EU ETS: The impact of including emissions from road transport and buildings

This EU Commission report aimed to understand the potential impact of extending the EU Emissions Trading System (ETS) to include emissions from road transport and buildings.

The study was led by ICF in partnership with Milieu, Eclareon, Ecologic, Enerdata, Fraunhofer, and Cambridge Econometrics.

The project included:

  • Recommendations on the general architecture of such an inclusion.
  • An analysis on the interactions between the options for the extension and the current regulatory climate and energy framework including the need for a just transition.
  • A more radical extension of the current ETS to all GHG emissions from the extraction and use of fossil fuels.

Cambridge Econometric’s contribution focused on:

  • The understanding and assessment of how energy is used within these two sectors.
  • Which levels of GHG emissions result from the consumption of fossil fuels.
  • How the sectors may react to price signals, including a carbon price.
  • Which abatement potentials can be expected in the two sectors, along with the associated costs and potential barriers.
Dóra Fazekas Managing Director (Hungary) df@camecon.com