EU agrees on Emissions Trading System (ETS) reform

31 Oct 2022

Thus, the details regarding the Border Carbon Regulation (SKD), which closely concerns Turkey, became clear.

The reporting obligation, which is seen as a test phase for the regulations, will come into effect as of October 1, 2023. Turkish exporting companies will also start reporting on October 1, 2023, and will face financial obligations as of 2026. Sectors within the scope of ETS will have to reduce their emissions by 62% by 2030 compared to 2005. Before the reform, this figure was 43%.

A second ETS was established for fuels in buildings and road transport (ETS2). Maritime transportation was also included in this scope. The Social Climate Fund was established to compensate for the financial burden that ETS2, which will be implemented in 2027, will create on households. Within the scope of the fund worth 86.7 billion euros, the most vulnerable Europeans will be supported and investments will be made in energy efficiency, decarbonization and sustainable transportation.

In the agreement, the Innovation Fund for investment in new green technologies; The Modernization Fund was also created to support low-income Union members. It is stated that the total size of the two will be approximately 50 billion euros. The revenues of these funds will come from both the sale of existing emission permit certificates and the issuance of new permits.

EU countries will keep track of emissions caused by city waste by 2024; By 2028 or 2030 at the latest, the waste sector will also be included in the ETS system.

The reduction of free allocations offered in the ETS system will begin in 2026, will decrease by 48.5% by 2030, and will be reset in 2034. This means that financial liabilities will gradually increase within the framework of the system and SKD will be fully implemented in 2034.

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