Tuesday, June 6, 2023

    EU agrees to cut emissions by 55% by 2030

    EU agrees to cut emissions by 55% by 2030 — carbon prices will now triple, says analyst

    The agreement by European leaders is set to rapidly increase the cost of emitting greenhouse gases, potentially speeding up the energy transition.

    EU leaders have agreed to cut the bloc’s net emissions by at least 55% by 2030, compared to 1990 levels, pushing the European carbon price to an all-time high of more than €31 ($37.50) per tonne.

    The 55%-by-2030 target still faces a challenge from the European Parliament, which wants to see an even more ambitious 60% reduction.

    The goal was not agreed by the European Council of the 27 EU leaders until the early hours of Friday morning because coal-reliant nations such as Poland had refused to sign on without increased financial assistance. Extra funds will now be granted to them from the bloc’s Modernisation Fund, which has been set up to help ten lower-income EU countries with their energy transitions.

    The agreement came hours after the leaders finally agreed on a €1.8trn seven-year budget and post-Covid economic recovery package, which had been held up by Hungary and Poland over objections to link EU payments to respect for the rule of law.

    The move will increase the carbon price — which makes polluting technologies more expensive and therefore encourages cleaner energy .

    “Approaching [a] three-digit carbon price level in 2030 reflects the fact that in order to become carbon neutral in 2050, costly abatement options in industry will have to be triggered sooner rather than later.”