EU2022.CZ | ETS and CBAM trilogues

Yesterday, trilogues started on two key climate issues for 2030: ETS and CBAM. The ETS imposes emissions limits for the whole of electricity generation, industry, maritime transport and aviation in Europe. These sectors will need to cut emissions by at least 61% by 2030 in order to achieve climate neutrality by 2050. For the remaining emissions, companies must purchase what are known as emission rights. The funds from these purchases will be returned to the Member states, including Belgium, to implement their climate policy. However businesses find it disadvantageous to have to buy these emission rights in Europe while their competitors outside of Europe do not. This creates a very unequal playing field. For this reason, the CBAM, or border tax on CO2, is being implemented. Upon entry into force, all products entering Europe will also be taxed based on their CO2 content. This will create incentives for producers outside of Europe to reduce pollution and protect our industry from unfair competition. CBAM will begin in 6 sectors: steel, cement, fertilizer, aluminum and power generation. In short, the ETS and CBAM will facilitate the industrial transition to zero emissions. In the trilogue which has just begun, the European Parliament, the Member States and the European Commission are seeking a common position. If the trilogue progresses well, a deal should certainly be reached before next summer. I wish the negotiators success and hope they will be able to balance high climate ambition with industry transformation for the future.