In an effort to reform the post-2020 carbons market and make the ETS more efficient in the fourth trading period (2021-2030), the European Parliament stated on Wednesday 15 February in Strasbourg that it was in favour of a higher target than the one set out by the European Commission but that it should be quite below that advocated by Parliament's environment committee (EUROPE 11724).
Unsurprisingly, the Conservative EPP group and Polish MEPs at the assembly succeeded in wrecking the compromise agreed last December between all the political groups at the environment committee. This compromise sought to make the ETS more robust, whilst protecting the competitiveness of industry, which is a large energy consumer and is exposed to international competition and the risk of carbon leakage (see EUROPE 11690).
This involves annual greenhouse gas emission reductions. Parliament re-established the linear reduction factor to 2.2% as planned by the European Commission but refused to follow its environment committee’s demand for 2.4%. It also rejected the idea of withdrawing the allocation of free credits from the cement sector and introducing a carbon border tax on cement imported into the EU. This was very well received by European cement producers but the Greens and environmental NGOs were very disappointed (see EUROPE 11720).
It did, however, maintain the current compromise on doubling the capacity of the market stability reserve for mopping up some of the surplus credits responsible for falling carbon prices, the provisions to strengthening the Innovation Fund, as well as those for introducing a fund for a “just transition” through the pooling of revenues generated by emissions trading. This should help promote training and the workers affected by the employment transition in an economy undergoing decarbonisation.
MEPs also left intact the compromise requesting a contribution from the maritime transport and international aviation sectors in the fight against climate change. According to MEPs, the aviation sector should receive 10% fewer allowances than its 2014-2016 average, in order to bring its efforts in line with other sectors. Revenues from auctioning allowances in the aviation sector would be used for climate action in the EU and third countries.
MEPs say that, in the absence of a comparable system operating under the International Maritime Organisation (IMO), CO2 emissions in EU ports and during voyages to and from them should be accounted for. They propose setting up a “maritime climate fund” to compensate for maritime emissions, improve energy efficiency, facilitate investment in innovative technologies and reduce CO2 emissions from the sector.
The text was approved by a small majority (379 votes to 263, with 57 abstentions), with geometric lines of division between the ECR and S&D groups, which is always the case with climate subjects. The EPP, ECR (except for Polish MEPs), the ALDE and just over half of the S&D group all voted in favour.
Those that voted against included the Greens/EFA, less than half of the S&D group (including the French Socialists) and the GUE.NGL group, due to a level of ambition judged insufficient, with three Polish EPP MEPs voting for the opposite reason and the ENF voting against for because it was afraid that reform would damage the interests of the steel industry that is under threat from Chinese competition.
Ian Duncan (ECR, United Kingdom) was delighted and said that this was a major step for attaining ambitious climate targets. The European Commissioner for Climate Action and Energy, Miguel Arias Cañete, congratulated Parliament on this result, which is expected to open up negotiations with the Maltese Presidency of the Council of the EU. The latter has not yet given its view but it is expected to make progress on this subject during the Environment Council on 28 February in Brussels.
“A missed opportunity for the climate”. NGOs, such as those that wanted to stick to the December compromise were concerned because they believe the text voted on made too many concessions to high energy consuming industry and “betrayed the Paris Agreement”.
The director of CAN Europe (Climate Action Network), Wendel Trio, said, “It is shocking that the Parliament chose to bow to the interests of polluting industries instead of protecting citizens from a catastrophic climate breakdown. The Parliament has completely failed the first test of its commitment to the Paris Agreement. The proposed reforms will keep the carbon market ineffective for a decade or more. We urge progressive EU governments to finally turn the ETS into a functioning tool and create a stimulus to ditch old models and move to green economy.”
The development NGO, Oxfam, believes that Parliament's vote is a missed opportunity for the climate and those who have been most affected in the world by climate change because the text voted on does not set out ambitious emissions reductions from European industry after 2020 and does not seek to transfer some of the revenues from the ETS to help poor countries adapt to the devastating impact of climate change.
European shipowners displeased. The European Community Shipowners’ Association (ECSA) criticised the European Parliament and Patrick Verhoeven said it was, "Putting unrealistic pressure on IMO with regional measures that will gravely hurt a global sector and do very little for climate is not the way to proceed. It will unduly complicate the achievement of an effective and timely global agreement in IMO that everyone in the end wants”. (Original version in French by Aminata Niang)