The European Parliament has finally accepted the revision of the EU Emissions Trading System (ETS) after an unexpected rejection of the changes two weeks ago. It voted Wednesday, June 21st, in favour of three key climate laws – an update of the EU’s ETS, a novel carbon border tax and a Social Climate Fund.
Members of the European Parliament (MEPs) voted on the revision of the EU ETS as part of the broader “Fit for 55” package of climate laws that aims to reduce emissions by 55% by 2030 compared to 1990 levels.
The new changes to the system include extending the ETS to the emissions released by the maritime sector for the first time. Until now the sector has been excluded. A separate system is also established for buildings and road transport but it will apply only to commercial buildings, exempting residential and private transport until, at least, 2029.
MEPs have also decided not to increase the system’s targets. Overall, the changes are seen as less ambitious than the proposals made by the European Parliament’s Committee on Environment, Public Health and Food Safety (ENVI) that the parliament was first offered and that were rejected two weeks ago.
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Revenues from the new ETS policy will be channelled into a Social Climate Fund. The fund will serve to finance income support for vulnerable households, invest in building renovation and stimulate a shift from private vehicles to public transport.
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Auction revenues under the new deal are estimated to raise $353 billion (€336 billion) for climate action and innovation which is $59 billion (€56 billion) less than the ENVI proposal.
The new policies were met with criticism and opposition. According to experts, they appear favourable at first, but a closer look would reveal they are a minor facelift to the same set of polluter-friendly policies. They are also deemed to fail to tackle the climate crisis, despite the parliament’s commitment to do so and help Europe meet the Paris Agreement targets.
“MEPs may have voted today for what they believe to be politically possible but this deal looks set to land us in the dreadful zone of dealing with temperatures more than 1.5°C above pre-industrial levels,” said Carbon Market Watch Executive Director Sabine Frank.
“The agreed [ETS] proposal is no more than old wine in new bottles as it fails to reintroduce the critical elements that had been lost in the first vote following intensive industry lobbying,” commented WWF Europe in a statement.