The urgency of combating climate change is gaining significant attention in recent years, particularly after adopting legislative proposals from the European Commission. The goal is to achieve climate neutrality in the European Union (EU) by 2050. The immediate target is the 2030 goal of at least 55% emission reduction compared to the 1990 level, with sectors covering EU Emission Trading System (ETS) required to reduce emissions by 43% compared to the 2005 level. Transparency, accountability, and reliability are needed to achieve the goals that are focused on by the EU. It is enhancing the EU ETS system.
Blockchain as a technology proposed a solution to address the lack of the current EU ETS system. By integrating blockchain, the need for centralized authority can be replaced with smart contracts, enhancing the system's transparency, accountability, and reliability. Multi-signature smart contracts add an extra layer of security above the security from the basic nature of the blockchain. Additionally, the Monitoring, Reporting, and Verification (MRV) process within the EU ETS system requires careful attention to prevent collusion between organizations and verifiers involved in the compliance cycle.
The lack of transparency in the current system has led to a lack of trust among citizens in the government. As the European Commission’s 2030 climate & energy framework stated, “the EU has adopted integrated rules to ensure planning, monitoring, and reporting progress towards its 2030 climate and energy targets and its international commitment under Paris agreement. Based on that, the governance process involves consultations with citizens and stakeholders”.
This study proposed integrating the current EU ETS platform with multi-signature smart contracts to achieve the system's transparency, accountability, and reliability while increasing security. By integrating Blockchain technology, the result demonstrates that the proposed integration is possible and can achieve a seamless integration from end to end. Additionally, the study uses a real EU ETS MRV system handbook, which aligns the implementation with the current system, allowing for seamless and easy integration with the current system.

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