This indicator presents trends in the revenues generated by auctioning the EU ETS carbon emission allowances that go directly to Member States and the reported usage by category of spending.
Member States report annually on the use of auctioning revenues for climate change- and energy-related purposes, under Article 17 of Regulation (EU) No 525/2013. From 2021, Member States have reported under Annex II of Implementing Regulation 2020/1208, under the framework of the Regulation on the Governance of the Energy Union and Climate Action (Article 19 of Regulation (EU) 2018/1999). These data have been used to estimate the share of revenues used for climate change- and energy-related purposes as shown in this indicator.
Note that Figures 1 and 2 above shows only the EU ETS revenues share that went directly to Member States (e.g. in 2021, the total EU ETS auctioning revenues amounted to EUR31 billion, of which EUR25 billion went directly to the 27 Member States).
It should be noted that annual reporting does not necessarily cover how the revenues generated that year are spent, but the spending of all revenues during that year, i.e. spending can include revenues generated in previous years. Member States report on spending only for purposes related to climate change and energy, but this does not mean that the amounts not covered by reporting are necessarily spent on other purposes. It is possible that revenues are spent later or used to fund many projects or activities, only some of which are linked to climate change and energy, or that a certain amount has been set aside for climate and energy but not all of it has yet been formally attributed to specific projects.
In addition, several Member States do not earmark their auctioning revenues for specific purposes, but instead attribute some or all of their revenues to a broad budget, such as the general budget, that is funded by multiple sources. The general budget can then be spent on activities related to both climate change and energy and on other purposes. Often, in such cases, example projects funded by the broad budget are reported, but a direct link to auctioning revenues cannot be made. Reported spending can also be higher than the revenues of that year, either if it includes the spending of previous years’ revenues or if the reported projects were co-funded with other funds. For the purposes of estimating revenue shares spent on climate- and energy-related activities, the annual shares have been capped at 100% to avoid distorting the figures.
Specific methodological notes on individual country data are available in the Commission’s technical information document accompanying the EU climate action progress report 2022.
In the functioning of the EU ETS, allowances are sold following an auctioning procedure, providing financial resources to public authorities. These resources are expected to increase and be used to support the transition to a carbon-neutral economy.
The figures presented are based on data reported by EU Member States to the EEA (publicly available on reportnet.europa.eu). These data were then quality checked by the European Commission and used in the report Accelerating the transition to climate neutrality for Europe’s security and prosperity — EU climate action progress report 2022 published by the European Commission. The published EEA (2022) report Trends and projections in Europe in 2022 was also used .
No uncertainty has been specified.
