The EU ETS Up to 2030

This report presents some figures
exploring the way Romanian installations have been operating
under the European Union Emissions Trading System (EU ETS).
At the request of the Government of Romania, a two-year
Reimbursable Advisory Services (RAS) Program on climate
change and low-carbon green growth was launched by the World
Bank in July 2013. The RAS project focuses on
operationalizing Romania’s national climate change strategy
and action plan, identifying and integrating climate-related
actions in new operational programs, building a solid
analytical base for impact assessments and climate-related
decision making, and enhancing climate-friendly practices
and monitoring systems. Component D aims at supporting the
Government institutions in implementing, monitoring, and
evaluating climate change actions and sharing their
experiences. In this context, the present report provides a
background overview and analysis on EU Emissions Trading
System (EU ETS) in general, as well as on the participation
and compliance of Romanian EU ETS installations. A number of
ETSs have been implemented to curb air pollution, in
particular greenhouse gas (GHG) emissions, in order to
mitigate climate change. The EU ETS was proposed in 2001 by
the European Commission to help EU countries meet their
national commitments under the Kyoto Protocol. The choices
in the allocation process made by European Member States
since the inception of the EU ETS in 2005 have modified the
way the “carbon rent” created through allocation is
distributed among economic players, industries, utilities,
but also governments and indirectly citizens and tax payers.
In parallel, European governments have committed to report
on their use of auction revenues and to dedicate at least
half of them to climate-related policies. In particular, the
changes in the allocation process raise questions regarding
their impact on European competitiveness. Because European
industries are already fighting to keep market shares on the
international market, it is often feared that an additional
constraint, through carbon pricing, would make their playing
field even less leveled. Member States thus have to consider
a number of parameters in their use of auction revenues.