Slovenia’s initiative to limit price risks due to the ETS 2 trading scheme
Ljubljana/Prague/Brussels – Several EU member states, including Slovenia, will, at the initiative of the Czech Republic, highlight a series of proposals in a letter to European Commissioner for Climate Wopke Hoekstra aimed at increasing transparency and predictability of emissions allowance prices in the emissions trading scheme for road transport and the building sector (ETS 2). The goal of the initiative is to limit the risks of excessively high price increases for consumers.
In the EU, the reform of the greenhouse gas emissions trading system (ETS) was adopted in spring 2023 as part of the legislative package Fit for 55. This reform aims to increase the overall target for reducing greenhouse gas emissions in sectors already included in the ETS (energy sector, manufacturing industry) from 43% to 62% by 2030 compared to 2005 levels.
At the same time, the reform establishes a new ETS 2 system for fuel for road transport and the building sector, meaning that these two sectors will also have to pay for emissions starting in 2027, and emissions trading will also take place in these two sectors. In the case of exceptionally high energy prices, a separate system will be introduced in 2028.
Recently, the Czech Republic initiated a letter to the responsible European Commissioner Hoekstra, in which EU member states would submit several proposals for greater transparency and predictability of emissions allowance prices at the start of trading as part of preparations for implementing ETS 2. According to unofficial information from STA, 17 member states have joined the initiative so far, including Slovenia. In Slovenia, road transport is the most important source of greenhouse gas emissions.
The aim of the letter is to reduce uncertainty regarding the initial level of emissions allowance prices and thereby increase the predictability of the price effects of this new scheme for businesses and end consumers. The countries want to reduce the risk of excessively high price increases in transport and construction, as such price shocks are also politically very sensitive and significantly reduce support for efforts to limit greenhouse gas emissions. (June 27)
