Issues and options for EU emissions trading after 2030
Publication date: 22 May 2025 | Report language: EN
This report is a partial result of a project on the future of the EU Emissions Trading System (EU ETS) after 2030. The project was carried out by Technopolis together with the partners Potsdam Institute for Climate Impact Research (PIK) and E3 Modelling (E3M) on behalf of the European Commission’s Directorate-General for Climate Action (DG CLIMA). The objective of the overall project was to provide a scientifically sound basis for decision-making on the further development of the EU emissions trading system in the period 2030-2040.
This report contributes to this by systematically analysing and describing key challenges and policy options for the period 2030-2040. This is based on a comprehensive review of the scientific literature, interviews with experts and stakeholders and a survey. The aim was to identify and categorise the most important issues for the development of EU emissions trading in the years ahead.
The topics analysed are divided into seven key areas:
- Market stability and market stability reserve (MSR)
- Negative emissions (Carbon dioxide removals, CDR)
- Distribution effects and social aspects
- Industry (Free allocation, Carbon Border Adjustment Mechanism – CBAM, Carbon capture and utilisation – CCU)
- International aspects (linking with third emissions trading systems, aviation and maritime transport)
- Coverage of emissions and linking of EU ETS1 and EU ETS2
- Role of financial market players
- Initial conclusions are formulated based on the analysis. Relevant developments are assessed and options for action are identified that require in-depth political and scientific discussion.
Note: The report reflects the status of discussions up to the end of 2023. The underlying analyses were mainly carried out between February and October 2023.
Authors: Jan Stede (Lead author), Marc Blauert, Liz Victor, Gaëtan Coatanroch (Technopolis Group) Michael Pahle, Claudia Günther, Sebastian Osorio (PIK).
Contributing authors: Michael Mehling (MIT) (Legal excursus, see Section 4.2), Barbara Hansen-Duncan, Marius Alt, Nadia Maki, Ross Hudson (Technopolis Group)
