Consumers and companies in the EU will have to pay more often for carbon dioxide (CO₂) emissions in the future. Negotiators from the EU Parliament and the states agreed early on Sunday morning on a reform of EU emissions trading, as announced by the Czech Council Presidency. This should make the most important instrument of European climate protection policy significantly more effective. In addition, a new climate social fund is intended to cushion the consequences of the energy transition for consumers. The agreement still has to be confirmed by the EU Parliament and the states, but this is considered a formality.
“Emissions trading is the key to achieving our climate goals,” said German MEP Peter Liese (CDU), who led the negotiations for Parliament. The compromise brings climate protection, but at the same time industry and citizens who cannot afford higher prices would be protected.
Specifically, the negotiators agreed to tighten the existing emissions trading in the EU. For example, companies have to buy pollution certificates if they emit CO₂. This should create an incentive to produce less CO₂. Now the number of pollution rights is to be reduced faster than previously planned, so that emissions fall more quickly.
In addition, free certificates for companies are to be phased out gradually by 2034. Companies that don’t make an effort in the energy transition have to hand in free certificates. “The worst polluters pay more and those who decarbonize are supported,” said Green MP Michael Bloss, who took part in the negotiations.
The climate social fund is intended to cushion the consequences of the energy transition
The system is also set to be extended to heating buildings and transport from 2027 – for both consumers and businesses. However, there is an “emergency brake”: If energy prices are particularly high, the system can be postponed in order not to burden consumers too much. In Germany, emissions trading already applies to buildings and traffic.
In addition, from 2026 onwards, a climate social fund is to be set up to absorb additional consumer spending due to the energy transition – such as rising heating costs. This is to amount to 86.7 billion euros and will be financed by revenues from emissions trading and partly by the member states. This is intended to relieve households and promote investments, for example in more efficient buildings or public transport.
The projects are at the heart of the “Fit for 55” package presented by the European Commission in the summer of 2021 to combat climate change. It aims to help EU countries reduce CO₂ emissions by 55 percent by 2030 compared to 1990 levels and become climate-neutral by 2050.