European Council Agrees its Position on Carbon Pricing

The European Council has adopted its negotiating positions on a number of legislative proposals in the European Commission’s Fit for 55 (Ff55) package ahead of trilogue discussions with the European Commission and Parliament. This includes the expansion of the EU Emissions Trading System (ETS), the introduction of the Carbon Border Adjustment Mechanism (CBAM) and the introduction of ETS2. The Council agreed to limit the overall ambition of the current ETS to a 61% reduction in emissions by 2030 and a one-off 117 million reduction in free allowances, expanding the system to cover maritime shipping emissions. While the Council endorsed the proposal to end free allowances for sectors covered by CBAM between 2026-35, it proposed a slower reduction in the beginning and an accelerated rate of reduction towards the end of the ten-year period. “If an industrial sector is covered by the CBAM, it should stop receiving freebies,” said Camille Maury, Industrial Decarbonisation Policy Officer at the WWF European Policy Office. “Throwing money at big industries for another 13 years and trusting blindly that it will be spent in the right way is not only naïve, but it comes at a huge cost to our climate, citizens and the public purse. The money would be better spent on energy efficiency, innovation and a socially just transformation.” The Council also agreed on the proposal to create a separate ETS for the buildings and road transport sectors from 2024. Now that the Council has agreed its positions on the proposals, negotiations with the European Parliament will begin to reach an agreement on the final legal texts.  

The practical information hub for asset owners looking to invest successfully and sustainably for the long term. As best practice evolves, we will share the news, insights and data to guide asset owners on their individual journey to ESG integration.

Copyright © 2024 ESG Investor Ltd. Company No. 12893343. ESG Investor Ltd, Fox Court, 14 Grays Inn Road, London, WC1X 8HN

To Top