Peter Liese has turned an embarrassment into a success – at least that’s what it looks like. The CDU MP could still manage to get the heart of Ursula von der Leyen’s “Fit for 55” climate plan through the European Parliament faster than expected.
At the beginning of June, the leading actor suffered a crushing defeat: his proposal for a reform of the EU climate rules surprisingly fell through in Parliament. As a result, the vote on two other projects from the legislative package was canceled altogether.
Now Liese has managed to form a grand coalition for a new attempt surprisingly quickly. Liese’s Christian Democratic EPP parliamentary group, the liberal Renew parliamentary group, which also includes the German FDP MPs, and the social democratic S
For six particularly energy-intensive companies, an important privilege is to be abolished in the coming years. So far, you have received emission certificates free of charge. The free certificates are intended to ensure that manufacturers can hold their own against competitors from countries where less stringent environmental standards apply. And they should prevent companies from migrating there.
Environmentalists criticize this system: companies would have less pressure to reduce their CO₂ emissions because of the free allocation.
The free certificates are therefore to be abolished for six industries that cause a particularly large amount of CO₂. In its place, the EU wants to levy a CO₂ surcharge, which should make imported products that are produced overseas in a more climate-damaging manner than in Europe more expensive at the EU borders.
The first vote in Parliament failed over the question of how quickly the allocation of free certificates should be stopped and replaced by the new CO₂ border adjustment mechanism (CBAM). The timetable that the three factions have agreed on now stipulates that the free certificates will be reduced from 2027.
The reduction in allowances is now starting a year later and is initially slower than planned by the Commission, but then picks up speed. Instead, the free allocations should disappear completely three years earlier than proposed by the Commission; namely already in 2032 and not only in 2035.
Nevertheless, the parliamentary compromise suits companies because it gives them more time to adjust to CBAM. And it leaves room for corrections: the slower replacement of free certificates by border adjustments ensures that politicians can take countermeasures if the new CO₂ barrier at the EU’s external borders does not work or if the World Trade Organization WTO does not allow it.
In addition, the parliamentarians want companies to continue to receive free emission rights for the part of their production that is exported, so that they can remain competitive on the world market. The federal government had also campaigned for this.
Parliament’s compromise also provides for millions of unused CO₂ certificates to be quickly deleted and for the total volume of traded certificates and thus the permitted CO₂ emissions to be cut each year faster than planned by the Commission.
The Greens also want to agree to the compromise: “With this proposal, we are complying with the minimum standard for the Paris climate agreement,” says Michael Bloss, the Greens’ climate policy spokesman in the EU Parliament. The reform of emissions trading is therefore likely to pass the vote.
However, the agreement comes at a high price: Parliament has deleted a core part of the climate plan beyond recognition: an EU-wide CO₂ price for drivers and heating of apartments and houses. From 2026 there should be a separate emissions trading for petrol, heating oil, gas and other fuels for heating. This is what the legislative proposal of the European Commission envisages.
It would be a parallel, second emissions trading alongside the existing one for energy producers and industry. “The new ETS plays a significant role in reducing emissions by at least 55 percent by 2030,” says an analysis by the commission. “It contributes around 45 percent to the emission reductions that are necessary in the building sector and in road transport compared to the applicable regulations.”
However, from the point of view of many European politicians, the so-called ETS 2 is the most sensitive project of the European Green Deal because it would increase the prices at the petrol pumps and the heating costs considerably. A large majority of MEPs in the EU Parliament feared a reaction from the affected consumers. That’s why even the Greens there rejected the project – mainly because the Green MPs from France feared for their popularity with the voters.
The result: the parliamentary compromise stipulates that the ETS 2 should come; however only for commercial consumers. An extension to private customers should not be possible before 2029 and only if high hurdles are overcome.
The federal government, which had campaigned strongly for the second ETS, is already dismissing this rule. Only for companies is it not worth the effort to get a second ETS off the ground, according to the specialist departments in Berlin. The savings that can be made are too small.
It is also unclear how practicable emissions trading can only be for commercial consumers: “How do you want to distinguish between private individuals and entrepreneurs at the pump?” says a lobbyist in Brussels.
In any case, it is questionable whether Parliament can assert itself with its demands. The EU member states are also negotiating the climate protection package at the same time. The French Presidency wants environment ministers to agree on a position at their meeting on June 28th.
“The Council Presidency is working flat out on this,” says a diplomat in Brussels. Parliament and the member states would then negotiate the final law with one another from autumn.
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