Why a new Emissions Trading System is needed in Europe to make road transport “Fit for 55”

04/28/2022 - The new Emissions Trading System proposed by the European Commission, the ETS2 – covering road transport and heating for buildings – is currently one of the most controversial topics in the European Parliament. To discuss it, stakeholders from science, business, civil society and policy gathered at a webinar 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) this week. Around 150 participants joined the event.
Why a new Emissions Trading System is needed in Europe to make road transport “Fit for 55”
Trucks. Photo: Nigel Tadanehondo/Unsplash

The new ETS2 would complement the existing one, which covers emissions from energy generation and industry. ETS2 is  part of the proposed EU policy package 'Fit for 55' to reduce European emission by 55% until 2030, compared to their 1990 values. Speakers included the European Parliament’s rapporteur for the ETS in the ENVI environment committee Peter Liese, Sofie Defour from Transport & Environment (T&E), Nicolette van der Jagt from the European Association for Forwarding, Logistics and Customs services (CLECAT), Thomas Fabian from ACEA, Michael Pahle from PIK, and Ottmar Edenhofer, Director PIK and MCC. The event has been moderated by Sam van den Plas, Policy Director at Carbon Market Watch. The presentations are available for download (see below).

Strikingly, all panelists supported the introduction of the ETS2, providing different perspectives on its role and how to implement it.

“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,” said Ottmar Edenhofer from PIK and MCC. Carbon pricing can reduce oil and gas demand and thereby also Russia’s future revenues from fossil fuel exports. It can hence reduce the EU’s dependency on energy imports from Russia. Taxing these imports could complement the ETS2 to change the composition of imports in the short term. But there’s more. “The second ETS can help energy prices go into the right direction,” Edenhofer said. Oil prices should rise and clean electricity prices should drop to ensure that sustainable road transport become more competitive, in time to meet the EU climate targets.

Thomas Fabian, ACEA’s Commercial Vehicle Director, urged policymakers to endorse the proposal to establish a solid carbon pricing system for road transport: “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.”

A video of the complete event is now available online.

For download

Webinar Agenda

From science, by Ottmar Edenhofer and Michael Pahle, PIK/MCC

From policy, by Peter Liese, Member of the European Parliament

From industry, by Thomas Fabian, ACEA

From NGO, by Sofie Defour, Transport & Environment

On the EU Green Deal

Information by the European Commission: https://ec.europa.eu/clima/eu-action/european-green-deal_en


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