The EU can’t afford an own goal: policy makers should look to score on bolder climate ambition as the final whistle is about to bring key legislative proposals to conclusion, namely the Emissions Trading System, the Social Climate Fund and the Energy Efficiency Directive
Brussels, 12 December 2022 – Negotiators from the European Parliament, the European Council and the European Commission are finalising talks on key legislative proposals in the coming days, what’s seen as a stocktake and decisive moment of the Fit for 55 climate and energy package that should deliver the EU Green Deal.
“This is a last call for EU legislators. This week EU Institutions are taking decisions which will massively influence the lives of millions of people in the multi-crisis we are in, especially the most vulnerable. We have seen clearly enough in recent emergencies that to truly rise from the ashes we need from policy-makers holistic solutions and a long-term vision of the just societies we want to live in. Now it’s the time to hit the nail on the head and fight for higher climate ambition through every piece of EU legislation that is being finalised these days. Calling for ambitious conclusions of these files is a very concrete and effective way to systematically address big challenges, including the current fossil fuel crisis that worsened after the war in Ukraine started, with all the devastating consequences it’s bringing,” said Chiara Martinelli, Director at CAN Europe.
Emissions Trading System – 16 December
The EU’s Emission Trading System (ETS) reform is entering a final round of talks between negotiators from the European Parliament, Council and Commission scheduled on 16 December and are expected to stretch well into the weekend. The early information suggests that we are heading towards a missed opportunity to strengthen climate ambition while continuing handing out millions of free pollution permits to industry.
Regarding the Social Climate Fund (SCF), that should be the tool to protect the most vulnerable people in the EU, we call upon Member States to agree on a bold and ambitious SCF, that does not lock low income households and energy poor into fossil fuels, and that is ambitious in size.
“Legislators should remember that the aim of the EU carbon market is to cut emissions and bring the ETS sectors in line with the Paris objectives and for that to happen we need a strong price on CO2 pollution. Instead, they starve the public purse to support low income households via the Social Climate Fund while continually feeding an under-performing industry with free money and no questions asked”, stated Klaus Röhrig, CAN Europe’s Head of Climate.
Energy Efficiency Directive (EED) – 14 December
The Energy Efficiency Directive (EED) is an important piece of legislation that can accelerate the urgently needed energy transition. On the 14th December, EU and national policy makers will sit down in the third EED trilogue under the Czech Presidency. Initially, the Czech Presidency was looking to have this as the last trilogue date, but it has been confirmed that the trilogue meetings on EED will conclude under the Swedish presidency in early 2023.
The Czech EU presidency has been trying to water down the unambitious position of the EU Council even further, risking to undermine well-functioning parts of the Directive, instead of steering towards a compromise with the more ambitious position of the Parliament. Most member states within the EU Council are content in following the Czech Presidency’s unambitious lead, in particular for the Energy Savings Obligation. As it stands, many member states (SK, MT, HU, RO, EL, CY, IT) are in favour of including fossil fuels in Energy Savings Obligation. Energy savings achieved by fossil fuel-based technologies from both public and private sectors must be excluded from the energy savings obligation.
Moreover, the Czech Presidency will be looking to conclude the heating and cooling articles within the EED. As it stands, we see a risk that cogeneration based on fossil fuels will be prolonged until 2045 and and incentivizes a switch from coal to fossil gas despite the need to reduce dependency on Russian gas. The alternative approach based on greenhouse gas emissions proposed by the Council incentivises low carbon sources instead of a switch to renewable heating sources until 2050.
“Since taking over in July 2022, it has become clear that the Czech Presidency has been trying to water down the proposed legislation within the Energy Efficiency Directive. However, this is in direct contradiction with the REPowerEU legislation and the EU’s climate commitments. The prolonged use of fossil fuels within the Energy Savings Obligation and in the heating and cooling provisions undermines the EU’s energy security as homes and communities will remain dependent on dangerous fossil fuels sourced from Russia and overseas. This jeopardises our future and further aggravates the looming climate crisis”, said Verena Bax, Energy Efficiency Policy Expert at CAN Europe.
Low carbon push threat – Progress Report Energy Council 19/12
France is attempting to introduce low carbon into the ‘Fit For 55’ package across files. This is happening under the negotiations on how to finance the ‘REPowerEU’ plans but also via the ‘gas package’ (hydrogen and decarbonised gas package). End of October, France and CEE countries asked to include accounting for low carbon gases (RFNBO’s) to the Renewable Energy Directive (RED) targets. This time the attempt comes via the gas directive with the introduction of a new article 8a. Basically, the gas directive would amend the recast Renewable Energy Directive to allow fossil and nuclear based hydrogen to account for renewable hydrogen targets under the RED. The Council’s legal service has expressed twice already (EWP and COREPER) that existing primary legislation cannot be amended through another primary legislation. It was discussed in COREPER last week and will still be on the agenda tomorrow 13th December ahead of next week’s Energy Council (19/12). The renewable industry and NGOs have issued a joint statement, specifically against the low carbon push via the gas directive.
“This scandalous attempt allowing low carbon fuels, such as fossil or nuclear based hydrogen, to account for renewable energy targets must be stopped. Those Member States calling to include low carbon fuels undermine the credibility of the legislative proposal on Renewable Energy, which must be for renewables only. The good news is that there is no legal backing to introduce such a change through the back door (via the gas directive) and a broad group of stakeholders representing renewable industry and civil society are largely mobilising against this attempt,” said Esther Bollendorff, Gas Policy Expert at CAN Europe.
Methane Regulation Proposal – Energy Council – 19th December
Energy Ministers will reach a general approach on the Methane Regulation proposal in the Energy Council on Monday 19 December. CAN Europe’s new Methane Legal Study concluded that extending the measures under the Methane Regulation beyond EU borders is possible and would contribute to cutting emissions occurring throughout the entire supply system. More than 80% of the fossil gas consumed in the EU comes from third countries responsible for up to 90% of the energy sector’s methane emissions. A recent report shows that legally speaking it is feasible to apply measures on non-EU operators placing products on the EU market. A summary of the main findings and recommendations from the study can be found in this factsheet.
Energy Ministers should reject the current proposal on the table as measures on Leak Detection and Repair (LDAR) have been considerably weakened and the upstream methane leakages from imports have not been considered at all.
Notes to Editor
- CAN Europe position paper on Climate Policy Architecture
- CAN Europe policy briefing on Why the EU needs to walk the talk on climate policy
- REPowering For the People – Flagship actions the Commission’s plan REPowerEU’ should feature in the current fossil fuel and energy prices crisis
ETS and Free Allowances resources:
- CAN Europe memo on the ETS Modernisation Fund
- CAN Europe Blog: The EU Emissions Trading System: Time to end free pollution permits for big polluters
- CAN Europe position paper on Emissions Trading System
- Joint statement on Social Climate Fund
- NGO open letter on the SCF
- Maximising the social benefits of climate action. CAN Europe scoping study based on a research by the Cambridge Institute for Sustainability Leadership (CISL) and endorsed by the Social Platform and the European Anti-Poverty Network
- CAN Europe blog on Energy Efficiency Directive
- CAN Europe policy briefing on the revision of the Renewable Energy Directive
CAN Europe will be following the ‘Fit for 55’ progress this week and also key developments in the coming Energy and Environment councils next week. For any inquiries, please contact:
- Nina Tramullas, Interim Head of Communications: email@example.com; firstname.lastname@example.org