Following up to the event on the EU ETS funding mechanisms, Central Europe Energy Partners (CEEP) in cooperation with European Roundtable of Climate Change and Sustainable Transition (ERCST) presents an updated paper on size and functioning of the funding mechanisms which are part of the EU ETS, i.e. the Solidarity Provision, Article 10c Derogation, the Modernisation Fund, and the Innovation Fund.
This paper further discusses how Member States (MSs) have made use of this flexibility mechanism and explains reasons regarding the use of the Article 10c Derogation by MSs.
It also seeks to provide an overview of current developments and regulatory decisions made in 2020, with a focus on:
- the state of play of the Modernisation Fund, and the Innovation Fund,
- the national frameworks which are being put in place by MSs to select investments from the Modernisation Fund,
- detailed information for the 10 Central and Eastern European (CEE) Member States, who are eligible for the Modernisation Fund and Article 10c Derogation.
In addition, this paper addresses the issue of the size of the EU ETS funding mechanisms under different scenarios. It shows how developments like a recalculation of the cap following Brexit, or an increase in the 2030 target, would affect the amount of allowances available under the EU ETS in phase 4, and under the individual funding mechanisms.