Strengthen and expand CO2 emissions trading and establish a Social Climate Fund

Plan działania na rzecz lepszego

In order to achieve climate neutrality by 2050, in line with the European Green Deal, Europe must reduce its emissions by at least 55% by 2030 compared to 1990 levels. In order to fulfill this commitment, the Union is taking steps to strengthen the EU Emissions Trading Scheme (ETS) and apply emissions trading to new sectors, with the aim of ensuring effective economy-wide climate action, and is seeking to establish a Social Climate Fund.

Under the EU ETS, a price is set forCO2 and each year the allowed level of emissions in selected sectors, such as electricity and heat generation, energy-intensive industrial sectors and commercial aviation, is reduced. Since the introduction of the EU Emissions Trading Scheme (ETS) in 2005, emissions have decreased by 42.8% in the major categories covered (electricity and heat generation and energy-intensive industrial installations). The measures taken will reduce emissions from EU ETS sectors by 62% by 2030 compared to 2005 levels. This represents an increase of 19 percentage points compared to the 43% reduction under current regulations. The rate of annual emission reductions will also increase – from 2.2% under the current system to 4.3% between 2024 and 2027 and 4.4% from 2028.

The EU also plans to establish a Social Climate Fund, providing special financial support to member states to help citizens and micro-enterprises invest in energy efficiency measures such as home insulation, heat pumps, solar panels and electric mobility. The fund will start operating in 2026, before the new emissions trading system for transportation and construction fuels comes into force, and will be financed by the EU budget of 65 billion euros plus 25 percent co-financing from member states.

The proposed measures will be crucial for the EU to achieve its climate goals under the Paris Agreement and make the European Green Deal a reality.

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