Hoekstra: EU aims to turn emissions market into source of investment

The European Commission is proposing to reform the Emissions Trading System (ETS), channeling revenues from emissions trading into modernizing and decarbonizing European industry while maintaining the focus on achieving climate goals, European Commissioner for Climate, Net Zero and Clean Growth Wopke Hoekstra said at a press conference in Brussels, Report informs.

He stated that since its launch in 2005, the ETS has helped reduce emissions in the sectors it covers by approximately 50% and generated approximately €270 billion in revenue.

However, a significant portion of these funds has not been used to decarbonize industry, and European companies are increasingly facing competition from producers receiving state subsidies outside the EU.

The Commission is proposing to maintain free allowances after 2030 for companies that invest in reducing emissions in Europe.

One of the main differences in the new system is that free allowances will no longer mean free money, Hoekstra said.

According to him, all freely received allowances will have to be used for decarbonization investments in Europe.

EU countries will be required to spend at least half of the ETS proceeds on supporting relevant industries.

Hoekstra also announced that €100 billion is planned to be allocated to finance industrial decarbonization through the new Industrial Decarbonization Bank, including €30 billion by 2030.

Furthermore, the EC proposes expanding the ETS. The system will include small maritime vessels and waste incineration plants.

Starting in 2029, carbon pricing will apply to all flights within a 5,000-kilometer radius of the geographic center of Europe.

According to Hoekstra, this will level the playing field between European and foreign airlines operating comparable routes.

Furthermore, private jets will be fully covered for the first time.