european union: EU lawmakers reach compromises on carbon market review

European Union lawmakers have reached initial agreements on reforms to the EU’s carbon market as they prepare to negotiate a review of the 27-nation bloc’s core policy to cut planet-warming emissions.

Lawmakers representing a large majority in the European Parliament’s environment committee backed most of the changes, the legislature’s chief negotiator Peter Liese said on Wednesday.

The changes would curtail a new carbon market planned to impose CO2 costs on suppliers of fuels used in buildings and transportation. Lawmakers agreed to apply the scheme to commercial entities from 2025, and only extend it to private consumers in 2029 if certain conditions are met.

Prices in the scheme would be capped at 50 euros ($52.82) per tonne, he said.

Liese said the deal to keep households out of the new market was a “painful compromise” but he considered it a victory, in light of opposition from some countries and lawmakers to introducing the scheme.

Parliament’s environment committee will vote on the proposed changes next week, before a full parliamentary vote in June or July. If approved, the deal will shape parliament’s position for final negotiations with EU countries on reforms.

There is also a change taking place in the current EU carbon market, the EU Emissions Trading System (ETS), its central climate policy, which forces power plants and factories to buy CO2 permits when they pollute and limits the provision of permits.

Prices under that scheme are currently around 85 euros per tonne.

Lawmakers agreed to make it easier to respond to price increases in the carbon market and reward industrial companies with the best environmental performance by giving them free additional permits, taken from companies without a plan to decarbonise.

Shipping emissions would be fully covered by the carbon market from 2024, two years before the original proposal by the European Commission, which writes EU law.

However, lawmakers could not agree on all the elements. Some parliamentary groups have agreed to push for even stricter rules, including an end to free CO2 permits for industry by the end of the decade.

EU lawmaker Michael Bloss, negotiator for the Greens, said the tougher proposals would cut emissions from the carbon market by 67% by 2030, compared with the 61% cut in the Commission proposal.

However, groups backing tougher rules may struggle to win majority support in the full parliament, leading to a difficult few months of haggling over lawmakers’ final position.

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