Climate Protection by way of the EU ETS

The EU Emission Trading System (EU ETS) is the most important instrument for climate protection in the European Union and makes a material contribution to achieving EU climate targets. Prior to its 4th trading period (2021–2030), the ETS has been comprehensively reformed. cep has prepared an Input assessing the status and perspectives following the reform.


In cep’s view, the EU ETS is an ecologically sound and at the same time economically efficient instrument for reducing GHG emissions. Additional sectors should therefore be included in the EU ETS in the future. In addition, the proportion of emission allowances, that are allocated free of charge to EU industrial installations that compete internationally, should not be limited to 46%. This could counteract the transfer of emissions that are harmful to the climate, from the EU to third countries (“carbon leakage”).