As part of the European Green Deal, with the European Climate Law, the EU has set itself a binding target of achieving climate neutrality by 2050. This requires current greenhouse gas emission levels to drop substantially in the next decades. As an intermediate step towards climate neutrality, the EU has raised its 2030 climate ambition, committing to cutting emissions by at least 55% by 2030.
In December Parliament and Council reached a provisional agreement to set up a new fund to help vulnerable citizens most affected by energy and transport poverty.
In the beginning, the fund will be financed through the revenues obtained from auctioning 50 million ETS allowances (estimated at around €4 billion). Once the ETS extension enters into force, the SCF will be funded from auctioning ETS II allowances up to an amount of €65 billion, with an additional 25% covered by national resources (amounting to an estimated total of €86,7 billion).
MEPs and EU governments agreed also to reform the Emissions Trading System to further reduce industrial emissions and invest more in climate friendly technologies.
The EU Emissions Trading System (ETS), which enshrines the “polluter pays” principle, is at the core of European climate policy and key to achieving the objective of EU climate-neutrality. By putting a price on greenhouse gas (GHG) emissions, the ETS has triggered significant reductions in EU emissions, as industries have an incentive to reduce their emissions and invest in climate friendly technologies. Emissions in the ETS sectors must be cut by 62% by 2030, compared to 2005, which is one percentage point more than proposed by the Commission.