The European Commission has welcomed the provisional agreement reached with the European Parliament and the Council to strengthen the EU's greenhouse gas emissions trading (ETS) scheme and to apply emissions trading to new sectors for effective climate action across the European economy, starting with the transport sector.
For the Commission "this agreement is a fundamental step towards achieving the EU's commitment to reduce net greenhouse gas emissions by at least 55 percent by 2030. At the same time, the Social Fund for the climate will help ensure that the transition is fair".
To integrate substantial climate spending into the EU budget, member states will spend all revenues from emissions trading on climate and energy-related projects and addressing the social aspects of the transition. Executive Vice-President for the European Green Deal, Frans Timmermans , said: "Emissions trading is at the heart of our European Green Deal: putting a price on carbon. A stronger emissions trading scheme will help us drive investment in decarbonisation and reduce emissions further and faster, in line with our climate goals.
With the new Social Fund for Climate, the EU will ensure that our green transition happens in a way that protects our most vulnerable people and helps them participate in the transition. At the end of a busy year, this is much needed positive news; in the face of strong headwinds, let us continue to deliver the European Green Deal for a sustainable future."
According to the EU, the deal will reduce emissions from EU ETS sectors by 62 percent by 2030, compared to 2005 levels . It will phase out free emission allowances to select companies and phase in the Carbon Border Adjustment Mechanism (CBAM) between 2026 and 2034 for covered sectors. This follows the provisional agreement reached on the CBAM by the European co-legislators on 13 December.
To support Member States in their efforts to reduce emissions from buildings and road transport and some industrial sectors, a new separate emissions trading scheme will start from 2027 for related fuel use. The compromise also increases the size of the innovation and modernization funds and creates a new social climate fund, which will provide specific financial support to member states to help vulnerable citizens and micro-enterprises with investments in energy efficiency measures.
It will be funded with €65 billion from the EU budget, plus 25 percent co-financing by member states . Now the provisional agreement requires formal adoption by the Parliament and the Council. (Source: https://www.agi.it/ )
ETS, a new system for trading greenhouse gas quotas is underway