On July 14, European Commission notified about the soon inclusion of shipping in Europe’s Emission Trading System (ETS). The decisions were made to fulfill the demand, raised under Brussel’s plan for meeting the Europe Union’s climate target.
The adjudicate for binding the emitters to pay for each tonne of carbon dioxide they beget, is their prime principle for instating Europe Commissions’ aim to reduce net greenhouse gas emission by 55% till the year 2030.
European Manufacturers, power firms, and airlines that are operating their flights are also covered under this plan. According to the unveiled plans announced by the commission on Wednesday, shipping would be staged into ETS in around a period of three years.
This protocol will cover the 50% of ships’ emissions from international voyages which are commencing and terminating in the EU. It will also consider the emissions, from sailings within the EU, as well as while the ships are at berth in EU ports.
Addressing the concerns of levies, the commission proposed the fund-raising criterion which will receive the contribution of 25% of the revenue earned from permitted sales in the new ETS. The proposed idea will shield low-income households from carbon costs.
The following decision of increase in payment will act as the aid for ETS market stability. Companies that have free permits will pay for the continuously growing emission rate and in return will buy further permits. This has made a record of more than 58 euros/tonnes.
The poposal will strengthen the “market stability reserve” for ETS. It will also focus on the mechanism development for reducing the building-up of excess permits that could depress the carbon prices. The EU ETS has made the decisions in the expectations to hold more than 1.096 billion of spare permits that would assure the reserve absorb of about 24% per year until 2030.
“All the measures are seeming to increase the price of carbon up to 90 euros/tonne till the year 2030.” [ Analysts commented]
All the proposed reforms will be negotiated among members states and European Parliament which would probably take two years to complete.