Public Consultation: 2030 Climate Target Plan and the extension of the ETS to buildings

EuroACE responded to the European Commission’s public consultation on the EU climate ambition for 2030 and the design of the related climate and energy policies, together with an addendum paper on the proposal to extend the EU ETS to the building sector.

Extending the ETS to buildings is not the most cost-effective solution. The characteristics of the building sector have very little to do with those of the energy intensive industries to which the ETS applies: the number of parties affected (building owners) is numbered in millions, and a market mechanism with strict surveillance would be next to impossible to establish. There is a high risk of introducing more administrative complexity, delaying action on building renovation.

The elasticity of carbon pricing on heating fuels is very low, and several studies indicate that the price per tonne needs to be in the order of €250 before a measurable effect on behaviour can be detected. Putting a tax on heating fuels will not automatically make renovation of buildings financially more attractive nor technically easier.