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The European People’s Party (EPP), the largest group in Parliament, is threatening to scupper a crucial reform of the EU’s carbon market in a high-stakes political gambit that risks derailing the EU’s climate ambitions.
Many people tend to forget this, but the European Union much resembles a classic parliamentary democracy: every five years, a new President of the European Commission – designated by EU heads of states – is presented to the European Parliament for a vote of approval.
In past mandates, the EU executive’s parliamentary majority was always secured by two political groups: the centre-right EPP and the left-wing Socialists & Democrats (S&D) who shared the Parliament’s presidency in a so-called ‘Grand Coalition’ backing the Commission’s political programme.
Today is different. For the first time after the 2019 European elections, the new Commission President, Ursula von der Leyen, needed a third party to secure a parliamentary majority. Enter the Liberal Renew group dominated by the centrist MEPs of French President Emmanuel Macron, who became the kingmakers of the new Commission.
Remembering how this unusual three-party coalition came into being is crucial to understanding the story unfolding in Parliament with the proposed reform of the EU carbon market.
To win support from the Socialists and Liberals, von der Leyen pledged to strengthen the EU’s climate ambition with a new target to cut the EU’s greenhouse gas emissions to 55% by 2030, making the Green Deal the hallmark of the new Commission. In the end, von der Leyen won Parliament’s support with only a paper-thin majority, suggesting uncertain times ahead for the Commission president with her three-way coalition.
Now, the EPP is showing what an unstable majority can look like when it comes to passing climate legislation in Parliament.
Earlier this week, Pascal Canfin, the chairman of the assembly’s environment committee, showed signs of impatience with the EPP, saying their proposals on the EU carbon market reform and three other pieces of climate legislation would fall short of the EU’s 2030 climate ambition.
“On all the elements of the climate package, we are witnessing a radicalisation of part of the EPP against the Green Deal,” Canfin told EURACTIV. “If we add up all the requests of the EPP on the four texts, we do not reach 55%. This is obviously unacceptable for us [Renew] and for the socialists”.
To reach a compromise on the carbon market reform, Canfin urged all parties to sit down at the negotiating table. “But that means the EPP must start playing ball,” he warned, saying: “The last thing we want is for such an important decision to depend on five votes in plenary.”
The EPP cannot simply be circumvented in the talks because they are holding the pen on the proposed reform of the EU Emissions Trading Scheme (ETS), the EU’s carbon market. In September last year, the EPP invested heavily to win parliamentary leadership on the proposal, with half of the files in the environment committee now held by lawmakers from von der Leyen’s centre-right political family. Their support will also be crucial to ensure a smooth passage of the ETS reform during a plenary vote in June.
But does the EPP still support von der Leyen’s Green Deal? Although the lead rapporteur on the ETS reform, Peter Liese, says he wants to stick to the EU’s 2030 climate objective, the Liberals, the S&D and the Greens all say the EPP’s proposals will fall short of the bloc’s 55% emissions reduction target.
Many suspect the EPP of falling back into old habits and defending the interests of polluting industries covered by the ETS. The centre-right was indeed never the biggest fan of climate policy and initially leaned towards a 50% emissions target for 2030, not the higher 55% goal that was finally supported by von der Leyen and subsequently adopted in Parliament. They now claim that the war in Ukraine will make it harder for the EU to reach its climate ambitions and that more leeway is needed for industrial polluters to reach their emission goals.
Whatever the motives, the four political groups now need to sit down, compare numbers and agree on a way forward. If the EPP is serious about reaching the 55% target, it must also be transparent about how it intends to get there.
At stake is not only the Parliament’s support for the von der Leyen Commission. It’s the EU’s credibility as one of the guardians of the Paris Agreement on climate change.
