The European Commission recently introduced a draft of the revised EU ETS Directive which, among other things, proposes that 100 % of ETS revenues should be used for environmental measures. We welcome this idea but we’re also sceptical about how the ETS revenues are used in the Czech Republic. Therefore, we have prepared an analysis mapping the use of ETS revenues in Czech Republic and sent it to the European Commission as an input for the recent public consultation. The main conclusions are presented below.
Czech law states that 50 % of ETS revenues has to be used for environmental measures, which are enumerated in the ETS Directive. For 2021 the Czech government decided to cap this share at CZK 8 bn. (EUR 310 mil.), the rest of the revenues are considered income to the state budget. In case ETS revenues are higher than CZK 16 bn. per year, as predicted for 2021, there is potential for non-compliance with the ETS Directive, which requires at least 50 % of ETS revenues to be earmarked for climate-related projects.
Information about projects supported from ETS revenues is not publicly available, we assume that some of the means flows into the state budget and aren‘t used for environmental measures. Furthermore, ETS revenues dedicated to the Ministry of Industry and Trade, are used for continuous operating support for photovoltaic projects from the 2010s, which does not have any incentivising effect for the energy transformation. This support would have been paid anyway.
Together with other environmental organizations, we succeeded in revoking a derogation from the emission levels associated with the best available techniques for the Počerady Power Plant, the largest producer of greenhouse gases in the Czech Republic. The illegal derogation allowed the plant to emit unprecedented amounts of toxic mercury. Now it is the turn of the Ministry of the Environment to push for an end to the ongoing illegal situation.
European Union and its member states have approved a framework to prevent that companies providing low prices based on dumping, child labour, pollution and exploitation will not be better positioned in the EU market. They adopted the Corporate Sustainable Due Diligence Directive (CSDDD), which will provide guidance to companies on how to prevent significant negative impacts in their operations and value chains.
The International Sustainability Standards Board is presenting in London this Tuesday the work plan for the upcoming two years, including research projects to develop standards for companies’ reporting on biodiversity and human capital.