EU Parliament backs major climate policy reforms

Blue European Union (EU) flag with yellow stars waves against blue sky (EU reforms)
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The European Parliament has approved major reforms to make EU climate change policies more ambitious, including an upgrade of the bloc’s carbon market that is set to hike the cost of polluting, Reuters reports.

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Europe’s carbon market forces power plants and factories to buy CO2 permits when they pollute. It has slashed those sectors’ emissions by 43% since 2005, but is facing a revamp to hit more ambitious EU climate change targets.

Parliament voted to approve, with a large majority, a deal agreed last year by negotiators from EU countries and Parliament, to reform the carbon market to cut emissions by 62% from 2005 levels by 2030.

Under the reforms, EU factories will lose the free CO2 permits they currently receive by 2034, and shipping emissions will be added to the CO2 market from 2024.

Lawmakers also backed the EU’s world-first plan to phase in a levy on imports of high-carbon goods from 2026, targeting imports of steel, cement, aluminium, fertilisers, electricity and hydrogen.

The carbon border levy aims to prevent EU industries being undercut by more-polluting foreign competitors, removing the temptation for EU firms to relocate to regions with lax environmental rules.

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Lawmakers also backed plans to launch a new EU carbon market covering emissions from fuels used in cars and buildings in 2027, plus a 86.7 billion-euro EU fund to support consumers affected by the costs.

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