How do Member States use ETS revenues?

From 2013 to late-2025, EU ETS auctions have raised over €245 billion in revenue. In 2024 alone, ETS revenues totalled some €39 billion, with some €25 billion directly benefiting EU Member States. The remainder supplied the Innovation Fund and the Modernisation Fund, as well as the Resilience and Recovery Facility, supporting investments in clean-tech innovation, energy transformation, and energy security. In 2025, EU ETS allowances have also been auctioned for the Social Climate Fund.

ETS revenues can support activities such as:

• Industrial decarbonisation
• Deployment of renewable energy sources, development of grids and energy efficiency improvement
• Clean technologies’ development
• Climate change adaptation
• Transport sector decarbonisation
• Just transition initiatives

Member States are required to use all collected revenues (or an equivalent financial value) to support climate action and energy transformation. The European Commission closely monitors compliance with this obligation to ensure all ETS revenues are genuinely spent for these purposes. 

This requirement does not apply to the funds provided by Member States in the form of State aid to help electricity-intensive industries cover indirect carbon costs. These costs may arise from increased electricity prices due to energy companies passing on the cost of buying allowances to business consumers. Just over half of the Member States use their revenues to grant aid for indirect carbon costs. 

Member State reporting

Every year, Member States report to the Commission on how they used their ETS revenues in the previous year, as mandated by the Governance Regulation. These reports follow specific templates and are publicly available on the website of the European Environment Agency (Reportnet 3). Reporting must be sufficiently detailed for the Commission to assess compliance with spending targets.

The latest available reporting covers the use of ETS revenues for 2024. The analysis of that reporting will be published in the 2025 Carbon Market report. Member States will be due to report on the use of ETS revenues for 2025 by 31 July 2026.

How did Member States use ETS revenues in 2023?

In 2023, the total revenue from EU ETS auctions reached €43.6 billion, with €33 billion going directly to Member States.

Of this revenue, €30.9 billion was allocated to climate action and energy transformation, while the remaining €2.1 billion was used to cover indirect carbon costs for electricity-intensive industries.

From the €30.9 billion, Member States reported spending €22.2 billion in 2023 and committing an additional €0.8 billion to specific projects and programmes. Member States will report on how they have used the remaining funds in the coming years. They are not required to spend the budget in a single year.

Of the €22.2 billion disbursed in 2023:

• €9.7 billion was invested in energy supply, grid and storage projects
• €2.3 billion supported projects related to energy efficiency, heating and cooling in buildings
• €5.1 billion was directed towards public transport and mobility projects
• €0.7 billion funded industry decarbonisation initiatives, including low-carbon technologies, carbon capture utilisation and storage (CCUS) and energy efficiency in the industrial sector (excluding the energy sector)
• €2.7 billion was used for social support and just transition measures

Examples of specific projects include:

• The installation of photovoltaic system in Romania
• Grants for energy efficiency improvements for low-income households in France
• The expansion of metro networks in Lisbon and Porto (Portugal)
• Financial and technical support to businesses in the Walloon region (Belgium) in their transition towards a net-zero economy

The below map illustrates the revenue collected by Member States in 2023 and highlights the project receiving the largest share of these funds.

Visibility of the use of ETS revenues

Member States must ensure the financial transparency of measures and projects funded by ETS revenues. This transparency is crucial for demonstrating the positive impact of the ETS on people and businesses across the EU, and for building public trust and support for the EU’s climate action and energy transition efforts.

This visibility requirement also enhances accountability, highlights tangible benefits, and enables Member States to share best practices and learn from each other, ultimately amplifying the effectiveness of EU climate and energy policy.

Visibility requirements

When using ETS revenues to fund projects or support private entities, Member States should ensure that the EU’s contribution is clearly visible. To achieve this, Member States can take the following steps:

• Share project details and results through relevant communication channels
• Display plaques and/or billboards on project sites and equipment
• Use promotional materials, both physical (e.g., brochure) and digital (e.g., videos)
• When engaging in the above, Member States should always designate a focal point for project communication to coordinate outreach activities, ensuring consistency
• Inform the implementing body well in advance of any specific project communication or dissemination activities that may have a substantial media impact

Importantly, Member States can allocate a portion of their auction revenues to support visibility initiatives, which are eligible as administrative expenses under the EU ETS management framework.

EU label

Communication activities and channels of EU-funded projects should acknowledge the origin of the EU support received and ensure its visibility. An essential aspect is the correct and prominent display of the EU label and the label ‘(co-)Funded by the European Union Emissions Trading System’:

• ‘Funded by’: is used when a project receives support exclusively from the EU ETS and not from other European or national funding schemes.
• ‘Co-funded by’: is used when a project receives other EU or national support, in addition to the funding from the EU ETS.

These labels should be displayed in English, as well as the language(s) of the project beneficiary and/or the country of implementation, on all communication and knowledge-sharing activities.

The labels should also appear on notice boards at strategic locations visible to the public, in accordance with the contractual requirements associated with funding from the EU ETS.

The EU label should not be modified or merged with any other graphic elements or texts. If other logos are displayed in addition to the EU label, the EU label should have at least the same size as the biggest of the other logos.

How to display the EU label

Publications & dissemination material

Published and material (reports, brochures, commercials)

Documentation

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