The vote on the biggest ever climate legislation of the European Union is expected to take place in less than three weeks. On 16th (and 17th) May, ENVI will vote on the ETS reform which not only covers the sectors that are already covered but also as a new sector the maritime sector and a new, separate system for road transport and buildings is planned. Positions in some issues are still very far apart even though negotiators of the political groups went now through all parts of the text. Two major outstanding problems are the level of ambition in ETS I and the question if and how the ETS II for buildings and road transport will be introduced. “A majority of the groups in ENVI demands more ambition in ETS I in mainly all the parts of the proposal: not only the overall ambition of 61% of emission reduction in 2030 but also the level of free allowance and the ambition of the so-called MSR. I personally am not convinced that this is the right thing to do and that it reflects a majority in plenary given some of the votes in the opinion-giving Committees,” said Peter Liese, Rapporteur on the file, in a meeting with journalists on Tuesday.
Read more: Over-ambitious ETS I and no ETS II not a good solution
Today the EU Agency for European Securities and Markets Authority (ESMA) has published its in-depth analysis of the EU carbon market. “The report shows that radical reforms of market mechanisms in the ETS are not necessary,” said Peter Liese, Rapporteur of the reform of the EU ETS. “It is important to let the market work and also to enable companies, especially SMEs, to get help from financial actors to manage their obligations. In any case, however, it is important to even increase transparency to avoid manipulation and to limit speculation”, said Liese. ESMA has found no current major deficiencies in the functioning of the ETS market, it says in its final report published on Monday. However, it said that the share of investment funds and high frequency and algorithmic trading mainly from companies from the U.K. and the U.S. have significantly increased. Moreover, it added that investment funds and other non-financial sector firms have also trade options to a larger extent and ESMA has faced significant challenges trying to identify the origin of the market participants. “All these findings require no radical reform but concrete action and I ask the Commission to act and propose this action immediately,” concludes Liese who had already included a respective amendment (Commission to act after ESAM report) his amendment to his own report in February.
Read more: ESMA report on functioning of EU carbon markets released
"The IPCC report makes clear that it is very important to act as soon as possible. The implementation of an ambitious climate policy package for 2030 is more urgent than ever. Most of the elements like increasing renewable energy and energy efficiency are also beneficial to be less dependent from Russian fossil fuels. While in the very short term, we may have to use more coal and more nuclear, the answer for the future is the Fit for 55 package,” said Peter Liese, environmental spokesman of the largest group in the European Parliament (EPP, Christian Democrats). Liese insisted that any solution must be found internationally: “The European Union is the only big economy that has reduced its emissions in the last 30 years and it is right that we have to increase the pace of the reductions drastically. Europe has to lead, but we also have to increase our efforts to convince third countries. Even the encouraging proposals of Joe Biden are much less ambitious than the EU’s targets for 2030.”
Read more: IPCC Report shows that immediate action on climate change is necessary globally
“The Green Deal is the solution, not the problem. Climate protection and independence from imports of gas, oil and coal from Russia requires the same measures in the medium and long term, which is why we must not question the European Commission's "Fit for 55" package now, but rather strengthen and prioritize different aspects of it. In the short-term it is necessary that also environmental politicians are making compromises so that we become as independent as possible from imports from Russia.” This emphasized the environmental spokesperson of the biggest group in parliament (EPP, Christian-Democrats) regarding the presentation of the package of the European Commission on affordable, save and sustainable energy in the EU.
The Commission has explained how it intends to ensure energy security in Europe in the face of the Russian invasion and the terrible war in Ukraine. The paper states that Russian gas imports currently amount to 155 billion cubic meters.
100 billion of these would be replaced by the "Fit for 55" package. In the short term, elements of the package are to be advanced in order to become independent even more quickly. At the same time, the supply of gas has to be diversified. Biomethane should play a bigger role. Its potential is estimated at 34 billion tons. Simultaneously, the development of hydrogen is to be brought forward. The Commission announces a solar strategy for June this year and wants to simplify the procedures for expanding renewable energy systems in the short term. Heat pumps will play an important role.
Read more: The Green Deal is the solution and not the problem