LAST UPDATE | 8 Jun 2022

THE EUROPEAN PARLIAMENT has voted against adopting a revision of the EU emissions trading system, rejecting a proposal that had been weakened down from its original ambition.

MEPs voted today on the European Union’s Fit for 55 package, a cornerstone of the bloc’s plans for reducing greenhouse gas emissions to try to prevent the dangerous impacts of the climate crisis.

The parliament has sent a proposal to change the EU’s emissions trading system (ETS), which puts a cap on the amount of greenhouse gases that can be emitted by factories, power plants and aviation to meet overall emissions targets, back to a committee.

Within the cap, which decreases each year, companies can buy and trade emission ‘allowances’.

Previously, the system has covered 43% of emissions from relevant sectors.

The EU Environment Committee sought to increase that to 67%, but pushback from some right-wing parties brought it down to 61%.

Other MEPs, uncontent with what they identified as a watered-down version of the proposal have voted against the reform and sent it back to the committee.

Speaking in the parliament, leader of the Progressive Alliance of Socialists and Democrats Iratxe García said: “You can’t ask for a vote from the extreme-right in order to reduce ambitions and then ask for our votes in order to support it as a whole.”

However, MEPs who voted in favour were displeased that the version of the proposal that was arrived at was not carried and that the reform has been stalled.

Overall, 340 MEPs voted against the proposal, with 265 in favour.

European Parliament European Parliament

MEPs then voted in favour of sending it back to the environment committee for reconsideration, 495 to 120.

The proposal sought to phase out free allocation of emission allowances to aviation, to include emissions from maritime transport in the ETS, and to create a new trading system for buildings and road transport.

Representing Ireland, Fianna Fáil and Fine Gael MEPs voted in favour of the proposal, while Green Party, Sinn Féin, and Left Independent MEPs voted against it.

To address social impacts that would arise from the new emissions trading system, the European Commission also proposed a Social Climate Fund as part of Fit for 55.

However, MEPs did not take a final vote on the fund today because it is closely linked to the ETS reform.

The fund would finance temporary direct income supports for vulnerable households and come from income that would be generated by expanding the ETS.

The fund would also support efforts in member states that reduce emissions from road transport and buildings and consequently reduce costs for vulnerable households, small businesses and transport users.

That can include measures like increasing buildings’ energy efficiency and improving access to public transport.

MEPs were also due to vote on a carbon border adjustment mechanism (CBAM) aimed at preventing efforts to reduce emissions in member states being offset by increasing emissions outside the bloc, but the final vote did not move forward because of the ETS failed result.

That ‘carbon leakage’ could happen if operations were relocated to non-EU countries or imports of carbon-intensive products increased.

In a bid to discourage those decisions, the CBAM would effectively implement a tax on CO2-intensive products entering the EU to try to equalise the price of carbon between domestic products and imports.

Overall, the EU’s target is to reduce its net greenhouse gas emissions by 55% by 2030 compared to 1990 and to be carbon neutral by 2050. 

Fossil fuel vehicles ban 

In a second set of votes this evening, MEPs narrowly voted to back a ban on new CO2-emitting vehicles by 2035.

Currently, cars account for 12% of the EU’s carbon emissions, with transport making up around one-quarter overall. 

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The proposal to limit future car sales to models that are emissions-free passed by 339 votes to 249, with 24 abstentions.

After the vote, EU environmental committee chair Pascal Canfin tweeted that the move was an “important victory and consistent with our objective of climate neutrality”.

However, the European People’s Party’s Agnes Evren said the decision would “condemn industrial activity and strongly penalise consumers” and that the legislation would prevent the commercialisation of high-performance hybrid vehicles or vehicles using biofuels.

The EPP, which Fine Gael is a member of, had pushed for a compromise that would have allowed sales of hybrid vehicles to continue, but the amendment was narrowly defeated.

Greens sought to bring the deadline forward to 2030, but that attempt also fell. 

Taoiseach

Speaking to the parliament in Strasbourg this morning, Taoiseach Micheál Martin said Europe must “redouble efforts to accelerate the decarbonisation of our society, break our dependence on fossil fuels, and provide a more resilient, secure and sustainable energy system for future generations”.

“There are many who continue to ignore or casually dismiss the scientific consensus about climate change. However, nobody can surely ignore the direct political and economic threat which dependence on fossil fuels poses,” Martin said.

“As far as Ireland is concerned we unequivocally accept that climate change is a critical threat and it must be a defining issue for us,” he said.

“An immediate and large-scale reduction in greenhouse gas emissions is crucial. Unless we act now terrible outcomes will be inevitable.”

He said Ireland believed that Europe “must push forward with its initiatives including the European Green Deal and the sustainable finance agenda”.

“Ireland is ready to play our part. We have enacted legislation to put a legally binding target of reducing emissions by 2030 to 51% below 2018 levels.

“In taking the necessary steps, we must bring our citizens with us, and ensure a just transition for all. Let us make sure that the regions which are most affected get a genuine opportunity to transition to a longer-term, more secure and more prosperous role in energy production.”