The European Union has introduced proposals that would limit the reduction of greenhouse gas emissions for businesses, as part of a major climate policy overhaul.
The changes will loosen the bloc’s emissions trading system (ETS) rules to give businesses more time to reduce their carbon emissions than previously planned.
These changes could mean that some industries could receive emission allowances until 2038 instead of 2034, if they commit to investing in carbonisation efforts.
The proposals still need to be approved by EU countries and legislators – a process that could take a year.
“We are taking a business-friendly approach and, may I say it, a smart approach,” said EU climate commissioner Wopke Hoekstra.
The European Commission, which develops the law for the 27 EU member states, said the changes would ensure the ETS is in line with the EU’s goal of reducing carbon emissions by 90% by 2040, compared to 1990 levels.
The ETS, launched in 2005, is the EU’s main instrument for curbing greenhouse gases.
But it has come under fire from many member states, with Italy in particular criticizing the trading system as a de facto tax that has helped keep energy prices illegally high.
Under the ETS, European industries and power plants are required to buy a permit, or allowance, per ton of carbon they emit, creating a financial incentive to invest in clean technology.
Companies can buy additional permits or trade them. Some businesses are given permits for free to help them compete with foreign firms that do not pay carbon fees.
The ETS also has a number of permits issued each year to ensure that jobs are reduced.
The Commission has proposed reducing the annual rate of reduction to around 3.7% from 2031 and 1.7% from 2036 – down from 4.3% currently.
As part of the reforms, the EU is also proposing to continue free allowances until 2038, rather than ending in 2034, when they would be replaced by a carbon border tax on imports in some sectors.
The Commission will also grant 80% of free permits to companies with plans to invest in decarbonisation in Europe. Businesses will receive the remaining 20% once that investment is made.
In response to these proposals, Poland’s climate minister Paulina Hennig-Kloska said Poland would move forward with weakening the policy.
“For the first time, we see a softening of the situation rather than a strengthening – this is a great achievement for Poland. Although we will strive for more,” he said.
But green politicians were not so impressed. German member of the European Parliament, Michael Bloss, said the plans would lead to “massive climate pollution” and the next generation would have a worse quality of life as a result.
Global temperatures have been rising over the past century due to human activities that release greenhouse gas emissions, but local or regional geography shapes the rate at which different areas warm.
As Europe heats up faster, it is more prone to frequent and intense periods of extreme heat.
