EU negotiations on the core of the climate package have started

Negotiations between the EU parliament and the states on a reform of European emissions trading and a fund to support consumers during the energy transition started on Friday. “Now it’s about everything,” said German Green MP Michael Bloss, who is taking part in the negotiations. “We need to save more CO2 to comply with the Paris climate agreement and we are fighting for that.”

However, given the difficult talks, it is still unclear whether an agreement can be reached. “Such an agreement is far from guaranteed,” French MEP Pascal Canfin, who is leading the talks, wrote on Twitter. A deal is not expected until Sunday evening at the earliest.

In order to reduce greenhouse gas emissions, the so-called emissions trading system (ETS) was created in 2005. Certain companies have to pay if they emit climate-damaging gases such as carbon dioxide (CO2). This is a strong incentive to avoid emissions.

In 2021, the European Commission proposed to accelerate the reduction of pollution rights and to gradually phase out free certificates for companies. However, parliament and states disagree on how quickly this should happen.

Parliament wants the certificates to expire in 2032 – the states are pushing for 2035. From then on, producers abroad must also pay for CO2 emissions if they want to sell their goods in the EU – via a so-called CO2 border correction. At the beginning of this week, the negotiators had already agreed in principle on this mechanism.

Emissions trading is also being extended to the heating of buildings and transport, so that emissions would also have to be paid for here. However, this is controversial, critics fear higher energy costs for consumers. That is why Parliament wants the ETS to initially only apply to commercial buildings and transport, while countries want to introduce it for everyone. In Germany, emissions trading already applies to all buildings and traffic.

Another sore point is the so-called social climate fund, which is intended to absorb higher costs for consumers as a result of the energy transition – such as rising heating costs. This is intended to relieve households and finance investments, for example in more efficient buildings.

For example, the fund must be fed with income from emissions trading. The European Commission wants a fund of up to 144.4 billion euros in 2032. The EU parliament is responsible for about half. The EU countries are going for an even smaller pot of about 59 billion euros. Germany in particular argued for downsizing.

The projects are part of the European Commission’s “Fit for 55” package. The aim is to help EU countries reduce CO2 emissions by 55% by 2030 compared to 1990 levels and become carbon neutral by 2050.

(SDA)