Meeting in plenary session in Brussels, MEPs approved by a narrow majority (374 votes in favour, 303 against and 22 abstentions) on Tuesday 15 September an amendment to the report by Manolis Kefalogiannis (EPP, Greece) to extend the Just Transition Fund (JTF) to gas investments, subject to a series of conditions.
According to this amendment, investments in natural gas-related activities will thus be able to receive financing from the European Union through the JTF.
However, in order to benefit from it, gas activities will have to, inter alia: – be qualified as sustainable according to the rules of the European taxonomy; – be used as a transition technology to replace coal, lignite, peat or bituminous shale; – significantly reduce greenhouse gas emissions; – not hinder the development of renewable energies in the territories concerned.
Following a very close vote (347 votes in favour, 337 against and 15 abstentions) on a specific point of the amendment, MEPs nevertheless approved a derogation from the first condition (taxonomy).
The amendment provides that the JTF may support investments in gas-related activities that are taxonomically unsustainable, if they comply with all other conditions set out in the amendment and if the Member State can justify the need to support these activities and demonstrate their consistency with EU climate objectives.
According to a parliamentary source close to the dossier, this derogation in fact applies to some 15 regions, mainly in the eastern Member States, which, by switching from coal to gas, would halve their emissions. A transition from coal to taxonomically ‘sustainable’ projects would nevertheless allow these regions to reduce their emissions even further (by dividing them by 3 or 4), this source tells us.
It should be noted that, for its part, the Council of the European Union advocates an outright exclusion of gas from the Just Transition Fund (see EUROPE 12513/9), as initially proposed by the European Commission (see EUROPE 12403/2).
A fragmented Parliament
According to the detailed voting results (https://bit.ly/2Rzfdtg ), the amendment on the inclusion of gas was supported by a large majority of EPP members, Renew Europe, ECR and ID, as well as around 30 Social Democrats (S&D) mainly from Poland, Romania, Greece and Portugal and a few members of the GUE/NGL.
While France defended the exclusion of gas from the JTF in the Council of the European Union, all French MEPs from Renew Europe, with the exception of Pascal Durand, voted in favour of the amendment.
Climate conditionality
By adopting a separate amendment to Mr Kefalogiannis’ report, MEPs also called for only those Member States that have set a national target for achieving climate neutrality by 2050 to receive their full national allocation. Otherwise, they would receive only 50% of their national allocation, the remaining 50% being made available to them after the adoption of said objective.
This amendment specifically targets Poland – the only Member State not to have officially committed itself to climate neutrality (see EUROPE 12389/1) – and thus facilitates negotiations on the ‘climate law’, a source tells us.
The proposals by the ECR and ID groups aimed at weakening the conditions to be met to benefit from the support of the JTF were rejected, on the other hand.
The major changes introduced in committee are maintained
In addition, MEPs supported the major changes introduced by the European Parliament Committee on Regional Development (see EUROPE 12521/1). They will therefore maintain the budget at €25.3 billion in 2018 prices in the context of the next 2021-2027 Multiannual Financial Framework, or even more than €57 billion with the amounts provided for in the Recovery Plan.
Another fundamental change supported in plenary was the decoupling of the European Regional Development Fund (ERDF) and the European Social Fund plus (ESF+) from actions financed by the Just Transition Fund. In addition, they approve a co-financing rate of 85% for the most vulnerable regions within the eligible regions and also support the ecological response mechanism at 18%.
In general, MEPs have extended the scope of the fund, for example, to soft mobility, under the impetus of Renew Europe, and more generally to the financing of energy infrastructure and projects.
In addition to the issue of investment in gas infrastructure, these are issues that will certainly be hotly debated in the interinstitutional negotiations. Member States took a position for a drastic reduction of the Fund to €17.5 billion at the extraordinary summit last July (see EUROPE 12538/4, 12533/3), while maintaining the compulsory coupling of the Structural and Investment Funds with the JTF in the partial EU Council negotiating mandate agreed at the end of June (see EUROPE 12513/9).
The consequence of these differences will be to shift the negotiations on the scope of the JTF, which was originally intended to cover only the social impact induced by the green transition, analyses one source.
According to our information, the first interinstitutional meeting with the EU Council is scheduled to take place on 24 September. (Original version in French by Damien Genicot and Pascal Hansens)