- EU market supervision: ETS in need of improvement
- Wind energy: Chinese competition growing
- StratCom: more disinformation from China
- G7 countries reject gas payment in rubles
- Vestager: sanctions-hit companies unlikely to get trillions in state aid
- EU Commission: stopping golden passports
- Survey: EU should have its own full budget
- Green subsidies: EU launches first WTO challenge against Britain
- Opinion: Right to repair – not a foregone conclusion
Last year, the EU Commission ordered a review of the Emissions Trading System (ETS). The goal was to investigate whether the system had loopholes for market speculation or manipulation. The European Securities and Markets Authority (ESMA) has now presented its report. The good news: There are no “material weaknesses” in the ETS in its current form. Lukas Scheid analyzed why adjustments are nevertheless necessary.
Nico Beckert has been researching the question of whether the domestic wind energy industry is facing the same fate as the solar industry, namely, an almost complete migration of technology and manufacturing to China. There are certainly parallels. The Chinese competition is pushing onto the global market – seven of the ten largest manufacturers are based in China, so the country has a good basis for exports. But there is one major difference with the solar industry, as you can read in the Feature.
Russia’s demand to pay its gas bill in rubles in the future is met with resistance from the G7 countries. They will abide by the treaties, which stipulate payment in euros or dollars, as stated during a special conference yesterday. Read more about this in the News.
A right to repair – that sounds environmentally and consumer-friendly since it would extend the life cycle of appliances and objects and thus conserve resources. But Patrick Stockebrandt and Svenja Schwind from the Centre for European Policy explain why the European Commission’s proposal is not all that convincing.
Lisa-Martina Klein
Feature
EU market supervision: ETS in need of improvement
In October 2021, the European Securities and Markets Authority (ESMA) had started its review. The 143-page report said that based on available data, it found “no material weaknesses in the functioning” of the ETS. Price fluctuations were driven by supply and demand dynamics, as well as planned reductions in allowances and rising energy prices. The war in Ukraine also had an impact on the ETS. The price had crashed with the start of the Russian war of aggression but has since recovered. According to ESMA, the situation remains volatile.
The Market Surveillance Authority is therefore proposing some adjustments. However, this does not involve direct intervention in the system, but rather the long-term improvement of the data situation for monitoring the ETS. For example, the reporting requirements on positions in the ETS are to be adjusted, transactions carried out are to be tracked more closely, and position management for derivatives on emission allowances is to be monitored more closely. In addition, the market supervisory authority recommends making it possible to identify individual market participants to ensure greater transparency.
In its report, ESMA says it has faced “significant hurdles” in identifying the origin of market participants. As a result, it is difficult to get a clear picture of who is trading CO2 allowances and from where. The ESMA analysts found that long positions were held mainly by non-financial firms for hedging purposes, while short positions were held by banks and investment firms.
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