High Energy Costs Intensify Debate over EU Plan to Decarbonise Heating and Transport

by Kate Abnett (EurActiv/Reuters) A European Union plan to charge fuel suppliers for the CO2 emitted by cars and heating buildings is emerging as the most contentious element in a raft of climate change policies the bloc’s member states are negotiating this year.

EU policymakers proposed the new carbon market for transport and heating in July, as part of plans to meet the EU’s climate change target to cut net emissions 55% by 2030 from 1990 levels.

EU countries are negotiating the package of measures, which Brussels says will both fight climate change and help cut dependence on Russian fossil fuels. Moscow’s invasion of Ukraine has put countries on a mission to quit Russian oil, coal and gas within a few years.

At a meeting of environment ministers from the 27 EU countries on Thursday, countries including Sweden, Denmark, Germany, the Netherlands, Finland and Austria supported the new carbon market.

“Emissions trading at European level is our most efficient tool for mitigating emissions,” Swedish climate minister Annika Strandhall said. “We do not see any plausible alternatives.”

Poland and Hungary opposed it, while states including Belgium, Romania, the Czech Republic, Spain, Slovakia and Slovenia raised concerns – all focussed on the potential costs for citizens.

Supporters say the market is needed to slash emissions from transport – which have risen in recent years – and Europe’s energy-guzzling buildings, which if left unchecked could scupper climate change goals.

Sceptics warn it could increase energy bills if fuel suppliers pass on the CO2 costs to consumers. The market would not launch until 2026, but debate around it has intensified in recent months amid soaring energy prices.

The European Commission has proposed using revenues from the market to support low-income households and invest in energy savings and other measures to curb bills. READ MORE/MORE

With 553 votes to 130 and 7 abstentions, Parliament confirmed an agreement reached with the Council in December 2021 on the eighth General Union Environment Action Programme (EAP) to guide the EU’s environmental policy to 2030 and align it with the European Green Deal.

Priority objectives of the eighth EAP

The six thematic priority objectives to be achieved by 2030 are:

climate change mitigation to attain the 2030 greenhouse gas emission reduction target;
adaptation to climate change;
advancing towards a wellbeing economy that gives back to the planet more than it takes;
pursuing zero-pollution, including in relation to harmful chemicals;
protecting, preserving and restoring biodiversity, and
significantly reducing key environmental pressures related to the EU’s material and consumption footprints including through EU 2030 reduction targets.

Phasing out fossil fuel and other environmentally harmful subsidies

In order to strengthen positive incentives and gradually end environmentally harmful subsidies, the EU will set up a binding legislative framework to monitor and report on member states’ progress towards phasing out fossil fuel subsidies. It should also set a deadline to cut all public aid to these environmentally harmful sources of energy, aligned with the ambition of limiting global warming to 1.5 degrees Celsius.

By 2023, the Commission shall present a methodology to identify other environmentally harmful subsidies with a view to reporting on member states’ progress towards phasing them out.

Improved governance mechanism

The Commission shall monitor, assess and report annually on the progress made by the EU and member states in meeting the priority objectives. The text foresees a new summary dashboard and indicators measuring progress ‘beyond GDP’, to guide policymaking. The assessment shall be public and both actions taken and planned future measures shall be discussed each year by the EU institutions. If a mid-term review of the progress (by 31 March 2024) determines that more needs to be done to reach the priority objectives by 2030, the Commission should table a legislative proposal with additional initiatives.

EU, national, regional and local authorities must also implement effective, dissuasive and proportionate penalties to reduce the risks of non-compliance with EU environmental law.

Quote

Grace O’Sullivan (Greens/EFA, IE), rapporteur, said: “The eighth EAP makes a “Wellbeing Economy” a priority objective for 2030. This is a first in EU law and marks an important step in moving away from the obsessive, unsustainable focus on GDP growth towards what this pandemic has shown us is the most important thing of all: the wellbeing of our people and planet. This is a positive example of the sort of systemic change required to reach our objective of living well, within the limits of our planet.”

Next steps

Once formally adopted by the Council, the legal text will be published in the EU’s Official Journal, entering into force 20 days later.

Background

EU EAPs are legally binding frameworks that have guided the development of EU environment policy since the early 1970s. Following the expiry of the Seventh EAP at the end of 2020, the new one will run until 31 December 2030. READ MORE