EU’s Timmermans defends new ETS in front of sceptical lawmakers

Austria plans on becoming carbon neutral by 2040. [EPA-EFE/STEPHANIE LECOCQ]

EU climate chief Frans Timmermans faced lawmakers in the European Parliament on Wednesday (14 July), hours after the European Commission presented a new legislative package aimed at reaching the EU’s 2030 climate goals.

The package features a set of 13 legislative proposals, including a controversial new emissions trading scheme (ETS) for transport and buildings, which has drawn criticism from MEPs for risking to hit the poor hardest. 

“This is going to be hard,” Timmermans admitted as he appeared in front of the Parliament’s environment committee, which will be in charge of scrutinising most of the proposals contained in the package. 

Both the European Parliament and the 27 EU member states must agree on a common text in order to pass legislation.

A major source of discontent for MEPs is the Commission’s proposal to introduce a separate ETS for transport and heating fuels. Pascal Canfin, a French MEP who chairs the Parliament’s environment committee, called the proposal “politically suicidal,” warning it risks triggering social unrest similar to the 2018 Yellow Vests movement in France.

“We still have to be convinced by some of the elements in the package,” Canfin said.

“We’ll get there,” Timmermans replied.

Planned EU carbon market reform is 'politically suicidal', warns French MEP

Plans to extend the EU’s carbon market to transport and buildings would be “politically suicidal” and risk triggering social unrest similar to the 2018 Yellow Vests movement in France, warned French MEP Pascal Canfin last week. EURACTIV France reports.

The European Commission sought to alleviate concerns over the proposal by providing more money to the vulnerable groups affected by the new ETS, which is expected to enter into force in 2026. 

A new social climate fund is now on the table to mitigate the costs for those most exposed to fuel price increases. The fund is expected to mobilise €72.2 billion in the period 2025-2032, and will be launched one year before carbon pricing comes into effect in order to ensure everyone is ready for the change.

According to the Commission, the volume of the new fund “will in principle correspond to 25% of the expected revenues” from the new ETS, and will be combined with national contributions of at least to 50%, a much higher proportion than initially anticipated.

But lawmakers weren’t fully convinced.

“How can you ensure that the Social Climate Fund will also reach the most vulnerable households,” asked Jytte Guteland, a leading Swedish MEP from the Socialists and Democrats (S&D). The new ETS, she warned, will hit hardest those who have no means to buy an electric vehicle or insulate their homes.

“There’s a lot of resistance all over the place,” said leading Green MEP Bas Eickhout, who pointed to opposition from the centrist Renew Europe group and pockets of discontent also within the centre-right European People’s Party (EPP).

But the new ETS also has fervent supporters, especially among the EPP.

“The S&D are wrong, the Greens are wrong,” said Peter Liese, a leading German MEP who hails from Angela Merkel’s CDU.

According to Liese, households will need financial support to buy cleaner heating systems or an electric car and only a CO2 price signal can given them the incentive to switch.

“This argument that households don’t behave rationally is not very convincing,” he told journalists on Wednesday (14 July). “I know Pascal Canfin uses it but it’s not convincing,” he said.

“There is an economic problem here. I’m not saying this ETS will solve all these problems,” Liese continued, “but you can’t say households don’t behave rationally.”

He also pointed the finger at the German Greens who supported higher CO2 prices on gasoline at the national level, but are now opposing similar measures at EU level.

“I expected opposition on CO2 pricing from the far-right but I’m really disappointed by the Greens,” Liese told journalists. “I have fought for a CO2 price all my life. And I could never ever believe that the Greens are against a CO2 price,” he said.

EU unveils plan to cut emissions 55% by 2030, wave fossil fuels goodbye

The European Commission tabled a root-and-branch review of the EU’s energy and climate laws on Wednesday (14 July), aiming to cut carbon emissions by 55% before the end of the decade and initiate a decisive break away from fossil fuels.

The issue of ambition

Finding a majority in Parliament is likely to be complicated by the Greens, who adopted a radical stance in June by voting against the EU climate law to denounce its lack of ambition.

The S&D, Renew Europe and a majority of the EPP, meanwhile, were part of the coalition that helped the proposal pass in plenary.

“We will fight for more ambition in the energy and automotive sectors,” said leading Green MEP Bas Eickhout, adding that the EU should get as much emission savings as possible from those sectors. 

The S&D is also looking to increase the ambition of the proposals tabled by the Commission, Guteland told EURACTIV. The S&D and Greens are both aiming for a 65% reduction in greenhouse gas emissions by 2030, which she said may be their starting point in the Parliament negotiations.

[Editing and additional reporting by Frédéric Simon]

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