ERCST event: Future of Emissions Trading in the EU/ Carbon Dioxide Removals

On 27-th of June 2025, at the “Future of Emissions Trading in the EU: Carbon Dioxide Removals” launch event, which was hosted by ERCST in Brussels, Robert Jeszke, Head of The National Centre for Emissions Management (KOBiZE) was invited to speak as one of the panellists.

Robert underlined that the ERCST report explains and captures the key elements currently under discussion, and that now is the right moment to reflect on the integration of Carbon Dioxide Removals (CDRs) into the EUETS – particularly in light of the upcoming 2040 EU climate target and the long-term goal of climateneutrality by 2050.

Robert Jeszke: “We are largely on the same page as ERCST: carbon removals are a necessity. To maintain the EUETS as the right instrument to deliver on the EU’s reduction targets, we need to act now – well ahead of 2040. There will be a shortage of EUA’s, and removals must become part of the solution.“

He also highlighted the following:

• The role of technologies such as BECCs and DACCs. He emphasised that, although these technologies are currently expensive (more than abatement costs in the EU ETS), early action is critical.
• The importance of high-quality removals to be integrated in a limited, credible and transparent way, supported by the Carbon Removal Certification Framework (CRCF).
• The need for an institutional mechanism such as the European Carbon Central Bank (ECCB) that could:
  • pre-purchase certified removals to create a strategic reserve;
  • help stabilise market liquidity and avoid CO2 price shocks;
  • enable early investment and support for industry sectors.
  • possibly use art. 6 mechanisms to source removals globally;
• Implement Carbon Contracts for Difference (CCfDs) to address high upfront costs.
• The EU must act ex-ante, not ex-post. If the market doesn’t receive these signals early on, it won’t invest. Time is of the essence.

CAKE on the LIFE COASE Workshop, 27.06.2025

On the 27th June 2025 CAKE/KOBIZE participated in the workshop “LIFE COASE- Workshop on ex-ante assessments of emissions trading” organised by Florence School of Regulation/ European University Institute.

• Jakub Boratyński, our CAKE expert was a speaker during the Session 2: “Modelling economic implications of Article 6 and ETS linking – recent evidence”. Jakub presented results of CAKE analysis prespared under LIFE VIIEW 2050 project.
• VIIEW on EU ETS 2050:

    VIIEW on EU ETS 2050: Linking EU ETS with other carbon pricing mechanisms (3.0 MiB, 263 hits)

• During the workshop, participants covered a range of issues, from technical challenges in modeling linkages between carbon-pricing systems to administrative and political aspects of implementing Article 6 of the Paris Agreement, which defines how countries can cooperate to meet and enhance their emission-reduction targets. They reflected on why Article 6 mechanisms have received limited attention in model-based analyses. Participants further examined proposals to allow international carbon credits to fulfill obligations under the EU Carbon Border Adjustment Mechanism (CBAM); although CBAM today requires the surrender of certificates equivalent to the EU ETS carbon price, consideration of credit use is part of the EU’s pending review of CBAM’s scope and modalities. It was noted that CBAM’s introduction has already accelerated efforts in China & other BRICS countries to integrate mitigation targets into policy and corporate practice.

• Agnieszka Gałan, Expert The National Centre for Emissions Management (KOBiZE) contributed insights during the open discussion on scaling and integrating carbon markets under Article 6 of the Paris Agreement. She stressed that scaling Article 6 hinges on clear demand signals-especially through upcoming NDC submissions as well as institutional readiness. On policy integration she explored the potential for integrating Article 6 into broader trade and industrial policy, such as the EU Carbon Border Adjustment Mechanism.

•  One forward-looking proposal: a European Carbon Central Bank (ECCB) to manage international carbon credits in the EU ETS, stabilize prices, and fund clean energy projects. 

