Because the increase in electricity and gas threatens the EU’s climate goals
The surge in energy prices intensifies the contrast to the Brussels carbon tax plan. The in-depth analysis of the Financial Times
Rising gas and electricity prices in Europe have intensified the political backlash against Brussels plans to extend carbon taxes on gasoline and heating bills, threatening a central EU policy to achieve net zero emissions by 2050.
EU energy ministers on Wednesday discussed rising energy prices that prompted some governments to prepare billions of euros in emergency aid for families in need.
The price squeeze has encouraged countries like Spain and France to strongly oppose the planned overhaul of the EU's carbon pricing system. They say it will further sink the poorest families into energy poverty, increasing household and gasoline bills – writes the FT .
Speaking after the meeting, EU Energy Commissioner Kadri Simson said the Union needs to "end our dependence on foreign fossil fuels as soon as possible". Russia is the largest source of natural gas in the EU.
Simson said Brussels will support policies to curb the impact of higher prices on consumers, including cutting excise duties on gasoline and direct family support as some countries have announced.
As part of its Green Deal package aimed at reducing greenhouse gas emissions, the European Commission has proposed extending the EU carbon market to include cars and the heating of buildings, including homes. Some lawmakers in the European parliament are now considering scrapping the plan and replacing it with alternative measures such as tougher regulation.
Pascal Canfin, a French MEP and head of the European Parliament's Environment Committee, which has to approve the Commission's green package, said his centrist group Renew Europe was working on plans to "recalibrate" the emissions trading system. (ETS) of the blockade to prevent a "gilets jaunes 2.0" – a reference to the uprising against gasoline tax increases in France that began in 2018.
"I am not convinced of the need to extend the ETS," said Canfin, whose concerns about the social impact of the measures are shared by some environmental NGOs, the Greens in the European Parliament and center-left governments in the EU.
The Green Deal includes 13 policies designed to reduce EU emissions by 55% by 2030 from 1990 levels, dropping to zero in 2050.
The plan to extend the ETS to consumer sectors such as cars and homes would drive up gasoline and energy prices as companies will be forced to buy carbon credits to cover their emissions. Brussels has also proposed a € 30 billion fund to help compensate for the people most affected by the changes.
Estimates within the EU suggest that a carbon price of € 50 per tonne on petrol and heating for buildings would impose a cost of € 40 billion on affected companies. "We can afford this increase," said a senior EU official.
Canfin said the extension of the ETS could be made more attractive if the CO2 price increase were not supported by domestic tenants but focused only on commercial buildings. Another option would be to exclude petrol from the ETS and instead tighten emissions targets for the automotive industry.
"We have to try to make it work because if it doesn't work, my fear is that it will damage the whole [Green Deal] package," he said.
The Commission resists wholesale changes in its plans, arguing that carbon price extension is the only way to reduce emissions in sectors such as transport, whose carbon footprint has increased over the past decade.
"If the extension of the ETS is gone, it leaves a big hole that will need to be filled," the EU official said. "You can't just replace a tool like the ETS with a new goal."
Disputes over how to best design a carbon pricing mechanism are set to last for months as governments and MEPs work out their positions on the ETS and separate plans, including emission targets for cars, an EU tax on carbon at the border and binding national greenhouse gas targets.
Brussels' plan for a € 30 billion social climate fund has sparked opposition from so-called frugal northern states, such as the Netherlands and Nordic nations, which oppose financial transfers that the Commission says are crucial to social equity. But countries in the south and east are pushing for a bigger fund to limit the regressive impact of higher carbon costs.
Nicolas Schmit, European commissioner for employment, told the Financial Times that Brussels will complement the climate fund with additional measures to alleviate the social impact of climate policy, including retraining plans for workers.
We will not leave anyone to fend for themselves, neither when it comes to paying their energy bills, nor when it comes to preparing for the new "greener" jobs, Schmit said.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/prezzi-energia-emissioni-unione-europea/ on Sun, 26 Sep 2021 06:00:18 +0000.