On 13 November 2006, the Commission presented a report outlining its first evaluation of the ETS and setting an agenda for a future revision of the scheme. In its communication, the Commission admits that simplification and more predictability will be needed in order to improve the market liquidity of the system.
A special working group under the European Climate Change Programme (ECCP II) will prepare recommendations for a revision of the ETS on close cooperations with all stakeholders (industry, NGOs and think tanks). This working group on emissions trading will report on these recommendation by 30 June 2007, after which the Commission will present new legislative proposals. If adopted, these new rules on the ETS could not come into effect until 2013 onwards.
The working group will focus on the following issues:
- Expanding the scope of the scheme by the possible inclusion of new greenhouse gases (e.g. nitrous oxides from ammonia production or methane from coal mines) and new sectors. One sector which is already under review for inclusion is the aviation sector but other economic sectors with smaller installations could also be included;
- further harmonisation to prevent national allocation plans to be too divergent as is the case now; the Commission will even explore if there is a need for a single EU-wide cap after 2012;
- improved monitoring and reporting guidelines which might lead to more robust compliance and enforcement, and;
- linking the ETS with other existing trading schemes in third countries or with the Kyoto flexible mechanisms which make it possible to involve developing countries into the battle against climate change.
