Council must take position on ETS this year, or risk ETS2 delay

The start of early auctions of ETS2 allowances is two months away, yet Poland, Czechia, Italy, and others have continued to challenge the system, repeatedly calling for a further delay. The main arena for that fight is the ETS Directive review, which focuses on ETS1 and does not envisage reopening ETS2, but gives the sceptics an opportunity to target it as the Council and the European Parliament each agree a position.

The analysis sets out how ETS2 might still be delayed beyond its scheduled start: through the ETS Directive review, depending on whether the sceptics’ blocking minority holds and whether the review is settled before elections in Spain and France change the Council arithmetic; through the routes that remain once the review is completed; or through Member States not transposing the ETS2 rules into national legislation. It closes with Veyt’s overall view on the ETS2 start and the milestones that will decide it.