Fit for 55: The difficult path to climate protection in the European Parliament

The greenhouse gas emissions should be cut by at least 55% compared with 1990 levels, and by 2050 the European Union should be climate neutral. That is the EU's target – an ambitious one, especially considering how divided MEPs were initially on the implementa-tion of concrete measures and how dissatisfied certain EU Member States are with the drafts.

The "Fit for 55" package includes draft amendments to existing EU legislation in the fields of climate, energy and transport and 13 new legislative proposals aiming to reduce emissions in a wide range of sectors. This makes it the EU's largest revision of climate and energy legislation to date. The package was presented by the Commission one year ago, in July 2021. For the drafts to become binding legal acts, the approval of the European Parliament as well as of the Member States, represented in the Council of the European Union, is required.

Dissatisfaction about the planned emission-free mobility

The European Parliament's most straightforward vote on a measure in the climate package so far was the adoption of the Commission's proposal to revise the CO2 emission performance standards for new cars and vans, reaching zero-emission road mobility by 2035. This means a de facto ban on the sale of diesel, petrol, and hybrid vehicles.

However, to arrive at an agreement among European environment ministers on this issue proved more difficult. Especially Germany's role in the negotiations was strongly criti-cized, for making late and uncoordinated proposals, such as a proposal on allowing synthetic fuels. Nevertheless, the Council voted in favour of the Parliament's position. Still, the German government continues to hope that a recital clause inviting the Com-mission to examine the use of CO2 neutral fuels outside the scope of the fleet standards will allow it to weaken the phase-out consequences.

Disagreement on the revision of the European Emissions Trading Scheme (ETS)

One of the central elements of the Commission's proposal, the reform of the European Emissions Trading System and its extension to transport and buildings, was initially rejected. So far, only energy-intensive industrial sectors, the energy sector and aviation within Europe must have their emissions certified.

While conservative politicians wanted to weaken the Commission's proposition by amending it, for example by continuing distributing free allowances to companies for a longer period of time, the Greens and Social Democrats considered the draft not being enough ambitious and instead of agreeing on a softened emissions trading regume, they rejected the text.

However, Christian Democrats, Social Democrats and Liberals agreed on a compromise outside the plenary sessions. That compromise reduces emissions in ETS by 63% by 2030 compared with 2005 levels. The Commission's original proposal set a target of 61%, and the Environment Committee originally called for 67%. It was also agreed to gradually phase out the free allowances by 2032, and from 2027 onwards, the Carbon Border Adjustment Mechanism (CBAM) should also be applied to the ETS sectors. Nevertheless, whether the CBAM will become law and is compatible with the rules of the World Trade Organization must still be seen.

Surprisingly, in the plenary session on 22 June 2022, MEPs went even further than agreed in the compromise and now want to establish a new ETS for commercial buildings and transport by 2024. According to the Parliament's vote, before this ETS is to include private buildings and road transport, there should be a new co-decision procedure, as this would further increase energy costs for citizens. Maritime transport should also be covered by emissions trading in the future.

On the night of 29 June 2022, the Council announced its negotiation position on this issue, which is more similar to the Commission's proposal. For example, it does not adopt elements such as the separation between the commercial and private building and transport sectors because of the difficulty of implementation. In the future trialogue, an inter-institutional negotiation, essential points will still have to be discussed.

Final votes are being adjourned

Important votes on parts of the climate package were initially adjourned, such as the vote on the Carbon Border Adjustment Mechanism (CBAM) and the vote on a Social Climate Fund to help vulnerable citizens cope with the increased costs of the energy transition. However, this made it possible to draw up even more climate-friendly drafts, which were adopted by the Parliament.
The Council has also already announced its negotiation positions on these issues, which, nevertheless, differ from the Parliament's drafts in some points. In these negotiations, the German government again was not very willing to compromise and wanted to drastically reduce the climate social fund. This made coming to an agreement within the Council more difficult.

Faster agreement in votes on environmental targets

MEPs were able to agree more quickly on environmental targets, including higher ambitions for carbon sinks in land use and in the forestry sector, higher emission reduc-tions in international aviation and higher reduction targets for EU Member States. Nonetheless, especially in the latter case, it is debated how the set target of 40% renewable energy sources in the EU's overall energy mix by 2030 can be reached, as currently the share of renewable energy is at only 20%. The Council has not yet com-mented on these targets.

Sufficient willingness to compromise?

It is striking that the Parliament successfully voted on texts of the climate package that concern theoretical targets, while actual measures were rejected or the vote on them was postponed.

It will be interesting to see whether the European Parliament and the Council, despite having differing positions, will show enough willingness to compromise in order to pass legislation that will help achieve EU's climate goals.

Prof. Dr Rainer Bierwagen