The cap on allowances under the reformed EU Emissions Trading Scheme (ETS) could be reduced while protecting industry by targeting free allowances, NGO Sandbag has told MEPs.
According to Sandbag, an effective reform of the ETS for the period after 2020 would reduce the current surplus of allowances on the market while avoiding the use of the ‘cross sectoral correction factor’ (CSCF). This dictates that the number of free allowances granted to all installations is reduced if the total number requested exceeds an agreed ceiling.
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