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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.

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Dear Ladies and Gentlemen,

The ETS reform is since 2005 an effective tool in driving emissions reductions cost-effectively. On Tuesday, we have voted on its reform to match up the new EU climate targets for 2030. In plenary, we will have the next vote in the June I session determining the final Parliament’s position to go into negotiations with the Council.

Broad debates about all aspects are essential to achieve the best outcome for all. Therefore, I invite you for a public consultation on my report. Priority will be given to stakeholders, which means to NGOs and industry representatives,that have a direct expertise and interest but did not have a chance to make their point elsewhere. However, everybody is welcome to take part in the debate. I am looking forward to an enriching discussion.


The Webex web conference will take place on:

Monday, 23 May 2022
15 - 17 h

Please sign up via a response to this e-mail address indicating your name and organisation: This email address is being protected from spambots. You need JavaScript enabled to view it.. The dial-in-data will be sent to you on Monday morning.

Best regards,

Peter Liese

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Parliament must have more say on spending / EPP supports 45% renewables and higher efficiency target, subject to conditions


"The proposal is going in the right direction, but we need to examine it more closely. The devil is in the details and I am very sceptical about some of the concrete proposals," said the environmental spokesperson of the largest group in the European Parliament, the EPP (Christian Democrats), Dr. Peter Liese (also rapporteur on the ETS), with regard to the European Commission's RePowerEU proposal. The Commission proposes to take 250 million allowances from the reserve and use them to make investments to replace Russian gas.

"I think this is a good idea. Auctioning will dampen the price in this difficult period without jeopardizing the climate target and it will free up a lot of money for investments. However, I find it completely unacceptable that the Commission wants to put the money into the RRF. Parliament has practically no say in this, and cross-border European projects are not being funded. I makes sense to put the money into the innovation fund in the emissions trading system. We as EPP support the proposal to reach 45% renewable energy in 2030. Renewable energy and energy efficiency are the answer to the crisis and we have to do everything now, including simplified permitting procedures. I personally also support a higher target for energy efficiency. For my colleagues, it is important that this does not jeopardize the decarbonisation of industry, which after all needs more energy to begin with, and that the storage of renewable energies, which we urgently need, is not torpedoed," said Liese.

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Good for climate, jobs and people / Joint action in Europe lowers costs / Tailwind for innovative companies / Inclusion of waste incineration / Some extreme proposals of the Environment Committee will not survive the plenary session

"The approval of most of my colleagues in the Environment Committee to my report on emissions trading is good for the climate, for jobs and for people," said the environment spokesman for the largest group in the European Parliament (EPP, Christian Democrats) in view of the final vote on the reform of the European emissions trading system. The report was adopted by 62 votes (62/20/5).

“I consider it a great success that companies that invest in climate-friendly technologies and thus secure jobs in Europe in the long term will get a tailwind. They are to receive not only financial resources from the Climate Investment Fund (previously the Innovation Fund), but also free certificates. "We have decided on three different mechanisms for this. In return, however, it will be very hard for those who want to continue operating old dirty plants. Anyone in Europe who does not invest in climate neutrality, has no future and should not be supported by the EU," Liese said.

MEPs also decided by a large majority to include waste incineration in the ETS system after an impact assessment in 2025.

  1. Emissions trading reform: adoption of compromises in the Environment Committee
  2. Compromise on ETS will help the climate, protect jobs and protect people
  3. Over-ambitious ETS I and no ETS II not a good solution
  4. IPCC Report shows that immediate action on climate change is necessary globally