Members of the European Parliament’s Committee on the Environment, Public Health and Food Safety (ENVI) exchanged views on the Carbon Border Adjustment Mechanism (CBAM) with DG TAXUD Director-General Gerassimos Thomas on Thursday, 9 September.
End of free quotas
Once again, MEPs raised the issue of phasing out free allocations from the Emissions Trading System (ETS), which will go hand in hand with the CBAM coming into force. The European Commission’s proposal to phase out free allowances from 2026 to 2036 at the rate of a 10% decrease per year is far from satisfying everyone. In another debate, the issue was raised in the same way by other members of the ENVI Committee (see other news).
Mohammed Chahim (S&D, Netherlands) questioned this timetable: “What about a scenario, for example, of a 20% decrease a year? [...] Why did the Commission decide to introduce 10% over 10 years?”
For the Greens and The Left, this timetable is far too long. “Something the [European] Court of Auditors confirmed recently (see EUROPE 12560/15), and it says that the poor design of ETS actually failed to trigger the decarbonisation of EU industry largely due to 90% of industrial emissions not being subject to any [...] carbon price. [...] We’re giving manufacturers 15 more years to adapt. [...] It’s simply way too slow”, asserted Sara Matthieu (Greens/EFA, Belgium).
The EPP, on the other hand, continues to support the continuation of these free allowances for European industries (see EUROPE 12675/8).
Gerassimos Thomas recalled that phasing out free allowances concerned the ETS revision, not the DG TAXUD. “If, in the framework of the strengthening of the ETS, there is a different path, we will mirror this. But for the moment, that’s the situation”.
He also put forward a different view of the effectiveness of free allowances: “My reading of the report is that the Court of Auditors [...] criticised the targeting, so the application, of the instrument. It’s not that the free allowances [...] has not been a good instrument overall”, he indicated. “They have helped reducing emissions in certain sectors”.
Scope
The groups S&D, Greens/EFA, and The Left have denounced a mechanism that would apply to too few sectors. The European Commission’s proposal envisages applying the CBAM to the cement, electricity, iron and steel, aluminium, and fertiliser sectors. However, the EPP would like to see the scope reduced: “I warn you that the Commission starts with a limited scope. [...] Can we not start with an even more limited scope?” asked Peter Liese (EPP, Germany).
Other technical questions were addressed to the European Commission, namely the details of how emissions contained in certain imports would be calculated by default and the risk of the mechanism being circumvented with processed products imported into the EU that do not pay for emission certificates.
ENVI Committee Chair Pascal Canfin (Renew Europe, France) concluded the discussion by reiterating the European Parliament’s overall support for the CBAM. (Original version in French by Léa Marchal)