As competitiveness takes centre stage in the political debate, decarbonising the European Union (EU)’s economy represents an opportunity to boost the development of clean technologies and solutions, making the EU a champion of clean manufacturing.  

While the EU is facing an enormous investment gap to reach the climate objectives set by the Green Deal, EU ETS revenues represent a huge opportunity to fill this gap. These revenues have been misallocated in the past and its crucial for Member States and EU Institutions to ensure the effectiveness of their use.  

The Draghi report, which will influence the work of the next Commission, identifies the problem and suggests an earmark of ETS revenues to decarbonise heavy industries. While this recommendation is important, it needs to be further developed to make this earmarking impactful from a climate perspective.  

Ahead of today’s ECOFIN meeting, on October 8th, 2024, the signatories call for Ministers of Finance of Member States and the European Commission to effectively allocate all EU ETS revenues to climate action, supporting a credible decarbonisation pathway and building a competitive clean industry in Europe. The signatories note the absence of the EU ETS issue on today’s agenda, despite the European Ministers seeking to present the EU as a climate leader at COP29. All ETS revenues must be spent on effective climate action for the EU to be taken seriously on the international stage. 

The recommendations put forward in the letter can be implemented without changing current legislation and are key for strengthening both EU competitiveness and EU climate objectives. 

See the joint letter here.