Last week, the European Parliament announced a preliminary agreement to include emissions from shipping in the EU ETS, resulting in interesting opportunities for companies producing green hydrogen and ammonia.
This week, the three EU institutions reached an agreement on the EU ETS for aviation. The provisional agreement, which still needs to be formally approved by both the Parliament and the Council, states that the EU ETS will only be applicable to intra-European flights (including the UK and Switzerland). The agreement strives to gradually phase out free emission allowances by 2026. Additionally, negotiators agreed on reserving 20 million allowances for operators that increase their use of SAF, such as green hydrogen, and the revenues from auctioning 5 million allowances for aviation will be allocated to researching innovative solutions for the electrification of the sector. Overall, hydrogen keeps its pivotal role in the European energy transition and increases its importance in other sectors such as shipping and aviation.
In the week ahead, ELS Analysis keeps its eyes on next week’s Energy Council meeting, the temporary price cap on gas is expected to be discussed.
We will investigate the issue further in our monthly reports. Visit www.elsanalysis.com for more information on recurring updates on market and policy developments, as well as tailored advisory and consultancy services.