EUROPEANCOMMISSIONBrussels,3.12.2025COM(2025)735 finalREPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT ANDTHE COUNCILon the functioning of the European carbon market in 2024(SWD(2025)388 finalENENTable of Contents1.Introduction..............32.State of play of the EU ETS.2.2.ETS2-the new emissions trading system for buildings,road transport and additionalsectors 52.3.Social Climate Fund.....52.3.1.Social climate plans…64.Auctioning ofallowances......4.1.Auctioning and cancellation ofallowances due to maritime scope expansion of the EU ETS4.2.Effort Sharing Regulation flexibility.124.3.Voluntary cancellation of allowances..125.Free allocation of allowances...5.1.Carbon Border Adjustment Mechanism.156.EU carbon market.............6.1.Balancing supply and demand........167.Emission trends...............7.1.Emissions from fossil fuel combustion in installations.........2.I8.Revenues from the EU ETS...................8.1.Aid for indirect costs..........268.2.ETS Innovation Fund.......288.3.ETS Modernisation Fund.............308.4.ETS Decarbonisation Fund for Greece..............3210.Maritime transport.….3511.EU ETS implementation framework.....11.1.Monitoring and reporting of emissions....3611.1.1.Monitoring and reporting of emissions from municipal waste incineration....3711.1.2.Monitoring and reporting of non-CO2 aviation effects ............3711.2.Verification and accreditation.3811.3.Guidance documents........3911.4.National competent authorities...3911.5.Compliance with the EU ETS .........................4011.6.Implementation framework for maritime transport..4111.6.1.Monitoring and reporting of emissions.4.