Workshop “From Climate Change to Fiscal Innovation: Transforming the EU Budget for Sustainability with CBAM, Climate Tax and ETS”

On 25 September 2025, the Faculty of Law of Charles University hosted a workshop under the 4EU+ Alliance project entitled From Climate Change to Fiscal Innovation: Transforming the EU Budget for Sustainability with CBAM, Climate Tax and ETS. The project’s principal investigator is JUDr. Miroslava Večeř, Ph.D., LL.M., Assistant Professor at the Department of Financial Law and Financial Science.

The event was opened by Prof. JUDr. Radim Boháč, Ph.D., Dean of the Faculty and Head of the Department of Financial Law and Financial Science, who mentioned that “The challenges posed by climate change require not only scientific and technological innovation, but also bold fiscal and legal strategies.”

The discussions focused on fiscal innovation in the context of climate change—a topic of global relevance and urgency.

The first expert contribution, entitled “Tax breaks for improving the energy efficiency of buildings (pending the implementation of the EU Green Homes Directive)”, was delivered by Dr. Ernesto Marco Bagarotto (Università di Milano). He presented Italian renovation-related tax breaks and “tax bonuses”, their economic effects (both positive and negative), and the potential to adapt similar instruments at EU level, especially in relation to the goals of the Green Homes Directive (No. 2024/1275).

The next presentation was delivered by Marika Turava, LL.M. Ph.D. Candidate (Visiting Researcher, Universität Heidelberg; Researcher, Max Planck Institute, Heidelberg; Ph.D. Candidate, Tbilisi State University), entitled “WTO Law and the EU’s Green Fiscal Transformation: Legal Perspectives on CBAM, Climate Taxes and ETS.” She examined relevant WTO law in relation to CBAM and the ETS, identified currently sensitive legal issues, and set out recommendations for mitigating risks in international trade.

After the break, Francesco Castro (Ph.D. Candidate, Università degli Studi di Ferrara) spoke on “ESG Challenges in Corporate Taxation: Deductibility of Expenses and Anti-Abuse Provisions.” He addressed key areas including the application of ESG criteria in the current tax environment, the impact of ESG on the corporate income tax base, and the deductibility of ESG-related expenses. He concluded by analysing the relationship between ESG philosophy and the duty of solidarity, emphasising that ESG should not be understood merely as a proxy for economic solidarity, but as a distinct agenda that may overlap with the duty of solidarity in some respects while pursuing different objectives.

In the subsequent talk, “The Future of the EU Budget: Where Climate Change Meets Fiscal Innovation,” the project’s principal investigator JUDr. Miroslava Večeř, Ph.D., LL.M. presented research conducted within the project together with Prof. Dr. Ekkehart Reimer, Director of the Institut für Finanz- und Steuerrecht, Universität Heidelberg. The objective is to identify legal pathways for introducing new own resources of the EU budget, with particular focus on own resources linked to the EU’s environmental and climate policy. She also reflected on a possible concept of a “climate tax” and on ways in which such resources could contribute to the EU’s climate goals while maintaining budgetary stability and sustainability. The findings will be published in AUCI 4/2025.

Another contribution was presented by JUDr. Sára Derková, LL.M., Eur, “As Carbon Gets Pricier: How Czechia Responds to the Arrival of ETS 2.” She outlined the main goals and challenges of ETS 2 for the Czech Republic and proposed measures to reduce price uncertainty and enhance transparency, including regular publication of information and price forecasts for ETS 2, early auctions in 2026 to reduce uncertainty for 2027, and setting an MSR (Market Stability Reserve) trigger modelled on ETS 1, with higher release volumes in tight market conditions.

The closing presentation was delivered by Associate Professor Dr. Beatriz Martinez Romera (Head of the Centre for Climate Change Law and Governance (CLIMA), Faculty of Law, University of Copenhagen), “Shipping Decarbonization and Carbon Pricing: EU and the IMO.” She presented the revised IMO GHG Strategy 2023 (trajectory to net-zero), indicative checkpoints for 2030 and 2040, with emphasis on a just and equitable transition, and outlined the IMO net-zero framework, its development timeline, the GHG fuel-intensity standard, and pricing mechanisms for the maritime sector.

Conclusion: The workshop confirmed that a successful climate transition requires a combination of legal-fiscal innovation and strong international coordination. The discussions identified concrete pathways for leveraging the EU budget and new own resources to support a sustainable future while maintaining fairness and competitiveness.