Ambitious EU green policy reforms approved despite backlash

The resistance against the EU’s ambitious environmental goals increased as the French Green party and other MEPs tried to block plans to put a carbon price on fuel used for transport and heating, but failed to prevent the sweeping proposed reforms.

The European parliament on Tuesday backed the move to expand the emissions trading scheme but 167 MEPs, mainly from green, leftwing and far right groups, voted against the plan, warning it would spark public opposition to rising energy costs. Some French members said they feared a return of the gilets jaunes (yellow vest) movement which disrupted France in 2018-19 with widescale protests over a proposed carbon tax on fuel.

Manon Aubry, French leader of the Left group in the European parliament, said increasing the cost of filling a car and heating a home would “boomerang” on climate activists.

“I hope I am wrong but in a few years’ time people will hate climate policies. People will go to the far right parties,” said Aubry, whose France Unbowed party supports more action to fight climate change.

She said extending the ETS, which requires businesses to buy emissions allowances, could increase the cost of domestic fuel and heating by half for households, arguing that big multinationals should pay a carbon tax instead.

A spokesperson for France’s Green party said: “This makes households bear part of the cost of pollution for emissions that they cannot necessarily avoid. It’s very similar to what led to the gilets jaunes in 2018.”

The party also criticised the decision to continue giving free emissions permits for heavy industry until 2026, after which they will be phased out over eight years.

The parliament voted to approve the ETS expansion by 413 votes to 167 against with 57 abstentions. However, it will not apply until 2027 and could be delayed if energy prices return to the record levels reached after Russia’s full-scale invasion of Ukraine.

Carbon permits, which companies can buy and sell under the EU’s ETS, have risen from around €20 to €100 a tonne over the past two years.

A cost of living crisis and tough measures needed to reduce the environmental impact of farming, including big cuts in the use of fertilisers and pesticides, have led some member states to try to slow the pace of the EU’s green transition.

Last month Germany forced the EU to revise a proposed ban on selling vehicles with combustion engines by 2035, allowing those using carbon-neutral fuels. In the Netherlands, a victory for the fledgling Farmer Citizen Movement in provincial elections could stall the government’s environmental reforms.

To alleviate the pressure on households, MEPs also agreed a fund worth up to €86bn which will use money from the sale of emissions trading permits to help poorer households cut their carbon footprint.

“The Social Climate Fund will help them to insulate their houses, install a heat pump, buy an electric car, or take up other measures that save energy and money,” said Frans Timmermans, the EU commission vice-president responsible for the green deal, which aims to reduce carbon emissions by 55 per cent between 1990 and 2030.

MEPs also approved the inclusion of shipping emissions in the ETS for the first time and agreed to phase out free allowances for airlines by 2026 unless they use sustainable aviation fuel.

Roberta Metsola, president of the parliament, said voters had backed parties promoting green policies in 2019 elections to the assembly, adding the climate fund would “ensure no one is left behind”.

Parliament also voted for the world’s first carbon border tax. The carbon border adjustment mechanism will take effect in 2026 and charge tariffs on imports from countries that do not have a domestic carbon price.

The mechanism intends to prevent EU-based heavy industry relocating production to avoid paying for emissions. But some industries fear losing export markets to competitors that do not have to meet the costs of a green transition.

Eurofer, which represents steelmakers, said: “The solutions for the export market have to be introduced before the CBAM fully kicks in [in]2026, otherwise we risk losing €45bn of EU steel exports and consequently related production capacity and jobs.”

All policies are subject to final approval by member states which have already agreed a deal with the parliament and normally pass the legislation without significant changes.