– Frédéric Simon
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This week’s top stories
- EU’s von der Leyen to present Russia oil ban in Parliament today
- EU ministers show unity ahead of Russia’s next gas-for-roubles payment deadline
- ‘Money time’ for EU carbon market reform in the European Parliament
- 100 European cities selected for goal of climate neutrality by 2030
- Electricity market ‘not to blame for current crisis’, EU agency concludes
- Von der Leyen defies Russia’s gas ‘blackmail’, vows EU unity with Poland and Bulgaria
- EU agrees to let Spain, Portugal cap cost of gas for power
- EU body sets out draft sustainability disclosure standards
- French Greens defend pact with Mélenchon’s party ahead of legislatives
- EU may offer Hungary, Slovakia exemptions from Russian oil embargo
- Germany signs hydrogen cooperation agreement with India
- Existing certification schemes to inspire EU plan for carbon removals
- Radical left and Greens agree ‘exceptional’ electoral pact in France
- EU to propose phasing out Russian oil by year-end in new sanctions wave
- Hydrogen will be ‘pivotal element’ in future economy, says EU climate chief
- Obstacles on the way to green capital markets
- German inflation hits 40-year record, fuelled by high energy prices
- Europe struggles for clarity on Russia’s roubles-for-gas scheme
- Climate impact of flying could be two thirds higher than thought
- Timmermans: Scaremongering on food security ‘dishonest, irresponsible’
- Bulgaria urges ‘stronger’ Europe to cut off Russian gas
- Algeria threatens to cut gas contract with Spain
- Germany’s Habeck: ‘We have to try the unrealistic’ to break free from Russian gas
- Bulgaria slams Russia for ‘gas blackmail’, will not halt Serbia deliveries
News from the capitals
BRATISLAVA. Slovak minister says Italy may have paid for gas in roubles. Italy may have already paid in roubles as Slovakia is experiencing higher transit volumes of gas, Slovak Economy Minister Richard Sulík (SaS) said following the meeting of EU energy ministers in Brussels on Monday. Read more.
DUBLIN. Data centres consumed more electricity than Irish rural households. Data centres in Ireland consumed more electricity in 2021 than all the country’s rural households combined, new figures by the Central Statistics Office (CSO) show. Read more.
LISBON. Portugal can play ‘decisive role’ on energy security, says president. Portugal can play a “decisive role”, for example, in energy security, with the port of Sines as a Euro-Atlantic hub and benefiting from the location of the Azores, President Marcelo Rebelo de Sousa said. Read more.
BELGRADE | ATHENS. Vucic visits Greece, says LNG important for Balkans. Construction of a terminal for liquefied natural gas (LNG) in Greece’s Alexandroupoli is important “for the entire region, the entire Balkans,” Serbian President Aleksandar Vučić said at a ceremony marking the start of construction, adding that he, like many others, had been sceptical and believed that it would take years to accomplish this. Read more.
PRAGUE | BRATISLAVA. Green technologies shortage looming in CEE. A boom in demand for heat pumps and solar panels combined with supply-chain disruptions is starting to cause severe material shortages in Czechia as producers focus on western European markets where consumers can pay more. Experts warn the problem is likely to spill over to other countries in Central and Eastern Europe, spelling possible trouble for the transition to a greener way of producing energy. Read more.
THE HAGUE. More Russian oil headed to Dutch ports. The CB Caribbean oil tanker, which was carrying Russian oil but not flying the country’s flag, docked at the Amsterdam port Monday morning with no resistance despite the dock having refused entry to the Russian oil tanker Sunny Liger the day before, broadcaster NOS reports. Read more.
HELSINKI. Finnish energy company ends contract with Rosatom over nuclear plant delivery. Finnish energy company Fennovoima has terminated an agreement over the delivery of the Hanhikivi 1 nuclear power plant with Rosatom. Read more.
PRAGUE. Czechia should reduce gas-based fertiliser dependency, says Commission. The European Commission called on the Czech Republic to reduce its dependence on synthetic fertilisers, mainly produced from Russian natural gas. Read more.
