The European Commission supported the reform of the EU carbon market shutterstock

The European Commission supported the reform of the EU carbon market

Katerina Belousova

European steel association Eurofer has expressed concern about CBAM

The head of the EU's climate service, Frans Timmermans, said that the adoption by the European Parliament of the agreement on the reform of the carbon market brought the EU closer to completing the work on the Fit for 55 package.

The reform of the Emissions Trading System (ETS), the implementation of the Carbon Border Adjustment Mechanism (CBAM) and the creation of the Social Climate Fund (SCF) have put the bloc firmly on the path to a greener future, EURACTIV reports.

The Fit for 55 package aims to reduce greenhouse gas emissions by at least 55% by 2030 from 1990 levels.

It is noted that the European Commission welcomed the European Parliament's vote in favor of the carbon market reform as a decisive step in the fight against climate change and the achievement of the EU's climate goal.

The article emphasized that the reform approved on April 18 will make the EU climate change policy more ambitious and raise the cost of pollution. In addition, it is designed to reduce emissions by 62% by 2030 from 2005 levels.

EURACTIV explained that although CO2 emissions from power stations and factories have fallen by 43% since 2005, thanks in particular to the obligation to buy emission permits, the reform will allow more ambitious climate targets to be met. After all, free permits for carbon emissions will completely disappear by 2034. In addition, the abolition of free allowances will take place against the background of the gradual introduction of the CBAM carbon tax.

The authors emphasized that CBAM is in favor the import of goods with a high carbon content will gradually begin to be introduced from 2026. It will cover such goods as steel, cement, aluminum, fertilizers, electricity and hydrogen.

It is noted that the CBAM should prevent the negative impact of foreign competitors with "dirtier" products on the EU industry. And also prevent the transfer of production to countries with milder environmental regulations.

"To overcome the climate crisis, emissions must decrease worldwide. When energy-intensive goods enter the EU, we will ensure that carbon dioxide emissions are paid for," said Timmermans.

However, European steel association Eurofer has expressed concern over the new border carbon tax, saying action must be taken now to prevent foreign companies from circumventing it.

She also called for measures to support European steel exports in the face of competition from foreign producers who do not face the same carbon constraints.

"Otherwise, we risk losing €45 billion in steel exports from the EU, and therefore the associated production capacity and jobs," Eurofer said.

The report stressed that plans to launch the new ETS II carbon market in 2027, covering emissions from car fuel and home heating, could cause social unrest. However, the European Commission believes that the new social climate fund will mitigate the negative consequences.

EURACTIV added that the laws still need final approval by EU countries. However, this is usually a formal procedure.

The European Parliament's lead negotiator, Peter Liese, said that ETS reform could help or hinder Europe's CO2 reduction targets.

"For the climate ETS itself is more important than all other documents combined," he said.

Earlier, EcoPolitic wrote, that on April 18, the members of the European Parliament approved agreements on the reform of the Emissions Trading System (ETS), the Carbon Border Regulation Mechanism (CBAM) and the creation of the Social Climate Fund (SCF).

As EcoPolitic previously reported, steelmakers from the Gerber Group stated that the carbon border adjustment mechanism (CBAM) threatens the existence of industries with intensive CO2 emissions, such as the production of cement, fertilizers or steel and stainless steel.

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