This position paper examines the financial implications of establishing a (partial) linkage between EU ETS1 (covering power generation, energy‑intensive industry and domestic aviation) and ETS3, a system proposed for the livestock sector (covering methane (CH4) from cattle and nitrous oxide (N2O) from fertilisers).
This paper assesses whether this linkage could help achieve greenhouse gas (GHG) reduction more cost‑effectively while supporting industrial competitiveness and finance the transition of the livestock sector, and explores whether this linkage has relevant co‑benefits.