IETA Welcomes Formal EU Approval of Wide-Ranging Carbon Market Reforms
BRUSSELS, April 25 – EU Ministers today approved a wide-ranging set of reforms to the EU Emissions Trading System, paving the way for the bloc to achieve a 55% cut in emissions from 1990 levels by 2030. This is the last step in a series of votes, following the preliminary agreement reached in December 2022.
IETA warmly welcomes the reforms, which highlight the EU’s leading role in the use of carbon markets to achieve the global goal set out in the Paris Agreement, of reaching a net zero climate target by the middle of this century.
“The completion of the EU ETS reforms reinforces the benchmark role that Europe’s cap-and-trade system plays for the world, by setting ambitious targets that will require a robust, transparent and fair price on carbon,” said Julia Michalak, EU policy advisor at IETA.
The European Union has also formally approved the creation of a second, parallel emissions trading system that will cover the emissions from fuels used in the domestic and transport sectors.
Research by leading analysis firm ICIS estimates that with this expansion of mandatory carbon pricing, as much as 76% of the EU’s total emissions will now be covered by a pricing mechanism.
The Council also approved the creation of a Carbon Border Adjustment Mechanism, which will impose a carbon levy on imported materials from jurisdictions that do not put a price on carbon.
“Europe is demonstrating that the impacts of a global pandemic, as well as an energy crisis and conflict on its doorstep should not detract from the climate imperative,” Michalak said. “With these reforms, the European institutions have shown that the political will to achieve the Paris goals remains strong in the face of economic and geopolitical turmoil.”