The agreement was reached after more than 16 hours of tough debates: the EU environment ministers met in Luxembourg on Wednesday night their positions on important climate protection laws agreed. Among other things, the politicians support the Commission’s proposal to only allow new cars with electric drives from 2035 onwards. Negotiations between the Council of Ministers, the body of the member states, and the European Parliament on the final version of the legal acts can now begin in the autumn. MEPs have already approved their positions on the laws. Some of the parliamentarians are in favor of stricter rules than the EU governments are now, so discussions between the two legislative chambers could become tedious.
Germany was represented at the Luxembourg meeting by Economics Minister Robert Habeck and Environment Minister Steffi Lemke, both from the Greens. Habeck said afterwards that this was “the largest climate protection package that has been forged in Europe for 15 years”. The EU governments not only spoke out in favor of the combustion ban, but also paved the way for tightening emissions trading, the EU’s most important climate protection instrument.
In the case of the internal combustion engine, the environment ministers stuck to the Commission’s draft that by 2035 the carbon dioxide emissions of new cars and light commercial vehicles should fall by 100 percent. In practice, this means that in 13 years only electric vehicles can be newly registered. Cars that have already been registered will continue to be allowed to run on petrol and diesel. The European Parliament had the combustion engine off in 2035 in his negotiating position also supported. The discussions between the Council of Ministers and Parliament should therefore be easy on this point – and saying goodbye to the internal combustion engine should be a foregone conclusion.
The issue had provoked a coalition dispute in Berlin; Only on Tuesday evening did the federal government announce that the FDP and the Greens had agreed on a common position. The Liberals wanted to ensure that cars with internal combustion engines can continue to be registered if they are only driven by climate-neutral synthetic fuels, so-called e-fuels. Italy’s environment minister also campaigned for such exceptions at the meeting in Luxembourg. EU governments finally agreed on a compromise that includes a vague promise by the Commission to examine whether there can be exemptions for ICE vehicles with e-fuels.
Half a million jobs are threatened
For car manufacturers like Mercedes, the end of the combustion engine is not so dramatic, since the corporations are already relying on electromobility. The ban is more likely to affect the suppliers. Their European industry association Clepa appreciatesthat the ban will cost half a million jobs in the EU. At the same time, 230,000 new jobs would be created in the production of electric drives and batteries, which together means a loss of 275,000 jobs by 2040, as the lobbyists calculate. Critics also raise the question of whether there will be enough charging stations in the EU by 2035 for the complete switch to electric drives – and whether the electricity for the cars will come entirely from renewable sources. After all, it does nothing for the climate if electric cars are driven by electricity from coal-fired power plants.
Another law that was negotiated overnight is much more important for the EU’s green goals: tightening emissions trading. In the EU, power plants and many industrial companies have had to show carbon dioxide certificates since 2005 if they blow greenhouse gases into the atmosphere. These pollution rights can be traded, and emissions are given a price. Corporations that find it easier to reduce CO₂ emissions can sell surplus certificates. This reduces emissions in the cheapest and most economical way.
The planned reform, which the environment ministers have now nodded, reduces the number of pollution rights in the system in order to achieve the EU’s ambitious climate protection goals. Therefore, the prices of the certificates will increase. Ministers advocate a 61 percent reduction by 2030 compared to 2005. This is in line with the Commission’s original proposal. In its negotiating position, however, the European Parliament calls for a minus of 63 percent.
Refueling and heating are becoming more expensive
In addition, the Commission wants to introduce a separate emissions trading system for fuel and gas or oil for heating in 2026 – filling up and living would be more expensive. At the same time, however, 25 percent of the income from this new system should be in one new EU climate social fund flow. The will support national programs with which governments help needy households to save energy. Money is redistributed from richer to poorer member states.
The environment ministers decided to postpone the expansion to include fuel and heating by a year. Difficult negotiations with the European Parliament are likely to be pending here, because the MPs are demanding in their positionto initially limit this extension to fuel and heating oil to company vehicles and commercial real estate so as not to burden the citizens.
The size of the new climate social fund was controversial among the 27 governments. The federal government initially insisted that it be drastically reduced. However, Eastern European governments only wanted to agree to the tightening of emissions trading if they received sufficient financial aid from Brussels – so Berlin’s austerity risked the failure of the reform. However, Minister Habeck was more generous again on Tuesday in Luxembourg: The fund could pay out almost 49 billion euros by 2032, not just 18 billion euros as the federal government had previously demanded, the Green said to his EU counterparts. In the end, the ministers agreed on a volume of up to 59 billion euros. Nevertheless, several EU governments voted against the negotiation package because they believe the fund is still too small. However, unanimity was not required for these laws.
A climate tariff is intended to protect industry
Another point of contention between the Council of Ministers and the European Parliament is likely to be the free pollution rights in the emissions trading system. So far, EU companies have been given many certificates to reduce disadvantages in competition with rivals from other countries without such a system. This protection against unfair competition will soon be taken over by a new climate tariff that the EU will introduce. This levy will make the import of some products more expensive if more lax climate protection standards apply in the countries of origin. Therefore, the free carbon dioxide certificates should be abolished.
The ministers want to do this gradually between 2026 and 2035. However, the European Parliament is in favor of letting these gifts expire as early as 2032. A long night of negotiations is over, but new tedious debates are soon to come.