EU Plans Softer Carbon Curbs, Longer Free Permits Phaseout

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomePMN BusinessEU Plans Softer Carbon Curbs, Longer Free Permits PhaseoutThe European Union is setting a slower pace for the reduction of its carbon market’s emissions cap over the next decade, as the bloc seeks to ease the impact of its climate goals on struggling industries.Author of the article:Ewa Krukowska and Alberto Nardelli You can save this article by registering for free here. Or sign-in if you have an account.(Bloomberg) — The European Union is setting a slower pace for the reduction of its carbon market’s emissions cap over the next decade, as the bloc seeks to ease the impact of its climate goals on struggling industries. THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountIn an overhaul of the Emissions Trading System due to be published Friday, the European Commission is set to propose a 3.7% rate of annual cuts in the cap in 2031-2035, and 1.7% from 2036, according to people familiar with the matter. It also plans a longer phaseout of free permits for companies in the cap-and-trade program that are covered by a carbon-border levy.The commission has faced mounting pressure from governments and industry groups over carbon costs after the Middle East conflict raised energy prices, exacerbating concerns over Europe’s declining competitiveness. The ETS reform seeks to lower the burden of the energy transition, while encouraging those who decarbonize faster to keep investing in Europe. Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againThe pace of the emissions cap reduction has become a polarizing issue, with more climate-conscious member states calling for the annual rate, known as Linear Reduction Factor, to be kept at the current 4.4%. Others want it below 3%. The slower emissions-reduction trajectory will allow the issuance of some permits after 2039, when the cap is set to drop to zero under current rules. Started in 2005, the ETS imposes gradually shrinking emissions limits on around 10,000 facilities in sectors from steel and cement to fertilizers. The system is part of an effort to cut carbon emissions 90% from 1990 levels by 2040.The commission declined to comment on the planned cap reduction rate, in line with its long-standing policy of not commenting on ongoing work. The reform proposal is due to be adopted on Friday, when EU commissioners will meet to approve its final design.To address the industry’s concerns over an uneven playing field against countries with laxer climate policies such as China and the US, the commission also plans to change the schedule for phasing out free allowances and phasing in the EU Carbon Border Adjustment Mechanism, a tool that puts a carbon price on emissions embedded in certain imported products. The CBAM phase-in started this year, with free allowances in covered sectors due to be phased out by 2034. Under the planned reform, the commission wants to extend the phase-out of free permits to 2037.In another tweak to offer companies in the system more flexibility, the commission is set to propose allowing international credits accounting for up to 2% of the ETS cap, according to the people. Another 3% will be allowed in sectors outside the main carbon market, known as ETS1 in areas such as transport and buildings covered by ETS2 as well as agriculture and forestry. The EU’s regulatory arm has repeatedly said that if such credits are authorized, their purchase should be centralized and companies covered by the system won’t be able to use them directly for compliance. Separately, the EU is planning to float on Friday the idea of setting an indicative electrification goal for the next decade as part of a plan to strengthen the local market for clean technologies and help shift the bloc away from fossil fuels. The target, to become part of a planned proposal for a post-2030 energy framework in the fourth quarter of this year, is poised to be 46% of energy consumption by 2040, according to the people.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. 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