We need to address all the three major crises at the same time: mitigate energy prices, stop finance Russian aggression in Ukraine and at least keep our climate ambition for 2030 / Strong criticism on Council’s mandate on REPowerEU / Agreement on steel benchmark and indirect cost compensation

"We need to address the problem of the high-energy prices with all possible means. One cannot overestimate the problems that citizens and companies are facing. At the same time, we need to get finally rid of our dependence on Russian energy. Due to our energy bill, we still finance the Russian aggression in Ukraine. On top of that, it is not at all the time to give up our goals for climate ambition. If possible, we should even increase it for 2030. It almost sounds as the square of the circle, but I think it is our duty to do so.” These were the comments of Peter Liese, Rapporteur of the European Parliament for the Emission trading scheme and the respective part of REPowerEU.

The Parliament’s Environment Committee, which has exclusive competences for this part of REPowerEU, last Monday agreed on their position on REPowerEU. One day later the Council agreed on a very different approach. The Parliament wants to finance the €20 billion in REPowerEU for the necessary infrastructure to get rid of Russian gas, for example, renewables and energy efficiency, by a frontloading of the certificates or rather emissions. However, the Council wants to finance the big bulk of the REPowerEU by taking away money from the Innovation Fund. “This fund is to be increased according to the Parliament’s and the Commission’s position to really enable the industry to decarbonize. It is already much smaller than the respective funds in the United States (Inflation Reduction Act). If we don’t want to lose our competitiveness in the field of decarbonisation technologies and the respective industries we can by no means accept the Council’s position here,” explained Peter Liese.

This Monday, the second trilogue and first political trilogue on the ETS took part. Parliament, Czech presidency and the Commission discussed a lot of issues. “There is a good common understanding of some points but on other points we still strongly disagree. I´m happy to see that on some specific points that are of utmost importance for the workers in a big part of the industry, we already solved the problem. We agreed that companies having a high electricity bill and be under the threat of carbon leakage, like aluminium industry, will continue to receive indirect cost compensation. The compensation was never 100 % so that efficiency and decarbonisation will always pay off. But it is important for this sector and other related sectors suffering from the high electricity prices to get predictability that they will continue to be compensated.”

We also agreed to continue to support the steel industry by free allowances. The Commission proposal wanted to get rid of the respective calculation methodology which would have created an enormous challenge for the steel industries much bigger than for other industries after the implementation of the amended ETS. We now concluded that the rules for the steel industry will remain the same. Of course, the steel industry will be challenged by the higher target and the respective changes in the linear reduction factor like all other industries. On some other more technical details we also agreed and on many more we have a good understanding where the landing zone is. So the trilogue was successful but it is of course only a first step and major items are not mature to take a decision. I encourage everybody to look at compromises and move from the original positions. Our common understanding is that an agreement under Czech presidency is possible but to finally arrive there, we need efforts and readiness for compromise from all three institutions,” completed Peter Liese.