EU: Important decisions of the Council of Environment Ministers on climate change

In the EU Council of Environment Ministers held overnight in Luxembourg, after overnight negotiations, an agreement was reached on five legislative proposals to tackle climate change, following an agreement reached in the European Parliament on 21 June, RIS announced.

Greece and the Minister of Environment and Energy, Costa Skreka, were represented by the Secretary General of Natural Environment and Water, Petros Varelidis.

According to official information, the main topic of the Council was the revision of the Emissions Trading Scheme (ETS-ETS) with the gradual integration of shipping from 2024, and the creation of the autonomous ETS for road transport and buildings in 2027. It was also decided , the establishment of the Social Climate Fund (Social Climate Fund) in which part of the revenues from the autonomous ETS will be channeled to compensate for the possible socio-economic effects and to support citizens and small and medium enterprises. At the same time, the proposal for a Regulation on the performance standards of CO2 emissions from new passenger cars and light commercial vehicles was adopted. This proposal seeks to accelerate the transition to zero-emission mobility, with the requirement to reduce the average emissions of new cars by 55% from 2030 and 100% from 2035, compared to 2021 levels, and by 50% and 100 % for new vans respectively. Thus, from 2035 all new cars and light trucks will have zero emissions.

In addition, it was agreed to revise the LULUCF Regulation, which sets an overall EU target. for the removal of carbon from natural sinkholes (such as forests and woodlands), equivalent to 310 million tonnes of CO2 emissions by 2030, according to European Climate Law.

The effort-sharing regulation has also been revised, which increases the target of reducing emissions in non-ETS sectors to 40% by 2030 compared to 2005, from the current 30%. Our country should contribute 22.7% to reductions in greenhouse gas emissions compared to 2005 levels, compared to 16% today.

The set of proposals ensures the reduction of emissions at EU level. 55% compared to 1990, as provided for in the European Green Agreement.

According to RIS, the secretary general Natural Environment and Water, in his interventions he reminded the fervent support of Greece in the adoption of ambitious goals, as was reflected in the recent adoption of the first National Climate Law. He also supported the creation of a strong Social Climate Fund in order to mitigate the social effects of the integration of road transport and buildings in the ETS and in particular the support of vulnerable households.

It further called for additional resources to be provided to the country as compensation for the integration of shipping into the ETS, additional measures for air and sea transport to the islands, as well as strengthening measures to support exports from industries (such as the cement industry, the aluminum production, etc.) which are negatively affected by the adoption of the Carbon Border Adjustment Mechanism (CBAM) and the abolition of the free emission allowances they currently receive.

In closing, he supported the need to adopt a balanced agreement, which would ensure high ambition on climate targets and ensure sufficient resources to achieve these targets, especially from the least developed EU countries, with a corresponding transfer of resources from the most rich EU Member States.

The package of legislative proposals adopted includes significant benefits for the country. Particularly:

* Greece is part of the Modernization Fund, from which it will receive for the period 2024 – 2030, the revenues from the auction of 19,493,000 emission allowances with a current value of approximately 1.65 billion euros (based on the current CO2 price).

* Efforts to reduce the total amount of the Social Climate Fund, which will eventually have 59 billion euros for the period 2027 – 2032, of which Greece will receive 5.52%, ie 3.26 billion euros, were rejected, 35% of which can be used for direct income support of vulnerable households.

* Our country was given an additional 6.86 million rights for the years 2024 – 2030 (worth about 580 million euros, based on the current CO2 price) as compensation for the inclusion of shipping in the ETS.

* The possibility of exemption from the inclusion in the ETS, until 2030, of coastal shipping and certain merchant ships, for voyages to or from islands up to 200,000 inhabitants.

* As far as shipping is concerned, at our request, the charterer was appointed as the obligor for the participation in the ETS instead of the ship owner.

* Improved the geographical balance of projects in the Innovation Fund with the possibility of claiming more projects from Greek companies and the provision for special calls for carbonation projects for shipping.

* A horizontal mechanism of sustainable alternative fuels for aviation was introduced, utilizing 20 million allowances to cover 70% of the price difference between kerosene and alternative fuels, if the aircraft is refueled with alternative fuels of more than 4% minimum mandatory under EU law. At the same time, it is foreseen that for flights to island airports with an area of ​​less than 10,000 sq. Km., 100% of the price difference will be covered.

* A more gradual abolition of free emission allowances was envisaged in the export industries belonging to the industries affected by CBAM.

Discussions with the European Parliament on all legislative proposals are expected to begin next September, with the aim of institutionalizing the legislative package within 2022 and achieving the ambitious EU climate targets that will make the EU climate-neutral and will help enhance its energy security.