The own-initiative report by Yannick Jadot (Greens/EFA, France) on the EU Carbon Border Adjustment Mechanism (CBAM) will be put to vote on Wednesday 10 March in full. While the text was the subject of a general consensus in the European Parliament, with compromise amendments successfully bringing together most of the groups (see EUROPE 12650/7), part of the EPP is now opposed to a key point in the report. These MEPs have taken a stand against the phasing out of free allowances allocated to European companies, in parallel with the implementation of the CBAM.
“The possible phase-out of free allowances could have a detrimental effect on European exporters. I would like to make sure that the design of the CBAM allows different tools, including free allowances, to coexist alongside each other, while respecting the rules of the World Trade Organization (WTO); I know that this is possible”, said MEP Adam Jarubas (EPP, Poland) during the debate in plenary session on Monday 8 March.
He is one of the elected representatives who wants to protect European companies by maintaining the allocation of free CO2 emission allowances for European companies. This group of MEPs tabled three amendments to the text that removed the phasing out of free allowances, as well as the reference to the different sectors that should be covered by the CBAM.
However, EPP members of the Environment Committee of the European Parliament (ENVI) had approved the report. In the Committee on Industry, Research and Energy (ITRE), who was consulted to provide an opinion, François-Xavier Bellamy (EPP, France) was the only member of his group to vote in favour of the text.
He reiterated his support, and that of the French EPP delegation, for the text on 5 March: “There is indeed a division within the group on free allowances. A compromise had been reached and part of the group is now saying that putting an end to free allowances is problematic. Our position is clear; we are in favour of the progressive end to free allowances”, he said on behalf of the French members of the group. His colleague Agnès Evren (EPP, France) supported this view during the plenary debate held on 8 March: “The report is balanced and I invite you to support it”, she told her fellow parliamentarians.
Lobbying. A group of European industrialists sent an email on 4 March to put pressure on MEPs, according to Reuters. The European associations for the iron (Eurofer), chemicals (Cefic), cement (Cembureau) and fertiliser (Fertilizers Europe) industries all signed the email that called on MEPs to review the proposal. They particularly noted the allocation of free allowances to companies. In their opinion, the CBAM must “co-exist with the current system of free allocation”.
The majority of groups in the European Parliament called for the text to be adopted in the vote to be held on 10 March in the European Parliament.
Choice of mechanism. The European Commissioner for Economy, Paolo Gentiloni, recalled that the European Commission plans to present its proposal in June. He said that several options were still on the table, although the report suggests favouring a mirror of the EU Emissions Trading Scheme (ETS). “We are hostile to a carbon tax, because a tax means reaching unanimity in the EU Council, and therefore a high probability that a country will oppose it so that the mechanism will not see the light of day”, explained Pascal Canfin (Renew Europe, France), president of the ENVI Committee in the European Parliament.
As for some of The Left, on the other hand, this system is seen as a “bad solution”. To this end, the group notes the choice of the mirror ETS system, which has “already proven to be ineffective”, the fact that some sectors, such as agriculture, are not covered by the system in the first instance, and the fact that there is a deadlock on freight transport emissions.
See the report: https://bit.ly/2OkkMgS (Original version in French by Léa Marchal)