EU agrees on scheme to put price tag on Carbon emissions starting 2027

By Al Mayadeen English
Source: Agencies
18 Dec 2022 21:25

The new plan when implemented will target households small businesses and road transport users with taxes per tonne of CO2 emissions.

European Parliament.

EU lawmakers agreed on a draft for a new pricing scheme for carbon emissions as part of the continent's goal to decrease CO2 emissions by a minimum of 55% by 2030.

The new scheme is part of the "Fit for 55" EU green plan and aims to increase carbon emission costs for homes, road transport, and small businesses starting in 2027, with a price ceiling of 45 euros per tonne until 2030.

EU green transition plan, also known as Fit for 55, was designed to reduce the bloc's greenhouse gas emissions as member states transition into a full "green economy" by 2050.

Earlier in June, the European Parliament backed EU regulations designating nuclear and gas energy as environmentally sustainable economic activities, saying that private investment in gas and nuclear projects may play a role in the green transition process.

Opponents of this taxonomy call it "greenwashing". The gas, when burning, emits significant amounts of CO2. As for nuclear power, it is free of CO2 but generates waste for which no lasting solution exists.

EU council however agreed that if energy prices remained "exceptionally high", the implementation of the new scheme would be pushed to 2028.

"It is appropriate to introduce measures to address the potential risk of excessive price increases, which, if particularly high at the start of the buildings and road transport emissions trading, may undermine the readiness of households and individuals to invest in reducing their greenhouse gas emissions," the council stated.

A new Social Climate Fund will be created, at 65 billion euros worth, to cushion the impact of the new CO2 pricing on households with low income, same as to businesses and transport users, while exempting taxes on agricultural vehicles.

Following the Fit for 55 announcements back in June, EU lawmaker Roman Haider said that the plan is unfeasible unless sanctions against Russia are lifted.

He also stressed that to achieve carbon neutrality by 2040 and meet the goals of the Paris climate agreement, Austria would have to cut emissions by 95% over the next 18 years, as a recent study shows that the country's CO2 emissions in 2021 reached 1990 levels.

At the same time, the reality of the current energy market volatility has forced some EU countries, including Austria, to consider resuming the use of coal, which is the most damaging fossil fuel on the environment.