European Parliament adopts largest climate change bill ever
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Good for the climate and good for jobs / 25 times more contribution to 2030 target than CO2 car regulation / Maritime transport, commercial road transport and buildings as well as process emissions for small businesses included
"Today's plenary decision is good for the climate and good for jobs. I am very relieved and glad that a large majority is now living up to its responsibility," commented the European Parliament's rapporteur, EPP MEP Dr. Peter Liese, on his colleagues' approval of the biggest climate protection law ever in plenary. "With this decision, we are making it legally binding that we save more CO2 in the next 8 years than in the last 30 years. That means we have to achieve at least 4 times as much emissions reductions per year. The ETS is the centerpiece of the Fit for 55 package: we are creating a reduction of 1.5 billion tons of CO2 with it, or 1,500 million . The controversial decision on CO2 cars will only bring 60 million by 2030 ."
The decisive factor for the large approval was an agreement between the three largest groups (Christian Democrats, Social Democrats and the liberal Renew Group) on the timetable for the introduction of the border adjustment mechanism (CBAM) and the phase out of free certificates for the affected industries such as steel, cement and chemicals. The agreement foresees that the reduction of free allowances and the start of CBAM will not begin until 2027. This is two years later than envisaged by the Environment Committee and one year later than proposed by the Commission. The start is also supposed to be very soft and cautious with only 7% burden for products from third countries and 7% less free allocation in the EU. Then, however, things are to move very quickly, with the mechanism taking full effect in 2032. That is three years earlier than envisaged by the Commission. "For us as EPP it is important that the new border adjustment mechanism is first carefully prepared and works really well before the free allowances are cancelled. The introduction of the mechanism is a mammoth project. It must first work technically and, above all, we need acceptance in the third countries. None of this can be taken for granted. If the free certificates are hastily reduced and disappear altogether without CBAM working properly, this could lead to massive job losses. If it works then, it can also be introduced completely quickly," Liese said.
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Plenary vote on the ETS
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The far-right, Greens and Social Democrats wreck compromises on emissions trading / Referral back to committee makes sensible compromises possible, but diminishes Parliament's influence
A majority of the far-right, Greens and Social Democrats narrowly rejected the Environment Committee's proposal on emissions trading (EU ETS) and referred the issue back to Committee. European Parliament rapporteur Peter Liese said: "The Social Democrats and the Greens have failed to live up to their responsibility for climate protection. The proposal has tightened up the Commission proposal in many places and means more climate protection, e.g. we would have achieved a 63% instead of a 61% reduction in emissions trading in 2030. We would have included waste incineration, included shipping much earlier than envisaged by the Commission and there were many other points where we tightened up the Commission proposal. For the Greens and Social Democrats this did simply not go far enough. They wanted a 67% reduction and a higher one-off reduction at the very time when we are challenged by the crisis in Russia and the need to become less dependent on Russian gas. I think it is really indecent and I hope that we can correct the mistake. Personally, I believe that the Council of Ministers will find sensible compromises on all the contentious points, but it is a pity for the Parliament. Sincere thanks go to the Liberal group and my group who supported the report in the end, although of course not everyone was happy with every single point."
Emissions trading reform: EPP, S&D and Renew agree on new compromise
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Fair compromise for still very high climate protection and sustainable jobs
Last night, Christian Democrats, Social Democrats and Liberals agreed on a new compromise on emissions trading. Peter Liese (EPP, Christian Democrats), environment and climate policy spokesman for the EPP Group and rapporteur on emissions trading for the European Parliament, said: "I am very relieved and very satisfied. This is a fair compromise for the EU's most important climate protection instrument. Parliament's climate protection ambitions remain very high. The new emissions trading scheme will quadruple the EU's climate protection ambitions each year, while at the same time protecting against deindustrialization and safeguarding and creating future-oriented jobs. This is a clear improvement over the original proposal of the Environment Committee."
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More breathing space for industry and citizens
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No price shock in 2024 / Still, more ambition than in the Commission proposal / EPP and Renew group propose compromise on EU ETS
“With our compromise amendment, we give industry and citizens more breathing space in difficult times and avoid a price shock in 2024. At the same time we still achieve more greenhouse gas reduction than in the Commission proposal.” This explained the Rapporteur on the EU ETS and spokesperson of the biggest political group in the European Parliament (EPP, Christian Democrats) Dr Peter Liese after a presentation of an amendment from his political group and the liberal Renew Europe group. While there was consensus between political groups on a lot of issues in the report on the biggest environmental law ever, the EU ETS including maritime, road transport and buildings, the ambition level was highly controversial. The Committee adopted by only 4 votes majority against the recommendation of Liese a steep increase of the ambition compared to the European Commission’s proposal. Instead of 61% proposed by the Commission which is the corresponding value to the net 55% target in the climate law, the Committee voted for 67% ambition. In particular problematic for the EPP and the rapporteur was the doubling of the so-called rebasing in 2024. “The Committee voted for taking out about 240 million allowances in 2024. This is twice as much as Commission has proposed and it would lead to an immediate price shock in times where we are already challenged with the need to be independent from Russian gas. Even though we all agree that renewable energies and energy efficiency are the future, we need to replace Russian gas also partly by coal, unfortunately, because the scale up will not be fast enough to over-compensate Russian gas already in 2024. That’s why we need breathing space for industry and consumers, in particular in a time where an economic crisis is more than likely. Therefore, we want a more even distribution of the efforts. I am very grateful that the Renew group compromised. The one-off-reduction will be only 70 million in 2024 and another 50 million will be taken out of the market in 2026. In adopting a higher linear reduction factor, we increase the ambition in 2030 to 63% and which is important also the overall emission between 2024 and 2030 are lower than in the Commission proposal so it is in any way more ambition.
On top of that, the EPP tabled the following amendments:
• Together with S&D and Renew an amendment to re-establish the 2,5% top up of the Modernisation Fund for Central and Eastern Europe
• A common amendment with S&D und Renew on the outermost regions.
• A common amendment with S&D on carbon leakage protection for harbours.
• An amendment on a bonus for sustainable alternative fuels in shipping and a derogation for ships carrying LNG and Hydrogen.
• An amendment on restricting market access to avoid manipulation and speculation.
• An amendment on exports in CBAM.
• Very important is an amendment on benchmark derogations in particular to the steel sector.
• On top of that the EPP tabled to all seven FitFor55 reports that are noted in plenary next week, an amendment for calling for regulatory moratorium in the light of the high energy and raw material prices and the war in Ukraine.
“The outcome of the ENVI vote was already very good. In 18 points, we improved the commission proposal substantially. If our compromise with Renew and hopefully some other amendments pass, the report will be even better. We want to decarbonize European Industry and not deindustrialize Europe. That is why those that invest, should be supported and those that do not understand that climate neutrality is a new normal, will feel a lot of pressure. ETS is the core of the European climate policy and will be substantially strengthened,” said Liese.