EU Tightens Control Over Carbon Price: New Stability Measures Unveiled

The European Union has passed new measures to control carbon market prices, responding to concerns about rising fuel costs. The new plan allows for releasing additional permits if prices exceed €45 per metric ton of CO2. These changes aim to stabilize prices and continue beyond 2030.

The European Union has implemented tougher measures to curb rising prices in its carbon market, a move aimed at addressing concerns that the emissions reduction initiative could inflate fuel costs. The European Parliament announced the agreement on Thursday.

Under the new policy, if the cost of carbon permits surpasses €45 per metric ton of CO2, 40 million permits will be introduced to the market from a 'stability reserve,' doubling the previous amount. This mechanism can be activated twice annually, potentially releasing a total of 80 million permits yearly.

The reserve is set to extend past 2030. Furthermore, from 2028, the EU's second emissions trading system (ETS2) will enforce charges on CO2 from heating and transport fuels. Proceeds will support consumer bills and investments in clean technologies. This system is separate from the existing one covering power plants and heavy industries.