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764. EU’s Climate Change Policy

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764. EU’s Climate Change Policy

Europe is known for its aggressive stance on environmental issues, and on April 18, the European Parliament reportedly adopted an ambitious policy to meet its climate change targets by 2030.

At the end of 2022, the European Parliament will require member states to reduce their greenhouse gas emissions by at least 55% from 1990 levels by 2030. At the end of 2022, the European Parliament proposed legislation (Fit for 55 in 2030 package) to reduce greenhouse gas emissions by at least 55% below 1990 levels by 2030. For the Emissions Trading System (ETS), an ambitious 62% emission reduction by 2030 compared to 2005 levels was adopted by a majority vote.

The Parliament also adopted rules for the Carbon Border Adjustment Mechanism (CBAM), a mechanism to provide incentives for non-EU member states to pursue ambitious climate change targets. The CBAM covers iron, steel, cement, aluminum, fertilizers, electricity, hydrogen, etc. Importers of these products are required to pay the difference between the carbon price in the country of production and the carbon price under the EU ETS.

The European trend is likely to have a significant impact on the policies and strategies of countries around the world, as Europe has a large global influence in setting rules related to climate change and environmental measures.

* Carbon Border Adjustment Mechanism (CBAM): A mechanism that requires companies in the EU to pay a price equal to the carbon price imposed under the EU Emissions Trading System (EU ETS) when importing products subject to the CBAM from outside the EU, if the product is manufactured in the EU. This is due to concerns about so-called carbon leakage, such as the relocation of production facilities outside the EU where regulations are less stringent, and the increase in imports from outside the EU as the EU tightens its regulations to reduce greenhouse gas emissions. The European Commission emphasizes that carbon leakage will not only have a negative impact on the EU's reduction targets, but may also lead to an increase in global emissions, and aims to introduce CBAM only as a climate change measure.


Contributor: IIYAMA Miyuki (Information Program)


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