Slovakia did not invest the prescribed amount from the sale of emissions in surface protection – euractiv.sk
Since 2013, member states have received 88.5 billion euros from the sale of emission allowances. Although half of this amount was supposed to go to climate measures, Slovakia devoted only 18 percent to them. They paid much more to the European country of industry in the form of free allowances.
Since 2013, the European country has given industry free CO2 emission allowances worth almost 100 euros, which is more than they get from selling them, he says a message environmental organization WWF.
Ongoing negotiations between the EU institutions on the revision of the current emission allowance trading system (EU ETS). They set a price for each ton of CO2. The obligation to purchase emission quotas concerns approximately ten thousand industrial enterprises – mainly companies doing business in Europe and in heavy industry.
The total number of emission allowances available is limited and must be reduced over time in line with the EU’s climate goals.
However, a large part of emissions from energy-intensive industries and the aviation industry are exempt from the obligation to buy and permit pollution. They use so-called free quotas, which are allocated to them by individual member states free of charge. The study shows that a total of 53 percent of emissions vs. emissions were within European trade quotas.
In the period from 2013 to 2021, according to the WWF report, which draws on data from EU member states and information collected by the European Environment Agency (EEA), European countries received a total of 88.5% of ETS revenue.
During this period, the main recipient of ETS revenue was Germany. It collected €18.4 billion over the nine years under review, while Poland is in second place with €13.5 billion, followed by Italy and Spain. With 1.3 billion euros, Slovakia is in the middle of the tables.
The industries that are allocated quotas for free cleaning had high profits from emissions trading for the period of 2013 to 2021. During this period, the studies received a total of 98.5 billion euros in the form of free allowances – which is ten euros more than the EU member states collected for pollution.
Under the EU ETS, European companies must pay for their emissions by purchasing emission allowances. The standard option is to buy these quotas at auction or they can be allocated free of charge. Buying emission permits increases costs for European manufacturers. Companies in China, the USA and other countries do not have such an obligation yet.
New fees for emissions at EU borders are to prevent the risk of “carbon leakage”. This situation occurs when manufacturing companies move their production outside Europe to areas where the price of pollution is lower. Currently, this problem is solved by free emission permits, which are obtained by industrial enterprises for free. These were to be gradually replaced by the introduction of a fee for the import of emissions at the Union border.
On the other hand, industry representatives and employers have been protesting against the abolition of free emission quotas for a long time.
According to the Commission, the EU ETS is the main policy instrument that supports the EU’s goal of reducing net emissions by at least 55 percent by 2030, but it did not confirm this for all emissions from industry. The system of available quotas has come under sharp criticism for undermining Europe’s long-standing problems. Among the critics are environmental non-governmental organizations, but also the EU’s own supervisory body – the European Court of Auditors.
Auditors claimed that major emitters had been allocated so many free allowances in recent years that they could not afford them. Companies can trade unused emission quotas on the market. According to the auditors, this led to an unexpected profit for companies that, on the other hand, should pay for pollution, which is also confirmed by the WWF report.
How EU Member States spent their ETS revenues
Under the existing Emissions Trading System Directive, member states are obliged to spend at least half of their revenue from auctioning emission allowances on measures in the area, whether it is the introduction of renewable sources, carbon capture and storage, improving energy efficiency or district heating.
But the report says the rules are “too weak” and only “encourage” governments to spend half of their ETS revenue on government measures. According to the research, more than half of the Member States did not follow the recommendations of the directive.
For example, in 2021, Latvia, Slovakia and Italy spent less than 20 percent of their ETS revenue on territorial measures, while Austria and the Netherlands spent zero, the study said. In Slovakia, spending on green measures from profits within the EU ETS had a downward trend. While in 2017 it was still 47 percent, last year it was only 18 percent.
In addition, the quality of Member States’ reports on what brings benefits from Member States’ emission quotas is very low and the data provided is “not reliable”, while the European Commission does not report these inaccuracies, according to the authors’ studies.
EU member states also have little control over “climate action” spending, leading to misleading reporting. France, for example, reports more than €1 billion in 2021 as “expenditures for measures in the area of the territory”, when this sum was actually transferred to the French general budget, the study says.
“This analysis shows that over the past decade the ETS has been based on the ‘polluters don’t pay’ principle – with billions and billions of lost revenue that EU countries could have invested in industrial decarbonisation instead.” he said Romain Laugier from the WWF European Office and lead author of the report.
“EU negotiators should confirm free allowances as soon as possible and ensure that the companies they receive only strict conditions for reducing emissions,” it should be emphasized that the EU must spend the entire amount they offer by selling emission allowances on climate measures.