Revenue from the EU ETS – Legal Requirements for the Use of Funds

This document contains a legal analysis on the rules found in the ETS Directive for ETS revenue usage by the Member States. It puts forward recommendations for compliance monitoring, policy, and Directive clarification. While some Member States are aiming to further attack the ETS2, and Germany plans to reroute its ETS1 revenues to the general budget (contrary to what the Directive demands), thus undermining their effective use for a green transition, significant investments are still needed to achieve the climate targets on EU and Member State level.