On 8 June, the European Parliament failed to adopt a common position on three crucial files of the Fit for 55 package. Indeed, the proposed reform of the EU Emission Trading Scheme (EU-ETS) was rejected by a clear majority, composed by parties of the far-right, the Greens and Social Democrats, with a spill-over effect on the other files discussed in Plenary.
With 340 votes against and 265 in favour, MEPs decided to refer the dossier back to the Environment Committee (ENVI) of the European Parliament. Therefore, the related vote on the EU Carbon Border Adjustment Mechanism (CBAM) and the Social Climate Fund were postponed for an indefinite period of time due to close links between the three proposals.
According to the Rapporteur of the file, Peter Liese (EPP), the Greens and Social Democrats supported a 67% emissions reduction in sectors covered by the ETS until 2030 (as agreed within the Environment Committee), while the amendments put forward by the center-right European People’s Party (EPP) resulted in a reduction of the target to 63%, with the aim of alleviating the pressure on European businesses and consumers, already hit by the war in Ukraine and energy crisis.
Key industry players had already expressed their concerns on the overambitious reforms proposed, arguing that they risked undermining European competitiveness with unrealistic benchmarks and legal unpredictability.
The content of these proposals and the substantial implications they would have on EU industry and society have therefore fostered an impasse in the European Parliament with MEPs more and more questioned by their own constituencies of the negative and positive effects of the Green Deal. The Environment Committee will now go back to the drawing board and identify possible solutions to overcome the impasse created and that consider the feedback of MEPs, industry and civil society.