Aong with comprehensive answers to the related questionnaire, actively contributing to the shaping of Europe’s flagship climate policy. It supports strengthening the EU Emissions Trading System (EU ETS) and the Market Stability Reserve (MSR) to accelerate the transition to a climate-neutral economy in a fair and socially equitable manner.
With some countries only beginning public participation in June (and others not having started at all), NGOs are concerned that measures outlined in NSCPs will be insufficient to protect those most vulnerable to ETS2 prices. National governments must prioritise completing their plans as soon as possible, but not at the expense of meaningful stakeholder engagement.
National plans for spending climate funds, which the government must submit to the European Commission by mid – 2026, represent a historic opportunity to rethink how common money is used – success will depend on the cooperation of social policy experts and climate and communication specialists between society and the government.
“The ETS is finally functioning as a proper climate tool,” said Sam Van den plas, policy director at Carbon Market Watch. “Instead of introducing risky loopholes, we need to strengthen what’s already working.”
The Italian approach to ETS2 and the SCF must move beyond ex-post compensation to embrace a pre-distributive logic. Rather than merely offsetting costs after they arise, policies should proactively direct ETS2 revenues toward systemic reforms that reduce both emissions and inequality. This includes investing in renewable energy, energy efficiency and low-carbon mobility, particularly targeting vulnerable households and microenterprises.
The EU’s Emissions Trading System is essential to meeting the European Union’s 2040 climate target. Watering the EU ETS down with international carbon credits or carbon removals will prove fatal, concludes a study commissioned by Carbon Market Watch.
