The free allocation of allowances will be phased out. The new EU fund would compensate for differences between member states.
BRUSSELS The EU’s climate package moved forward as the European Parliament agreed on its position on three key bills.
The proposals were returned to preparation at a sitting of Parliament two weeks ago. The return was mainly due to disagreements over the free allocation of allowances and carbon tariffs.
Now all three proposals were approved by a clear majority. The background was the agreement reached on the content of the package by the three largest groups in Parliament – the center-right EPP, the Social Democratic S&D group and the center-liberal Renew group.
– I argued that Parliament’s position is really strong because all the main parties are involved, the Renew Group Nils Torvalds assesses .
There is a desire to curb industrial carbon leakage
Parliament called on the EU to introduce carbon tariffs on imports of high-emission products.
In practice, separate charges would be levied in the future for high-emission products such as steel imported into the EU. Underlying this is the desire to safeguard the competitiveness of European companies as EU climate legislation is tightened.
MEPs also agreed on an end to the free allocation of allowances to companies. According to Parliament, the free allocation would be phased out between 2027 and 2032.
Parliament’s position on free distribution was tightened compared to a proposal that was rejected two weeks ago. Some MEPs would have liked bigger reforms on emissions trading.
– The level of ambition is not enough, it does not take us on the path of Paris. That is why I could not vote for it, representing the Left Group in Parliament Silvia Modig comments.
However, according to Modig, the proposal is an improvement on the current situation and a small improvement on the Commission’s original proposal. Therefore, he also did not want to vote against the proposal.
Social disparities need to be addressed
Parliament also supported the Commission’s proposal for a new social climate fund. The purpose of the fund is to offset the social impact of the green transition.
According to Parliament, the fund should be financed by additional revenues from emissions trading. Underlying this is a proposal to extend emissions trading to commercial fuel distribution and buildings.
Among other things, the fund is intended to offset the effects of expensive energy and encourage new, climate-friendly investments.
Parliament has yet to reconcile its position with the Council, which represents the Member States, and the European Commission. The content of the climate package may therefore still change in the light of Parliament’s proposal.
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