Government says carbon market changes won’t cost much

The Secretary of State for Environment and Energy considered this Sunday that an agreement to reform the European carbon market was of paramount importance and said the changes would not come at a great cost to the Portuguese.

Speaking to TSF, Joao Galamba said he was pleased with the agreement reached this Saturday by MEPs and European Union (EU) member states and stressed its importance for “unification, expansion and inclusion of all countries.”

The deal raises the ambitions of the current EU carbon market by phasing out the free “pollution rights” granted to industry.

At the same time, it plans to charge capped emissions from building heating and road transport so as not to burden families, the European Parliament said in a statement on the agreement reached after about 30 hours of intense negotiations.

“The expansion to buildings and transport will not affect Portugal, because Portugal has already embarked on this path (…) neither for families in terms of heating and cooling buildings, nor for the transport sector, because Portugal already had a carbon tax, there was already an environmental tax in this area,” the TSF secretary of state said.

Asked if these changes will lead to changes in how the Environment Fund is used, João Galamba said that there will be no changes, but there will be other ways for the country to invest in decarbonization.

“There will be more funds to invest in this acceleration,” as under this agreement, Portugal “became eligible to participate in the modernization fund,” thereby adding “about 900 million euros of additional funds to invest in decarbonization,” he said, quoted by the TSF .

To cover carbon dioxide (CO2) emissions, electricity producers and energy-intensive industries (steel, cement, etc.) in the EU currently have to purchase “pollution permits” under the EU Emissions Trading Scheme (ETS), established in 2005 and applicable to 40% of the continent’s emissions.

Under the terms of the agreement, the rate of reduction of proposed permits will be accelerated with a reduction of 62% by 2030 compared to 2005 (and the previous target of 43%), which means that interested industries will be required to reduce emissions. by 62%.

The carbon market will gradually expand to the maritime sector, emissions from flights within the European space, for which the currently allocated free allowances will be eliminated, and from 2028 to incineration sites (subject to a positive study by Brussels).

In exchange for imposing a “carbon tax” at the borders, the EU will gradually eliminate the free emission credits that have so far been given to European producers to allow them to compete with non-European companies.