Planned EU transport and buildings emissions trading needs socially just framework – NGO alliance

The planned EU emissions trading system for transport and buildings (ETS 2) must be designed in a way that guarantees a socially acceptable burden-sharing, an analysis commissioned by NGO umbrella organisation Climate-Alliance Germany has found. “While we generally support the polluter-pays principle as well as carbon pricing as a policy tool, we have strong concerns regarding the new ETS for transport and buildings,” said the alliance’s deputy head Malte Hentschke-Kemper. The ETS 2 system alone would not be enough to achieve the EU’s climate targets, he argued, adding that the system would become “absurd” if it excessively burdened poorer households. “It would jeopardise the acceptance of climate action measures,” Hentschke-Kemper concluded. Contrary to the existing ETS 1, which covers energy generation and industry emissions, measuring the impact and optimising cost allocation is much more difficult for the transport and heating sectors, where CO2 emissions are much more decentralised. The analysis therefore lists several accompanying measures that are needed to reduce pressure on low-wage consumers. These include price control mechanisms to ensure the policy is effective and socially adequate; the closing of loopholes; the elimination of exemptions for large emitters; making climate-friendly mobility and heating alternatives widely available and affordable before the carbon price increases significantly; and the use of 100 percent of the funds generated with ETS 2 for climate action and social compensation. 

The European Commission last year proposed to set up a second emissions trading system from 2026 for the transport and buildings sectors as part of its “Fit for 55” package of energy and climate legislation to bring the bloc on course for its 2030 climate target. The process is now in the hands of member state governments in the EU Council and the European Parliament. Peter Liese, a member of the European Parliament from Germany, has recently proposed that member countries should have the option to temporarily opt out of the planned emissions trade when it comes to the private sector.