EU legislators approved a significant carbon market change
On Tuesday, the European Parliament passed comprehensive climate legislation, including the imposition of a carbon import border tax, with the goal of drastically reducing EU greenhouse gas emissions.
The legislative action finalizes an expansive EU proposal to change the carbon market in Europe by expanding an emissions trading program to other industries and reducing allowed polluting gas allowances.
Ursula von der Leyen, president of the European Commission, tweeted, “With today’s votes, we reach another milestone.”
2 years ago we presented the laws to deliver the #EUGreenDeal
With today’s votes, we reach another milestone.
I want to thank @Europarl_EN for its support, and call on Member States to now take the final steps.
Together, we will make Europe the first climate neutral continent.
— Ursula von der Leyen (@vonderleyen) April 18, 2023
She asked EU members to give the measures their final assent so they could go into action.
According to the proposed legislation, carbon emissions in the European Union will decrease by 62 percent by 2030 compared to levels in 2005, which is a significant increase from the prior goal of a 43 percent reduction.
The EU, which consists of 27 European nations, ranks third among all carbon dioxide emitters worldwide.
The largest by far is China, which, despite a commitment to reach net zero carbon emissions by 2060, is significantly expanding its network of coal-fired power plants.
Next is the United States, which has historically been the largest emitter of greenhouse gases and has a long-term plan to achieve net zero emissions by 2050.
In order to advance the movement toward a greener America, US President Joe Biden has introduced a $370 billion Inflation Reduction Act that offers significant incentives for US industry.
In response to US subsidies and massive Chinese investment in the renewable energy sector, Brussels is drafting separate EU laws to increase industrial competitiveness in Europe.
In order to prevent its sectors from being undercut by firms outside the bloc that are not subject to the same expenses, it will levy the carbon tax on imports while remaining committed to achieving its green transformation.
Technically speaking, this measure—which is referred to as a “adjustment” rather than a tax—requires importers into the EU to purchase a “emission certificate” if their goods exceed the bloc’s carbon standards.
Initially focused on the industries that produce the greatest pollution—steel, aluminum, cement, fertilizer, and electricity—MEPs added suppliers of hydrogen, and Brussels is considering extending the list to include businesses that produce organic compounds and polymers.
Up to 14 billion euros in revenue each year will be injected into the EU budget.
When the emission restrictions for European industrials are eliminated, the carbon price will be expanded between 2026 and 2034. It will begin as a pilot program in October of this year.
(AFP)
