The forgotten innovation agenda of the ETS

(EurActiv, 19 Apr 2022) Climate innovation is crucial in de-risking the effort to decarbonise the economy, and European policymakers need to make this part of ETS reform, argue Andris Piebalgs and Alessia Virone.

Andris Piebalgs is the former European Commissioner for Energy; Alessia Virone is the Clean Air Task Force’s Director of EU Advocacy.

The forthcoming revision of Europe’s Emissions Trading Scheme (ETS) has generated many column inches. From breathless coverage of the highs and lows of the ETS price over the past 18 months to the spectre of the Gilets Jaunes conjured up by the proposed expansion to housing and road transport, few EU policies in the Fit for 55 have received more attention.

But one part of the reform has been largely ignored – the backing of climate-forward innovation projects in Europe. The ETS should ensure the decarbonisation of EU industries, but, at the same time, it should support the development of the innovative technologies required to reach this decarbonisation.

Climate innovation is crucial for meeting Europe’s decarbonisation targets. The International Energy Agency (IEA) estimates that nearly 50% of the reductions in emissions that Europe needs to reach its 2050 climate goals will come from technologies that are yet to be deployed at scale. For sectors that have been slow to reduce emissions – like heavy transport and industry – developing pathways to new technology options is crucial for decarbonisation.

Building new industrial infrastructure at an appropriate scale will take decades, and postponing them would jeopardise reaching climate neutrality by 2050. Thus we need to start immediately. In the meantime, those stubborn industrial emissions will offset gains made elsewhere in the energy system.

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EurActiv, 19 Apr 2022: The forgotten innovation agenda of the ETS