Houses and cars have been excluded from the EU's Commission ETS II framework
The imposition of an "emissions tax" on houses in the European Union has been postponed, as they will not be included in the extension of the EU Emissions Trading Scheme (Emissions Trading System), that will be adopted for the buildings and land transport sector.
Achieving climate neutrality by 2050 is the EU's long-term objective. In the shorter run, all focus is on the Fit for 55 package of legislation to revise and update current climate, energy and transport-related legislation to cut greenhouse gas emissions by at least 55 % by 2030 and to become independent from expensive and polluting fossil fuels from Russia well before 2030.
The Emissions Trading System (ETS) has been in place since 2005 and currently covers around 41 % of EU greenhouse gas emissions. It obliges more than 11,000 power plants and factories to hold a permit for each tonne of CO2 they emit.
This should provide a financial incentive to pollute less: the less you pollute, the less you pay. Companies have to buy them through auctions and the price is affected by demand and supply. As the demand for permits and prices dropped, the Commission proposed a set of changes to the existing system that should result in an overall emission reduction of 61% by 2030 compared with 2005 in sectors covered by ETS.
The European Parliament is expected to initially support the creation of ETS II only for commercial buildings and vehicles. The possibility of including houses and cars will be examined later on the agenda - and in any case not before 2029 - after the Commission reconsiders the issue.