Stopping carbon leakage must be at the heart of all climate policy, this is especially applicable for the EU ETS.
It is companies, not Member States, which will make the investments required to achieve this transition. Unprofitable companies will not be able to make the necessary investments. Furthermore, Swedish and European production is already generally climate efficient; thus, EU policy cannot allow European production to be replaced by dirtier production elsewhere.
Industry within the EUETS is already facing a large burden of meeting the overall reduction target. Since we want to reach net zero by 2050, it is urgent that all sectors - and, for that matter, all member states – take an increased share of the responsibility. Cost efficiency must also be considered also between ETS and ESR, and not only within ETS. The road to a climate-neutral EU 2050 will not be straightforward, as it will take time and technological breakthroughs will be essential for some sectors to reduce emissions.
Further, industry needs predictability in order to invest in technology needed to decrease emissions. Given the short amount of time left until 2030, especially considering the time necessary for the legislative reform, we believe that the room for major changes to the EU ETS is limited.
The current system benefits members states which have yet to transform their power sector. Member states which have already shifted from coal and gas, lack the necessary funds to compensate for indirect costs. The present system effectively punishes member states which have taken a greater share of the burden. A harmonization would rectify this.
Please read the comments from the Confederation of Swedish Enterprise on the consultation on the EU ETS below.EUClimateClimate changeEU ETS