EU Parliament to Seal the Fate of New Carbon Market for Road Transport & Buildings

Can the European Parliament introduce an effective price on road transport and building emissions?

The ETS2 is the carbon market for road transport and buildings, which was proposed last year as part of the landmark Fit for 55 package. Under this new ETS2, fuel suppliers would need to buy pollution permits for each liter of fuel they put on the market. They would then pass on the cost of pollution permits to end-consumers, in the form of increased prices for refueling your car or heating your home. To shield low-income households from this price increase, the Commission proposed a new Social Climate Fund (SCF).

These two packages offer a step in the right direction to curb emissions whilst protecting households from the increased price of the transition. Yet, more is to be achieved to ensure a just transition in Europe. T&E has produced two short briefings that look at what is at stake for these two key climate files.

Originally published on Transport & Environment.


Related article by T&E:

EU Parliament to vote on future of national climate targets

What is the future of the Effort Sharing Regulation (ESR) — a key European legislation that sets binding emission reduction targets for each EU country?

The Effort Sharing Regulation (ESR) sets binding emission reduction targets for each EU country in the sectors of road transport, buildings, waste, small industry and agriculture (~60% of the EU’s GHG emissions). In July 2021, the Commission proposed a new EU-wide target for the ESR sectors, bringing it up to -40% from -30% (compared to 2005). National ESR targets were also increased. They range from -10% for Bulgaria to -50% of Germany and are set on the basis of GDP per capita and cost-effectiveness of reducing emissions.

But national targets remain empty shells if not properly implemented and enforced. What can the European Parliament do to improve the proposal?

 


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