• You can read our CAKE brief on ECCB here:

    Policy brief: Introducing the ECCB as the new institution to manage the future EU carbon market (799.8 KiB, 48 hits)

New policy brief: The European Central Carbon Bank (ECCB) – a governance solution for the future EU ETS

The KOBiZE/CAKE expert team presented new policy brief analysing the concept of establishing the European Central Carbon Bank – an independent institution that would manage the supply of emission allowances (EUAs), carbon dioxide removals (CDRs), and high-quality international offsets under the EU ETS. 

  Policy brief: Introducing the ECCB as the new institution to manage the future EU carbon market (799.8 KiB, 48 hits)

The EU ETS is entering a new phase of evolution: permanent EUA scarcity, political visibility, and integration of complex mechanisms like ETS2, carbon dioxide removals (CDRs), and international offsets. These changes challenge the adequacy of existing institutions and governance tools. In response, the CAKE/KOBiZE team proposes the creation of the European Central Carbon Bank (ECCB) – an independent body modeled after a central bank, designed to stabilize the carbon market and manage supply across an increasingly complex system.

Key features of the ECCB concept:

• Supply and liquidity management – ECCB would dynamically regulate the management of EUAs, removals and offsets to maintain market stability and investor confidence.
• Replacing outdated mechanisms – It could eventually replace current tools like the Market Stability Reserve (MSR) and Article 29a of the ETS Directive.
• Global integration – ECCB could serve as a platform for linking with international carbon markets and coordinating the purchase of high-integrity offsets under the Paris Agreement (Article 6).
• Climate finance channel – Revenues could be reinvested via green investment funds or allocated to international mitigation and EU Member States’ transition efforts.
• Independence and accountability – The ECCB would operate independently but with clear reporting and governance oversight (like other banks).

Recommendations

• Include ECCB in the 2026 EU ETS review
• Launch an impact assessment and feasibility study
• Involve stakeholders from Member States, industry and civil society
• Prepare legal reforms to operationalise ECCB before 2030,

If you have any questions, please contact cake@kobize.pl.

LIFE ENSPIRE WEBINAR, “Carbon Pricing: Challenges for the EU and EU Neighbourhood”, 17th June 2025

On the 17 th June 2025 LIFE ENSPIRE webinar on “Carbon Pricing: Challenges for the EU and EU Neighbourhood”  was organised by CAKE.

We were delighted to host over 80 participants from Poland, the EU, and neighbouring countries for an in-depth dive into the current challenges and future outlook of climate policy, with a particular focus on carbon pricing, CBAM, MRVA, and cross-border cooperation. The meeting was opened by Marta Rosłaniec (CAKE/KOBIZE) opened he meeting by welcoming the speakers and providing a short brief overview of the  LIFE ENSPIRE workshop.

Maciej Pyrka (CAKE/KOBiZE) the LIFE ENSPIRE project coordinator of presented the main goals and scope of the project, which is focused on the carbon pricing. He also presented also the CAKE team and our experiences in climate modelling which were achieved in the previous projects. Finally, he introduced the members of the Advisory Board for the LIFE ENSPIRE project.

Jakub Boratyński (CAKE/KOBiZE) in his presentation provided an analysis of the carbon content and cost estimates for the introduction of the Carbon Border Adjustment Mechanism (CBAM), with projections for 2030 – 2035, based on CAKE’s analysis. Jakub presented the main assumptions for both reference scenario, and the extension scenario. The cost and revenues were presented for Poland, and for the EU. The projected allowance price in EU ETS is 123 EUR in 2030 and 147 EUR in 2035. Please find below a presentation.

Tomasz Karpiński  (Energy Community) delivered a presentation on the state of MRVA in the EU neighbouring countries. He also presented the status of the transposition and implementation of the EU ETS directive in several neighbouring countries.

In the second part of the webinar the panel discussion was moderated by our expert Maciej Cygler (CAKE). The core of the discussion centres  on the implications and conconsequences of the CBAM for neighbouring countries, as well as the current situation.

