Post 2020

The Trade Directive governing the EU Emissions Trading System is currently undergoing a review in preparation of the fourth trading period extending between 2021 and 2030.

Once the new directive has been finalised, work will be commenced with reviewing and updating all the other regulations and the national legislation. The contents of this text may therefore be updated.

Proposals submitted to the revision of the Directive are:

  • A new annual reduction factor of 2.2% (compared to the current 1.74%)
  • 57% of all allowances will be auctioned, the other part will be allocated free of charge
  • Allocate 10% of the auction volume to the Member States with the lowest per capita GDP
  • Improved handling of so-called carbon leakage. I.e. the risk of production being moved out of the EU and thus leaving the EU ETS
  • Sales of 600 million allowances where the money goes to an innovation fund to support innovative technologies for lower emissions
  • Establishment of a modernisation fund to support renewal in energy infrastructure and support a reduction of greenhouse gas emissions in Member States with GDP per capita below 60% of the EU average
  • Removal of allowances from the market stability reserve
  • Handling of emissions from shipping
  • Reduced allocation to aviation