Change Partnership’s new report – Reducing the ETS surplus: The new pact between manufacturing industry and the climate – outlines one of those rare opportunities where an industry-friendly improvement also has the biggest improvement on the environment.

Based on modelling from Thomson Reuters, the report concludes that nearly 700 million ETS tonnes can be reduced from the surplus by reducing the proposed 2021 auctioning share from 57% to 52%. Importantly, this would incentivise the electricity generation sector to decarbonise at a much quicker rate.

Coupled with a temporary change to the MSR removal rate, the surplus could be further reduced by 1,009 million tonnes in just three years from 2019-2021.