EU Member States yesterday endorsed the provisional deal on reforming the EU emissions trading system (ETS) after 2020.
The reforms agreed by the Council of Ambassadors earlier this month aims to help the EU to deliver on its target of cutting greenhouse gas emissions by at least 40% before 2030.
It hopes to achieve this by encouraging more innovation and promoting the use of low carbon technologies.
The Council says the revision will strengthen the ETS by reducing the cap on the total volume of emissions by 2.2% each year, as well as temporarily doubling the number of allowances until the end of 2023.
A key objective of the reform is to help industry and the power sector meet the innovation and investment challenges of the transition to a low carbon economy.
Member states will still be able to provide compensation for indirect carbon costs in line with state aid rules.
Siim Kiisler, Minister for the Environment of the Republic of Estonia, said: “We are putting in place a more effective ETS that will decrease emissions further, making our air cleaner and our industries more modern and competitive.”