FRANCE. Strasbourg: On Tuesday, the European Parliament will vote in the final round to decide whether to adopt sweeping changes that would enhance the EU’s carbon market and make the EU’s climate change policies more ambitious.
Power stations and factories are required to purchase CO2 permits when they pollute Europe’s carbon market. It has reduced emissions in those industries by 43% since 2005, but it needs to be revamped to meet more aggressive EU climate change targets.
Parliament will vote on a deal that EU negotiators and Parliament reached last year to restructure the carbon market to reduce emissions by 62% from 2005 levels by 2030.
By 2034, companies will gradually stop receiving the free CO2 permits they currently get under the upgrade. Additionally, the measures will require ships to begin paying for their emissions as of 2024.
The EU’s groundbreaking proposal to impose CO2 fees on imported commodities starting in 2026, including steel and cement, will also be put to a vote by legislators. This policy aims to level the playing field for European and non-European businesses.
The legislation still needs to receive final approval from EU nations, who will evaluate it in the next few weeks, before it can go into effect.
Normally, this approval is merely a formality that sees pre-arranged agreements through with no changes, but since Germany abruptly objected to another strategy to phase out fossil fuel-powered automobiles, the process has been called into question.
Lead Parliamentary negotiator on the carbon market reform, Peter Liese, said that the programme will result in almost 25 times more CO2 savings this decade than the EU’s automotive CO2 emission standards.
“For the climate, the ETS alone is more important than all the other files together,” he said.
Liese predicted that the reform would receive a majority of the vote in Parliament. As a result of the anticipated reforms, the cost of EU carbon permits has increased dramatically in recent years. The governments of EU member states receive a portion of the proceeds from the carbon market to fund climate action.
The benchmark EU carbon price, which has roughly doubled since the year 2020 began, was trading at around 93 euros per tonne of CO2 on Monday. In February, it reached 100 euros per tonne for the first time.
In addition, the EU will introduce a new carbon market in 2027 that will include providers of the fuels used in buildings and cars, as well as an EU fund of 86.7 billion euros to assist consumers in bearing the expenses.
Also Read: United Nations Passes Historic Climate Justice Resolution
