Pinwan, June 23, according to the Financial Associated Press, on Wednesday (June 22) local time, the European Parliament passed three key draft EU laws in the “first reading”.
According to the European Parliament press release, the three draft laws are the reform of the Emissions Trading System (ETS), the amendment of the relevant rules of the Carbon Border Adjustment Mechanism (CBAM), and the establishment of the Social Climate Fund, which is called “Fit for 55”. part of the package.
The EU’s “Fit for 55” plan aims to reduce pollution by at least 55% from 1990 levels by 2030, and every industry will be forced to accelerate the shift away from fossil fuels, putting the EU on course to eliminate greenhouse gases by mid-century emission road.
Emissions Trading System Reform
The version adopted by the European Parliament’s Environment Committee in “first reading” slightly raised the coverage of relevant sectoral emissions from 61% to 63% by 2030, and created a new trading system, ETS II, for buildings and road transport.
At the same time, the new version of the draft will also support the phasing out of free carbon emission allowances from 2027 to 2034. The draft also hopes to introduce an incentive system in 2025 to incentivize enterprises and innovation, which means that the EU will accelerate industrial decarbonization. .
Carbon Boundary Adjustment Mechanism (Carbon Tariff)
Regarding the Carbon Boundary Adjustment Mechanism (CBAM), the new draft states that CBAM will be implemented from January 1, 2023, with a transition period until the end of 2026. Importers need to pay for the direct carbon emissions of their imported products, and the price is linked to the EU carbon market.
In addition to steel, petroleum products, cement, organic basic chemicals and fertilizers, the new draft will include organic chemicals, plastics, hydrogen and ammonia in the CBAM levy, according to an official European Parliament press release. In addition, the council also wants to expand to indirect emissions, that is, electricity is also included in the scope of the collection.
Source: European Parliament
Social Climate Fund
The third draft is for a Social Climate Fund to help disadvantaged citizens cope with the increased costs of the energy transition.
The draft text emphasizes that the fund will benefit households, small businesses and transport users, who are particularly vulnerable to the negative impacts of the carbon neutrality process.
The fund will complement the financial resources of EU member states in two directions: first, temporary direct subsidy measures (such as lowering energy taxes and fees) in response to rising road transport and heating fuel prices; and second, long-term structural investments, such as renovations Buildings, investing in renewable energy, directing people to public transport, etc.
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