Europe's carbon market forces power plants and factories to buy
CO2 permits when they pollute. It has slashed those sectors'
emissions by 43% since 2005, but is facing a revamp to hit more
ambitious EU climate change targets.
Parliament will vote on a deal agreed last year by negotiators
from EU countries and Parliament, to reform the carbon market to
cut emissions by 62% from 2005 levels by 2030.
Under the upgrade, factories will gradually lose the free CO2
permits they currently receive by 2034. The measures will also
force ships to start paying for their emissions from 2024.
Lawmakers will also vote on the EU's world-first plan to impose
CO2 levies on imported goods including steel and cement from
2026, a policy designed to put European and foreign firms on a
level footing.
The laws still need final approval from EU countries, who will
assess them in the next few weeks, before they enter into force.
That approval is usually a formality that waves through
pre-agreed deals with no changes - but the process has been
called into question after Germany lodged last-minute opposition
to another policy to phase out fossil fuel-powered cars.
Peter Liese, Parliament's lead negotiator on the carbon market
reform, said the policy would deliver approximately 25 times
more CO2 savings this decade than the EU's car CO2 emission
limits.
"For the climate, the ETS alone is more important than all the
other files together," he told Reuters.
Liese said he expected Parliament to approve the reform with
majority support.
The price of EU carbon permits has soared in recent years,
boosted by anticipation of the reforms. Carbon market revenues
are returned to EU country governments to invest in climate
measures.
The benchmark EU carbon price was trading at around 93 euros per
tonne of CO2 on Monday, having nearly quadrupled since the start
of 2020. It hit 100 euros per tonne for the first time in
February.
The EU will also launch a new carbon market covering suppliers
of fuels used in cars and buildings in 2027, plus a 86.7
billion-euro EU fund to help consumers cope with the costs.
(Reporting by Kate Abnett in Strasbourg, France; Editing by
Matthew Lewis)
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