The European Parliament on Tuesday dropped its call to end the free allowances received by industrial sectors under the European Union carbon market if those sectors were covered by the bloc’s planned carbon border policy. Companies based outside the EU are required to pay an emissions-based fee to sell polluting in the bloc’s market. This is aimed to prevent firms from leaving Europe to avoid CO2 costs.
Meanwhile, EU industries enjoy their own allowances, allowing them to emit a certain amount of CO2 for free under the EU’s carbon market so they can stay competitive. Industry groups have said that they need both a border levy and free carbon permits, saying that the phase-out of the allowances when the border levy is applied would risk investor certainty.
