Press releases about business, cryptocurrency, fintech and more news in Hong Kong and Asia

EU reaches deal on national CO2 emission cut targets

In this April 29, 2021 file photo, a coal-fired RWE power plant steams on a sunny day in Neurath, Germany. (MARTIN MEISSNER / AP)

BRUSSELS – The European Union has agreed to a law that sets national targets to reduce overall carbon emissions by the end of the decade across sectors including agriculture, buildings and transport.

Negotiators of the European Parliament and the European Council, which represents the 27 EU members, agreed to a deal on the legislation called the Effort Sharing Regulation (ESR) late on Tuesday.

ALSO READ: 'EU post-COVID emissions rise ends on cleaner, saved energy'

The regulation sets national targets for emission reductions from road transport, domestic maritime transport, heating of buildings, agriculture, small industrial installations and waste management.

Countries can trade limited amounts of allowances with others or "bank" some allowances if their emissions were lower in a given year or "borrow" from future years if their emissions were too high

These sectors, not now included in the EU emissions trading system, generate about 60 percent of EU greenhouse gas emissions. The planned law should reduce them by 40 percent compared to 2005.

The law is part of the overall EU plan to cut net emissions by 55 percent by 2030 from 1990 levels and to achieve climate neutrality by 2050.

The ESR is designed to ensure that all EU members contribute to the goal in a fair way. So richer countries Denmark, Finland, Germany, Luxembourg and Sweden need to make 50 percent cuts, while for Bulgaria the target is 10 percent.

READ MORE: Europe's climate masterplan aims to slash emissions within decade

Countries can trade limited amounts of allowances with others or "bank" some allowances if their emissions were lower in a given year or "borrow" from future years if their emissions were too high.

The law needs approval by the European Parliament and the European Council before it can enter force, although that is normally a given after negotiators agree a deal.

The deal is one of three the European Union is hoping to clinch in time for the United Nations climate summit that started in Egypt on Sunday.

ALSO READ: EU countries approve landmark climate change law

The bloc struck a deal last month on a law effectively banning the sale of new petrol and diesel cars from 2035 and on Thursday aims to conclude negotiations on a law to expand Europe's CO2-absorbing "sinks", such as forests.