BRUSSELS, Dec 14 (Reuters) – The European Union (EU) reached an agreement on Wednesday to mobilize an additional 20 billion euros from its carbon market to end the bloc’s reliance on screw Russian fossil fuels.
Negotiators from member states and the European Parliament agreed early Wednesday on a 60% levy in the European Innovation Fund, fueled by carbon market revenues and devoted to innovative low-carbon technologies.
The remaining 40% would come from the sale of CO2 emission permits organized earlier than expected.
Under the European carbon market, power stations and factories must buy CO2 emission permits when they pollute. The price of these permits has risen considerably in recent years, which has increased the revenue collected by European countries.
The funds will be allocated to areas such as the development of renewable energy, renovations aimed at saving energy and projects intended to support the decarbonisation of heavy industry.
EU member states and the European Parliament have yet to formally endorse the deal, which will take effect in 2023.
The European Commission originally proposed that the funds would come from the sale of permits stored in the Emissions Trading System’s market “stability reserve”, a mechanism designed to absorb excess permits and prevent market saturation. .
Countries such as the Netherlands and Denmark have opposed the proposal, warning that using the reserve could undermine confidence in the carbon market and drive down the price of carbon in the bloc. (Report Kate Abnett, French version Diana Mandiá, edited by Blandine Hénault)
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