ABSTRACT
This chapter reviews what the EU Emissions Trading System (EU ETS) has achieved so far and how it is intended to function in the coming years, following the major review that was accomplished in 2023 as part of the “European Green Deal”. 2 Over the last two decades, the EU ETS has become the main instrument of the EU’s climate policy and it is likely to continue that role on the path to climate neutrality by 2050. The 2023 review 3 strengthened the system significantly and established an adjacent system in view of incorporating transport and heating fuels as well as smaller industrial combustion emissions. The ETS also creates significant revenues that are being used to enhance climate action, to address social concerns and to encourage low-carbon innovation. The 2023 review ensures that the use of ETS revenues and the system’s ambition go hand in hand.
