EU strike deal to promote carbon market, Europe’s biggest climate policy | Popgen Tech

BRUSSELS, Dec 18 (Reuters) – European Union negotiators reached a political deal on Sunday to overhaul the bloc’s carbon market, cut planet-warming emissions faster and impose new CO2 costs on fuels used in road transport and buildings from 2027. used.

The EU carbon market requires around 10,000 power plants and factories to buy CO2 permits when they pollute – a system central to meeting the EU’s target of cutting its net emissions by 55% by 2030 compared to 1990 levels .

Under the deal agreed by negotiators from EU countries and the European Parliament, the EU carbon market will be reformed to cut emissions by 62% from 2005 levels by 2030.

The plan involves removing 90 million CO2 permits from the system in 2024, 27 million in 2026 and reducing the rate at which the cap on CO2 permits in the system falls by 4.3% from 2024-2027 and 4, 4% from 2028-2030.

“From 2027 is crunch time. Everyone has to reduce emissions by then or will have to pay a lot,” said Peter Liese, the European Parliament’s chief negotiator, adding that he hoped this looming deadline would encourage investment in green energy.

From 2026-2034, the EU will phase out the free CO2 permits it currently gives to industries to protect them from foreign competition. Those permits will be scrapped as the EU phases in a carbon cap tariff designed to prevent domestic firms from being undercut by overseas rivals.

After 30 hours of talks starting on Friday, the EU also agreed to introduce a new carbon market covering suppliers of CO2-emitting fuels used in cars and buildings in 2027.

After EU lawmakers resisted including households in the scheme, negotiators agreed several measures to protect citizens from high CO2 prices.

If fuel prices in 2027 are as high as they are today, the introduction of the carbon market will be delayed until 2028. If its CO2 price hits 45 euros ($47.62), extra CO2 permits will be released into the market to try to tame prices.

The price of EU carbon permits has soared in recent years, fueled by expectations that stricter EU emissions targets will hamper the supply of CO2 permits in the scheme. The benchmark EU carbon price traded on Friday at around 84 euros per tonne of CO2, around ten times its value five years ago.

The EU will also launch an 86.7 billion euro fund to help consumers and small businesses cope with the CO2 costs and invest in energy-saving building renovations or electric vehicles – partly financed by revenues from the new EU CO2 market, and partly by national governments.

The provisional agreement has yet to be formally adopted by the European Parliament and the European Council.

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Reporting by Sabine Siebold; Editing by Christopher Cushing, Michael Perry and Louise Heavens

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