EU Emissions Trading System needs further improvements: EU auditors

The European Union (EU)'s emissions trading system (ETS) needs further improvements, said a report published by the European Court of Auditors (ECA) on Thursday.

The report found the European Commission and member states didn't adequately manage all aspects of the EU ETS, which is a main element of the EU climate and energy package.

Continuous improvements were introduced at the initiative of the European Commission to protect the integrity of the EU ETS as a market-based mechanism, but some issues still had to be addressed to further improve market integrity, noted the report.

The report recommended improvements to market regulation and oversight so as to increase investor confidence and leverage the EU ETS as a tool of environmental policy.

"The EU ETS is the cornerstone of the EU's climate policy. It has been progressively improved since its introduction ten years ago. But still more could be done in a number of areas, such as controls on the opening of ETS accounts, the monitoring of transactions, market supervision and the verification of emission levels at installations," said Kevin Cardiff, the ECA member responsible for the report.

"Given the considerable financial stakes involved in the multi-billion-euro carbon market, previous security incidents, and the goal of promoting real action to reduce greenhouse gas emissions, improvements are needed to the framework for protecting market integrity, and the system as a whole needs to be better implemented," added Cardiff. Endit