MEPs ready to negotiate with Council of EU on REPowerEU chapters of national recovery plans

*** modified on Thursday 27 October 2:30 pm ***

On Tuesday 25 October, MEPs on the European Parliament’s Committees on Budgets (BUDG) and Economic and Monetary Affairs (ECON) agreed by a large majority (80 votes in favour, 6 against, 4 abstentions) on their negotiating position with the Council of the European Union on the inclusion of REPowerEU chapters in the Member States’ recovery plans in order to speed up the reduction of the EU’s dependence on Russian energy and the climate transition (see EUROPE 13049/11).

MEPs approved most of the compromise amendments submitted to them. In particular, they endorsed issues relating to the financing of the REPowerEU chapters via the loan component of the NextGenerationEU Recovery Plan, the frontloading of the auctioning of CO₂ emission allowances and a contribution from the cohesion policy. The same applies to the introduction of a 20% pre-financing of the REPowerEU chapters, as well as to the distribution key between the Member States of the €20 billion of subsidies from the ETS, which is modelled on the key determined by the Council of the EU (see EUROPE 13035/14).

Projects implemented since February 2022 can be included in the REPowerEU chapters, and at least 35% of the available budget must go to cross-border projects.

However, some amendments relating to the exception to the application of the do no significant harm environmental principle for investments to improve oil and gas facilities were not adopted. MEPs approved the amendment that restricts this exception to gas projects. According to one source, the inclusion of oil projects would only concern the Druzhba pipeline, which is important for Hungary.

The amendment limiting aid for oil and gas projects to €10 billion was also not accepted. However, the European Commission will be responsible for analysing the maximum amount needed for these projects, which must be operational by the end of 2024. It must also consider whether there is a renewable energy alternative to projects that derogate from the do no significant harm principle.

Finally, MEPs rejected two amendments from the Committee on Industry (ITRE), according to which the REPowerEU chapters should be used to stimulate the production of low-carbon energy sources (hydrogen produced from electricity, notably from nuclear power plants). Both amendments should be re-tabled for voting at the European Parliament mini-plenary session scheduled for Thursday 10 November, in Brussels. (Original version in French by Mathieu Bion)