Posted on December, 12 2019

Brussels, Belgium - 12 December 2019

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.  

EU leaders will try and agree a climate neutral EU target today. Poland, Hungary and the Czech Republic are requesting more climate transition money in return for their support; in response, the EU Commission will refer to a Just Transition mechanism when it presents the European Green Deal on Wednesday. 

However, WWF finds that those countries did not spend all their ETS revenues on climate action in 2018 (the Czech Republic spent 63%, Hungary 29%, Poland 51%). What’s more, they spent some of their revenues in ways that harm a just transition to climate neutrality. Poland, for example, spent €13.5 million from 2016-8 on actions including building a biogas plant. Over the same time period, Hungary spent €4.6 million on replacing gas boilers. Gas is a fossil fuel and incompatible with a climate neutral EU. 

Imke Lübbeke, head of climate and energy at WWF EU said:
“There are untapped billions available to support a fair shift to zero carbon across Europe. Knowing there is an upcoming Just Transition fund, which can be complemented by broader EU funds and the ETS, mean there should be no excuse for any EU leader not to support a climate neutral target this week. Science and citizens demand it.”

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

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

See WWF’s analysis
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