hen the new "parallel" carbon market, covering both road and real estate transport, enters into force in 2027, it will force these sectors to realise "unprecedented" emissions reductions. Between 2005 and 2021, their greenhouse gases fell by only 11%
The analysis of the German Öko-Institut
(sustainabilityenvironment.com) – By 2030, emissions from road transport and buildings in Europe will have to fall five times as fast as they have so far. It is the roadmap dictated by the inclusion of these sectors in the new carbon market established by the legislative package Fit for 55 in 2021. A trajectory, that of the ETS transport and buildings (ETS 2), that will have to bring cars, trucks and real estate to cuts of the greenhouse gases “ambitious” and “unprecedented“.
The roadmap of the ETS transport and buildings
The reductions achieved so far are barely doubling. Between 2005 and 2021, greenhouse gases from these sectors fell by only 11%. The ETS transport and buildings will place the new sector targets within the Effort Sharing Regulation (ESR), the mechanism by which Brussels sets specific targets for the 27 sectors that do not fall within the carbon market (which mainly covers the energy sector and industry).
The new version of the ESR – approved in Europe at the end of 2022 – increases the overall target from -30 to -40% of emissions in non-ETS sectors, then increases national targets by balancing them according to GDP and a cost-benefit assessment (for Italy the target is -43,7%). While it provides more flexibility for Member States from 2025 onwards, the entry into force of the ETS will mean that transport and buildings will have to be cut much more sharply than has been the case so far.
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According to the analysis of the German Öko-Institut, the trajectory will be very steep to comply with the progressive lowering of the ceiling of carbon credits available in ETS 2. “To comply with the development of the ETS 2 ceiling, the sectors covered will have to reduce emissions to unprecedented speeds: between 2005 and 2021, the average annual reduction in emissions in the sectors covered by ETS 2 was about 11 Mt of CO2. The ETS 2 ceiling will decrease by about 62 Mt of CO2 per year, more than five times faster,” the institute explains in a recently published report.
