETS’sstatusbyMayeachyear,usingdatafromthepreviousyear.The2026StateoftheEUETSReportrelieson2025data.Despitethelimitationsimposedbytheavailabilityofpubliclyaccessibledata,thereportendeavourstoaddresswhethertheEUETSis“fitforpurpose”bylookingatitsenvironmental,competitivenessandsocioeconomic,andmarketfunctioningdelivery.

ToaddressdatalimitationsthemembersofthisconsortiumhaveundertakenacategorizationofallEUETScoveredinstallationstospecificsectors,acomplexprocess,butonethatallowsthisinitiativetoundertakecomplexanalysis.All~17,000installationsintheCommission’sEUTLverifiedemissionsdatasethavebeencategorizedbysector.ThisclassificationisbasedonacombinationofofficialEUTLmainactivitycodes,industrydataandsector-specificinformationfromtheCommission’s2015and2020carbonleakagelists.ThisexercisehasenabledthesectoraldisaggregationofEUTL"combustion"installations,yieldingamoregranularrepresentationofbothenergy-intensiveindustriesandthepowersector.Thisnewapproachdistinguishesthisyear'sreportfrompasteditions.

Overall,the2026StateoftheEUETSReportassessesasystemthatisenteringanincreasinglycomplexpolitical,economic,andinternationalcontext.Formanyyearsnow,theEUETSisnolongeronlyadecarbonisationinstrumentforthepowersector,butitisincreasinglyexpectedtosupportindustrialtransformationandinteractcoherentlywithawidersetofclimateandindustrialpolicyinstruments.

Thepolicycontexthasalsoevolvedsignificantlysinceourlastreport.CompetitivenesshasbecomecentraltothediscussiononthefutureofEUclimatepolicy,especiallythatnowthatitisnotonlypricesthatareincreasing,butalsotheEUETScosts.Thechallengeisnolongerjusttodecarbonise,buttodosowhilemaintainingindustrialcapacityandstableinvestments.IndustryhasbecomeextremelyvocalinitsaskswithregardtotheEUETS.Inthiscontext,theinteractionbetweentheEUETS,theCarbonBorderAdjustmentMechanism(CBAM)andtheirindustrialdevelopmentiscrucial.Regulatorystabilityisemergingasakeyconditionforthecredibilityofthesystem,ascompaniesmakelong-terminvestmentdecisionsundercontinueduncertaintyaboutcarboncostsandthefuturedesignofboththeTheEU’s2040climatetargetwillneedtoalignwiththenextphaseofreformofEU’sclimatepolicy,includingthe90%reductiontarget.Questionsarebeingraised,suchaswhetherandhowcarbondioxideremovals(CDRs)couldbeintegratedintotheEUETSarchitecture,whatroleinternationalcreditsmightplayinthefuture,andwhetherlinkageswithothercarbonpricingsystemscanberealisticallypartoftheEU’slonger-termplanning.

TheinternationalcontexthasalsoanimportantimpactontheevolutionoftheEUETS.TheoutcomeofCOP30,whichdidnotresultinanysignificantmovement,thechangingstanceoftheUSininternationalclimatepolicyanditsimpactonUNFCCC,IMOandUNEP,andthebroaderstateofinternationalclimatecooperationingeneral.OtherdevelopmentsincludingfailedeffortstoreachanagreementintheInternationalMaritimeOrganization(IMO),areincreasinglysettingthetone,whichwillalsoaffectdiscussionsontheEUETS.

Againstthisbackdrop,thedebateonthefutureoftheEUETScontinuestogrowinimportance.Whilethereviewwillstartmid-year2026,itwillbeheavilyinfluencedbymanyofthe(new)realitiesthatweoutlinedabove.

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2.AnEUETS“fitforpurpose”

ToassesswhethertheEUETSis"fitforpurpose",itisnecessarytoidentifytheparametersmeasuringitssuccess.Simplyput,“WhatdoweexpecttheEUETStodeliver?”and“Arethesedeliverablesbeingachieved?”.ItshouldbenotedthatcertainmetricsorKPIsmayentailadegreeofsubjectivityandpoliticaljudgment.Inthiscontext,itisworthrecallingArticle1oftheEUETSDirective

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,outliningEUETS’sobjectives:

“ThisDirectiveestablishesasystemforgreenhousegasemissionallowancetradingwithintheUnion(hereinafterreferredtoastheíEUETS’)inordertopromotereductionsofgreenhousegasemissionsinacost-effectiveandeconomicallyefficientmanner.

ThisDirectivealsoprovidesforthereductionsofgreenhousegasemissionstobeincreasedsoastocontributetothelevelsofreductionsthatareconsideredscientificallynecessarytoavoiddangerousclimatechange.ItcontributestotheachievementoftheUnion'sclimate-neutralityobjectiveanditsclimatetargetsaslaiddowninRegulation(EU)2021/1119oftheEuropeanParliamentandoftheCouncilandtherebytotheobjectivesoftheParisAgreement.”

