EU assessment highlights Carbon Pricing options to accelerate EU integration and the energy transition in the Energy Community
The Energy Community is exploring four carbon pricing options proposed by the European Commission: a regional emissions trading system (ETS), a fixed-price ETS, a carbon tax, and integration into the EU ETS. These options, outlined in the Impact assessment for the establishment of a regional Emission Trading System in Energy Community Contracting Parties and presented in the December 2024 Ministerial Council in Vienna, respond to the Contracting Parties' earlier request for a detailed analysis of the pros and cons of different carbon pricing models for the region. The scenarios range from electricity-only pricing to broader coverage, with gradual alignment to the EU ETS.
The Ministerial Council invited the Contracting Parties to reflect on the study's findings and communicate their preferred carbon pricing policy scenarios to the European Commission and the Secretariat well ahead of the Informal Ministerial Council in July 2025. This will inform the draft proposal for updating the Decarbonisation Roadmap, which includes a commitment to achieving climate neutrality by 2050. The proposal, prepared by the Commission, is expected to be adopted by the Ministerial Council in 2025.
“The carbon pricing decisions made by the Contracting Parties are expected to align them more closely with the EU system, which is based on the polluter-pays principle. The Energy Community could effectively help to gradually establish domestic carbon pricing systems while ensuring that the integrity of the electricity market is preserved,” says Artur Lorkowski, the Director of the Energy Community Secretariat.
The carbon pricing process is expedited by the full implementation of the EU's Carbon Border Adjustment Mechanism (CBAM) in 2026, ensuring imported goods, including electricity, face the same carbon costs as EU products. This will impact exports from the Energy Community. The Energy Community Secretariat's latest CBAM-Readiness Tracker highlights the progress in the region’s energy and climate action.