The carbon dioxide (CO2)-intensive industry in Asturias will have a softer timetable than originally proposed by the European Commission to comply with emission reduction requirements and to comply with the abolition of free carbon credits.
The European Council and Parliament reached an agreement earlier this Sunday (which is currently provisional and pending ratification by the legislatures and ministers of the 27 member states in the Council). harmonization will begin in 2026 – the year the European Commission and Council of Europe originally proposed – will be slower in the first years, with decreases of 2.5% in 2026, 5% in 2027, and 10% in 1028. and 22.5% in 2029.
Free rights. The agreement envisions the definitive abolition of free carbon credits for major emitting industry by 2034; that’s two years more comfortable than what’s coming out of parliament, and although it predicts it will expire in a year compared to what was originally advocated, the Commission and Council have come forward with the gradual proposition of phasing out carbon credits free of charge for emitting factories, the industry’s carbon-intensive technologies other clean and greenhouse makes it more convenient to adapt and replace it with ineffective technologies.
The European Commission, the executive body of the Union, aimed for the reduction to be much more intense and accelerated in its first approach: 10% in 2026, 20% in 2027, 30% in 2028 and 40% in 2029. It is done in “slower at the beginning of the period and faster at the end of the period” mode.
In the case of the Asturias steel industry, completion in 2034 gives the company a margin, as blast furnace A has now ceased to exist and is expected to be replaced by an electric arc furnace, as in the Gijón steelworks. hybrid and an iron ore direct reduction furnace – as it will expire in 2024 and blast furnace B will be depleted in 2032. the duration of its useful life.
The same would not have happened if his proposal, which began months ago from the European Parliament’s Environment Commission (the toughest of all proposed), had been successful and had been rejected by the chamber’s plenary in June. This alternative, if successful, would mean that the adjustment would begin a year ago (in 2025) and end in 2030; two) would have completed its life cycle.
CO2 reduction. The interim agreement signed this Sunday between the European Union’s two co-legislators will require the elimination of the emissions market of 62% of CO2 tonnage by 2030, which is likely to happen if escalated to final status. Volume released by European industry in 2005. Since then (seventeen years ago), emissions have already fallen by 41%, according to the Council of Europe, and the decision is to take a “more ambitious” approach, carbon-neutral production methods to prevent climate change.
The agreement proposes to increase the reduction rate by 4.3% per year between 2024 and 2027 and by 4.4% between 2028 and 2030.
Climate schedule. The tightening of the environmental policy will be balanced with the introduction of the climate tariff. This border regulation (a tax on imports of steel, cement, aluminum, fertilizer, electricity and hydrogen from non-EU countries, with looser legislation and no penalties for CO2 emissions) was adopted for parallel implementation with the EU in 13 of them. reduction of emission rights. While it will enter into force on 1 October, it will be informative and will not be fully effective until 2026, when carbon credits begin to be phased out.
The Council of Europe stated that the limit carbon regulation “will only apply to the emission rate that does not enjoy free emission rights”.
Export. An estimated 47.5 million euros will be donated from the states’ emission rights auction to protect European exports to non-EU countries with favorable environmental legislation for their national production. Its investment aims to neutralize any risk of efficient displacement: the so-called “carbon leakage”. Before 2025, the European Commission should assess the risk of this situation linked to the export taking place and, if necessary, propose a law to avoid it.
Innovation Fund. The two co-legislators decided to increase the so-called Innovation Fund by another 125 million. This vehicle, which will be equipped with 575 million and will last until 2030, will support European industry’s investment in green technologies. As Asturian Member of the European Parliament Jonás Fernández reminds, ArcelorMittal has already presented several projects.
Transport and homes. The shipping industry will be subject to trading carbon credits, which will affect 40% of its emissions in 2024, 70% in 2025 and 100% in 2026.
A new trade in rights regime has also been established apart from the general regime for distributors supplying fuel to buildings due to CO2 emissions from road transport, the residential sector and heating. The system will start operating in 2027, but will be delayed to 2028 if energy prices are extraordinarily high, and additional rights will be released if its price exceeds 45 euros.
Social Fund for Climate. A Social Fund for Climate with 65,000 million was created to help vulnerable households, SMEs and transport users cope with the rights regime introduced in these sectors.
Asturian MEPs Jonás Fernández and Susana Solís and FADE congratulate the decision
The agreement reached by the Council of Europe and the Parliament was celebrated as good news for Asturias by the two Asturian Members of the European Parliament (Jonás Fernández and Susana Solís) and the Asturias employers’ association (FADE). Jonás Fernández (PSOE) pointed out that the approved schedule is “favorable for Asturias industry as it delays the expiration of free emission rights until 2034 and slows their elimination by slowing the reduction rate compared to the European Union’s initial proposal”. 10% increased commission per year. “The new legislation,” he said, “assures that our industry can undertake the necessary ecological transition with guarantees and without putting jobs at risk.” “The European Parliament’s Environment Committee made a truly unacceptable proposal and we’ve worked hard to fix it.”
Susana Solís (Citizens) said: “What Asturias has been demanding for years for the competitiveness of its industry is now a reality with this deal.” “We have a good deal for the Asturian industry. There were two key points and both of them took into account the claims of our industry”, referring to the timetable for the implementation and phasing out of the border adjustment mechanism. He explained emissions rights (“While close in time to start, their implementation is sufficiently progressive for the industry to have time to adapt their production”) and the mechanism “to protect our exports.”
María Calvo, head of FADE, “celebrated” the agreement. According to him, “the new calendar is doing less harm to our industry than was originally suggested.” Fade supports decarbonisation, but “not at the expense of competitiveness.” For this reason, it demands that “the border regulation mechanism be put into effect as soon as possible so that its operation can be monitored and its real impact can be learned before the reduction of free emission rights begins”. He also asked for the acceleration of European funds.