Strategic spending: how the EU Emissions Trading System can fund fair climate action

Posted on December, 13 2019

EU Member States are spending billions of Euros less on climate action than they could

EU Member States are spending billions of Euros less on climate action through the Emissions Trading System (ETS) than they could, WWF analysis reveals.

According to EU Member States’ reporting, of the €13.9 billion total ETS revenues in 2018, one-third - €4.6 billion - was not spent on climate actions like insulating homes or installing renewable energy. What’s more, emissions allowances worth €11 billion were given out to polluters for free. This makes almost €16 billion of missed money for climate action last year.

For an effective ETS for the climate, WWF makes six recommendations:

Improve Member State reporting on how they spend their revenues
Agree that Member States must spend 100% of revenues on climate action, and ensure climate spending is additional to state climate spending
End free allocation of allowances
Exclude fossil fuel investment from ETS revenue spending
Remove excess ETS allowances from the market for good, and lower the cap
Introduce sustainability and climate proofing rules to ETS climate spending

See WWF’s analysis (summary paper)
See WWF's analysis (full report)
See WWF’s asks on the Just Transition fund

Nb: Data on ETS revenue use sourced from The European Environment Agency's EIONET Central Data Repository and EU Emissions Trading System (ETS) data viewer