Kerstin Andreae on the vote on the EU ETS in the EU Parliament

Source: BDEW Bundesverband der Energie- und Wasserwirtschaft e.V., 08 June 2022

The European Parliament voted in its plenary session today on the revision of the EU Emissions Trading Scheme (EU ETS) and other important climate policy legal acts under the "Fit for 55" package.

The report to the EU ETS received surprisingly no majority and was referred back for further negotiations to the environmental committee in charge. For this, Kerstin Andreae, Chairwoman of the BDEW Executive Board, explains: "CO2 pricing is the key instrument for cost-effective and market-driven CO2 reduction. Therefore, it is right to continue the EU Emissions Trading Scheme as proposed by the EU Commission in line with the European Climate Change Act and to align the greenhouse gas reduction targets in the energy sector and energy-intensive industry with the new climate targets by an ambitious increase of the linear reduction factor. In this context, it is important to ensure appropriate burden sharing between all sectors. In addition, the functioning of the market must not be jeopardized by hasty and far-reaching interventions.

The introduction of a second, separate trading system for the placing on the market of fuels in the areas of buildings and road transport proposed by the European Commission also makes sense. Although the Commission proposal still has some question marks in the concrete design, the experience of the EU ETS and the national fuel emissions trading law have shown us: If we want to reduce CO2 efficiently and in a targeted manner, we have to put a price on it. It is also clear, however, that CO2 pricing must be accompanied by a broad mix of measures to ensure that the desired emissions reductions are achieved in practice. In addition to social cushions, we need, for example, a promotion of climate-friendly technologies to facilitate the changeover for people and for companies.

Despite the surprising rejection of the report on the EU ETS by the plenary of the European Parliament, it is important that an agreement is nevertheless found quickly. With a view to the European climate target for 2030, it is important to create planning security in a timely manner for the affected companies, which must already make their investments on the path to climate neutrality today."

As small power plants are added and cities or communities must be able to remain self-sufficient, for example.