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EU talks resume in hunt for pivotal carbon market deal

EU talks resume in hunt for pivotal carbon market deal
EU talks resume in hunt for pivotal carbon market deal Copyright Thomson Reuters 2022
Copyright Thomson Reuters 2022
By Reuters
Published on Updated
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By Kate Abnett

BRUSSELS - European Union negotiators were set on Saturday morning to resume efforts to reach a deal on overhauling the EU carbon market, the bloc's main policy tool for fighting global warming, after a first round of talks failed on Friday.

At stake is the EU's ability to contribute to global efforts to fight climate change, and achieve its target to cut net greenhouse gas emissions by 55% by 2030 compared with 1990 levels.

Meeting that goal will require the EU carbon market to be reformed to cut emissions faster, which it does by requiring around 10,000 power plants and factories to buy CO2 permits when they pollute.

"On Friday, a lot was negotiated, but little was decided. Saturday morning we will continue and hopefully conclude the negotiations on Europe's largest climate protection package," said German lawmaker Michael Bloss, a European Parliament negotiator.

Swedish lawmaker Emma Wiesner said Friday's talks had achieved a "surprisingly big amount of progress". Other EU officials said deals had not yet been found on the most divisive issues.

Negotiators are at odds over how quickly to end the free CO2 permits the EU gives industries to protect them from foreign competition. Those permits will be wound down as the EU phases in a carbon border tariff designed to prevent domestic firms from being undercut by overseas competitors.

EU lawmakers want 50% of free permits phased out before 2030, with the rest gone by 2032 - far earlier than the 2036 end-date countries support.

Other issues include a planned new carbon market to impose CO2 costs on suppliers of fuel for cars and heating homes, a divisive policy that some countries and lawmakers fear could cause a public pushback.

Revenue raised by the new market would form a 59 billion-euro fund to compensate consumers facing higher bills, under the original EU proposal.

But EU lawmakers want to exclude private consumers from the new CO2 market, a stance opposed by EU countries.

If approved, the revamped carbon market will form the centrepiece of a package of 12 new EU policies designed to cut planet-heating emissions faster.

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