Council approves new rules for the period 2021 to 2030
|On 27 February 2018 the Council formally approved the reform of the EU emissions trading system (ETS) for the period after 2020.
The revised ETS directive is a significant step towards the EU reaching its target of cutting greenhouse gas emissions by at least 40% by 2030, as agreed under the EU’s 2030 climate and energy framework, and fulfilling its commitments under the Paris Agreement.
“As Presidency we will work towards retaining the EU’s leading role in the negotiations on the conclusion of the implementation rules of the Paris Agreement. Reducing greenhouse gas emissions will not only contribute to the fight against climate change but it will also positively impact the improvement of the air quality. Protecting the environment and the health of European citizens is one of the priorities of the Bulgarian Presidency.”
The emissions trading system is reformed by introducing the following elements:
The revised ETS directive also contains a number of new provisions to protect industry against the risk of carbon leakage and the risk of application of a cross-sectoral correction factor:
Background and next steps
The EU emissions trading system sets a cap on how much CO2 heavy industry and power stations can emit. The total volume of allowed emissions is distributed to companies as permits which can be traded. ETS is a cornerstone of the EU’s policy to combat climate change and its key tool for reducing greenhouse gas emissions cost-effectively. Set up in 2005, it is the world’s first major carbon market and remains the biggest one. It operates in all 28 EU countries plus Iceland, Liechtenstein and Norway. ETS limits emissions from more than 11.000 heavy energy-using installations (power stations and industrial plants) and airlines operating between these countries. It covers around 45% of the EU’s greenhouse gas emissions. Putting a price on carbon and trading it delivers concrete results for the environment: In 2020, emissions from sectors covered by the system will be 21% lower than in 2005.
The formal approval at the Council today is the final step in the legislative process. The new directive will enter into force on the 20th day following its publication in the official journal.