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Carbon Market Watch’s feedback to energy taxation directive impact assessment

Carbon Market Watch welcomes the opportunity to provide feedback on the ETD revision. Several aspects of this directive are crucial to set the EU on a  pathway compatible with the Paris Agreement’s objectives. Carbon Market Watch supports the revision of the Directive, in particular with regard to the aim of “aligning taxation of energy products and electricity with EU energy and climate policies with a view to contributing to the EU 2030 targets and climate neutrality by 2050 in the context of the European Green Deal”. 

The ETD should be brought in line with setting a carbon price at a level compatible with the Paris Agreement (40-80$/tCO2e in 2020 and rising to 50-100$/tCO2e in 2030, according to the high-level commission on carbon pricing). Revenues from taxation should be reinvested into climate action as well as measures to ensure a just transition. Climate action must leave no one behind. Revenues should therefore be re-distributed to the most affected workers, and the poorest communities and regions. This can be done through direct payments, tax rebates, re-training of workers, and other measures. […]

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