The European Parliament’s rapporteur for the review of the EU Emissions Trading System (ETS), Peter Liese (EPP, Germany), defended the introduction of a new EU Emissions Trading System covering emissions from buildings and road transport (ETS2), on Tuesday 22 March, in a discussion with his colleagues on Parliament’s Committee on the Environment, Public Health and Food Safety (ENVI).
In his view, the EU needs a functioning ETS, to extend this system to the maritime sector and to introduce ETS2 in order to provide the necessary incentives to reduce emissions in the different sectors, including heating of buildings and road transport (two sectors where emissions are still increasing), while generating revenues to support these decarbonisation efforts.
He therefore called on MEPs to seek compromises, in particular on ETS2, the potential creation of which continues to cause divisions both between and within Parliament’s political groups (see EUROPE 12888/11), as well as on the side of Member States (see EUROPE 12913/15).
Many MEPs fear the impact of a system like that on the most vulnerable households and SMEs, already hit by soaring energy prices.
The rapporteur therefore wondered whether it would not be possible to provide for a mechanism to ensure that the ETS2 would only become operational once energy prices had fallen to a lower level.
He also put forward the possibility of a ‘price corridor’, an option deemed impossible to implement by Michael Bloss (Germany), the Greens/EFA shadow rapporteur on this dossier.
Jytte Guteland (Sweden), shadow rapporteur for the S&D group, also did not seem convinced by the rapporteur’s suggestions.
“We believe that the proposal as it stands for the ETS2 is not the most social inclusive and effective way to reach the 2030 [climate] target”, she said.
The shadow rapporteurs of the ECR and The Left groups, Alexandr Vondra (Czech Republic) and Silvia Modig (Finland), also reiterated their opposition to ETS2.
“We have big concerns in terms of what it means for social justice and for the just transition”, Modig said.
For his part, Mr Liese recalled that ETS2 would be accompanied by a ‘Social Climate Fund’ financed by resources from ETS2, aimed at supporting the most vulnerable households in the energy transition.
“I think we need a Social Climate Fund and we need it frontloaded”, he said.
Divisions on the current ETS
The debate also showed the persistence of divisions regarding the revision of the existing ETS.
While Ms Guteland and Mr Bloss insisted on the need to reduce the surplus of emission allowances in the system through a one-off reduction in the number of allowances in circulation and an increase in the linear reduction factor (for the proposals of these two groups: see EUROPE 12893/18), Mr Vondra called for no major changes to the system “in order to avoid the bankruptcy of energy-intensive industries like steel, cement and others”.
Mr Bloss also called for the introduction of a floor price of €60, which would increase annually.
Emma Wiesner (Renew Europe, Sweden) has called for the ‘Innovation Fund’ to be transformed into a ‘net zero fund’ by including carbon sinks (for her proposals see: EUROPE 12895/11).
On the other hand, Mr Liese felt that a majority of political groups seem to support the idea of excluding both fossil fuels and nuclear power from the scope of the ‘Modernisation Fund’.
As a sign of the importance of this dossier, the rapporteur indicated that he had already received 1,711 amendments. (Original version in French by Damien Genicot)