UFE’s position paper on the Emission Trading System (ETS) and carbon offset schemes

The European Union has set a very high ambition for decarbonising its economy, with a goal of achieving carbon neutrality by 2050 and reducing greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels. UFE firmly supports these two objectives, which are consistent with scientists’ recommendations to limit climate change.

Achieving them requires drastically reducing CO2 emissions in all sectors, in particular those covered by the ETS (currently the electricity sector and a part of the industry in ETS 1, and in the future, buildings, road transport, and other sectors in ETS 2). The ETS explicitly prices the negative externality of CO₂ emissions, enabling the most cost-effective investments in emission reduction. This approach is particularly relevant as climate targets may become more ambitious. Given the substantial macroeconomic costs of the transition, optimising expenditure remains a top priority.