The European Parliament has voted by a large majority to reform the carbon market and tariff, indicating that the legislative process of Fitfor55, the EU’s emissions-reduction package, will move to the next stage. Draft legislation from the European Commission further toughens carbon cuts and imposes tougher rules on the Carbon Border Regulation Mechanism (CBAM). The key target is a 63 per cent reduction in greenhouse gas emissions by 2030 compared with 2005 levels, higher than the 61 per cent cut previously proposed by the Commission but lower than the 67 per cent cut proposed by its opponents in the last vote.
The new plan is more aggressive in cutting the key industry sector’s free carbon quota schedule, phasing in cuts from 2027 to zero in 2032, two years earlier than the previous plan. In addition, changes have been made in shipping, commercial transport and the inclusion of carbon emissions from commercial buildings into carbon markets.
There are also changes to the EU CBAM scheme, which has increased coverage and will include indirect carbon emissions. The main aim of CBAM is to replace existing carbon leakage protection measures with a gradual reduction of free carbon quotas for industry within Europe to incentivize emissions reductions. The inclusion of indirect emissions in the proposal would replace the existing indirect carbon price subsidy scheme.
According to the eu legislative process, the European Commission will first draft legislative proposals, namely the “Fitfor55″ package proposed by the European Commission in July 2021. Subsequently, the European parliament adopted amendments on the basis of the proposal to form the “firstreading” text of the draft legislation, that is, the draft adopted by this vote. The parliament will then begin tripartite consultations with the European Council and The European Commission. If there are still suggestions for revision, the process of “second reading” or even “third reading” will be entered.
The eu steel industry is lobbying for the inclusion of export provisions in the carbon market text, taking into account a portion of EU steel production worth 45 billion euros per year; Before CBAM takes effect, phase out free emission trading quotas and compensate related indirect costs; To amend the existing market stability reserve requirements; Include ferroalloys on the list of materials to be considered because of their significant contribution to carbon dioxide emissions. The agency said it missed emissions of raw materials needed to make stainless steel. Emissions from these imports are seven times higher than from EU stainless steel products.
The European Steel industry has deployed 60 low-carbon projects that are expected to reduce CO2 emissions by 81.5 million tonnes a year by 2030, equivalent to around 2% of the EU’s total emissions, representing a 55% reduction from 1990 levels and in line with EU targets, according to Eurosteel.
Post time: Jul-05-2022