The EU Emissions Trading System (EU ETS) has been Europe's flagship climate policy for more than two decades, delivering substantial emissions reductions while supporting cost-effective decarbonisation across the economy. Built on the principles of environmental integrity, market-based efficiency, transparency and rule-based governance, it has become Europe's central climate instrument. As the European Commission prepares for the post-2030 review of the EU ETS, the system must adapt to new challenges, including a shrinking cap, increasing competitiveness pressures, and the transition towards climate neutrality.
In IETA's Vision for the Post-2030 EU ETS, IETA sets out its vision for preserving the EU ETS as Europe's central climate instrument while adapting it to the realities of the post-2030 period. The paper calls for an integrated approach to the review, recognising that key elements of the system - including the cap and linear reduction factor, the Market Stability Reserve (MSR), free allocation, carbon removals, international credits, linking, ETS revenues and competitiveness safeguards - must be considered together to strengthen the effectiveness, predictability and efficiency of the EU ETS.
The paper explores a range of priority issues, including:
- Predictability and regulatory stability
- Expanding the scope of the EU ETS
- Linking compliance carbon markets
- International carbon credits
As the EU works towards its 2040 climate target and climate neutrality by 2050, IETA highlights the importance of maintaining a predictable, rule-based carbon market that provides long-term investment certainty, preserves environmental integrity and supports cost-effective decarbonisation.
The paper also sets out IETA's positions on strengthening international carbon market cooperation, expanding carbon pricing where appropriate, supporting high-integrity carbon removals and international credits, and ensuring the EU ETS continues to support both climate ambition and European competitiveness.
