MEPs and EU Member States reached an agreement this Sunday on a broad reform of the European carbon market, essential in the climate plan of the “27”.
The deal raises the ambitions of the current EU carbon market, phasing out free “pollution rights” given to industry.
At the same time, it plans to charge for emissions from heating buildings and road transport, with a ceiling price so as not to burden families, according to a statement from the European Parliament on the agreement reached after some 30 hours of tough talks.
To cover carbon dioxide (CO2) emissions, electricity producers and energy-intensive industries (steel, cement, etc.) in the EU are currently required to purchase “pollution permits” under the EU’s Emissions Trading Scheme. EU (ETS), created in 2005 and applicable to 40% of the continent’s emissions.
Under the terms of the agreement, the pace of reduction of the proposed allowances will be accelerated, with a reduction of 62% by 2030 compared to 2005 (and the previous target of 43%), meaning that affected industries will be forced to to reduce emissions. by 62%.
The carbon market will gradually extend to the maritime sector, emissions from flights within the European space, for which the free rights currently assigned will be abolished, and from 2028 to waste incinerators (subject to a favorable study by Brussels) .
In exchange for the introduction of a “carbon tax” at the borders, the EU will phase out the free allowances granted to date to European manufacturers to allow them to compete with non-European companies.
At least 48.5% of these free “rights to pollute” will be abolished by 2030 and completely gone by 2034, a timetable that has been hotly disputed between MEPs and Member States.
Another controversial issue was the European Commission’s proposal to create a second carbon market (ETS2) for space heating and road fuels.
Given the social impact of the measure, MEPs defended the initial application to office buildings and heavy vehicles.
Ultimately, households will pay a carbon price on fuel and gas or heating from 2027, but this price will be capped until 2030, and if the current rise in energy prices continues, enforcement will be delayed. one year.
The revenue from the new market will be used to finance a Social Climate Fund of 86.7 billion euros, which was created to help vulnerable families and companies in the energy transition.
Source: TSF
