Ahead of the October European Council meeting, where the future of the EU’s energy policy will be high on the agenda, the CBI has published a position paper on the future of the EU Emissions Trading System - with a call for "comprehensive and co-ordinated reform."

The CBI believes that, if designed well, a smart European energy and climate change policy framework can support the competitiveness of European industry, keep energy prices under control for consumers and attract the €1 trillion investment needed to meet our environmental targets and secure our energy supplies.

The UK's leading business lobbying organisation says that as a market-based system, the EU ETS has the best potential to reduce greenhouse gas (GHG) emissions in the most cost-effective way, and create a clear market signal to drive low-carbon investment across Europe.

The CBI’s paper argues that:

• The ETS should remain the cornerstone of EU energy and climate policy, but it is falling short of its potential

• The first step to reform must be securing political agreement on a 2030 emissions reduction target

• This must be underpinned by holistic and long-lasting ETS reform in order to instil confidence in the market

• The ETS must work for all businesses in order to drive sustainable growth

• EU leadership on ETS can drive confidence in other markets and set a global example.

However, the CBI believes the ETS  is not currently delivering on this potential  and that a strong ETS needs to be in place that will command the confidence of businesses from every sector and the markets themselves. The CBI is now calling for a “comprehensive and coordinated reform of the whole system that will stand the test of time.”

Click here to download the CBI’s EU ETS Position Paper