Commission moves to approve Sweden's unilateral EU ETS scope extension for pulp, paper and board installations

The European Commission (DG CLIMA) has published a draft Delegated Decision initiative to approve Sweden's Article 24 request to unilaterally extend EU ETS (ETS1) scope to greenhouse gas emissions from pulp, paper and board installations that currently fall outside the ETS under Annex I, point (1) because they exceed the 95% biomass threshold.

This would bring previously exempted biomass-heavy pulp, paper and board installations in Sweden into the EU ETS carbon price and compliance obligations, expanding the scope of covered emissions and setting a precedent for how the 95% biomass threshold exemption interacts with unilateral scope extensions under Article 24.

This is a narrow, sector-specific unilateral scope extension under Article 24 of the ETS Directive, distinct from broader Member State activity/gas inclusion requests. Its direct market impact on EUA price formation and liquidity is likely marginal given the limited number of Swedish pulp/paper/board installations affected, but it is a notable precedent for how biomass-threshold exemptions can be unwound via unilateral extension, and it adds newly regulated participants to the ETS1 compliance pool. The process is currently in the EU's internal planning/inter-service consultation (ISC) workflow ahead of formal adoption, with no confirmed adoption date yet disclosed.

Article 24 of Directive 2003/87/EC (EU ETS Directive); draft Commission Delegated Decision under EU better regulation planning/ISC/adoption workflow

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