Debate: Revision of the EU Emissions Trading System - Monitoring, reporting and verification of greenhouse gas emissions from maritime transport - Carbon border adjustment mechanism - Social Climate Fund - Revision of the EU Emissions Trading System for aviation
Date: MONDAY, 17 APRIL 2023
Speaker: Paolo Gentiloni
Language: EN

The agreements discussed today, together with the rest of the ‘Fit for 55’ package, will fully deliver on the climate law commitments and put the EU on track to become the first climate—neutral continent by 2050. They form an ambitious and coherent package, which will also give us the means to ensure a socially fair transition and make sure that no one will be left behind. The reinforced emissions trading system extended to the maritime sector will strengthen our domestic carbon pricing policy, helping us drive investments into decarbonisation, including for aviation. The separate ETS covering buildings and road transport will allow reducing emissions in high emitting sectors. The revenues from this separate ETS will fund the Social Climate Fund, which will help Member States addressing the social impact of the transition. The carbon border adjustment mechanism, by putting a fair price of carbon on imported products, will prevent that the EU increased ambition is undermined by carbon intensive goods produced outside the EU and incentivise our international partners to implement decarbonisation policies. I would like to thank the rapporteurs, Liese, Chahim, de Lange, Casa and Glavak for making these arrangements possible. And let me stress some key aspects of each arrangement.  Emissions trading is the centrepiece of European climate policy. We put a price on carbon. It will now be strengthened to reduce emissions by 62 % by 2030 compared with 2005, extended to maritime transport and the size and scope of its innovation and modernisation funds will be increased. As part of the compromise, the Commission agrees in a statement to implement a number of measures to further enhance the integrity and transparency of the European carbon market. And there is another key point of the European way of tackling climate change. We all know that while the poorest and most vulnerable people contribute the least to the crisis, they bear the brunt of climate change impacts. We have the responsibility of preventing the most vulnerable from being disproportionately impacted. This is why, with the reviewed ETS, Member States will spend the entirety of their ETS revenues on climate projects and to address social aspects of the transition. And the Commission has provided an explanatory statement on this. The EU carbon border adjustment mechanism will be a landmark tool to put a fair price, equal to the price paid by EU producers, on the carbon emitted during the production of carbon-intensive goods that are entering in the EU. The EU is the first jurisdiction in the world to put in place such a breakthrough climate measure at its borders. It is already having a positive impact globally, as a growing number of jurisdictions are considering putting a price on carbon. There must be no ambiguities. CBAM is a WTO-compliant climate instrument to support our increased green ambition in an efficient way. This product scope may be further extended in the future, based on a thorough analysis as part of a report that the Commission will prepare in 2025. We will continue to work with the industry and our international partners for a gradual and smooth implementation of CBAM. On ETS aviation, the agreement brings major advantages, including financial support for airlines using sustainable aviation fuels, a monitoring, reporting and verification system for non—CO2 emissions, and more transparency of emissions data for international flights.  The agreement is also historic for the shipping sector, which will be included under the ETS by 2024.  A new separate emission trading system covering road transport and buildings will start from 27. It could contribute to 45 % of the additional emission reductions compared to current policy in 2030. There will be a smooth and gradual start with safeguards for households in case prices exceed certain thresholds or if market liquidity is too low. For example, we will increase even further the predictability of the price development in cases that the average carbon price over a period of two consecutive months should exceed a level of EUR 45. We are confident that this and other safeguards, such as the initial injection of additional volumes into the market or the automatic triggers from the market stability reserve are relevant mechanisms to protect citizens while reducing fossil fuels allowances. And, of course, another key element is the Social Climate Fund. It will address the social impact of the transition on vulnerable households, transport users and micro—enterprises, in particular citizens in energy or transport poverty. It will mobilise EUR 86.7 billion between 26 and 32.  The Commission is making three statements on the Social Climate Fund. One concerns the deletion of the mandatory use of a single data—mining tool. Another one relates to the possibility to designate more than one authority to sign the management declaration. Last, there is a link between the Social Climate Fund and the Energy Efficiency Directive with regard to definition of energy poverty. President, honourable Members, if you support these proposals, our Union will again be proudly in the lead. In the lead for the protection of our planet, of the future of new generations and of the most vulnerable people to climate change. So thank you and I look forward for this debate.