Reorganization of carbon trading to hit polluters in the portfolio
The European Union is on the verge of hitting carbon polluters in the portfolio with the aim of reducing the bloc’s greenhouse gas emissions which are massively contributing to global warming.
The group of 27 industrialized countries is preparing to overhaul its system by which it effectively taxes polluters for the damage they have caused to the environment, Reuters news agency reported on Wednesday.
Reuters says the overhaul of the bloc’s emissions trading system, or ETS, will be the largest since the initiative launched in 2005.
He said a leaked EU draft document details how the bloc plans to make pollution more expensive and how it also wants to expand the ETS system to cover pollution created by ships, trucks and heating systems. massive.
The ETS system, which already covers factories, power stations and airlines, requires carbon producers to purchase permits to offset their pollution. The number of permits needed is based on the amount of pollution created, which prompts companies to produce less carbon in order to save money.
Polluters currently pay around 56 euros per tonne of carbon they produce, double the figure two years ago. The Financial Times said the price could reach 85 euros per tonne by the end of the decade.
Reuters said the EU would consider reforming the ETS on July 14, although the bloc has yet to confirm this.
The EU is trying to meet its target of reducing net carbon emissions by 55% from 1990 levels by 2030.
The Bloomberg news agency said the ETS overhaul will include a reduction in the number of permits issued by the EU. With fewer permits available, the price at which they are trading will inevitably increase.
If the proposals are actually discussed on July 14, EU member countries and European Parliament lawmakers will be able to amend and approve or drop them. Reuters said the ETS overhaul process could take around two years.
The European Commission, which is the executive arm of the European Union, has previously said it will use all the money raised through the ETS system to boost the competitiveness of its industrial sector and help vulnerable families pay for their energy needs, so the cost increases due to Greening Strategies.
Bloomberg noted that the proposed overhaul of the ETS will be unveiled along with a series of updated EU laws that are being rewritten keeping in mind the bloc’s climate change commitments to the 2030 horizon contained in the European Green Agreement.