The European Parliament voted in favor of the EU Climate Law with 442 supporting votes, 203 opposing, and 51 votes that abstained. The EU Climate Law establishes carbon targets and carbon mechanisms to address polluted imports and reduce carbon leakage from EU companies moving production offshore. Due to its legislative statute, the EU Commission is now obliged to screen future legislative proposals with the EU Climate Law targets.
This transition marks the region’s commitment to becoming carbon neutral by 2050 at the latest. The legislation has targeted a 55pc reduction in emissions by 2030, from 1990 levels, which allows states a target of 28.8pc due to carbon sink. It will require many companies, including steel, to accelerate plans that previously had milder goals for 2030. Some of those that abstained or opposed the vote did so as they thought the measures enacted were insufficient to combat global warming and required goals of 60pc by 2030.
In March 2021, the EU Parliament adopted a resolution that included a WTO-compatible EU carbon border adjustment mechanism. The carbon mechanism is a component in the European Green Deal discussed in December 2019. The rule adds a carbon price on certain goods imported from countries with less ambitious climate change policies than the EU. Import prices would more accurately reflect carbon content costs. The plan also aligns with the Paris Agreement’s goal to move towards a net carbon emissions status by 2050. The proposal has now become regulation as of Jun 24.