And the next hurdle is already looming: The reform of emissions trading, the EU’s most important climate protection instrument, failed with a bang at the first attempt in the plenary session of the European Parliament. Only at the second attempt could the MPs last week a position on the act say goodbye. This Tuesday, the EU environment ministers want to agree on their own common negotiating position at their meeting in Luxembourg. Then talks between the Council of Ministers, the body of the member states, and the European Parliament on the final version of this directive could begin in the autumn. But Germany of all places is now endangering an agreement in the Council of Ministers.
Because Berlin represents in a related project, the new multi-billion dollar climate social fund, a hard line, and the two projects are related. An EU diplomat says Berlin’s demands came “surprisingly and very late” and could torpedo an agreement between the EU environment ministers on the overall package this Tuesday. The CDU MEP Peter Liese, who is responsible in Parliament for the reform of emissions trading, complains that “in particular” Federal Finance Minister Christian Lindner (FDP) is pushing for the climate social fund to be reduced: “But if the federal government and the finance minister are not more willing to compromise here , threatens the core” of the EU climate protection package – tightening of emissions trading – to fail.
In the EU, power plants and many industrial companies have had to be able to show carbon dioxide certificates since 2005 if they blow greenhouse gases into the atmosphere. These pollution rights can be traded. 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 reduces the number of pollution rights in the system in order to achieve the EU’s ambitious climate protection goals. Hence the prices go up.
In addition, the Commission wants to introduce a separate emissions trading system for fuel and gas or oil for heating in 2026 – refueling and heating would be more expensive. At the same time, however, 25 percent of the income from this system is to flow into a new EU climate social fund. It would support national programs that governments use to help needy households save energy. Money would be redistributed from richer to poorer member states.
Eastern European governments need the money for the ambitious measures
In its negotiating position, the European Parliament is calling for the controversial expansion to include petrol and heating oil to be initially limited to company vehicles and commercial real estate so as not to burden citizens. However, the Council of Ministers, the body of governments, does not seem to think much of this: the most recent compromise proposal between the 27 governments sticks to the extension to fuel and heating oil for citizens, but would postpone it by a year, to 2027. The delay would increase the volume of the climate social fund from 72 billion euros by 2032 to 58 billion euros.
However, the federal government is demanding a significantly smaller climate social fund. Then more money from the expansion would flow to the national finance ministers and less into this new pot. However, many Eastern European governments argue that they are dependent on generous aid from this fund if their countries are to implement the ambitious climate protection program. The fear: If Berlin sticks to its frugal position, the poorer member states will not agree to the tightening of emissions trading. The important project could be delayed. Difficult debates are ahead of the ministers this Tuesday.