SOFIA. Bulgarian businesses warn of strikes if electricity state aid removed. Industrial and business organisations will launch nationwide protests if the state stops compensating them for expensive electricity, the chairman of the Bulgarian Chamber of Commerce Dobri Mitrev announced on Monday, adding that the economy could also crash. Read more.
BUCHAREST. Romania calls for more investments in gas infrastructure. Romania has already identified alternative sources and routes for natural gas to reduce dependency on Russian imports, but it needs the region’s gas corridors to become operational, the energy minister said. Read more.
BERLIN. Germany U-turns to support oil embargo. Germany now favours an EU embargo on Russian oil, having previously opposed further energy sanctions against Russia, according to information obtained by several national media. Meanwhile, EURACTIV was informed that the EU is considering banning imports of oil transferred by tankers and allowing the ones through pipelines, at least for now. Read more.
PARIS. French left, and ecologists join forces on Labour Day. Thousands gathered across several French cities to participate in Labour Day demonstrations on 1 May, just a week after French President Emmanuel Macron was re-elected and as parties gear up for legislative elections in June. In a symbolic move, the same day Jean-Luc Mélenchon’s La France insoumise (LFI) reached a deal with Julien Bayou’s Europe-Ecologie-Les-Verts (EELV). Read more.
THE HAGUE. Dutch port employees refuse to dock Russian oil tanker. Workers at the Amsterdam port refuse to unload a Russian oil tanker that was previously refused docking at a Swedish port and is now anchored in the sea lock in IJmuiden, broadcaster NOS reports. Read more.
WARSAW | VILNIUS. Poland opens new gas pipeline from Lithuania. Poland has opened a new pipeline bringing gas from Lithuania after Russia’s Gazprom stopped deliveries to the country on 27 April. Read more.
BRATISLAVA. Most Slovaks oppose Russian gas import ban. More than 60% of Slovaks are not in favour of stopping Russian gas imports, while only 25% favour a gradual halt, and 7% want an immediate one, a new survey by the Focus agency has found. Read more.
LJUBLJANA. Fuel prices surge after price caps end in Slovenia. On Sunday, regular petrol prices in Slovenia jumped by about 8%, and diesel became over 20% more expensive than Saturday after the government decided to end price administration. Read more.
SOFIA. Bulgaria becomes regional hub for gas supplies. A regional coordination centre will be set up in Bulgaria to manage the overall use of gas and electricity infrastructure and additional gas purchases for the Balkans and Italy, announced Deputy Prime Minister and Finance Minister Asen Vassilev in Brussels after meeting with EU Commission President Ursula von der Leyen and Executive Vice-President Frans Timmermans on Thursday (28 April). Read more.
BERLIN. Germany prepared for ‘sudden’ Russian gas ban, says Scholz. Germany has prepared for the day it is “suddenly” cut off from Russian gas, Chancellor Olaf Scholz said in a statement. Read more.
HELSINKI. Nearly half of Finns ready to turn engines off. Almost half of the Finnish people would be ready to cut down their travels and commuting in case the price of transport fuels keeps rising, a new survey has found. Read more.
BUDAPEST. Hungary would pay Gazprom in roubles. Hungary does not think Russia’s Gazprom will cut gas to the country and does not have a plan to replace it “overnight”, the government said on Thursday, adding that it will pay in roubles if needed. Read more.
WARSAW. Russian ban leaves Polish municipalities without gas. The Russian-controlled Novatek Green Energy company cut gas supplies to several Polish municipalities due to the sanctions imposed on Russian oligarchs and firms. Read more.
SARAJEVO. BiH authorities suspend construction of new mini hydroelectric plants. Authorities have decided to suspend the issuance of licences for the construction of small hydroelectric power plants following several campaigns launched by domestic and international environmental groups. Read more.
THE HAGUE. Dutch continue to receive Russian gas despite refusing to pay in roubles. Russia is still supplying the Netherlands with gas even as it refuses to pay for it in roubles since the country’s state-owned companies have direct contracts with Russia, NOS reports. Read more.
