Money time for EU carbon market reform in European Parliament – ​​

The lawmaker overseeing the passage of a key package of EU climate legislation in the European Parliament has urged colleagues to stop fighting over the proposed reform, saying Europe must rise to the occasion in the context current geopolitics.

Pascal Canfin, a centrist French MEP who chairs the European Parliament’s environment committee, warned against strong stances on the proposed EU carbon market reform and urged his colleagues to show a spirit of compromise.

“The message I want to send is that everyone must stop repeating their starting positions and enter into a real phase of negotiation,” Canfin told EURACTIV, warning that the lack of agreement on the package before a vote in committee on 17 May would risk derailing the EU. climate agenda.

“Without an agreement in committee, the package can be reopened in all its dimensions in plenary. And I don’t think, given the climate emergency and the current geopolitical context, that we can afford to play around with that,” he said.

“It would be like tossing the future of the climate package on a coin toss,” Canfin warned, saying passing the carbon market reform was likely to depend on as few as five votes in Parliament’s plenary.

The EU Emissions Trading Scheme (EU ETS) – which establishes the world’s largest carbon market – is often described as the crown jewel of European climate policy. It is currently being revised to align the bloc with its new climate ambition to cut global warming emissions by at least 55% by 2030.

This week, the parliamentary groups are holding three successive rounds of talks in order to find a compromise on the EU ETS reform project and on three other related legislative files: the social climate fund, the carbon border adjustment mechanism and a proposal for regulating CO2 emissions form cars.

Peter Liese, a German Christian Democrat who is Parliament’s main rapporteur on the ETS, said MPs will hold an open-ended meeting on Wednesday evening (May 4) in which lawmakers will meet “as long as necessary” to find a common position.

After a committee vote on May 17, the European Parliament will vote on the proposal in a June 6-9 plenary session, paving the way for final talks with EU member states to wrap up the reform.

The Green Brief: The dice are cast for ETS reform

The EU emissions trading scheme – which establishes the world’s largest carbon market – is often described as the crown jewel of EU climate policy. It is now due for revision and all eyes are on the European Commission’s draft plan.

“Progressive majority” or “von der Leyen majority”?

To reach a compromise, Canfin said MEPs must avoid replicating what happened with the text on CO2 emissions from cars.

During negotiations in committee, the centre-right European People’s Party (EPP) took a hard line on the proposal, which Canfin said amounted to “unraveling the climate ambition of the text originally proposed by the European Commission”.

According to Canfin, this tough stance made negotiations with the EPP “impossible” and led the other political groups – the left, the Greens, the Socialists and Democrats (S&D) and the centrist Renew Europe – to form a so-called “progressive” formation. “. majority’ on the text, without the EPP.

But while such a progressive majority would ensure the adoption of the carbon market reform in the Parliament’s environment committee, it will probably not be sufficient to adopt the text in plenary, where the support of the EPP will be essential.

“It is therefore necessary that the parties … negotiate a compromise that will give us stability in plenary,” Canfin said. “But that means the EPP has to start playing ball. The last thing we want is for such an important decision to depend on five votes in plenary.

European Commission President Ursula von der Leyen, a German Christian Democrat, has made climate policy the top priority of her five-year term, pushing through legislation to achieve climate neutrality by 2050 and reduce EU emissions by 55% by 2030.

However, she was only confirmed in this position with a very narrow majority in the European Parliament three years ago, relying largely on the support of her own camp – the EPP – as well as the S&D and the centrist group. Renew led by French MEPs. of President Emmanuel Macron’s party.

The same three-party coalition must now unite on the EU’s ETS reform proposal to secure passage of the reform in plenary, Canfin said.

“I would like to send a message to the Socialists and the EPP,” the French MEP told EURACTIV: “Let us maintain the strategy that has been ours from the beginning, namely to maintain a von der Leyen majority on the key texts, therefore in order to allow Europe to move forward in this historic moment with a cool head.

Canfin warns against the “radicalization” of the EPP on the Green Deal

For now, however, such a majority seems elusive.

The EPP and the S&D clashed over key aspects of carbon market reform. As the EPP insists on putting a carbon price on emissions from transport and buildings, Socialists and Greens have warned it will raise consumers’ energy bills and insisted on a social climate fund more important to compensate the poorest households.

The Greens and Socialists say the fund should be kept separate from plans to create a new emissions trading scheme for transport and buildings, which the EPP wants to see fully implemented.

The EPP, in turn, took a hard line on the proposed EU carbon market reform. In a briefing with reporters last week, German Christian Democrat MEP Peter Liese, the parliament’s lead lawmaker on the proposal, said the “progressive majority” was pushing for too much ambition on the text.

“There is a strong demand from these groups to be much more ambitious and to have more than 61% reduction in emissions” from the sectors covered by the ETS, Liese said. This would mean the EU would “significantly exceed” its greenhouse gas reduction target of 55% for 2030, he added.

Liese disputed these demands, saying the EPP preferred to stick to the original European Commission proposal. “61% is very demanding and you shouldn’t overdo it, especially in this time of crisis, where you have to be independent of Russian gas as soon as possible.”

According to Liese, the war in Ukraine has made EU climate goals more difficult to achieve in the short term, with EU countries preparing to restart coal-fired power plants in case Russian gas supplies are cut off. .

“At least for the next two or three years, I think we might have to use more coal to get rid of Russian gas,” Liese said. “And that will of course be a challenge for the ETS,” he said, advising against any attempt to increase the EU’s climate ambition.

That stance was questioned by Canfin, which said the EPP’s proposals on the four pieces of legislation currently on the table would fall short of the EU’s 2030 climate target.

“On all elements of the climate package, we are seeing a radicalization of part of the EPP against the Green Deal,” Canfin told EURACTIV. “If we add up all the demands of the EPP on the four texts, we do not reach 55%. This is obviously unacceptable to us [Renew] and for the socialist.

find a happy medium

Conversely, Canfin said socialists must abandon unrealistic demands to establish a social climate fund without matching funding from the new ETS on transport and buildings.

“We cannot simultaneously reject the ETS2 and want an identical or even larger social fund. The money has to come from somewhere! said the French MEP.

“Thus, each must take a step in the direction of the other: On the one hand, the EPP must accept that the ETS2 proposal is recalibrated, starting more modestly” in order to take into account social considerations. “And for their part, the socialists must accept that if the ETS2 is limited, the social fund must also be limited.”

15 days before the vote in committee, the French MEP called on all political groups to show responsibility and to agree on a compromise by Thursday 12 at the latest.

“We are now entering ‘money time’. And there, you have to find a landing zone. Because if the mindset is to refuse concessions until the last minute, then there is no deal. There are starting positions that need to move,” Canfin said.

“At Renew, our strategy is simple: to be the guarantors of the von der Leyen majority and of the Parliament’s climate ambition. This means that we cannot go below the ambition threshold set in the climate law, which consists of reducing greenhouse gas emissions by 55% by 2030.

However, not all parliamentarians seem willing to compromise. A senior parliamentary source with knowledge of the EPP’s position said many MEPs would prefer to postpone Parliament’s vote on carbon market reform until September, when EU countries will have more clarity on the bloc’s response to Russia’s war in Ukraine.

The source, who spoke to EURACTIV on condition of anonymity, said Parliament’s other lawmakers did not necessarily share the level of ambition displayed by the environment committee, which he likened to “a sect”.

[Edited by Zoran Radosavljevic]

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