European Union negotiators reached agreement early on Dec. 18, 2022 on overhauling the bloc’s carbon market, the bloc’s essential policy tool for fighting global warming.
Liesa Johannssen | Bloomberg | Getty Images
European Union negotiators reached agreement early on Sunday on overhauling the bloc’s carbon market, the bloc’s essential policy tool for fighting global warming, the Czech EU presidency and the European Council said.
“The agreement … will allow us to satisfy climate objectives throughout the essential sectors of the economy, while ensuring essentially the most vulnerable residents and micro-enterprises are effectively supported within the climate transition,” Czech environment minister Marian Jurecka said in an announcement.
At stake was the EU’s ability to contribute to global efforts to fight climate change, and achieve its goal to chop net greenhouse gas emissions by 55% by 2030 compared with 1990 levels.
Meeting that goal would require the EU carbon market to be reformed to chop emissions faster, which it does by requiring around 10,000 power plants and factories to purchase CO2 permits after they pollute.
Negotiators were at odds over how quickly to finish the free CO2 permits the EU gives industries to guard them from foreign competition. Those permits can be wound down because the EU phases in a carbon border tariff designed to forestall domestic firms from being undercut by overseas competitors.
After 30 hours of talks that began on Friday, negotiators agreed to boost the general goal to chop emissions within the sectors covered by the European Emissions Trading System to 62% by 2030, the European Council, grouping the bloc’s member states, said in an announcement.
Negotiators also decided to rebase “the general emissions ceiling over two years of 90 and 27 million allowances respectively, and increase the annual reduction rate of the cap by 4,3% per yr from 2024 to 2027 and 4,4 from 2028 to 2030,” the statement added.
A Social Climate Fund is to be established to support vulnerable households, micro-enterprises and transport users deal with the worth impacts of an emissions trading system for buildings, road transport and fuels for added sectors, based on the statement.
The provisional deal still must be formally adopted by the European Parliament and the European Council.
