The EU27 heads of state or government of the EU Member States will discuss climate issues on Tuesday 25 May. While their objective on this issue seems clear, namely to provide guidance to the European Commission in view of the presentation of the ‘Fit for 55’ legislative package scheduled for 14 July, the outcome of the discussion remains unclear.
According to our information, the negotiations between the EU27 could indeed be complicated given the importance of the ‘Fit for 55’ package - which is supposed to enable the EU to achieve a reduction in its net greenhouse gas emissions of at least 55% by 2030 - and the different sensitivities of the Member States on the subject.
It is therefore possible that the European Council of 24-25 May will not adopt conclusions on this point.
The summit could also be a preliminary exchange before a more in-depth discussion at a forthcoming summit in June, several EU diplomatic sources said. However, according to another European diplomatic source, this possibility, if it exists, is clearly not the preferred option.
Effort Sharing
As the latest draft of the European Council conclusions obtained by EUROPE shows, the discussion is expected to focus on the revision of the EU Effort Sharing Regulation (2018/842), which is foreseen in the ‘Fit for 55’ package.
This regulation sets a binding target for each Member State to reduce its emissions by 2030 for sectors - agriculture, road transport, waste - not covered by the EU Emissions Trading Scheme (ETS).
However, while Member States seem to broadly agree that these national targets need to be revised in the light of the EU’s new 2030 climate target (see EUROPE 12703/1), they are divided on how to do so.
“The European Council confirms that distribution of efforts among Member States should be based on the criteria of the existing Effort Sharing Regulation”, the draft conclusions read.
However, the EU countries with the highest targets under the Regulation would like to see more convergence between the different national targets, taking more into account the potential for cost-effectiveness.
The Central and Eastern European countries, on the other hand, defend the retention of GDP per capita as a criterion for setting targets.
Moreover, according to one EU diplomat, the divisions in the EU Council go beyond a simple East-West opposition, because of the extent to which the ‘Fit for 55’ package affects the economic and social choices of Member States.
Extension of the ETS
Another issue, which is likely to be discussed and is divisive, is the possible introduction of an ETS for emissions from road transport and buildings, an option which the Commission seems to be seriously considering (see EUROPE 12702/8).
While Poland has already expressed serious reservations about such an option, Germany and Denmark are said to be particularly supportive. Taking a cautious approach, other countries such as France are reportedly willing to consider this possibility.
In an exchange with the press on Thursday 20 May, the Greens/EFA group in the European Parliament expressed its opposition to the idea.
Environmentalist MEPs say that even a high carbon price is unlikely to encourage people to adopt cleaner transport technologies, as the road transport sector is very price inelastic.
They also consider that this would threaten the improvement of current regulatory measures, such as stricter CO2 emission standards for cars and vans or a phase-out of petrol engines.
For buildings, the Greens believe that this would be a “socially regressive” measure, even more so than for transport. They argue that this would lead to an immediate increase in average household gas heating costs, while most citizens will only switch to low-carbon solutions after many years, even with an ambitious 3% building renovation rate.
See the provisional version of the European Council conclusions: https://bit.ly/3veLUhS (Original version in French by Damien Genicot)