This policy submission reflects on the implementation of the new ETS phase where a key element is the update of the requirements for climate neutrality plans, drafted by operators of installations whose greenhouse gas emission levels are higher than the 80th percentile of emission levels for the relevant product benchmarks.

While Carbon Market Watch strongly believes that free allocation of allowances should be fully phased out by 2030 at the latest to guarantee the implementation of the “polluter-pays” principle, it is essential that while free emission allowances are still handed out there are strong obligations for operators to commit to decarbonise their activities.

While we welcome the proposed implementing regulation and Annex, a few changes are necessary to guarantee the plans are not an empty exercise for companies to be able to receive free allowances, but a solid framework to evaluate their efforts towards full decarbonisation of their own activities.