Members of
the European Parliament in Strasbourg passed a law Tuesday to strengthen EU
curbs on CO2 emissions from industrial sites, in order to comply with Paris
climate accord commitments.
The text
was approved by 535 votes to 104, with 39 abstentions.
The new
law, already informally agreed upon by EU ministers, will accelerate the
withdrawal of emission allowances available on the carbon market, which covers
around 40 percent of EU greenhouse gas emissions, according to the European
Parliament
“The ETS
remains the cornerstone of our EU policy to combat climate change,” said
rapporteur Julie Girling, an MEP from the UK. “We have done our best to agree
on an ambitious update. The ETS has had many detractors over the years. We
tackled most of the problems – from a carbon price that was clearly too low to
make the market function, to the extremely difficult issue of striking the
balance between our environmental ambition and the protection of an
energy-intensive European industry,” Girling added.
The law
provides for an increase in the yearly reduction of emission allowances to be
placed on the market (the so-called “linear reduction factor”) by 2.2 percent
from 2021, up from the 1.74 percent planned at present. This factor will also
be kept under review with a view towards a further increase by 2024 at the
earliest.
The law
also provides for a doubling of the ETS Market Stability Reserve’s capacity to
mop up excess emission allowances on the market. When triggered, it would
absorb up to 24 percent of excess allowances in each auctioning year for the
first four years, and thus increase
their price by adding to the incentive to reduce emissions, the European
Parliament said.
According
to the new law, two funds will help foster innovation and spur the transition
to a low-carbon economy. Moreover, a modernisation fund will help to upgrade
energy systems in lower-income EU member states. MEPs tightened up the
financing rules so that the fund is not used for coal-fired projects, except
for district heating in the poorest member states.
An
innovation fund will provide financial support for renewable energy, carbon
capture and storage and low-carbon innovation projects.
The law
also aims to prevent “carbon leakage”, i.e. the risk that companies might
relocate their production outside Europe due to emission reduction policies.
The sectors at the highest risk will receive their ETS allowances for free. Less
exposed sectors will receive 30 percent for free.
https://www.neweurope.eu/article/meps-pass-law-strengthen-eu-curbs-co2-emissions/