Bioenergy Europe contribution on the EU Emissions Trading System and Market Stability Reserve review

Key points from Bioenergy Europe’s feedback

Bioenergy Europe contributed to the European Commission’s consultation on the EU Emissions Trading System (ETS) and Market Stability Reserve (MSR) review. The Organisation supports EU’s ambitions to reach climate neutrality by 2050 and strongly endorse the proposed intermediate target of a 90% reduction in net greenhouse gas emissions by 2040.

The EU ETS remains a cornerstone of the EU’s climate policy, and its further evolution must enable the scaling of emissions reductions and permanent removals, while maintaining cost-efficiency, environmental integrity, and administrative proportionality.

Here are five essential recommendations from the Bioenergy sector:

• A net target for 2040 including permanent carbon removals: the inclusion of carbon removals in the EU ETS is not only scientifically and economically necessary but politically strategic.
• Permanent carbon removals and the "like-for-like" principle: to maintain environmental integrity, only permanent removals certified under the Carbon Removal and Carbon Farming Certification (CRCF) Regulation should be eligible within the EU ETS. 
• Design considerations for CDR integration into the EU ETS: the integration of permanent carbon dioxide removals into the EU ETS must be carefully staged to ensure it strengthens the system without undermining emissions reduction incentives.
• Complementary measures to enable scaling: the inclusion of permanent carbon removals in the EU ETS must be accompanied by a robust framework to ensure their effective and sustainable scale-up.
• Concerns over the feasibility of lowering thermal input thresholds: Bioenergy Europe does not support lowering the current 20 MW threshold for inclusion in ETS1. The introduction of ETS2 in 2027 will already bring installations below 20 MW under carbon pricing, using a lighter and more appropriate regulatory approach for small emitters.