Energy Regulation Solutions

Maryna Hritsyshyna

Energy Regulation Solutions

Maryna Hritsyshyna

  • Energy Regulation Solutions

    Maryna Hritsyshyna

    About us

    Energy Regulation Solutions offers specialized regulatory consulting at the intersection of innovation, climate goals, and market readiness. We support developers, investors, and policymakers in navigating complex regulatory landscapes for hydrogen, CO₂, and Power-to-X technologies in the EU, Germany, and the US

Tag Archives: #ETS

Author Image Posted By : admin 5 Oct, 2025

EU ETS II Pricing Scenarios

September 17, 2025 BloombergNEF published its Report: EU ETS II Pricing Scenarios

As the EU prepares to launch its new carbon market for road transport and buildings (EU ETS II) in 2027, the discussion about its social and political sustainability is gaining momentum.

In June 2025, sixteen EU Member States voiced concern that high carbon prices could impose heavy costs on households and businesses – risking a public backlash despite broad support for climate goals.

BloombergNEF’s new analysis explores what a “carbon price sweet spot” could look like — one that balances affordability for consumers with effective emissions reduction.

✅ Key insights:

📌 Under its current design, EU ETS II could see prices as high as €122/tCO₂ in 2030, the highest globally, cutting emissions by 40% (vs. 2005) but raising fuel prices by up to one-third.

📌 Flexible market design could help stabilize prices around €78/tCO₂, with limited impact on emission targets.

📌 Recycling 50% of ETS II revenues into electrification subsidies could lower average prices to €67/tCO₂.

📌 Complementary policies, such as stricter vehicle and building efficiency standards, could further ease pressure, keeping prices around €86/tCO₂.

📌 A combined approach could reduce average prices to €45/tCO₂, cutting social costs by 55% while maintaining climate ambition.

In parallel, the European Commission highlights the broader benefits of carbon pricing:

✅ Cutting emissions by 50% since ETS launch 20 years ago.

✅ Funding innovation through the Innovation Fund and Modernisation Fund.

✅ Supporting over €200 billion in clean investments.

✅ Mobilising €86.7 billion via the Social Climate Fund (2026–2032) to protect vulnerable households.

☑️ Main Conclusion: The success of ETS II will depend on finding this balance, ensuring climate ambition remains credible while keeping the transition socially fair and politically resilient.

➡️ Source: 5 things you should know about carbon pricing

Author Image Posted By : admin 12 Jun, 2025

Hydrogen in the Reformed EU ETS

green and blue hydrogen costs

Figure: Comparing green (left) and blue hydrogen (right) costs accounting for EU ETS impacts (assumed CO2 price: 80 €/tCO2) based on the optimistic end of near-term cost estimates for 2025 to 2030. The value of free allocations is calculated based on CBAM factor of 100 %, which applies until the end of 2025. No additional subsidies considered here.

Source: Nils Bruch, Falko Ueckerdt, Michèle Knodt (2025): Hydrogen in the Reformed EU ETS – Implications for Competitiveness and Emissions Reductions. Kopernikus-Projekt Ariadne, Potsdam.

Hydrogen in the Reformed EU ETS: What It Means for Competitiveness and Emissions Reductions?

🔹 Key insights:

📌 The EU ETS alone cannot make hydrogen competitive.

  • Hydrogen production (both renewable and blue) remains significantly more expensive than natural gas — currently 4 to 6 times more costly.
  • The value of freely allocated ETS allowances does little to close this gap, as illustrated in the picture below with the green part, especially with today’s relatively low CO₂ prices.

📌 To bridge the cost gap and enable a fuel switch from natural gas to low-carbon or renewable hydrogen, CO₂ prices of €300–500/tCO₂ would be necessary.

📌 Switching from blue to green hydrogen would require €2500/tCO₂ if only downstream emissions are priced.

✅ Policy recommendations include:

📌 Expanding the EU ETS to cover upstream emissions for a more accurate climate cost signal.

📌 Gradually lowering the emission intensity threshold (currently 28.2 gCO₂eq/MJ) for low-carbon hydrogen to encourage innovation and deeper decarbonisation.

💡 To use hydrogen for the energy transition, it is essential to go beyond emissions pricing and rethink how to support its competitiveness and climate impact.

Author Image Posted By : admin 20 Apr, 2025

Public Consultations. EU ETS for maritime, aviation and stationary installations

EU ETS for maritime, aviation and stationary installations

The European Commission has commenced the public consultation regarding EU ETS for maritime, aviation and stationary installations, and market stability reserve.

📄 Type of Act – Proposal for a Directive

📅 Feedback period – 14 April 2025 – 08 July 2025

✅ The following aspects are subject to review:

📌 Aviation emissions:

  • the EU has temporarily limited the scope to intra-EEA flights that encourages the development of an effective global carbon pricing scheme by the ICAO.
  • by mid-2026, the Commission should make a report on CORSIA.
  • the ETS Directive suggests assessment criteria and indications on geographical scope.

📌 Maritime emissions:

  • the European Commission will have to assess the GHG pricing mechanism and market-based measures that will possibly be adopted at the IMO in 2025 and review the ETS accordingly to avoid a significant double burden on maritime operators;
  • the European Commission will have to consider extending the EU ETS to cover emissions from smaller ships (i.e. ships below 5 000 gross tonnage but not below 400 gross tonnage);
  • the European Commission should monitor implementation of the recent extension of the EU ETS to maritime transport, and consider legislative improvements to ensure the effective implementation of the extension;
  • the European Commission should simplify and improve the system where possible.

📌 Municipal waste incineration:

  • This looks at the feasibility of including such installations in the EU ETS from 2028.

📌 Non-permanent carbon capture and use:

  • the impact assessment will look at whether all GHG emissions covered by the EU ETS are effectively accounted for and whether double counting is being avoided, in particular regarding GHG emissions considered to have been captured and utilised in a product non-permanently.

📌 Carbon removals:

  • the possible inclusion of domestic permanent carbon removals in the EU ETS.
  • how the EU ETS could account for negative emissions resulting from GHGs that are removed from the atmosphere and safely and permanently stored underground or permanently stored in products;
  • how those negative emissions, if appropriate, could be covered by ‘emissions trading’ or other policies, setting a clear scope and strict criteria;
  • putting in place of safeguards to ensure that such removals do not offset necessary emissions reductions.

☑️ WHAT NEXT?

📌 At the end of this consultation process, a factual summary report and a synopsis report will be drafted.

📌 The Commission Adoption – Q3 2026.

➡️ Source: EU emissions trading system for maritime, aviation and stationary installations, and market stability reserve – review