The EU ETS does not make an industrial policy and it mustn’t become a cash cow to repay EU recovery funds.

The EU has committed to increased climate ambitions by 2030 and promised that this will be accompanied by a just transition for the workers impacted. It is on the basis of this balance that industriAll European Trade Union has supported the European Green Deal, as well as the long-term ambition of carbon neutrality by 2050.

The upward revision of the EU 2030 emission reduction target requires a revision of the EU Emission Trading System. The two main proposals made by the European Commission, when it comes to reforming the EU ETS in the context of the -55 %, are to expand it to building and road transport, and to reduce the cap.

In its initial response to the EU public consultation, industriAll Europe sets out the implications of the proposed policy options from a worker perspective. Notably, industriAll Europe is not in favour of extending the EU ETS to other sectors, as proposed by the European Commission. Carbon pricing can provide an additional incentive to decarbonise sectors, such as road transport and building, but the EU ETS is not the best vehicle to achieve that objective.

The ETS currently covers around 40% of EU Greenhouse emissions from approximately 11,000 installations in all EU Member States, Norway, Iceland and Lichtenstein, as well as from airlines operating within that group of countries. Sectors covered by the EU ETS represent approximately 7.5 million jobs (5.9 million in energy-intensive industries and 1.5 million in energy sectors). These sectors are also key suppliers of other sectors across the economy and are of strategic importance for EU prosperity.

Decarbonisation will not happen in a vacuum, and we are in the midst of a severe economic downturn (-7.5 % for the EU GDP in 2020), which is impacting production levels as well as companies’ liquidity and investment capacity.

Judith Kirton-Darling, industriAll Europe Deputy General Secretary states:

“The EU ETS does not make an industrial policy and it mustn’t become a cash cow to repay EU recovery funds. Fundamentally, a reform of the ETS must be enshrined into a broader industrial strategy that would provide all the key enabling elements that are needed to trigger the necessary transformative action. Use of revenues should provide additional support for climate action, including investment to transform the installations in the sectors covered by the ETS.”

A comprehensive trade union position on the ETS revision will be discussed by industriAll Europe’s Executive Committee in April.

Contact: Andrea Husen-Bradley (press and communication), Benjamin Denis (benjamin.denis@industriall-europe.eu)