EUAs fell to close at 7.40 €/t (-6.1% w/w) on Friday as the market sold off on the ETS reform package finally being agreed at EU trilogue in the early hours of Thursday morning. The market was bid up in the sessions before the trilogue on expectations that a deal would be clinched, but it softened after the deal, despite the package being resolutely bullish for EUA prices in the long-term (see E-mail alert: Bullish EU ETS Phase 4 reform bill finally agreed at trilogue, 9 November 2017). The biggest bullish surprise was the large volume of EUAs—up to 2 Gt of EUAs in 2023—to be cancelled from the MSR under the bill. The EU was keen to get the bill through trilogue during the UN COP meeting, which runs from 6-17 November, and also announced other measures aimed at transforming EU energy policy. One of the most significant was the European Commission (EC) legislative proposal for CO2 emission reduction targets for new cars and vans of 30% by 2030 compared with 2021 levels and a crediting system for compliance. Under the current legislation, CO2 emissions from the sales of new cars are to come in at a fleet average of 95 gCO2/km by 2020. The new 2030 target would come in around 67 gCO2/km, which is lower than the emissions of a new hybrid vehicle today. This all suggests that pure electric vehicle car sales will need to be at least 50% of all new car sales by 2030, for the sector to be compliant. Under the draft proposal, vehicle manufacturers will be fined €95 for every gram of CO2 above the limit for each new vehicle registered in that year. The EC also proposed €800 million to support the construction of EV charging points for electric vehicles and €200 million to support battery development. Counter-intuitively, this suite of EUA policies is bullish for EUAs in the long term as the faster electrification of vehicles will create higher power demand, pushing emissions up in that sector.