The European Union finalized the approval of a carbon tax reform that will see polluting industries face higher costs for continuing to generate emissions and incentivize the switch to wind and solar.
Approved by the European Parliament last week, the reform will see the EU’s carbon permit regime extended to more industries, including air and maritime transport, and reduce the availability of these permits with a view to phasing them out entirely by 2034.
In four years, the carbon permit regime will extend further to cover emissions from cars and buildings. To soften the blow, the EU plans to set up an 86.7-billion-euro fund. The money will be raised from the sales of carbon permits.
The price of these permits has soared in the past couple of years, largely in anticipation of the reform. In fact, since the start of 2020, the price per ton of carbon dioxide has tripled to 88 euros, Reuters noted in a report.