EU Climate Agreement: Citizens will also pay for emissions

The European Parliament and EU member states took a big step towards a more ambitious climate policy on Saturday night. After more than thirty hours of almost continuous negotiations, they reached an agreement Modifications to the emissions trading system (Educational Testing Services). The agreement should ensure that greenhouse gas emissions fall faster, so that the 2030 climate goals are met, and perhaps even enhanced, despite difficult economic conditions. The new plans affect large industry as well as individual citizens and small businesses.

Peter Lees, chief negotiator on behalf of the European Parliament, described 2027 as a defining moment in the first response. By then, everyone should be working to reduce emissions. If not, “a lot will have to be paid.” Lees said she hopes the new agreements will provide an incentive for more investments in green energy.

What’s new in the agreement is that fuel use and energy consumption in the built environment will also work with an emissions trading system – which has been around for much longer for the energy sector and heavy industries, such as steel, chemicals and cement. This means that individuals (and small businesses) will also pay for the emissions they emit with their cars, homes or workplaces. This new form of carbon tax will be introduced in 2027, a year later than proposed by the European Commission. If energy prices are still too high as they are now by then, the decision will be deferred by one year.

Very sensitive topic

This was a very sensitive issue for both Parliament and Member States, as it directly affects people’s wallets. So agreements were made to prevent costs from getting excessively high. CO. should₂– If prices rise above 45 euros per ton, then up to 20 million additional emission allowances can be put on the market to artificially lower the price.

There will also be a social climate fund to protect vulnerable citizens. This fund is paid from the proceeds of the new tax and amounts to more than 85 billion euros. This money is for people who are in trouble as a result of the new tax and can be used, among other things, to insulate homes and commercial buildings or to switch to electric transit.

Chief negotiator Peter Lies hopes the new agreements will provide an incentive for more investments in green energy

“We want to ensure that these costs do not come on top of high energy bills for consumers,” said Mohamed Shahim, a member of the European Parliament, who was involved in the negotiations. “That is why it is so important for us to cap this carbon dioxide price₂ It has an emergency mechanism that can shut down the system if the price of gas or oil rises too high.”

His colleague Bas Eckhout (GroenLinks) also places great value on the Climate Fund because, according to him, climate goals can only be achieved if the most vulnerable groups in society can also participate. It is believed that the agreements on the fund are not enough. “This Social Climate Fund is unfortunately a very cautious first step,” says Eckhout. “In terms of volume, it is still not enough, and this is where the EU countries have to really work to support people who are poor in transport or energy.”

End of free bonuses

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In addition to the new ETS system, existing emissions trading will also be addressed. After 2026, the distribution of free emission allowances to large enterprises will gradually end. From 2034, they will have to pay for every ton of carbon dioxide they emit₂ which they then emit. The purpose of free emissions allowances was not to jeopardize the competitive position of European companies. But that fear has diminished Enter import tax on contaminated products from outside the EU, for which an agreement was already reached in Brussels last week. The introduction of an import tax, which is facing a lot of resistance in China and the United States, among others, will go hand in hand with the phasing out of free emissions allowances in the European Union itself.

In terms of volume, this is still not enough, and here the EU countries really have to work to support people who are poor in transport or energy

Bass yachts MEP GroenLinks

“It was important to us social democrats that industry in particular had to meet more stringent requirements,” said Shahim. “That would have been a little more ambitious on our part.” According to Eckott, member states have long resisted phasing out free allowances. He’s glad it’s happening now, but it’s moving very slowly — in the early years by a few percentage points a year. “Unfortunately, we’ve been stuck with these untargeted subsidies for over ten years.”

Innovation Fund Expansion

The current agreement was also agreed upon in the agreement Greening Innovation Fund to expand the industry. The fund is paid out of the proceeds from the sale of emissions rights. So far, funds estimated at 450 million allowances have been available for this, which will be increased to 575 million allowances – 1 Emissions Allowance (for emitting 1 tonne of CO2).₂) It costs about 84 euros, about ten times the price of five years ago. also for update boxwhich should help poor member states in the energy transition, additional funds will be provided.

Carbon Market Watch, an NGO with extensive experience in the emissions market, Reply disappointed on the outcome of the negotiation. According to Carbon Market Watch, policymakers have succumbed to industry pressure amid misguided fears that harsh climate policies will deindustrialize Europe. “The European carbon market will fail to reduce emissions sufficiently, and therefore will not make polluters pay the price,” said spokesman Sam van den Plaas.

But chief negotiator Peter Lees, a German Christian Democrat, disagrees. “This deal makes a significant contribution to combating climate change at a low cost,” he says. “It will give citizens and industry an outlet in difficult times and send a clear signal to European industry that it is pushing to invest in green technologies.”