French right, Greens join forces on EU carbon border levy

"The creation of an 'ecological barrier' at the entrance to the single market was a key promise of the campaign of the Right and the Centre for the European elections," said Les Républicains MPs Agnès Evren, Nathalie Colin-Oesterlé, and François-Xavier Bellamy. EPA-EFE/IAN LANGSDON [IAN LANGSDON / EPA]

The European Parliament has voted to maintain free CO2 allowances. This has provoked outrage among some European People’s Party (EPP) lawmakers, particularly from the French Republican party, who, together with the Greens, have sided against the amendment. EURACTIV France reports.

On the carbon border adjustment mechanism, French EPP lawmakers and the Greens are of the same view as centrist MEP Pascal Canfin, who said that the upcoming border charge should “replace the free allowances” that many industrial sectors benefit from.  Canfin has praised in a tweet the vote of the French Republicans, who have not weakened against the conservative right in Parliament.

However, in a surprise move on Tuesday evening (9 March) in the European Parliament, the abolition of free quotas was rejected as MEPs in favour of keeping them expressed concern about their effects on European industry.

“The creation of an ‘ecological barrier’ at the entrance to the single market was a key promise of the campaign of the right and the centre for the European elections,” said Les Républicains MEPs Agnès Evren, Nathalie Colin-Oesterlé and François-Xavier Bellamy.

“This will finally constitute an unprecedented change in globalisation: the carbon adjustment mechanism at the borders will make the single European market a decisive lever to encourage foreign producers to reduce their carbon emissions, and thus steer the world economy towards more environmentally friendly production,” they added.

Historically, carbon border adjustment has been a pet project of the French right. Already in 2008, then-president Nicolas Sarkozy advocated establishing a European mechanism to limit CO2 emissions linked to the import of products and services into the continent.

Though the measure was deemed protectionist by other European countries at the time, the idea was later taken up by former president François Hollande and President Emmanuel Macron and has since gained ground in Brussels.

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Since Jacques Chirac first proposed a carbon border tax, French presidents have never let go of the idea. Now, the European Commission plans to integrate it into its recovery plan, much to the irritation of Beijing, just as an EU-China summit opens on Monday (14 September). EURACTIV France reports.

Their calls are in line with views expressed by Yannick Jadot, a French Green MEP in charge of the European Parliament’s report on the EU’s upcoming carbon border charge.

“The carbon border adjustment mechanism is a great opportunity to reconcile climate, territories, industry, employment, resilience, sovereignty, and relocation,” he said.

It is also a way of “imposing the same carbon price on products manufactured inside and outside the European Union so that the most polluting sectors also play their part in the fight against climate change and innovate to move towards zero-carbon,” he added.

Phasing out free quotas would have a ‘detrimental effect’ 

“We have to be very careful when we say that CBAM [carbon border adjustment mechanism] is an alternative to free quotas. It clearly does not work in the same way,” warned EPP lawmaker Adam Jarubas, who wants both the EU emissions trading system (ETS) and the CBAM to work simultaneously.

“The possible phasing out of free quotas could have a detrimental effect on European exporters. If we eliminate them, we could encourage carbon leakage not in the sectors directly concerned, but in those that depend on their production,” he added.

However, Canfin fears that such dual protection would not be WTO-compatible.

EU Parliament votes to retain free CO2 quotas for industry

The European Parliament has rejected proposals to phase out free CO2 pollution credits for industries covered by the EU’s Emissions Trading System (EU ETS), even as the bloc plans to gradually replace the scheme with a carbon levy at its border.

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