European Union negotiators came to an agreement on Sunday regarding the overhaul of the bloc’s carbon market. This is the main tool that the bloc has for combating global warming. The Czech EU presidency, and the European Council stated.
Marian Jurecka, Czech environment minister, stated in a statement that the agreement “will allow us to achieve climate objectives in the main sector of the economy while making sure the most vulnerable people and micro-enterprises in the climate change transition.”
The EU’s contribution to international efforts to combat climate change was at stake. It also had to achieve its goal to reduce net greenhouse gas emissions by 55% in 2030, compared to 1990.
To meet this goal, the EU’s carbon market must be reform to reduce emissions quicker. This is done by making it mandatory for around 10,000 factories and power plants to purchase CO2 permits whenever they pollute.
The EU grants industries free CO2 permits to help them protect themselves from foreign competitors. Negotiators disagreed on how fast to stop this practice. These permits will end as the EU introduces a carbon tariff to protect domestic companies from being outsourced by foreign competitors.
Following a 30-hour negotiation that began Friday, negotiators reached an agreement to increase the target for reducing emissions from the sector covered by the European Emissions Trading System by 62% by 2030. This was according to the European Council which represents the member countries of the bloc.
The statement also stated that negotiators decided to lower the overall emissions limit over the next two years to 90 million and 27 millions allowances, respectively. They also increased the annual cap reduction rate by 4,3% annually from 2024-2027 and 4,4 per year 2028-2030.
According to the statement, a Social Climate Fund will be created to help vulnerable households, micro-enterprises, and transport users deal with the price impact of the emissions trading system. This fund will support them in dealing with fuel prices for other sectors and road transport.
However, the provisional agreement must still be officially adopted by both the European Parliament & the European Council