The EU agrees to retain more CO₂ emission permits to avoid sharp price rises for industry

The agreement reached on Tuesday raises the maximum number of emission allowances that can be accumulated in the European reserve from 400 to 700 million.

The Council of the European Union and the European Parliament have reached a provisional agreement to modify the rules of the European CO2 emissions market and allow more permits to be kept to pollute, with the aim of preventing a possible shortage in the future from causing sharp price rises for companies, which must pay for the carbon dioxide they emit. Specifically, the agreement reached on Tuesday raises from 400 to 700 million the maximum number of emission allowances that can be accumulated in the European reserve, a mechanism that keeps surplus permits so that they can be returned to the market when necessary and that, with the current rules, definitively eliminates those that exceed the established limit. In this way, the EU will be able to retain up to 300 million additional allowances to deal with possible shortages, although it will maintain the obligation to definitively withdraw those that exceed the new threshold, in the face of the European Commission’s initial proposal to suspend this elimination indefinitely.

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