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Emissions Trading System reform: free allowances for industries phased out more quickly and citizens included later in ETS II
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Broader scope and faster implementation in new carbon leakage instrument
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Stricter trajectory, more transparency and less flexibility for member states’ greenhouse gas emissions in other sectors
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New EU carbon sinks goal will increase EU 2030 reduction target to 57%
MEPs adopt their position on key EU draft laws to combat climate change by reducing greenhouse gas emissions by at least 55 % by 2030 and to protect jobs and citizens.
On Tuesday, the Committee on Environment, Public Health and Food Safety adopted five reports of the “Fit for 55 in 2030 package”. This is the EU’s plan to reduce greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels and have net zero greenhouse gas (GHG) emissions (climate neutrality) by 2050 in line with the European Climate Law.
The package adopted today is an important step towards the EU’s goal to become independent from expensive and polluting fossil fuels from Russia well before 2030.
Emissions Trading System reform
MEPs want to incentivise industries to further reduce their emissions and invest in low-carbon technologies. The Emissions Trading System (ETS) should be reformed, including:
- New ETS II for buildings and road transport – citizens not to be included before 2029
- Free allowances to be phased out from 2026 and disappear by 2030
- A bonus-malus system to be introduced from 2025
- Revenues to be used exclusively for climate action in EU and member states.
Higher ambition in new carbon leakage instrument
MEPs call for a broader scope and faster implementation of the EU Carbon Border Adjustment Mechanism (CBAM) to prevent carbon leakage and raise global climate ambition, including:
- Phasing in CBAM earlier and ending free allowances in EU ETS by 2030
- Scope to be extended to include organic chemicals, plastics, hydrogen and ammonia as well as indirect emissions
- EU budget to support least developed countries through amounts equivalent to sums collected through CBAM
- Need for a centralised EU CBAM authority.
Stricter rules for member states’ greenhouse gas emissions in other sectors
MEPs also amended EU effort-sharing legislation, covering GHG emissions in sectors not included in the ETS, representing roughly 60% of EU emissions. For the first time, all EU member states would have to reduce greenhouse gas emission with targets ranging between 10-50%. MEPs call for more transparency and less flexibility to borrow, bank and transfer emissions allowances.
New EU carbon sinks goal will increase EU 2030 reduction target to 57%
MEPs agreed to increase the EU carbon sinks target for land use, land use change and forestry sector (LULUCF), which would de facto increase the EU’s 2030 GHG reduction target to 57%.
- Carbon farming to deliver 50 million additional tonnes CO2-equivalent of net removals
- MEPs want sub-targets for cropland, grassland and wetlands both at EU and member state level
- GHG removals targets for 2035, 2040, 2045 and 2050 to be set by the end of 2024.
Next steps
A vote on the Social Climate Fund report is foreseen for Wednesday jointly with the Committee on Employment and Social Affairs.
All these reports, including those on CO2 emission standards for cars and vans and CORSIA adopted last week, are scheduled for a vote during the 6-9 June plenary session, after which Parliament will be ready to start negotiations with EU governments.
Parliament’s position on the Market Stability Reserve for the ETS was adopted by Plenary in April.
HORIZON EUROPE: Social science for land-use strategies in the context of climate change and biodiversity challenges |
Source: European Parliament
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