EU ETS Reform Widens Scope, Revenue Use Questioned

• The reform expands aviation scope to include all private jets regardless of origin.
• Maritime scope now covers a larger group of ports on the other shore of the Mediterranean.
• Member states receive 80% of ETS revenue distribution, and 90% of those funds are not used for industrial decarbonisation.
• Global temperature has reached 1.8 degrees, a level described as formally beyond the 1.5-degree threshold.

Scope of the Reform

The European Union's Emissions Trading System reform expands aviation scope to cover all private jets regardless of origin. The revised system also folds in a larger group of ports on the other shore of the Mediterranean. Waste is added to scope with accounting that reflects local circumstances.

EU ETS Reform Widens Scope, Revenue Use Questioned

Credits and Negative Emissions

The reform incorporates credits under an agreement reached with the European Parliament. It also includes negative emissions.

Revenue Distribution

Member states receive 80% of ETS revenue distribution. Some 90% of those funds are not used for industrial decarbonisation. Part of the money is spent through the Innovation Fund on clean technologies.

Compliance Concerns

One report states that some companies sell free allowances and invest in China.

Policy Design

The ETS is described as market based, holistic and predictable.

Climate and Energy Backdrop

Global temperature has reached 1.8 degrees. That level is formally beyond the 1.5-degree threshold. Europe imports 80% of its gas. Europe imports 95% of its oil.