MEPs adopted their position on carbon market reform on Wednesday, two weeks after surprisingly rejecting a first version of this key text of the EU's climate plan.
The European Parliament adopted by 479 votes (103 against, 48 abstentions) a compromise providing for the expansion of the carbon market and the gradual abolition between 2027 and 2032 of free emission quotas allocated to companies, as the EU borders a carbon tax on imports from third countries.
This vote paves the way for negotiations between MEPs and Member States.
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MEPs had failed on June 8 in Strasbourg to agree on the timetable for the abolition of free allowances for industrialists, a pillar of Brussels' strategy to reduce the European Union's greenhouse gas emissions by 55% by 2030 compared to 1990. In the process, two other texts (carbon border tax, social climate fund) had been rejected.
A new compromise, bitterly renegotiated between the political groups in committee, is submitted to all the MEPs gathered in Brussels to fix their position before their talks with the States.
"
We found a solution in less than a week
," says Pascal Canfin (Renew), chairman of the Environment Committee,
will get “
a stable and wide vote
”.
The ministers of the Twenty-Seven, they will try at the end of June to agree on a common position.
The European carbon market
Currently, the European carbon market, where "
pollution permits
" have been traded since 2005 , created in limited numbers and which must be purchased by electricity producers and energy-intensive industries (steel, cement, etc.), only covers 40% of emissions of the Twenty-Seven.
MEPs, on the whole, approve of its extension to the maritime sector, aviation, heavy goods vehicles and office buildings.
But until now, the majority of manufacturers receive "
free quotas
so as not to put them at a disadvantage compared to imports from third countries.
However, Brussels provides for the disappearance of free quotas as imports of polluting sectors (steel, aluminium, cement, fertilizers, electricity) will be taxed at EU borders on the basis of the price of European CO2.
On June 8, the deadlock was tied around the calendar: the EPP (right, first force in Parliament) wanted to maintain free quotas in the EU until 2034 (the Commission proposed 2035), postponing the tax accordingly at the borders.
A “
red line
” for the Greens and S&D (social democrats).
S&D and Renew (centrists and liberals) had unsuccessfully supported a gradual reduction between 2026 and 2032.
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Gradual decrease in free quotas
The new version, the result of an agreement between the EPP, S&D and Renew, finally provides for a gradual reduction in free allowances from 2027 until their disappearance in 2032, with, in return, increased progressiveness in order to satisfy the EPP: companies will thus still receive 50% free allocations in 2030. “
We need to decarbonise by giving companies time to adapt.
This agreement combines climate concerns and economic realities,
” welcomed EPP President Manfred Weber.
The compromise postpones the start of the application of the "
carbon adjustment mechanism
» at the borders in 2027 (compared to 2025 initially).
And if there is a consensus to extend the scope of covered imports to additional sectors (plastics, chemicals), these same sectors in the EU will, if necessary, benefit from free quotas until 2035. Another concession to the EPP: the sites manufacturers will continue to receive free allowances for their production intended for export to third countries that do not have a comparable carbon price.
“
However, this system must be compatible with the rules of the World Trade Organization and only concern installations that have been the subject of green investment
,” insists Pascal Canfin.
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Other key aspects remain unchanged: the text still aims to reduce by 63% by 2030, compared to 2005, emissions from sectors subject to the carbon market, better than the Commission's objective (-61% ).
MEP Marie Toussaint (Greens) judges the compromise "
hardly satisfactory
", but believes that her party has succeeded in "
maintaining the essentials so as not to make this climate package an empty shell
" in the face of the "
slowdown efforts
" of the EPP and
Renew's "
wait-and-see positions ".
Environmental NGOs were disappointed.
"
Urgent actions are delayed: distributing free allowances to big polluters beyond 2030 is a major gift on the backs of citizens, the planet and other sectors who will pay the bill
”, indignant Klaus Röhrig, of CAN Europe .
"
This will hinder industrial decarbonization (...) with an enormous cost for our climate and public finances
", abounds Camille Maury, of WWF.