Members of the European Parliament’s Committee on the Environment, Public Health and Food Safety (ENVI) approved by a large majority (48 votes in favour, 15 against and 4 abstentions) the draft opinion of Peter Liese (EPP, German) on the use of revenues from the auctioning of carbon allowances from the EU Emissions Trading System (ETS) to partially finance the ‘REPowerEU’ plan, during the evening of Monday 3 October.
The text, negotiated between the EPP, S&D, Renew Europe and Greens/EFA groups (see EUROPE 13031/9), includes bringing forward the auctioning of a number of carbon allowances from the 2027-2030 period to the period up to 31 December 2025 (‘frontloading’), for a total value of €20 billion.
This avoids releasing allowances from the ‘Market Stability Reserve (MSR)’ - an instrument to reduce the surplus of allowances in circulation in order to push up the price of CO2 and thus provide an incentive for sectors covered by the ETS to reduce their emissions - as initially proposed by the Commission (see EUROPE 12955/4).
“The Commission proposes to raise €20 billion by releasing about 250 million additional allowances onto the market (at today’s prices). This will increase the EU’s emissions by 250 million tonnes of CO2”, said Emma Wiesner (Swedish), Renew Europe’s shadow rapporteur on this dossier, after the vote.
Welcoming the outcome of the vote, the shadow rapporteur for the Greens/EFA, Michael Bloss (German), said: “If we want to become energy independent, we must not finance it by fuelling the climate”.
Mr Liese, for his part, stressed that auctioning allowances earlier than planned will “curb” carbon prices, “and therefore energy prices”, but will require the EU to make “additional efforts” in the second half of this decade.
While the Parliament’s Committee on Budgets (BUDG) and Committee on Economic and Monetary Affairs (ECON) are in charge of the financing aspects of the ‘REPowerEU’ plan, the ENVI Committee has exclusive competence for the ETS part of the text.
This part of the text will therefore be inserted in the draft report prepared by the BUDG and ECON Committees.
For its part, the EU Council wants 75% of the €20 billion from the ETS to come from the Innovation Fund and 25% by anticipating, by 2026, the auctioning of allowances (see other news).
See the compromise amendments adopted in ENVI: https://aeur.eu/f/3eb (Original version in French by Damien Genicot)