ETS2 Flashcards

1
Q

ETS2 will cover and address the CO2 emissions from fuel combustion in , transport and additional sectors (mainly industry not covered by the existing EU ETS).

A

ETS2 will cover and address the CO2 emissions from fuel combustion in buildings, road transport and additional sectors (mainly small industry not covered by the existing EU ETS).

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2
Q

The ETS2 will become fully operational in . Although it will be a ‘cap and trade’ system like the existing EU ETS, the ETS2 will cover emissions upstream. It will be , rather than end consumers such as households or car users, that will be required to monitor and report their emissions. These entities will be regulated under the ETS2, which means they will be required to surrender sufficient allowances to cover their emissions.

A

The ETS2 will become fully operational in 2027. Although it will be a ‘cap and trade’ system like the existing EU ETS, the ETS2 will cover emissions upstream. It will be fuel suppliers, rather than end consumers such as households or car users, that will be required to monitor and report their emissions. These entities will be regulated under the ETS2, which means they will be required to surrender sufficient allowances to cover their emissions.

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3
Q

Regulated entities will purchase these allowances at auctions. The ETS2 cap will be set to bring emissions down by X% by 2030 compared to YYYY levels.

A

Regulated entities will purchase these allowances at auctions. The ETS2 cap will be set to bring emissions down by 42% by 2030 compared to 2005 levels.

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4
Q

X% emission allowances in the ETS2 will be auctioned, and a share of the revenues will be used to support vulnerable households and micro-enterprises through a dedicated . Member States will be required to use the remaining ETS2 revenues for climate action and measures, and they will report on how this money is spent.

A

All emission allowances in the ETS2 will be auctioned, and a share of the revenues will be used to support vulnerable households and micro-enterprises through a dedicated Social Climate Fund (SCF). Member States will be required to use the remaining ETS2 revenues for climate action and social measures, and they will report on how this money is spent.

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5
Q

As a first step, the monitoring and reporting of emissions will begin in YYYY. Over the course of 2027, a X% higher volume of allowances will be auctioned to provide market liquidity. As in the existing EU ETS, the ETS2 will operate with a dedicated, rule-based to mitigate insufficient or excessive supply of allowances to the market.

A

As a first step, the monitoring and reporting of emissions will begin in 2025. Over the course of 2027, a 30% higher volume of allowances will be auctioned to provide market liquidity. As in the existing EU ETS, the ETS2 will operate with a dedicated, rule-based market stability reserve to mitigate insufficient or excessive supply of allowances to the market.

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6
Q

During the first three years the ETS2 is operational, if the price of allowances exceeds €X (in 2020 prices, i.e. adjusted for inflation), additional allowances may be released from the ETS2 market stability reserve to address excessive price increases. Allowances may also be released from this reserve if the price of allowances . The rules and conditions for such a release are specified in the ETS Directive.

In case of exceptionally high gas or oil prices in 2026, the start of the ETS2 system could be postponed to YYYY to ensure a smooth implementation.

A

During the first three years the ETS2 is operational, if the price of allowances exceeds €45 (in 2020 prices, i.e. adjusted for inflation), additional allowances may be released from the ETS2 market stability reserve to address excessive price increases. Allowances may also be released from this reserve if the price of allowances increases too rapidly. The rules and conditions for such a release are specified in the ETS Directive.

In case of exceptionally high gas or oil prices in 2026, the start of the ETS2 system could be postponed to 2028 to ensure a smooth implementation.

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