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Germany got what they wanted – now everyone has to face it.
On Wednesday, the European Commission unveiled its Fit for 55 mega-package of climate legislation, intended to put the bloc on track to meet its 2050 emissions targets.
At the heart of it was a plan to extend carbon pricing to road transport and buildings through the EU’s Emissions Trading System (ETS) – an initiative championed by two German leaders, Chancellor Angela Merkel and Commission President Ursula von der Leyen at a summit hosted by US President Joe Biden in April as the EU executive drafted the Fit for 55 laws.
The plan, however, sparked a split in the von der Leyen Commission and is likely to attract criticism from governments across the bloc, wary of a social backlash if the proposed measures hit consumers’ wallets.
From the morning of the launch, the question of the extension of the ETS pushed the college of commissioners to the brink of an extraordinary revolt. A large group of multi-party commissioners opposed the measure, according to four officials.
They included members of von der Leyen’s center-right European People’s Party and center-left socialists of climate tsar Frans Timmermans, as well as liberals from Renew Europe.
Some commissioners were also enraged by the impression that von der Leyen had pressured them to support the measure by detailing the reforms in newspaper interviews published on the morning of the legislation’s launch. A third of the commissioners, officials said, asked that their dissent be recorded in the minutes of the commissioners meeting before the reveal.
Carbon pricing for transport – which in practice will add pennies a liter to fuel prices by the end of the decade – is a policy few people outside of Brussels or Berlin have called for.
Wary of the yellow vests demonstrations that rocked France in 2018, many capitals fear introducing measures that would directly hit the wallets of motorists. The road pricing plan would force fuel producers to buy credits and pass the cost, albeit marginal, on to consumers.
Denmark has been the sole supporter of its German neighbors, said the country’s Climate Minister Dan Jørgensen: “It would actually be difficult for me to simply name a lot of other countries that support it. “
In a set of proposals that includes a de facto combustion engine ban from 2035 and the creation of a € 72.2 billion Social Climate Fund – which will be financed by ETS revenues – the decision lowering carbon pricing in road transport risks overshadowing the package.
Even the plan’s central cheerleader, Commission Vice President Timmermans, didn’t always agree.
“I myself was quite reluctant at the start,” he said in an interview a few hours before launching the proposals.
Timmermans will soon be visiting Prague on plans to curry favor with the EU for a dozen pieces of legislation that make up the package. After that, there is a meeting of environment ministers in Ljubljana and a G20 session in Naples.
The aim is to use the preparations for the COP26 climate summit in Glasgow later this year to bang the drums of legislation and present it as a global benchmark for tackling climate change.
It will be difficult work given the concern in Brussels.
A senior Commission official said that Timmermans’ cabinet had “been strongly pushed on the various proposals by the German mentality, especially in the European Parliament”. The official singled out Peter Liese, a German MEP with close political ties to von der Leyen and a supporter of the proposal.
The official said the current Commission treats ETS as if it is “all and an end” rather than just an “important tool”. This is a problem for the political narrative of the European Green Deal, the official said, because “it takes too much bandwidth” when “no one inside my house would understand what ETS is”.
Green groups had previously opposed the policy, arguing that it would be a distraction from legislation that mandates the end of production of gasoline and diesel vehicles.
Better to blame the big car manufacturers in the bloc than to tax millions of Europeans, said William Todts, executive director of the NGO Transport & Environment.
“The plan faces a lot of opposition and it may be years before it is accepted,” Todts said of the road transport ETS.
Yet what was once a flawed policy to clean up the energy sector is now taking center stage in the fight against transport emissions.
While other sectors such as energy, industry, housing and agriculture have Cut emissions since 1990, transport has not followed this trend. Air, road, maritime and rail emissions increases in 2018 and 2019, road transport being the main contributor to these emissions.
This means that measures to curb the hike had to go beyond raising targets for reducing the fleet’s CO2, the main policy lever to get automakers to produce clean cars, Timmermans told MPs from the European Parliament’s Environment Committee on Wednesday evening.
The committee will guide most of the Fit for 55 package through the process of its entry into force.
“Don’t be so optimistic,” the committee chairman, French liberal lawmaker Pascal Canfin, told Timmermans ahead of a difficult exchange on the plan Wednesday night.
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