It was a key text of the European Union (EU) climate plan.
MEPs adopted the second version of the carbon market reform on Wednesday, two weeks after having rejected the first version of the text by surprise.
Member States must now agree.
This compromise, adopted by 439 votes (157 against and 32 abstentions) provides for the expansion of the CO2 market and the gradual abolition between 2027 and 2032 of the free emission quotas allocated to companies, as the borders of the EU a carbon tax on imports from third countries.
MEPs also validated their position on this unprecedented carbon tax, with application starting in 2027 and on the social fund intended to cushion the impact of environmental transition.
These are pillars of the strategy proposed last July by the Commission to reduce the European Union's greenhouse gas emissions by 55% by 2030 compared to 1990.
An extension to the maritime and aeronautical sectors
Currently, the European carbon market, where "pollution permits" have been traded since 2005, created in a limited number and which must be purchased by electricity producers and energy-intensive industries (steel, cement, etc.), only covers 40% of emissions from Twenty seven.
MEPs on Wednesday approved its expansion to the maritime sector, aviation, heavy goods vehicles and office buildings.
But up to now, most manufacturers have received “free quotas” so as not to be disadvantaged in relation to imports from third countries.
However, Brussels provides for the disappearance of free quotas as imports of polluting sectors (steel, aluminium, cement, fertilizers, electricity) will be taxed on the basis of the price of European CO2.
On June 8, the deadlock was tied around the calendar: the EPP (right, first force in Parliament) then demanded that these free quotas be maintained in the EU until 2034 (the Commission proposed 2,035), rejecting as much as the border tax.
A “red line” for the Greens and S&D (social democrats).
S&D and Renew (centrists and liberals) had unsuccessfully supported a gradual reduction between 2026 and 2032.
#climatepackage The European Parliament corrects its copy and adopts a carbon border tax, a fund to help the most precarious and a carbon market – barely – more ambitious.
Compromise found!
The ball is in the court of the Member States who have still not decided.
— Karima Delli (@KarimaDelli) June 22, 2022
The new version adopted on Wednesday, the result of a compromise found between the EPP, S&D and Renew, finally provides for a reduction in free quotas from 2027 until their disappearance in 2032, with in return increased progressiveness: companies will still receive 50% free allowances in 2030.
Another concession to the EPP: industrial sites will continue to receive free allowances for their production intended for exports to third countries that do not have comparable carbon pricing.
Other key aspects remain unchanged: the text still aims to reduce emissions from sectors subject to the carbon market by 63% by 2030, compared to 2005, better than the Commission's target (-61%) .
