The EU prioritizes ETS decarbonization, reinvestment, and cross-border energy flows
EU countries need to invest more revenue from the Emissions Trading System (ETS) to support investments in industrial decarbonization, European Commission President Ursula von der Leyen has said. The European Commission, meanwhile, is seeking to eliminate bottlenecks in the electricity grid in order to ensure the free flow of clean energy in the demand area, as well as contribute to reducing national energy taxes.
At the EU level, 100% of ETS revenues are reinvested in industrial innovation. An example of this is the 100 billion euro ($119 billion) Industrial Decarbonization Bank, whose first 1 billion euro pilot auction is due to close next week. "This will finance the decarbonization of furnace heating, metal melting or chemical mixing methods," Von der Leyen said at the European Industrial Summit in Antwerp on Wednesday.
.However, Kallanish notes that EU member states invest less than 5% of ETS revenues in industrial decarbonization. The President of the European Commission said she plans to raise the issue at the Alden Bizen summit on Thursday with EU leaders.
"Thus, channeling more ETS revenue back to industry will be the main focus of the upcoming reform of the emissions trading system this summer. Because these resources come from the industry, and they need to be reinvested in the industry itself, where the money comes from," she said.
Sharp spikes in energy prices in one country should be avoided by allowing cheaper energy to flow across borders, which is what the package of European energy systems announced in December is aimed at. This implies the accelerated construction of so-called energy highways throughout Europe. For example, the energy island of Bornholm will connect the Baltic Sea's offshore wind energy with the national grids of Denmark and Germany, turning Baltic wind energy into a "common European energy system," von der Leyen noted.
"We will overcome all these bottlenecks one by one. The goal is simple. Clean energy should flow freely throughout our Union so that cheap energy can flow where it is needed, when it is needed," she added.
In addition to reducing national energy taxes to lower prices, all member states should conclude electricity purchase agreements and CFDs in order to fix energy prices for the long term, she continued.
Von der Leyen also mentioned the Law on Accelerating Industrial Production, which will be presented later in February. It introduces special EU content requirements for strategic sectors, including