Report on the functioning of the European carbon market

Summary:

Report presented on 31 October 2019 by the European Commission providing a snapshot of developments in the European carbon market during 2018 and presenting initiatives proposed or agreed in the first half of 2019.

Further information:

The EU Emissions Trading System (EU ETS) has been the cornerstone of the EU's strategy for reducing greenhouse gas (GHG) emissions from industry and electricity and heat production since 2005. It contributes significantly to achieving the overall EU target of cutting GHG emissions by 20% from 1990 levels by 2020. While the EU is on track to surpass this target, cutting GHG emissions by at least 40% (as part of the EU's current 2030 climate and energy policy framework) and at least 50%, going towards 55% in a responsible way would require continued progress.

Following the entering into force of the EU ETS revision for phase 4 in April 2018, the adoption of the implementing legislation for the fourth trading period is progressing at a fast pace. Over the past year, implementing legislation on the new carbon leakage list and free allocation rules has been adopted, and the legal framework for the Union Registry system has been revised to accommodate the required adjustments for phase 4.