Decarbonise European industry, not deindustrialise Europe / EPP Rapporteur wants to trigger innovation and protect and create jobs

The European Parliament's rapporteur for the Emissions Trading Scheme, MEP Peter Liese clearly ruled out spending money from the EU scheme on nuclear energy in the draft legislation he presented on Friday. This was Liese's reaction to the debate in recent weeks.

"Personally, I believe that the European Commission's proposal on taxonomy is not acceptable as it stands. Irrespective of this, however, we have to be very strict when it comes to EU funds for innovation. The European Commission has proposed that all fossil fuels be excluded from the modernisation fund, which is intended above all to help Central and Eastern European Member States make the transition to climate neutrality. This means that it cannot be funded if a company invests in the most modern gas-fired power plant in the world and converts it to CO2-neutral fuels in the short term. For nuclear energy, however, there are no requirements at all. In my view, this is completely unacceptable. I therefore propose that money from those the funds can only be spent on renewable energies, energy efficiency and other indisputable measures. I propose the same for the Innovation fund. The funds together comprise about 72 billion euros until 2030 (with a CO2 price of 50€).

“We need to decarbonise industry but we should do everything to avoid a deindustrialisation of Europe. We need to protect jobs and create new ones. That is why the ETS must be ambitious but we should not punish those that work for innovation.” This is the main message of Peter Liese. Liese presented his draft report on Friday and proposed among other things to give more incentives to industry that develops break-through technologies to produce steel, chemicals, cement and other products in a climate neutral way. Amongst other things, those companies that not only belong to the 10% best performers but are even better, should get an additional benefit. Under any circumstances, the 10% best performers should be protected against any burden under the ETS. Peter Liese: “We must not punish companies that go for innovation and climate neutral technologies. If we cannot ensure that they will not be bothered by carbon pricing, we may lose jobs and at the same time will not help the environment,” said Liese.

All sectors have to contribute their fair share to the decarbonisation of the EU, especially in the transport sector where emissions continue to rise. In all areas, it must be worthwhile for every company and every individual to save CO2. In the maritime sector, that the Commission rightfully proposes to include in the ETS, Liese suggests to phase-in the auctioning faster than proposed by the European Commission to assure the integrity of the schemes. He also engaged with the Rapporteur on the ETS aviation Suncana Glavak to also speed up the phase-in here. “When we are giving more free allowances in one area, we must take them away somewhere else and carbon leakage is definitely a bigger problem for steel and chemicals than for maritime and aviation,” said the EPP-MEP.

On top of that, Liese introduces a malus, which means 25% less free allowances for those companies that don’t have a plan to make their process carbon neutral. “Because the target is now climate neutrality in Europe and globally, the focus of the ETS needs to be strengthened. Not everybody can be climate neutral soon but in the long-run, everybody needs to know what is the end of the journey and this journey needs to start as soon as possible.”

To improve the level playing field and ensure the achievement of the ambitious targets, Liese wants to advance the so-called ETS2 for road transport and heating by one year and include additional commercial activities. Commission proposal did not cover process heating in small installations, non-road machinery and many other activities. Liese wants to cover them all. To react to criticism from some Member States and some colleagues, Liese wants to gives Member States the option of an ‘Opt Out’ for private transport and private buildings until 2027. “I am convinced that we need a carbon price for all activities. Command and control measures cannot do the trick alone. The 447 million people living in the EU have better ideas to reduce CO2 than politicians in Brussels and the capitals only. Everybody who saves CO2 should be better off than those that do not. That applies to private people and companies alike. But at the same time I have to accept that I need to be ready to compromise and that is why this opt out is needed in my point of view.”

In line with the two Co-Rapporteurs on the Social Climate Fund, Esther de Lange and David Casa, both also from EPP, Liese suggests a much stronger link between ETS2 and the Social Climate Fund. It should be sure that 25% of the money will definitely be spent on people in need, especially low-income families and also the 75% that will remain in the Member States’ budgets should be spent for the same purpose.

ETS Draft Report