New Delhi: The European Union reached an agreement to strengthen and expand its flagship carbon market, its main policy tool in the fight against global warming.

“The agreement … will allow us to meet climate objectives within the main sectors of the economy, while making sure the most vulnerable citizens and micro-enterprises are effectively supported in the climate transition,” said Czech environment minister Marian Jurecka.

The deal is yet to be formally adopted by the European Parliament and the European Council.

As per DW report, the agreement was struck after a 30-hour session. It claims the overhaul will help the bloc contribute towards the global efforts of combating climate change and specifically cut carbon emissions by 55% by 2030 when compared to 1990’s levels.

Meeting that goal will require the EU carbon market to be reformed to cut emissions faster, which it does by requiring around 10,000 power plants and factories to buy CO2 permits when they pollute.

While some measures put forward in 2021 were watered down as the EU grapples with an unprecedented energy crisis following Russia’s invasion of Ukraine, the bloc is determined to make the green overhaul the basis of its growth strategy, and set a precedent for other nations and regions in the fight against climate change.

“The deal is a success for the EU and will provide certainty to companies and investors even if some compromises had to be made as the economic environment is very challenging,” said Ingo Ramming, head of carbon markets for Banco Bilbao Vizcaya Argentaria in Madrid.

Expectations of stricter rules already helped send carbon prices to a record 99.22 euros per metric ton this year. Benchmark carbon futures traded in Amsterdam closed at 83.82 euros on Friday, more than 10 times the levels seen five years ago.

(With inputs from agencies)