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Post-2020 reform of the EU Emissions Trading System [EU Legislation in Progress]

Written by Gregor Erbach (8th edition),

Updated on 28.5.2018

© Kromosphere / Fotolia

In July 2015, the European Commission proposed a reform of the EU Emissions Trading System (ETS) for the 2021-2030 period, following the guidance set by the October 2014 European Council meeting. The proposed directive introduces a new limit on greenhouse gas (GHG) emissions in the ETS sector to achieve the EU climate targets for 2030, new rules for addressing carbon leakage, and provisions for funding innovation and modernisation in the energy sector. It encourages Member States to compensate for indirect carbon costs. In combination with the Market Stability Reserve agreed in May 2015, the proposed reform sets out the EU ETS rules for the period until 2030, giving greater certainty to both industry and investors.

In the European Parliament, the ENVI Committee took the lead on the proposal, while it shared competence with the ITRE Committee on some aspects. The European Parliament and the Council adopted their respective positions in February 2017, and interinstitutional trilogue negotiations were concluded in November 2017. After its adoption by Council and Parliament, the Directive entered into force on 8 April 2018.


Proposal for a Directive of the European Parliament and of the Council amending Directive 2003/87/EC to enhance cost-effective emission reductions and low-carbon investments
Committee responsible:


Environment, Public Health and Food Safety (ENVI)

Julie Girling (ECR, UK)

COM(2015)0337 of 15 July 2015

procedure ref.: 2015/0148(COD)

Ordinary legislative procedure

Procedure completed. Directive (EU) 2018/410
OJ L 76, 19.3.2018, pp. 3–27




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