Meeting in Brussels, EU environment ministers remained divided over the possibility of establishing a new EU emissions trading system for buildings and road transport (ETS2 or ETS BRT) on Thursday 17 March, during a debate attended by Environment Commissioner Virginijus Sinkevičius.
While some Member States supported the idea of an ETS2 (Sweden, Denmark, Germany, Finland, Austria, the Netherlands and Portugal), other Ministers expressed concerns about the socioeconomic impacts of such a tool and even serious reservations.
“This proposal from the European Commission raises serious concerns among the Member States, in view of its economic and social impact, particularly on the most vulnerable households and businesses”, acknowledged Barbara Pompili, the French Minister for the Environmental Transition and chair of the meeting, at the press conference prior to the debate.
Based on the ministers’ comments, the countries most opposed to this proposal include Poland, Estonia, Malta, Cyprus, Romania, the Czech Republic, Bulgaria, Slovakia and Hungary.
“We consider it to be an environmentally inefficient system. (...) It is also socially unjust”, said Adam Guibourgé-Czetwertyński, Poland’s Minister for Climate and Environment, for example.
In particular, he felt that the wealthiest households would largely escape this mechanism, as they would be able to buy an electric car.
“Hungary believes that ETS2 is not an efficient instrument (...) Energy prices have skyrocketed. Under these circumstances, we believe that any further artificial increase in energy prices is neither necessary nor acceptable”, agreed Hungary’s deputy ambassador to the EU, Gábor Baranyai.
Slovenia, Spain, Belgium, Lithuania, Croatia, Latvia, Luxembourg, Greece, Ireland and Italy expressed concerns and worries.
Supporting the idea of an ETS2, the Netherlands and Austria recommended extending its scope to all fuels.
“We are aware of the reservations about this proposal, but let’s be honest: what would be a realistic alternative?”, said Rob Jetten, the Dutch Minister for Climate and Energy.
No alternative, according to the European Commission
For its part, the European Commission tried to defend its proposal for a new ETS for buildings and transport by stressing the need to reduce emissions in these two sectors by more than 2% per year (around 120 million tonnes in total) in order to achieve the objective of reducing the EU’s net greenhouse gas (GHG) emissions by at least 55% by 2030.
“The question is: can we achieve such substantial emission reductions by intensifying the existing policy instruments? I believe we cannot”, Mr Sinkevičius said, referring to a European Commission analysis sent to Member States the day before the meeting (see other news).
An analysis which, according to Mr Guibourgé-Czetwertyński and other ministers, nevertheless has serious limitations.
Maintaining the link with the ‘Social Climate Fund’
In addition to the ETS2, the ministers addressed several other issues of the climate legislative package (‘Fit for 55 package’) under their responsibility, including the creation of a ‘Social Climate Fund’, the revision of the CO2 emission standards for new cars and vans, the revision of the Effort Sharing Regulation (2018/842) and the revision of the Greenhouse Gas Emissions and Removals from Land Use, Land Use Change and Forestry (LULUCF) Regulation (2018/841). EUROPE will continue to follow this story.
Asked what approach the French Presidency of the EU Council would take in view of the major divisions over ETS2, Mrs Pompili said that the discussions had shown the importance of the link between this tool and the ‘Social Climate Fund’ designed to offset the socioeconomic impacts of ETS2.
“This new ETS, if it were to be put in place (...), could not be done without having this very important link with financing”, she said.
She also reiterated the French Presidency’s desire to move forward in a “grouped manner” on the entire ‘Fit For 55’ package in order to maintain its coherence, while assuring that it was nevertheless ready to show “pragmatism” and “realism” on how to reach agreements between the EU countries.
Unanimous desire to move away from energy dependence on Russia
While the issue of the ETS2 continues to divide Member States, the Ministers were unanimous on the need to move the EU away from dependence on Russian fossil fuel imports.
They therefore strongly emphasised the importance of making progress in the negotiations on the ‘Fit for 55’ package to enhance energy efficiency and renewable energy deployment.
“The Council sent a clear message: the negotiations must continue, and even accelerate”, summarised Mrs Pompili at the end of the meeting, while considering that “the momentum has been strengthened to implement the Green Deal as soon as possible”. (Original version in French by Damien Genicot)