ETS to encourage Energy Efficiency

The Energy Package includes a target of 20% increase in energy efficiency in the EU. The instrument to achieve this is the Emission Trading Scheme (ETS) as agreed in Directive 2009/29/EC. The new amendments and extension of the ETS will result in a 21% reduction of GHG emissions in 2005 from most industrial sources to be reached in 2020. In that period free emission permits are to be phased out with the exception of the energy-intensive industry, in order to prevent carbon leakage. Member States have the obligation if additional reduction targets for the sectors outside the ETS.

 

The aviation sector has now been included in the ETS which will become effective from 2012 for flights within Europe. Their emissions will be capped at 97% of their average 2004-2006 level in 2012, to be reduced to 95% from 2013. Airlines will receive 85% of their emission allowances for free in 2012; this percentage may be reduced from 2013.

 

Revenues from the auction of emission permits are to be made available for protection measures against the effects of climate change. Further details may be found in Directive 2009/29/EC and the original Directive 2003/87/EC.