Home News The European Union agrees to a comprehensive reform of the carbon market

The European Union agrees to a comprehensive reform of the carbon market

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This will be the focus of Europe’s “climate plan”: after some thirty hours of tough talks, negotiators from the European Parliament and EU member states reached an agreement Saturday night to Sunday 18 December for an overhaul of the carbon market.

This agreement expands the scope of the carbon market, according to a press release from Parliament. To cover CO2 emissions, electricity producers and energy-intensive industries (steel, cement, etc.) in the EU must buy now “license to pollute” The European Market for Emissions Shares (ETS), created in 2005 and applicable to 40% of the continent’s emissions. The aggregate quotas established by countries decrease over time to encourage them to reduce emissions.

sequel after announcement

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The reform, proposed by the European Commission in July 2021, aims to advance it in all directions to achieve the ambitious greenhouse gas reduction targets of the EU’s climate plan.


According to the agreement reached, the rate of proposed quota reduction will accelerate, with a reduction of 62% by 2030 compared to 2005 (compared to the previous target of 43%) – meaning in effect that the manufacturers involved will have to comply compulsorily. reduce its emissions by 62%.

The carbon market will gradually extend to the maritime sector, to emissions from flights within Europe (for which the free quotas currently allocated will be abolished), and from 2028 to waste incineration sites (subject to a study in favor of the study from Brussels).

In exchange for creating a carbon tax At the border, the EU will gradually eliminate the free emissions quotas hitherto distributed to European industrialists to allow them to face competition from outside Europe.

sequel after announcement

At least 48.5% of those ‘right to pollution’ Free will will be abolished by 2030 and completely gone by 2034, a schedule that has been the subject of a fierce struggle between members of the European Parliament and countries.

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heating tax

Another controversial point: the commission proposed creating a second carbon market (ETS2) for building heating and road fuels.

Fearing the social impact of such an extra cost, MEPs first appealed to reserve the measure for office buildings and heavy goods vehicles.

In the end, households will already pay a carbon price on fuel and on gas or oil-fired heating from 2027, but that price will be set until 2030, and if the current rise in energy prices continues, demand will be deferred by a year.

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Revenue from this new market will be fueled in particular by A “Social Climate Fund”€86.7 billion, created to help vulnerable households and businesses with the energy transition.

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