EU adopts 2030 climate targets on carbon emissions
The European Union (EU) has passed five new laws that will allow the bloc to reduce greenhouse gas emissions in key sectors of the economy, including maritime transport and aviation.
According to Xinhua, the legislation is part of the EU’s main climate action package, “Fit for 55,” which aims to reduce greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels.
The vote in the EU Council is the final step in the decision-making process.
The EU’s carbon market, which is based on the polluter pays principle, grants allowances for emissions to energy-intensive industries, power generation, and the aviation sector.
However, under the new Emissions Trading System (ETS) rules, sectors such as energy, iron, paper, and oil must reduce their greenhouse gas emissions by 62% compared to 2005 levels.
Free emissions allowances in the aviation sector will be phased out gradually in 2026.
For the first time, emissions from maritime transport will be included in the scope of the ETS.
Obligations for shipping companies to surrender allowances will be phased in 40% for verified emissions from 2024, 70% from 2025, and 100% from 2026.
The ETS will cover the majority of large vessels from the start, while the regulation on the monitoring, reporting, and verification of CO2 emissions from maritime transport will initially cover offshore vessels.
Buildings, road transport, and small industries now have their own emissions trading system.
This is to ensure cost-effective emissions reductions in these sectors, which have proven difficult to decarbonize thus far.
From 2027, the new system will apply to distributors who supply fuel to buildings, road transport, and other sectors.
A safeguard has been put in place, which states that if oil and petrol prices are unusually high in the run-up to the new system’s launch, it will be postponed until 2028.
The Carbon Border Adjustment Mechanism (CBAM), which concerns imports of products from carbon-intensive industries, will remain in place until the end of 2025, after which it will gradually become mandatory in tandem with the phase-out of free allowances.
Cement, aluminum, fertilizers, electric energy production, hydrogen, iron and steel are among the industries that receive free allowances under the Carbon Border Adjustment Mechanism.
Between 2026 and 2034, these will be phased out over a nine-year period.
What is Net Zero and why its important for Indian Economy?
Content Credit: ETAuto