UPDATE - European Council endorses carbon market reform

The European Council on Tuesday adopted five laws that are part of the EU’s “Fit for 55” package and were approved by the European Parliament last week.

The laws will reform the EU carbon market, introducing a more ambitious emissions reduction goal for sectors covered by the EU Emissions Trading System (ETS), an extension of the scope of the EU ETS to maritime transport and a gradual phase-out of free emission allowances for the aviation sector.

The changes further include a new emissions trading system for the buildings and road sectors.

The laws in addition establish the Carbon Border Adjustment Mechanism (CBAM), which relates to imports of products in carbon-intensive industries and the Social Climate Fund, which will be used by member states to support vulnerable households, micro-enterprises and transport users.

The Council’s adoption completes the decision-making procedure. The laws will now be signed by the Council and the European Parliament and published in the EU’s Official Journal before becoming effective.

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