The 27 EU member states adopted overnight five key EU climate texts, mainly agreeing on the amount of a fund aimed at mitigating the impact on consumers of a carbon market that has been extended to cars and houses.
At their meeting in Luxembourg, the European Union’s environment ministers adopted their common position on the 2035 zero-carbon target, to share climate effort between Member States and to set targets for natural “carbon sinks” (eg forests, etc.), before the talks with MEPs on the finalization of these texts.
However, the proposal for a “climate social fund”, another important aspect of the plan presented by the European Commission in July 2021, was the subject of tough negotiations until late at night, threatening to block the agreement on the other texts of the package.
The European plan calls for fuel and heating oil suppliers to buy in a new coal market quotas to cover their CO2 emissions, as is already the case for electricity suppliers and some industries.
Concerned about the additional costs for small businesses and the most vulnerable households, Brussels is proposing a “social fund”, powered by the proceeds of the new “housing and road transport” coal market, to offset the effects of price increases. , through “temporary” direct payments and the financing of projects that reduce their energy consumption.
Agreeing in principle, the 27 objected to the amount of the fund’s resources. Brussels had a target of € 72.2 billion for the period 2025-2032: an amount which was too high for a group of so-called “frugal” states (Germany, Denmark, the Netherlands, Finland, etc.).
Berlin had proposed reducing the share of new coal market revenues available to the fund to a minimum, reducing it to € 20 billion so that a significant portion of that revenue would go back to national budgets. Germany finally raised the amount proposed yesterday, Tuesday, to 48 billion.
In contrast, many countries in Eastern or Southern Europe considered the social mechanism to be largely inadequate.
France, which holds the rotating EU presidency, has united the majority of countries in a compromise proposal of € 59 billion for a more limited period (2027-2032), redirecting € 11.5 billion to the social fund. coal market revenues, which were originally earmarked for the European “Innovation Fund”.
This strategy allowed the increase of the level of social funds without further cutting the revenues from the carbon emissions that return to the states, something that was the red line of the “stingy”.
Paris welcomed “a fairly balanced compromise”.
However, the agreement did not convince Poland, which denounced “decisions that run the risk of not gaining popular support for the climate plan”. Latvia also expressed concern about a “too small fund that will not be able to meet the challenges” and hoped to increase its resources in the forthcoming negotiations with parliament.
EU Member States also agreed today on the phasing out of free emission quotas in certain industrial sectors, as a carbon tax on imports from third countries will increase at the EU border between 2026 and 2035.
The Council proposes a much more gradual reduction rate than suggested by Brussels and MEPs.
Free quotas for airlines will also be abolished by 2027.
Finally, the 27 ratified the inclusion of maritime transport in the coal market, but with “transitional” arrangements for winter navigation, “public service” travel and the service of small islands.
Source: AMPE
Source: Capital
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