On Thursday, 10 November, the European Parliament decided—by a large majority (471 votes in favour, 90 against, and 53 abstentions)—on its negotiating position regarding the ‘REPowerEU’ chapters that will be inserted into national recovery plans within the framework of the NextGenerationEU Recovery Plan so as to expedite reducing the European Union’s dependence on Russian hydrocarbons and implementing the climate transition (see EUROPE 13051/20).
With regard to financing the initiative, MEPs recommend the following terms and conditions: (1) the ‘loan’ component of NextGenerationEU, namely a potential budget of over €200 billion, may be used to finance ‘REPowerEU’ chapters, Member States having 30 days from the future regulation’s entry into force to indicate whether they intend to use the allocated loans (otherwise, the remaining amounts may be used for other countries); (2) frontloading the auctioning of CO2 emission allowances intended for the 2027–2030 period from now until 2025 will make it possible to offer €20 billion in grants, the European Parliament taking over the allocation per Member State established by the Council of the EU (see EUROPE 13035/14); and (3) cohesion policy will contribute “€27 billion” according to an estimate made by Pascal Arimont (EPP, Belgian) during Wednesday’s plenary debate, but cohesion policy rules will prevail.
Still on the subject of financing ‘REPowerEU’ chapters, a recital in the text mentions an option to use part of the funds collected through taxes on excessive profits made by the fossil fuel sector, as approved by the ‘Energy’ Council. “Many countries are making progress in creating these taxes, and I think it would be reasonable for [companies] that are benefiting from this crisis to help finance the necessary investments”, declared Eider Gardiazabal Rubial (S&D, Spanish), co-rapporteur on the dossier, on Wednesday.
Executive Vice-President Valdis Dombrovskis confirmed to some journalists that, as the European Council requested, the European Commission is, for its part, continuing to analyse whether or not to increase the firepower of the ‘REPowerEU’ strategy.
Other changes compared to the European Commission’s original proposal are as follows: the European Parliament is calling for Member States to be able to receive up to 20% in prefinancing, as opposed to the EU Council’s suggested 15%; in addition, projects that started as of February 2022 may be eligible to be labelled as ‘REPowerEU’ projects, and at least 35% of them will have to have a cross-border dimension.
“We want to create an Energy Union. We need to interconnect”, Siegfried Mureşan told the press.
‘Do no significant harm’. In order to move quickly with regard to diversifying sources of supply, an exception to the application of the ‘do no significant harm’ environmental principle was introduced for investments meant to improve gas facilities. As during the vote in the Committee on Budgets (BUDG) and the Committee on Economic and Monetary Affairs (ECON), the plenary excluded oil projects from this exception.
“We could have a derogation for gas, not for oil”, confirmed Ms Gardiazabal Rubial when speaking to EUROPE. She set out the “cumulative conditions” that will apply to the derogation: the European Commission will have to approve the projects in question and consider the maximum amount of financing available for projects receiving this derogation; the projects must be considered urgent and completed before the end of 2024; there must be no viable, less-polluting alternative available within a reasonable timeframe and at reasonable cost; and the beneficiary Member State will have to present parallel measures that reduce environmental damage.
It should be noted that the European Parliament took over (313 votes in favour, 289 against, and 8 abstentions) its industry committee’s amendment—despite its having been rejected in the BUDG and ECON committees—according to which ‘REPowerEU’ chapters could stimulate the production of “low-carbon energy sources”, such as hydrogen produced from electricity notably generated by nuclear power plants.
Pleased with this development, French EPP members stated on Twitter, “Member States will be able to use European funds to extend their power plants”.
However, it will be very difficult, according to a parliamentary source, to successfully complete an eligible project that uses nuclear power during the period ranging from February 2022 through the end of 2026 while keeping the project’s cost within the set limits.
Trilogues. “We’re ready to start the negotiations with the EU Council and finish before the end of the year”, indicated Mr Mureşan. This is also the intention of the Presidency of the Council of the EU.
Interinstitutional negotiations are thus expected to proceed at a blistering pace; the first sessions are scheduled to take place in Strasbourg on Wednesday, 16 November, and during the week that follows, on the margins of the plenary session.
See the European Parliament’s position: https://aeur.eu/f/402 (Original version in French by Mathieu Bion)