The energy community explored four carbon pricing options proposed by the European Commission and presented in the study Impact assessment for the establishment of a regional emissions trading system in the contracting parties of the Energy Community.
The Ministerial Council of the Energy Community called on the contracting parties to carefully consider the findings of the study and submit their preferences regarding carbon pricing policy scenarios to the European Commission and the Secretariat well in advance of the Informal Ministerial Council planned for July 2025.
Four options for trading emissions
The European Commission, as part of its efforts to reduce greenhouse gas emissions and support the transition to a sustainable energy transition, has presented four options for carbon pricing in the Energy Community contracting countries.
One of the options is the Regional Emissions Trading System (ETS), which operates on the cap-and-trade principle. This implies an upper limit of emissions (cap) which is reduced every year in order to achieve reduction of emissions, while trading of permits (trade) implies that companies receive or buy permits for emissions (per ton of CO₂). If a company reduces its emissions below its limit, it can sell the excess allowances to other participants with higher emissions.
Another option is the ETS with a fixed price, which is similar to the previous model, with the fact that the price of emission permits is predetermined and fixed. Companies still buy emission permits, but the price per ton of CO₂ does not depend on market trends.
As a third option, the European Commission proposes a carbon tax, i.e. direct taxation of CO₂ emissions at a fixed rate, whereby companies pay a tax for each ton of emissions they produce.
The fourth option is integration into the EU ETS (EU Emissions Trading System) kThis implies that the contracting countries of the Energy Community join the existing system that functions within the European Union.
Each of these options has its advantages and disadvantages, and the choice depends on the specific circumstances and priorities of the Energy Community contracting countries. Key factors include implementation costs, opportunities for harmonization with EU policies, administrative capacity and impact on the economy.
The European Commission encourages countries in the region to consider the long-term benefits of establishing a carbon pricing system, focusing on decarbonisation and competitiveness within the framework of EU green policies. Scenarios range from electricity-only pricing to broader coverage, with gradual alignment with the EU ETS.
The aim of this process is to contribute to the preparation of draft proposals for updating the Decarbonisation Roadmap, including the commitment to achieve climate neutrality by 2050. The proposal, which is being prepared by the European Commission, should be adopted at the session of the Ministerial Council in 2025.
Energy portal
Source: energetskiportal.rs
