EU Okays Deal To Boost Carbon Mart, Cut Emissions Quicker
European Union (EU) negotiators have reached a political deal to overhaul the bloc's carbon market, cut planet-heating emissions faster and impose new CO2 costs on fuels used in road transport and buildings from 2027, Sabine Siebold and Kate Abnett reported for Reuters.
Photo Insert: Lead negotiator Peter Liese
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 to cut its net emissions 55% by 2030 compared with 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 cutting the rate at which the cap on CO2 permits in the system falls by to 4.3% from 2024-2027 and 4.4% from 2028-2030.
"From 2027 on, it's crunch time. Everybody needs to reduce emissions by then or will have to pay a lot," said the European Parliament's lead negotiator Peter Liese, 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 industries to protect them from foreign competition. Those permits will be wound down as the EU phases in a carbon border tariff designed to prevent domestic firms from being undercut by overseas competitors.
After 30 hours of talks that started on Friday, the EU also agreed to launch a new carbon market covering suppliers of CO2-emitting fuels used in cars and buildings in 2027.