Ivan Mrvaljevic (Elektroprivreda Crne Gore, Montenegro) presented resented the latest developments in Montenegro’s preparations for EU accession in the context of the EU ETS and CBAM, with a particular focus on the electricity and energy sectors. It was emphasised that the region is unique and that investment in RES energy and the transmission system is essential. Montenegro has a national EU ETS, and the country is preparing a special plan to implement the full ETS by 2030. Montenegro has expressed its desire to accede to the EU in 2028 or 2029, and is currently engaged in negotiations with the European Commission.

Marie Missao Raude (Florence School of Regulation, European University Institute) provided an overview of the current status of carbon pricing in the EU. Furthermore, the primary elements and objectives of the CBAM were outlined. She also presented several policy changes that are currently under review. These include the 20240 target proposal for emission reduction, the MRS review and the inclusion of carbon removals in the EU ETS. One of the challenges that was highlighted was the impact of the ETS 2 and CBAM changes. She also presented the LIFe COASE project, which is currently managed by the EUI. This provided an excellent opportunity for networking between the two LIFE ENSPIRE and LIFE COASE projects.

Pavlo Masiukov (GIZ, UA) presented a detailed overview of the decarbonisation situation and challenges in Ukraine. He emphasised that Ukraine is a candidate country to the EU and has implemented the Climate Law, which has set a 2050 climate neutrality target. The ETS in Ukraine has been introduced, but its coverage and alignment differ from those of the EU ETS. Therefore, adaptation would be necessary. The MRVA system was introduced in 2021, but was put on hold in 2022 due to the full-scale Russian invasion of Ukraine. It was subsequently reintroduced in 2025, and 500 installations currently provide MRVA reports. There are ongoing developments in the regulations concerning domestic ETS, with the pilot phase scheduled to be implemented in 2028. The final decision on the specific rules for ETS introduction is still under consideration. Ukraine’s challenges in relation to the CBAM are due to the lack of public data that is available due to the ongoing war situation. 

The contributions offered fresh insights into how the EU and its neighbours can better align their climate policies and integrate carbon pricing systems more effectively. 

Agenda: LIFE ENSPIRE_workshop_agenda_17062025_v3

Presentations:

  LIFE-ENSPIRE_Workshop_Maciej-Pyrka_17062025.pdf (2.1 MiB, 14 hits)

  LIFE-ENSPIRE_Workshop_CBAM_Jakub-Boratynski_17062025.pdf (1.3 MiB, 13 hits)

  Tomasz Karpiński_State-of-MRVA-in-the-Energy-Community.pdf (1.0 MiB, 11 hits)

EEA & Energy Community conference on climate and energy reporting

The annual meeting “Energy Community Climate and Energy Reporting under the Adapted Governance Regulation” on climate and energy reporting took place on 3-4 June 2025 at IOŚ-PIB in Warsaw. The conference was organised by the EEA and the Energy Community, and the event was attended by representatives of the EU institutions (DG ENER, DG CLIMA), the Energy Community and delegations from the Western Balkan countries, Ukraine, Moldova.

The main objectives of the meeting included:

• to exchange experiences in the use of climate and energy data,
• discussing the challenges of reporting and compliance with the requirements of the Regulation,
• presenting the results of the data quality control process and identifying areas requiring technical support.

Plenary sessions and panels addressed, among others:

• the role of data in climate policy making (EEA presentation),
• perspectives of countries such as Ukraine, Montenegro, Kosovo or Moldova, including institutional constraints and training needs,
• Poland’s experience in integrating reporting data into the national decision-making system (KOBiZE),
• activities to date and plans of the LIFE ENSPIRE project on regional cooperation on climate policy.

The second day of the event was dedicated to group work and discussions on technical improvements and long-term reporting needs. A common conclusion from the deliberations was the need to:

• to better adapt the reporting requirements to the realities of the countries covered by the Regulation,
• further strengthen administrative competences,
• simplify the reporting process and make it more useful for national and regional policy.