The EU Emissions Trading System and Renewable Energy Policies: Friends or Foes in the European Policy Mix?

Abstract

The EU’s energy transition has advanced rapidly over the last decade, with important implications for the policy landscape. Scholars have characterized the Emissions Trading System (ETS) and the Renewable Energy Directive as the most important policies for reducing greenhouse gas emissions in the electricity sector. However, since the early 2010s, non-governmental and industrial actors have debated whether renewable energy (RE) support and targets are compatible with the ETS. This article systematically assesses the policy preferences of five groups of non-governmental actors with respect to the role of the ETS versus RE policies in three policy processes. For most groups, preferences remain stable across the policy processes. In the electricity industry group, preferences vary from one policy process to another. During the ETS-reform, this group of actors argues that the ETS should be the main climate policy, whereas, in the Clean Energy Package-process, almost half of the utilities endorse continued RE support. This represents a shift in their line of reasoning and policy position: from asserting that RE policies ‘destroy’ the ETS, towards a position which recognizes the value of having both the ETS and RE policies as complementary instruments in the policy mix. The findings point to increasing support for RE policies, which is important for policy makers and scholars involved in designing and implementing the EU’s decarbonization policies.