Carbon market: MEPs reject a key text of the EU climate plan

MEPs on Wednesday rejected a reform of the European carbon market, deemed not ambitious enough by the Greens and the left. But they adopted other proposals from the EU climate plan, including the end of combustion engines for new cars in 2035.

MEPs, in plenary session in Strasbourg, voted on eight of the fourteen texts of the roadmap proposed in July 2021 by the European Commission to reduce greenhouse gas emissions by 55% by 2030, compared to 1990. EU greenhouse.

These votes determine the positions of the European Parliament before negotiations with the Member States.

However, the key text of the plan, which provides for the expansion of the market for CO2 emission quotas and the gradual abolition of free quotas for manufacturers, was rejected by 340 votes once morest (265 for, 34 abstentions). It will be sent back to the parliamentary committee for re-examination.

Compromise between EPP and Renew

‘Thunderbolt! The majority must review its copy (…) because of rules that are not ambitious enough. The climate does not wait’, rejoiced MEP Karima Delli (Greens).

The proposal reflected a compromise between the EPP (pro-European right, leading force in Parliament) and Renew (centrists and liberals) to reduce by 63% by 2030, compared to 2005, emissions from sectors subject to the carbon market : better than the Commission’s target (-61%), but below the vote in the Environment Parliamentary Committee (-67%).

Above all, it adjusted the timetable for eliminating the free emission quotas granted to European industrialists, as imports into the EU of polluting sectors (steel, aluminium, cement, fertilizers, electricity) will be taxed on the basis of the price of European CO2.

‘Red line’

An amendment, pushed by the EPP and adopted on Wednesday, demanded that these free quotas be maintained in the EU until 2034, in the name of business competitiveness… Which also postponed until 2034 the full implementation of a carbon tax on imports.

After the vote in the parliamentary committee to abolish free quotas from 2030, this postponement to 2034 was a ‘red line’ for the Greens and S&D (social democrats), who therefore voted once morest the final text, in unison from the extreme right. S&D and Renew had unsuccessfully supported an intermediate compromise on 2032.

‘A shame’

‘What a terrible day. Shame to see the far-right vote with Socialists and Greens,” reacted Peter Liese (EPP), rapporteur for the rejected text, in an electric atmosphere within the hemicycle.

On the left, we were rather indignant that the amendment on the timetable for the end of free quotas was voted on by both the EPP and… the far right.

“You can’t seek far-right support to lower climate ambition, and then complain that we’re opposed,” said Socialist leader Iratxe Garcia Perez.

Eliminate free quotas

MEPs, on the whole, approve of the extension to the maritime sector, to aviation, to heavy goods vehicles and to office buildings, of the European carbon market, which today only covers energy and industry (only 40% of EU emissions).

On the other hand, to stay in the nails of the World Trade Organization (WTO), the EU will have to eliminate the free quotas offered in the sectors concerned by its future border tax. However, the date for removing them without destabilizing companies is hotly debated.

The votes scheduled for Wednesday on the “carbon border adjustment” and a social fund to help the most vulnerable households were also canceled for the sake of consistency, and the texts sent back to committee.

“We are going to start these renegotiations now, to return as soon as possible to the plenary with a stable compromise,” explained Pascal Canfin (Renew), chairman of the Environment Committee. The left says it is ready to build a ‘solid pro-European, pro-climate majority’.

Heat engines

At the end of the followingnoon, MEPs on the other hand approved three other texts of the climate plan, including Brussels’ proposal to reduce emissions from new cars to zero from 2035, de facto only authorizing the sale of vehicles electrical.

A narrow vote due to fierce opposition from the right, worried regarding the consequences for the automotive industry, the first in terms of jobs in Europe, and which instead defended a 90% reduction in automotive emissions in 2035, allowing continue selling hybrid vehicles.

/ATS