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. 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.

On March 2023, Parliament adopted the revision of the regulation on the land use, land use change and forestry sector (LULUCF) which seeks to improve natural carbon sinks to make the EU the first climate-neutral continent by 2050 and improve biodiversity in line with the European Green Deal. The new law should reduce greenhouse gases in the EU in 2030 by up to 57% compared to 1990.

Trilogue on Emissions Trading System

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