The EU ETS and the EU 2040 climate target (Carbon Pricing Hub - LIFE Effect)

In early July, the European Commission will release its proposal to set a 2040 climate target by amending the European Climate Law. Since the initial proposal of a 90% net emissions reduction by 2040 was proposed on 6 February 2024, the European Commission has begun to consider introducing flexibilities such as the inclusion of credits under Article 6 of the Paris Agreement, in place of necessary domestic emission reduction actions, in opposition to the the scientific recommendations of the ESABCC. With the creation of ETS2, which will apply carbon pricing on buildings and road transport from 2027, 75% of the EU’s emissions will be covered by the union’s carbon market, making the EU ETS key to achieving the EU’s 2040 climate target. As policymakers and stakeholders prepare for the 2026 review of the ETS, the report ‘The EU ETS and the 2040 Climate Target’ by Oeko Institute provides valuable insight into how to manage the ‘ETS homestretch’, potential changes to the market stability reserve, and considerations around the role of carbon removals in the EU ETS. This video includes the presentation of the findings of the study by Jakcob Graichen, senior researcher climate and energy, Oeko Institute, followed by a lively panel discussion featuring: Beatriz Yordi – director in European Commission DG CLIMA – responsible for ETS and international cooperation on carbon markets Sam Van den plas – policy director – Carbon Market Watch Ola Hansén – public affairs director – Stegra Steel Eleanor Scott – EU carbon market expert – Carbon Market Watch (moderator)