EU to reduce issuing carbon credits by 2,2 percent annually

The European Parliament supported the European Commission’s proposal to reduce the number of carbon credits by 2,2 percent each year from 2021 as against 1,74 percent in the existing legislation.

The MEPs are already planning to increase that percentage to 2,4 by 2024 at the earliest, announced the European Parliament. Carbon credits are permits issued to countries for the production of a certain amount of carbon emissions. They can also be traded on the EU Emissions Trading System (ETS).

EU ETS, which operates in 31 countries including all 28 EU countries plus Iceland, Liechtenstein and Norway, limits emissions from more than 11,000 heavy energy-intensive power stations, industrial plants and airlines. It covers around 45 percent of the EU’s greenhouse gas emissions.

The EU plans to boost greenhouse gas emission curbs through influencing the Emissions Trading System. The goal is to bring EU climate policy into line with the aims of the Paris climate agreement. Also, the plan is to double the capacity of the 2019 market stability reserve (MSR) to absorb the excess of allowances on the market.

“The Parliament has voted through ambitious measures to fulfill our Paris Agreement obligations, and we have sent a strong signal to the European Council that we are serious about the fight to stop global warming,” said EP rapporteur Ian Duncan after the voting. The Commission’s proposal was approved by 379 votes to 263, with 57 abstentions.

The European Council will meet at the end of February. If member states agree on a common position, negotiations between the Parliament, Council and Commission can proceed to determine the final shape of the legislation.