BRUSSELS: European Union negotiators agreed to a compromise on carbon market reforms on Thursday, with the bloc keen for a deal this week to show leadership at UN climate talks in Bonn. The deal reached was reached early on Thursday after months of dogged talks among EU nations, the European Parliament and the EU executive to finalise reforms to the EU Emissions Trading System (ETS) for after 2020.
The cap-and-trade system is the EU’s flagship tool for reducing greenhouse gases and meeting its climate goals by regulating emissions at some 12,000 industrial and power installations.
But it has suffered from a glut of permits, giving added political urgency to the push for reform. Negotiations had been stuck over the uses of a new clean technology fund, with some lawmakers and member states demanding that installations with emissions of over 450 grams of carbon dioxide per kilowatt hour to be banned from receiving funds. That rules out coal-fired power plants.
Late on Thursday, negotiators provisionally agreed to the restrictions on the so-called Modernisation Fund with the limited exception of sustainable district heating projects in Bulgaria and Romania, EU sources said.
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