On Tuesday 7 June, meeting in Strasbourg on the eve of a series of votes on eight proposals in the ‘Fit for 55’ of climate legislation, MEPs expressed serious differences over the revision of the EU Emissions Trading System (ETS), the creation of a new carbon market for buildings and road transport (ETS2) and the end of sales of new internal combustion cars and vans from 2035.
Unsurprisingly, their discussions on the ‘Fit for 55’ package included reducing the number of emission allowances in the current ETS and replacing free allowances with a ‘Carbon Border Adjustment Mechanism’ (CBAM).
Esther de Lange (EPP, Netherlands) noted her group’s opposition to a ‘one-off reduction’ in the number of allowances in circulation so as not to “hit our companies and industries” with a new rise in the price of CO2, but rather to give them “a breathing space in these difficult times”.
Advocating a more gradual approach, she then received the support of her colleague Peter Liese (EPP, Germany), Parliament’s rapporteur for the ETS review, who advocates a reduction of 70 million allowances in 2024 and 50 million in 2026 (compared to a reduction of 117 million from 2024 according to the Commission's proposal).
On behalf of the EPP, Ms de Lange also called for free allowances - originally introduced to tackle carbon leakage - not to be abolished “until we know whether CBAM works in practice”.
Representing the Greens/EFA group, Bas Eickhout (Netherlands) urged his colleagues to vote in favour of abolishing free allowances, calling them a “fossil fuel subsidy for latecomers”.
“What is at stake is whether we are willing to keep the 1.5-degree target alive”, he said.
Mohammed Chahim (S&D, Netherlands), Parliament’s rapporteur on the creation of CBAM (see EUROPE 12966/3), agrees.
Disagreement with the Commission on ETS2
MEPs also disagreed on the introduction of a second ETS covering emissions from heating of buildings and road transport.
Ms de Lange and Mr Liese regretted the compromise negotiated with the Renew Europe, S&D and Greens/EFA groups to restrict this new carbon market to commercial activities at least until 2029 (see EUROPE 12954/2), mainly because of its potential impact on households.
They nevertheless called on their colleagues to stick to the compromise, “even if it is not very nice”.
This point of the ETS review will not be reopened in the plenary session, stressed Pascal Canfin (Renew Europe, France), chairman of the ENVI committee, to the great displeasure of Frans Timmermans.
During the debate, the Executive Vice-President of the European Commission responsible for the Green Deal repeatedly criticised the compromise negotiated by the political groups.
In his view, the Commission’s original proposal would finally reduce emissions from these sectors in a socially fair way, including through the parallel creation of a ‘Social Climate Fund’.
“Instead of delivering 45% of emissions reductions in buildings and transport, [the compromise] would only deliver 10%”, he said.
Adding: “So the Commission reserves its position ahead of the vote and we’ll stand in trilogues for a package that is complete, coherent and socially fair”.
Uncertainty surrounding the vote on the end of petrol cars
Mr Timmermans also criticised the opposition of some groups (EPP, ECR and ID) to his proposal to ban the sale of new internal combustion cars and vans from 2035.
He called the EPP’s proposal to limit the ban to 90% of sales (and not 100%) a “fudge” in order to give the sector the opportunity to develop e-fuels.
And stated: “These fuels will never, ever be available in sufficient quantities. They will be more expensive at the petrol pump, far more expensive than driving an electric car”.
Saying that the vote on this dossier will be “the most uncertain of the package”, Mr Canfin criticised the EPP’s approach: “I note, when I look at all the amendments that come [...] from the EPP, put end to end, that there is no longer any climate ambition, nor for cars, nor for industry, nor for aviation, nor for shipping”.
His group and the EPP nevertheless negotiated an amendment on the reduction of the number of allowances in the ETS (see EUROPE 12963/7).
Other files
In addition to the above-mentioned dossiers, the Parliament will also adopt its position on other texts of the ‘Fit for 55’ package: - the creation of a ‘Social Climate Fund’ (SCF); - the revision of the ETS for aviation; - the revision of the Effort Sharing Regulation (ESR); - the revision of the Land Use, Land Use Change and Forestry Regulation (LULUCF); - the inclusion of the ‘Carbon Offset and Reduction Scheme for International Aviation’ (CORSIA).
On these dossiers, the votes are not expected to result in significant changes to the texts adopted by the Parliament’s Committee on the Environment, Public Health and Food Safety (ENVI) (see EUROPE 12954/3, 12954/4, 12954/5, 12764/10).
Mr Timmermans also welcomed the fact that the Parliament “is confirming the key architecture of our proposals” for the revision of the LULUCF and ESR regulations. (Original version in French by Damien Genicot)