Someobjectivesareclearlyenunciatedandidentified,whileotherobjectivesmayberegardedasmoreimplicit.ThedirectdeliverablesassessedbythisReportinclude:

1.Environmentaldelivery.DoestheEUETSdeliveragainstabsoluteenvironmentaltargets?(Chapter4).

2.Competitivenessandsocio-economicdelivery.DoescompliancewiththeEUETSdelivermacroeconomicefficiencyandcost-effectiveness?IsitadriverforchangewithoutdamagingEUindustrialcompetitiveness?IstheETSallowedtoprovideapricesignal?(Chapter5).

3.Marketfunctioning.TheEUETSisaregulatorymarket,whichisacomplexset-up.Isitworthhavingamarketonlyifitfunctionswellandleadstogoodpricediscovery?(Chapter6).

Overtime,otherdeliverablesorindicatorshavecometobe“expected”or“understood”.Somestakeholders,wrongfullyinourview,equatetheproperfunctioningoftheEUETSwiththedeliveryofa“rightprice”,incentivisingspecifictechnologiesorapproaches.However,theEUETSisbydefinitionatechnologically-neutralapproach

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.Itshouldnotbemisusedasaninstrumenttopromotecertainapproachesortechnologiesorserveasasourceofrevenues

AnumberofotherdimensionsshouldbeexaminedinanalysingthestateoftheEUETS.

2.1.Long-termcompetitiveness

Theachievementofemissionreductionsshouldbeachievedinacost-efficientandeconomicallyefficientmanner.Thismeans,thatwhenaimingforemissionreductions,competitivenessshouldnotbeabandoned,ratheritshouldbeacoreconsideration.

TheEUhasplacedgreateremphasisoncompetitivenessinthepastyear.Thus,itisnotsurprisingthatsomestakeholdersviewtheEUETSnotonlyasakeyclimatepolicytoachieveenvironmentaldelivery,butalso

1Directive(EU)2003/87.

2Inthisline,InnovationFund“projectsshallbeselectedbymeansofatransparentselectionprocedure,inatechnology-neutralmanner”.Article10a(8)oftheEUETSDirective.

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asatoolforeconomiccompetitivenesstoacceleratethetransitiontoalow-carboneconomy.TheEUETScanachieveitsobjectivesby:

●Providingapricesignaltoacceleratetheeconomictransition,aswellaspromotingsocietalvalues,behaviour,andsystems;

●Addressingthesocio-economicimpactsassociatedwiththetransitiontoalow-GHGeconomy;

●Contributingtothecreationofamarketforlow-carbonproducts.

●EnsuringthesurvivalofentitiescoveredbyEUETSandstrengtheningtheircompetitiveness.

TheEUETSDirectiveoutlinesspecificinstrumentstoachievelong-termcompetitiveness.Forinstance,itencouragesinvestmentsinlow-carbontechnologiesthroughtheInnovationFund,itaddressessocio-economicimpactsbyfacilitatinga“JustTransition”throughtheModernisationFund,anditallowsMemberStatestocompensatesectorsexposedtocarbonleakageduetosignificantindirectcostsincurredfromGHGemissionspassedoninelectricityprices.Whilenotdirectlyexplicit,wecanalsoconsidertheseinstrumentsasmeasurestoaddressthecompetitivenessofcoveredinstallations.

TheprogresstowardstheseobjectivescanbequantitativelyassessedbydevelopingKPIs.Otherlong-termobjectiveslackmaturityandclarityinpolicydiscussions,makingithardertodefinespecificKPIsforthemcurrently.

2.2.Promotecarbonpricing

TheEUimplementedtheEUETSin2005.Sincethen,theEUhasestablisheditselfasaleaderinpromotingcarbonmarketsasatooltoaddressclimatechangeandtopushforeffectiveclimateaction,withmanyotherjurisdictionsnowfollowingsuite.Research,includingtheICAPStatusReport2025

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andtheWordBank’sStateandTrendsofCarbonPricing2024

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showthatcarbonpricingisspreadingacrosstheworldatanincreasingpacewith38ETSsinoperationandafurther20underconsideration.NotableexamplesincludeTurkeyandBrazilannouncingtheirowncarbonpricingpolicies.

TheEUETSanditsaccompanyinginstruments(i.e.CBAM)havebeensuccessfulinextendingthecarbonpricingapproachworldwidethroughinternationalisationandlinkageofnationalcarbonmarkets(i.e.Switzerland).TheEUfollowsdifferentstrategiestopromotetheintroductionofcarbonmarketsworldwide:

●Firstly,by“leadingbyexample”andpersuasiveclimatediplomacyhingedonmultiplebilateralisms,theUnionincentivisesotherjurisdictionstotakeinspirationfromtheEUETS.AnexampleistheCommissiontaskforcetosupportthecreationofcarbonmarketsgloballyfosteringinternationaltradeofCO2emissions

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,ortheCouncil'sadopti