Expansive reforms that would ensure EU climate change policies become more ambitious, including an upgrade of the bloc’s carbon market that is set to hike the cost of polluting in Europe, have been approved by the European Parliament on Tuesday.
Carbon market in Europe has a legislation in place that forces power plants and factories to buy CO2 permits when they pollute. However, the market is facing a revamp to hit more ambitious EU climate change targets after it had already slashed those sectors’ emissions by 43% since 2005.
Last year, the Parliament voted overwhelmingly in favour of a deal agreed by negotiators from EU countries and Parliament as part of efforts to reform the carbon market and cut emissions by 62% from 2005 levels by 2030.
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Under the upgrade, factories will lose the free CO2 permits they currently receive by 2034, and shipping emissions will be added to the CO2 market from 2024.
The EU’s world-first plan to phase in a levy on imports of high-carbon goods from 2026, targeting imports of steel, cement, aluminium, fertilisers, electricity and hydrogen was also backed by the lawmakers.
The aim of the carbon border levy is to prevent EU industries from being undercut by more-polluting foreign competitors, thereby removing the temptation for EU firms to relocate to regions with lax environmental rules.
The laws still need final approval from EU countries, who will assess them in the next few weeks.
Lawmakers also backed plans to launch a new EU carbon market covering emissions from fuels used in cars and buildings in 2027, plus a 86.7 billion-euro EU fund to support consumers affected by the costs.
Story was adapted from Reuters.
