The European Commission’s decision on the quantity of allowances to be issued next year under the EU ETS for stationary installations and maritime transport activities was just published in the Oficial Journal. A separate decision regarding the permits to be allocated for aircraft operators would be published soon.

According to the executive’s calculation, the cap for 2024 is set at 1,38 billion allowances, roughly 6,7% lower than the number of allowances issued this year. The main reason for the reduction is the new increased linear reduction factor (LRF).

 

To accomplish the emissions reduction target of 62% set for 2030, the LRF was raised from 2,2% to 4,3% during 2024-2027 and to 4,4% from 2028-2030. Furthermore, the revision of the EU ETS also includes two downward adjustments of the cap (rebasing). Therefore, the number of allowances released next year would be reduced by 90 million with an additional 27 million scheduled for 2026.

 

However, the cap’s decline is less steep amid the inclusion of maritime transport activities.  As of 2024, the EU ETS will include emissions from shipping. Therefore, the cap figure for 2024 considers an additional 78,4 million as the result of the extension in the scope of the EU ETS. Without the allowances for maritime transport, the cap for 2024 would have been almost 12% lower than the number of allowances issued this year.