During a webinar held in late April 2022, stakeholders from across Europe discussed the proposed new EU Emissions Trading System (ETS2) covering road transport and heating for buildings. The ETS2 is intended to complement the current system, which aims to regulate emissions from energy generation and industry. It is part of the ‘Fit for 55’ package, which sets out the legislative framework and actions that the European Commission considers necessary to reduce CO2 emissions by 55% by 2030.
Organised by the Potsdam Institute for Climate Impact Research (PIK), the Mercator Research Institute on Global Commons and Climate Change (MCC), and the European Automobile Manufacturers’ Association (ACEA), speakers at the webinar included Peter Liese, MEP and rapporteur for the ETS in the Parliament; Sofie Defour from Transport & Environment; Nicolette van der Jagt from the European Association for Forwarding, Transport, Logistics and Customs Services; Thomas Fabian from ACEA; Michael Pahle from PIK; and Ottmar Edenhofer from PIK and MCC. All panellists were said to support the introduction of ETS2, providing different perspectives on its role and how to implement it.
The emission trading system for buildings and road transport (BRT ETS) proposed in the Fit for 55 package is seen as a key policy tool to decarbonise road transport, but price uncertainty presents a challenge. This can make finding political agreement challenging. The webinar was held to clarify why carbon pricing is needed to decarbonise road transport, and how the BRT ETS might balance political concerns with economic necessities.
“The ETS2 has the potential to combine climate policy and energy security. In times of war, this is an important aspect which hasn’t been discussed much,” stated Ottmar Edenhofer Director of PIK and MCC. “ETS2 could help energy prices go in the right direction. Oil prices should rise and clean electricity prices should drop to ensure that that clean vehicles become more competitive.”
Thomas Fabian, ACEA’s Commercial Vehicle Director, added, “The ETS for road transport is a crucial part of the policy framework that enables the decarbonisation of the sector. It is not ‘a silver bullet’ to replace other regulations, but, without it, the necessary CO2 reductions will simply not be possible. Indeed, a broad market uptake of alternatively-powered vehicles can only be expected if the carbon content of all energy carriers and CO2 emissions is priced appropriately.”