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HomeU.S.EU reaches deal on emissions trading, social climate fund

EU reaches deal on emissions trading, social climate fund

'Quick read' news summary

BERLIN -- European Union governments and lawmakers reached a deal Sunday on key elements of the 27-nation bloc's green deal, reforming the EU's trading system for greenhouse gas emissions and creating a new hardship fund for those hardest-hit by measures to curb climate change. The EU's executive Commission said the measure would require European industries to reduce their emissions by 62% by 2030 from 2005 levels, compared to a target of 43% under the previous rules. Governments and the European Parliament also agreed to extend the bloc's emissions trading system to cover road transport and the heating of buildings from 2027.

BERLIN — European Union governments and lawmakers reached a deal Sunday on key elements of the 27-nation bloc’s green deal, reforming the EU’s trading system for greenhouse gas emissions and creating a new hardship fund for those hardest-hit by measures to curb climate change.

The two sides agreed to push European industries and energy companies to cut their emissions by speeding up the phase-out of free pollution vouchers. Doing so makes each ton of carbon dioxide that’s released into the atmosphere more expensive for polluters.

The EU’s executive Commission said the measure would require European industries to reduce their emissions by 62% by 2030 from 2005 levels, compared to a target of 43% under the previous rules.

To ensure a level playing field, the EU will also introduce a tax on foreign companies that want to import products which don’t meet climate-protection standards European companies have to comply with. The so-called Carbon Border Adjustment Mechanism was agreed to last week.

Governments and the European Parliament also agreed to extend the bloc’s emissions trading system to cover road transport and the heating of buildings from 2027. This is likely to raise the price of gasoline, natural gas and other fossil fuels for consumers, providing an incentive to switch to cleaner alternatives.

The deal includes an emergency clause allowing the introduction to be postponed by a year if energy costs are particularly high.

Against the backdrop of the current energy crisis that has stoked inflation in Europe and beyond, negotiators agreed to also create a social climate fund

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