ATHENS. Greece ready to cope with Russian gas cut-off on 20-21 May. Athens has not ruled out having its Russian gas flows cut off – like Poland and Bulgaria – on 20-21 May, government spokesperson Giannis Oikonomou said, adding that it would not come as a surprise. Read more.
MADRID. Algeria threatens to cut gas contract with Spain. Gas giant Algeria threatened Wednesday (27 April) to break a contract to supply gas to Spain if Madrid transferred it onwards to “a third destination”, amid tensions with regional rival Morocco. Read the full story.
WARSAW. Poland now totally free of Russian dependence, says PM Morawiecki. Russian energy giant Gazprom’s decision to cut supplies to Poland means Poland is now fully independent from Russia, Prime Minister Mateusz Morawiecki announced during a press briefing on Wednesday. Read more.
BRATISLAVA. Ending Russian gas dependency must be realistic and feasible, says Slovak president. An immediate halt on gas deliveries from Russia would cause problems for Slovakia, so a timeframe for getting rid of Russian gas must thus be “realistic” and “feasible”, President Zuzana Čaputová has said. Read more.
BELGRADE. Serbia not affected by Russia cutting gas to Bulgaria, Poland. Russian energy giant Gazprom’s suspension of gas delivery to Poland and Bulgaria does not affect the Serbian gas supply, Energy Minister Zorana Mihajlović said on Wednesday, adding that Serbia gets gas through the Balkans via Bulgaria, as a transit country. Read more.
News in brief
Clean power coalition comes out in support of EU electricity market. A coalition of six industry groups involved in clean power production and trade have come out in support of the EU’s electricity market.
The joint letter by SolarPower Europe, EFET, Eurelectric, Europex, SolarPower Europe, and WindEurope was sent to the European Commission on 29 April, to coincide with the publication of a much-awaited report by the EU Agency for the Cooperation of Energy Regulators (ACER) on the role played by the EU’s wholesale electricity market in the ongoing energy price crisis.
The letter spells out the industry’s concerns regarding state intervention in the electricity market, such as the temporary price cap decided in Spain and Portugal. The letter urges the EU “to avoid changing the current electricity price setting mechanism,” which came under heavy criticism by Spain and France because it is driven by “marginal” production capacity available from gas power plants that can be fired up at short notice to meet peak demand.
“Following Gazprom’s decision to stop supplying gas to two EU member states, it is clear that the only way out of the energy crisis is to massively deploy alternative, renewable, energies. More than ever, we need clear and stable market signals to accelerate the investment volumes into the energy infrastructure we need,” said Walburga Hemetsberger, CEO of SolarPower Europe. “With other measures on the table, interfering in electricity market pricing is unnecessary, and would send long-lasting detrimental signals around renewable investment,” she said. (Frédéric Simon | EURACTIV.com)
Appeal for donations in support of Ukraine’s energy sector. The Energy Community Secretariat, based in Vienna, is coordinating donations in support of Ukraine’s energy sector.
Donations can include specialised energy equipment and fuels from energy companies or direct payments into a special fund set up for governments and international financial institutions to support the country’s energy sector.
The fund will be used to purchase much needed emergency energy equipment, fuels for electricity production and heating as well as other types of support. The Energy Community Secretariat will act as fiduciary of the fund as well as an intermediary between the donors and the Ukrainian authorities. More detail here and video explainer here. (Frédéric Simon | EURACTIV.com)
EU-US discuss progress on LNG deal, energy efficiency and heat pumps. The EU-US task force on energy security held a meeting in Washington last week to discuss the implementation of an agreement struck between the two sides on 25 March.
Under the March deal, the US will aim to supply 15 billion cubic metres (bcm) of additional liquefied natural gas (LNG) to EU markets this year to help Europe break away from Russian fossil fuel supplies. The March 25 statement also said: “The European Commission will work with the EU Member States toward ensuring stable demand for additional US LNG until at least 2030 of approximately 50 bcm/annum.”
