European Union flags flutter outside the EU Commission headquarters in Brussels, Belgium June 17, 2022. REUTERS/Yves Herman

BRUSSELS, June 22 (Reuters) - The European Parliament voted on Wednesday on three policies to slash emissions faster this decade, including an overhaul of the EU carbon market, its main tool for tackling climate change. read more

The policies are part of a broader package of laws designed to deliver the 27-country European Union's target of reducing net greenhouse gas emissions 55% by 2030, from 1990 levels.

With the EU racing to wean itself off Russian energy, Brussels is also touting the policies as a way to hasten the switch from imported fossil fuels to locally produced green energy.

Here's what parliament voted for, which will form its position in upcoming negotiations with EU countries on the final laws.

The biggest proposal is an upgrade of the EU's carbon market, which forces industry and power plants to buy permits when they emit CO2 and then caps the number of permits available, to make sure emissions keep decreasing.

Lawmakers voted to reinforce the scheme to deliver a 63% emissions cut by 2030 - higher than the 61% proposed by the European Commission, which drafts EU laws, but below the 67% cut some lawmakers wanted.

That would be achieved by raising the rate at which the cap on CO2 permits falls each year - to 4.4% from 2024, 4.5% from 2026 and 4.6% from 2029. An extra 70 million permits would be removed in 2024 and 50 million in 2026, to drive faster CO2 cuts.

Lawmakers backed a proposal to phase out free CO2 permits for industries by 2032 and replace them with a carbon tariff on imported products. Industry has lobbied to keep their free permits, which allow them to emit some CO2 for free, but critics say the system has removed the incentive to curb their pollution. read more

Parliament boosted plans to add shipping to the carbon market, voting to include 100% of emissions from international voyages to and from EU ports from 2027 - versus the 50% the Commission had proposed.

One amendment that won support would make it easier for policymakers to intervene if CO2 prices spike, and others would prevent investors from trading carbon permits - a move designed to stop them influencing prices, but which could limit liquidity in the market.

Parliament scaled back a new EU carbon market imposing CO2 costs on polluting fuels used in buildings and transport from 2025.

The EU assembly said the scheme should be restricted to the commercial sector, exempting private consumers until at least 2029. Brussels has warned that could risk the EU missing its climate targets.

This proposal has proved divisive, with some countries fearing the measure would raise household bills, although Brussels points out that recent high energy costs have been driven predominantly by soaring fossil fuel prices.

Lawmakers also supported a fund to use revenues from the new carbon market to help poorer households switch to clean energy. And they backed the EU's world-first plan to impose a CO2 levy on imports of carbon-intensive goods like steel and cement.

The vote outcomes are a relief for the EU, after parliament had rejected the entire carbon market law in a first vote - exposing tensions among lawmakers over how ambitious climate policies should be against a backdrop of soaring energy prices and inflation.

Lawmakers are now ready to negotiate the final laws with EU countries later this year. Ministers from EU countries plan to agree their own position on the policies next week.

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