EU ETS Innovation Fund – an underrated carbon price determinant?

Source: Heren


With the post-2020 EU ETS reform adopted, implementing legislation is getting more in the spotlight. One of the discussion points with significant price impact remains the timing of monetising allowances to fill the Innovation Fund. This report looks at three different timescales for monetising the 500m allowances reserved for funding innovation projects. We analyse the impact of an extreme frontloading (monetisation mainly in 2021 and 2022), a frontloading (monetisation first half of TP4) and an even distribution scenario (monetisation spread across TP4).

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