EU will increase energy financing at expense consumers to abandon Russian gas
2022.12.14 07:01
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EU will increase energy financing at expense consumers to abandon Russian gas
Budrigannews.com – According to a political agreement that was reached on Wednesday, the European Union will raise an additional 20 billion euros from its carbon market for investments that will assist in accelerating the end of the bloc’s reliance on Russian fossil fuels.
In the early hours of Wednesday, negotiators from EU nations and the European Parliament reached an agreement to raise sixty percent of the grants from an EU Innovation Fund, an existing pot of carbon market revenue that is currently used to fund cutting-edge green technologies.
The remaining forty percent would come from sales of CO2 permits that were held earlier than anticipated.
More Germany heavily dependent on raw material imports
The EU carbon market influences power plants and industrial facilities to purchase CO2 licenses when they dirty. Countries’ profits from selling permits to companies that emit CO2 have increased as a result of the permits’ rising cost.
Projects to assist heavy industry in decarbonizing as well as expanding renewable energy sources will benefit from the funding.
The agreement needs to be officially approved by all EU member states and the European Parliament before it can take effect next year.
Prices for carbon permits in the EU have risen as a result of stricter targets for reducing emissions, which will reduce the number of CO2 permits available this decade. On Wednesday, the price of the EU’s standard carbon permit was approximately 88 euros per tonne.
The European Commission had originally suggested that permits stored in the “market stability reserve” of the carbon market would be sold to fund new energy investments. This plan was intended to absorb excess permits and prevent the market from becoming oversupplied.
That idea was opposed by Denmark and the Netherlands, who warned that playing with the reserve could undermine trust in the carbon market and lower the EU carbon price.
Later this week, EU negotiators will also attempt to reach an agreement on a broader overhaul of the carbon market. This overhaul is crucial to the EU’s goal of reducing its net emissions of greenhouse gases by 55% from 1990 levels by 2030.
