Negotiators from EU countries and the European Parliament agreed that 60% of the money will come from an EU Innovation Fund - an existing pot of carbon market revenue that is currently spent on breakthrough green technologies. The other 40% will come from proceeds from CO2 permit sales held earlier than planned.

The deal will take effect next year. The negotiators will try to strike a deal later this week on a broader carbon market overhaul, which is central to the EU's goal of cutting its greenhouse gas emissions 55% below 1990 levels before 2030.