REPORT: Funding Mechanisms in the fourth phase of the EU ETS, exploring what is known and identifying issues for clarification and discussion.

REPORT: Funding Mechanisms in the fourth phase of the EU ETS, exploring what is known and identifying issues for clarification and discussion.

The revision for the fourth phase of the EU Emission Trading System (ETS), covering the period 2021 - 2030, introduced a number of important changes concerning the ‘funding mechanisms’ in the system. Firstly, the existing mechanisms – the Solidarity Provision and the option for transitional free allocation for the modernisation of the energy sector as captured in Article 10c [“Article 10c Derogation”] – were prolonged and updated. Secondly, new mechanisms – the Modernisation Fund and the Innovation Fund – were introduced.

In this context, the European Roundtable on Climate Change and Sustainable Transition (ERCST), together with the Central European Energy Partners (CEEP) has prepared a paper that aims to guide stakeholders through the complex infrastructure of funding mechanisms in the revised EU ETS.

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