EU Nations to Push for Delay to Controversial New Carbon Market
(Bloomberg) -- A group of European Union countries will call on Commission President Ursula von der Leyen to delay the start of a controversial new carbon market designed to cut emissions from buildings and road transportation.
Cyprus and a group of predominantly central and eastern EU member states will request a three-year delay to the so-called ETS2 market to 2030, according to a draft letter seen by Bloomberg News. Leaders are due to meet in Brussels next week to discuss the bloc’s climate targets.
“We are compelled to convey our deep concern regarding the current design and implementation timetable,” the group said in the draft, which is still subject to change. “The 2027 launch of ETS2 risks triggering unintended social, economic and political disruptions, particularly in member states with higher exposure to energy poverty” and limited public-transportation alternatives.
The letter marks the latest attempt to push back or reduce the cost of the new emissions trading system. It comes as various economic and political headwinds threaten to derail progress toward the EU’s 2040 and 2050 carbon-cutting goals. The commission has so far failed to submit an updated climate pledge to the United Nations, with only weeks to go before the COP30 conference in Brazil.
In June, 19 member states lobbied the EU to implement stronger price controls in the new cap-and-trade program on concern it could drive up heating and transportation costs for consumers.
BloombergNEF estimates that the price to emit carbon dioxide under the new system may reach €149 a metric ton in 2029. That’s more than 80% higher than the current EU price for emissions from power plants and industry.
Next week, leaders are due to discuss the commission’s proposal to cut greenhouse-gas emissions 90% by 2040 from 1990 levels, and the conditions needed to reach that goal. Countries are expected to raise ETS2 during that meeting, alongside the EU’s combustion-engine car ban and greater protections for industry.
The draft letter doesn’t address what to do about a social climate fund that would be financed by ETS2 proceeds and is currently due to start next year.
The EU already puts a price on CO2 emitted by manufacturers, airlines and shipping.
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