The European Parliament and the Council of the EU met on Tuesday 24 November to discuss the regulation establishing the Just Transition Fund (JTF), without making any real progress, as the co-legislators faltered on the environmental response mechanism and investments in gas operations, two provisions introduced by the European Parliament.
It is reported that the environmental response mechanism, which sets a financial surplus of 18% for Member States that exceed initial climate targets, was rejected by the German Presidency of the Council of the EU, supported by the European Commission. Although the Presidency welcomed Parliament’s proposal, it felt that the mechanism would be difficult to apply and would alter the distribution of budgets to Member States during the financial year.
The gas-related negotiations, meanwhile, are closely linked to negotiations on the European Regional Development Fund (ERDF), where the positions are reversed: the Council of the EU wants to provide finance for gas using 1% of the ERDF (see EUROPE 12593/23), a position that the European Parliament opposes.
The Council of the EU is reported to have reiterated during the interinstitutional negotiations on the JTF that finance for gas could not be provided from a fund that was set up to reduce carbon emissions and which has very strong symbolic value within the Green Deal. We are told that the compromise involves one of the two funds being required to fund gas infrastructure.
According to a source close to the issue, the co-legislators eventually agreed that this should be the ERDF. Another source told us that the regulation might not get through the European Parliament if it still contains a provision of this kind, because the majority in the European Parliament in favour of funding gas under the JTF is very small (fewer than 10 votes in plenary, see EUROPE 12561/11).
The German Presidency of the EU Council is therefore seeking to bring the two European Parliament negotiating groups together, i.e. the groups negotiating the JTF and the ERDF, in order to reach an agreement on investing in gas. We are told that Parliament will not be in favour of this option. The two European Parliament negotiating groups have apparently not yet liaised with each other.
Another potential stumbling block is the “negative” condition whereby 50% of the funds will be retained for Member States that do not commit to a carbon neutrality target.
We have been informed that negotiations on the ERDF and the JTF are scheduled for 8 or 9 December. (Original version in French by Pascal Hansens)