MEPs at the European Parliament plenary session debated the European Commission’s ‘Fit for 55’ climate package for the first time, on Tuesday 14 September, in the presence of Frans Timmermans, the Commission Vice-President responsible for the European Green Deal. This was an opportunity for the different groups to give some indication of their intentions.
While most welcomed the Commission’s work, MEPs also expressed their willingness to improve some of the 13 proposals in the package, which aim to allow the EU to achieve a reduction in its net greenhouse gas (GHG) emissions of at least 55% by 2030 compared to 1990 levels, while putting it on a path to climate neutrality by 2050 (see EUROPE 12762/1).
On behalf of the EPP group, Peter Liese (Germany) expressed unambiguous support for the Commission’s choice of a “market-based approach with social compensation”. He thus came out clearly in favour of the new ETS and the ‘Social Climate Fund’ to address the social impacts of the latter (see EUROPE 12762/6).
“With this package, we have entered the stage of action”, said Mohammed Chahim (S&D). However, the Dutch MEP said he sees room for improvement, especially with regard to the phasing-out of free allocations under the current ETS.
Concerns about the creation of a new ETS
The question of the cost of the measures envisaged and how to distribute them fairly was raised many times, with the proposal to establish a new Emissions Trading System (ETS) for emissions from road transport and heating of buildings taking centre stage.
“We are very sceptical about (...) extending the carbon market to buildings and transport, because we consider the political cost to be very high and the climate impact to be very low”, said Pascal Canfin (Renew Europe, France), Chair of the Parliament’s Committee on the Environment, Public Health and Food Safety (ENVI).
A position also expressed by the Greens/EFA. For Bas Eickhout (Netherlands), it is not possible “that industry continues to benefit from free allowances and at the same time we extend the ETS to sectors where citizens will have to pay”. At a press conference, Greens/EFA Co-President, Philippe Lamberts (Belgium), confirmed the group’s opposition to the idea, arguing that it would lead to the cost being passed on to consumers rather than putting pressure on the production side.
When asked by EUROPE about the S&D group’s position, MEP Eric Andrieu (France) explained that it will depend on the measures and means foreseen to compensate the social impact of this new carbon market. At this stage, the S&D has serious reservations, he added.
Accusing the Commission of being a “prisoner” of its “neo-liberal logic” by wanting to “leave it to the market” to reduce greenhouse gas emissions, the Chair of The Left group, Manon Aubry (France), expressed concern about the consequences of the new ETS on the bills of the working class. According to her, they would see their petrol and heating bills increase by 370 and 420 euros respectively.
Anna Zalewska (ECR, Poland), for her part, expressed fears that citizens would bear “the brunt of the EU’s ambitions”, while energy prices “tripled” during the Covid-19 pandemic.
Paolo Borchia (ID, Italy) torpedoed the ‘Fit for 55’ package. According to him, it is a plan that “will replace European dependence on Middle Eastern oil with a dependence on Chinese technology (...) as 60% of the raw materials for this revolution will be imported from China”.
After the MEPs’ interventions, Frans Timmermans called for not falling into the trap where “we oppose social equity and solidarity to tackling the climate crisis” nor the trap of constantly talking about the cost of the transition while hiding the much higher human and financial cost of non-transition.
He also pointed out that only about 1/5 of the increase in energy prices can be attributed to the rise in CO2 prices. The rest, he says, is “simply a consequence of shortage in the market”.
He added: " We should speed things up in the transition to renewable energy so that affordable renewable energy becomes available for everyone.
CBAM
As for the Carbon Border Adjustment Mechanism (CBAM), another flagship measure of the ‘Fit for 55 ‘ package, only a few MEPs, mostly on the right of the hemicycle, addressed the issue. Christophe Hansen (EPP, Luxembourg) warned the Commission against the risk of European companies losing competitiveness with their foreign competitors as a result of the phasing out of free allocation of emission rights. “It is inconceivable to me that it is our companies that pay for the lack of ambition of others. Wouldn’t it be logical that it’s the polluter who pays?”, he asked.
His group is in favour of maintaining free allowances for European companies, an instrument that has so far served to protect EU producers from foreign competition not subject to the ETS.
The S&D, The Left, Greens/EFA and Renew Europe groups, on the other hand, spoke out in parliamentary committee against these quotas, which they said would constitute double protection for European companies once the CBAM was in force.
The ID group raised the issue of CBAM revenues. Including these in the EU’s own resources is a mistake, according to Catherine Griset (France), who echoed her colleague Aurélia Beigneux (France) who spoke along the same lines in the Environment Committee on 9 September. (Original version in French by Damien Genicot and Léa Marchal)