Czech Business Today

From September 2023, Czech government discusses state budget with the aim to decrease public debt. As part of these discussions, government also discusses the use of revenues from EU ETS trade. This is related to ongoing review of the Act on the conditions for trading greenhouse gas emission allowances due to recasted EU ETS directive. Dissolving revenues from trading EU ETS allowances in the state budget was raised as one of the possible income sources for the state budget. The Confederation of Industry of the Czech Republic (SP CR) opposes this, citing the future of our economy and the need for investment into decarbonisation.

Moreover, such a choice would contradict the principle that revenues from the EU ETS trade should be used where they are most needed, i.e., for decarbonising industry and energy sectors. In the end, EU ETS allowances are paid precisely by industrial and energy utilities. Relevant EU legislation clearly states that these funds should be used to decarbonise the economy, inter alia by allowing decarbonisation of companies that fall within the scope of the EU ETS. Given the enormous investment costs of decarbonising the Czech economy, which will have to be incurred in the short future, it is essential that the amendment to the Act ensures that all the revenues from the auctioning of emission allowances are used for the decarbonisation of the economy, fully in line with the EU ETS directive. Dissolving the revenues in the general budget would jeopardise the success of the industrial transformation and the achievement of the Green Deal objectives.

SP CR has repeatedly drawn attention to the need to properly use the cohesion funding as well as revenues from the EU ETS trade, most recently during the inter-ministerial consultation on the draft act. SP CR has also contacted relevant ministers to stress that the EU ETS revenues must be used in line with the principles of the Directive, to fulfil decarbonisation targets. SP CR also calls for the early adoption of the act so that companies falling under the scope of the EU ETS have clear information on the relevant procedures, particularly on the deadlines for the submission of emission allowances and on the rules for climate neutrality plans. SP CR also pointed out the need to set clear rules for compensation of indirect carbon cost to help the most affected energy-intensive industries in a way which corresponds to practice in neighbouring EU Member states.

Source: SPCR.cz