The 28 April meeting reviewed progress in implementing the deal. The two sides “also discussed options to reduce Europe’s demand for natural gas, including with the deployment of heat pumps, technologies that promote energy efficiency and savings such as smart thermostats, and renewable energy,” according to a statement issued after the meeting.
Work will continue at technical and senior official level in the coming weeks. Another in-person meeting is scheduled in June to assess progress on the work plan, the statement said. (Frédéric Simon | EURACTIV.com)
- The road to green hydrogen certification – and the potholes to be avoided – By Corinna Klessmann, Gemma Toop and Sacha Alberici
- No, LNG will not derail Europe’s climate goals – By Lukas Trakimavičius
- EU risks letting Putin’s gas divide-and-rule strategy win – By Agata Łoskot-Strachota, Georg Zachmann and Simone Tagliapietra
- Casting an eye on the EU’s electricity market and its long-term goals – By Christian Zinglersen
- Will Bulgaria manage to escape the gas trap? – By Genady Kondarev
- 2030 land use targets need to reflect the complexities of different EU countries – By Anna Zalewska
- How to go faster and further on building renovation to sever ties with Russia – By Adrian Joyce
- How to deploy heat pumps at scale – and fast – By Richard Lowes
10 MAY. Due diligence and sustainable sourcing: can a common approach for all sectors work? Join this EURACTIV Virtual Conference to discuss responsible sourcing and due diligence. How can companies best develop tools and standards that fit the upcoming European legislation? And how can the European Commission ensure there is a coherent approach for all actors involved? Speakers to be announced soon. (Supported by the Nickel Institute).
17 MAY. Sustainable and healthy buildings – reaching the goals of the EU Green Deal. Join this EURACTIV Virtual Conference to discuss how the revision of the Energy Performance of Buildings Directive (EPBD) can support a healthy indoor climate while accelerating a decrease of energy costs and decarbonising our buildings. Speakers to be announced soon. Programme and registration here. (Supported by Velux).
17 MAY. A revised EPBD – faster decarbonisation of the EU’s building stock? Join this EURACTIV Hybrid Conference to discuss what can be done to improve the existing regulatory framework to support an effective decarbonisation process in the building sector. Speakers to be announced soon. Programme and registration here. (Supported by EdEn – Equilibre des Energies).
15 JUne. Mind the gap – can biofuels play a strategic role in reaching EU energy and food security? Join this EURACTIV Hybrid Conference to discuss how the EU can maintain its commitment to achieving Fit for 55 climate and energy goals in an uncertain geopolitical situation. And what is the evolving role of low-carbon renewable fuels in achieving EU climate and energy goals. Programme and registration here. (Supported by ePURE).
On our radar
4 MAY. European Commission proposal to phase out oil imports from Russia.
18 MAY. The European Commission will present its REPowerEU plan to break away from Russian fossil fuels. This combines with a new “international partnerships and energy package”, consisting of:
- New strategy on international energy engagement
- Joint Communication on a partnership with the Gulf
25-27 MAY. Meeting of G7 climate and energy ministers.
7 JUNE. Joint Communication on international ocean governance.
15 JUNE. 2022 Strategic Foresight Report.
22 JUNE. Nature protection package (tbc):
- Sustainable use of pesticides – revision of the EU rules
- Protecting biodiversity: nature restoration targets
27 JUNE. Energy Council.
28 JUNE. Environment Council.
5 JULY. New design requirements and consumer rights for electronics (tbc).
20 JULY. Circular Economy Package 2:
- Policy framework for bio-based, biodegradable and compostable plastics
- Review of the Packaging and packaging waste directive to reinforce the essential requirements for packaging and establish EU level packaging waste prevention measures and targets
- Review of the Urban Wastewater Treatment directive
- Proposal for a Regulation on substantiating environmental claims using the Product/ Organisation Environmental Footprint methods (green claims)
20 JULY. Development of post-Euro 6/VI emission standards for cars, vans, lorries and buses