Battle for internal combustion engine splits EU parliament

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Industrial, environmental and political interests are coming to a head in the European parliament in debates today and a vote tomorrow on its negotiating position on the bloc’s green policy agenda. The most contentious of the eight pieces of legislation on the table is the one banning CO₂-emitting cars as of 2035, where the centre-right European People’s party is pushing for an indefinite exemption for a tenth of new cars.

One piece of legislation that will soon be seeing the light of day is on minimum wages in the EU, after a deal was struck last night among negotiators of the parliament, governments and the European Commission.

In London, Boris Johnson lived to see another day as prime minister, after surviving a confidence vote last night. Over in Strasbourg, some centrist MEPs seek a similar punishment for commission chief Ursula von der Leyen, who will be fielding questions from lawmakers today over why she approved Poland’s recovery plan.

And at the UN, European Council president Charles Michel prompted a rare Russian walkout, when he blamed the Kremlin for causing a world food crisis.

Low ambition coalition

When the European parliament’s environment committee last month upheld the target proposed by the European Commission to fully ban the production of CO₂-emitting cars as of 2035, it followed a familiar pattern. (The European parliament usually upholds or even increases the commission’s level of ambition on climate-related policies.)

But that playbook is about to be thrown out the window in tomorrow’s plenary vote, amid a push from industry-proxy centre-right to far-right MEPs to water down that ban and create an unlimited exemption for 10 per cent of the new cars.

In addition, Italian lawmakers are seeking an exemption for small luxury car manufacturers including Ferrari, Bugatti and Lamborghini — in what is now being dubbed the “Ferrari amendment”.

French centrist MEP Pascal Canfin from the Renew group, who chairs the environment committee, says it would be “very strange and unprecedented” for the European parliament to enter negotiations with a lower level of ambition than even member states.

“The vote will be tight, but we’ll do everything we can to stop anti-climate agenda,” he told Europe Express.

Once hailed as a pro-EU, pro-climate majority, the parliament’s top four groups are no longer voting in lockstep, particularly since the largest one, the centre-right European People’s party has lost representation in governments in Berlin, Paris, Madrid and Rome.

Canfin has observed the EPP filing amendments seeking to reduce the ambition of CO₂ emissions in all modes of transport, concluding that “if you add everything up, in the end it’s clearly impossible to meet climate goals.”

He says that if the cars emission targets are watered down, this will “derail” upcoming standards for trucks and aviation and will eventually mean that Europe cannot meet its goal of becoming carbon-neutral by 2050.

The argument floated by the German centre-right (now in opposition), also at national level, where the government seeks a ban on internal combustion engines as of 2035, is that this technology shouldn’t be banned, as it continues to be used elsewhere in the world.

Canfin argues that the ban is not on one technology or the other, just on CO₂ emissions — so if internal combustion engines can be used with CO₂-neutral hydrogen, for instance, that could work too. But he does acknowledge that in terms of personal vehicles, batteries are much more advanced than hydrogen, so that electric cars are already shaping up as the prevailing technology. But hydrogen-fuelled trucks or even planes could contribute to the bloc’s green house gas reduction targets, he said.

In the end, insiders expect some sort of compromise where a small part of the new car fleet produced after 2035 is allowed to emit CO₂, but with an end-date in sight.

Chart du jour: Greenwashing central

Read more here about why the war in Ukraine and allegations of greenwashing are challenging the use of the term ESG, making it increasingly difficult for funds to package together environmental, social and governance factors.

Inching towards fairer wages

Talking about how much people earn is always sensitive, but even more so when inflation is over 8 per cent, energy and commodity prices are going through the roof and more economic gloom is predictable given the continuing war in Ukraine. Against this background, last night’s agreement on the minimum wage directive will be welcomed by many, writes Javier Espinoza in Brussels.

The deal between the European parliament, member states and the European Commission will set in motion a process by which countries will assess whether or not the minimum wages they have are adequate or not.

“This is a good day for social Europe. We have reached an agreement on the directive on adequate minimum wages in the EU. This is especially important at a time when many households are worried about making ends meet,” said Nicolas Schmit, commissioner for jobs and social rights.

In this assessment, member states will be able to use metrics including the price of the most common items purchased by a household, which gives an indication of where prices are headed. Member states will be able to also look at the average salary paid in a country as a benchmark to measure adequate pay, people with direct knowledge of the discussions said.

Capitals will then have the duty to report on their findings and make the needed changes to improve the conditions of workers.

To Agnes Jongerius, one of the MEPs leading the debate in the parliament, the direction of travel was clear: “In the last decade wages have stayed behind the rise in productivity. Workers caught a smaller piece of the pie. This is especially true for those earning the lowest wages.”

She said workers had been the victims of policymakers pushing for a general reduction in the welfare systems after the financial crisis.

Expect some last-minute drama too. While the directive only needs a qualified majority to be adopted, Denmark is likely to vote against it out of the principle that the country does not think the EU should meddle in issues related to wages, said two people familiar with the Danish position.

In past years, other Nordic countries had also expressed concerns that this EU law would undermine their collective bargaining system.

Separately, a different trialogue (negotiations between parliament, commission and capitals) could reach a deal today on a law obliging companies to have a target of achieving 40 per cent female participation on their boards.

Message to Ursula

Ursula von der Leyen’s decision to go ahead with Poland’s spending plans for its €36bn slice of the EU’s post-pandemic recovery fund has not gone down well with lawmakers concerned about the rule of law, write Valentina Pop and Javier Espinoza in Brussels.

Three centrist-liberal lawmakers (Renew) from the Netherlands, Belgium and Spain have initiated a procedure that could end up with a vote of confidence in the von der Leyen commission the moment funds start flowing to Warsaw.

The move by Guy Verhofstadt, Sophie in’t Veld and Luis Garicano came on the eve of a plenary debate with von der Leyen about Poland’s recovery plan which was given the green light despite internal dissent from five commissioners. Among them were two of von der Leyen’s most powerful deputies, Margrethe Vestager (who ran as a Renew top candidate for the commission presidency) and Frans Timmermans (who was von der Leyen’s challenger from the Social Democrats). The political machinations have not gone unnoticed by other commissioners.

“We are at the second part of the mandate and they seem to be trying to weaken the president by positioning themselves against her,” said a person briefed on last week’s internal wrangling.

In the parliament, the vote of confidence would require a two-third majority to topple the commission — an unlikely prospect.

Still, the move is a political signal aimed at reminding von der Leyen not to compromise on the EU values she’s supposed to defend.

“The commission is fully aware that the remedies announced by the Polish authorities are purely cosmetic,” the three Renew MEPs wrote in an email asking colleagues to co-sign their motion for a vote of confidence.

“By calling these and other cosmetic changes ‘milestones’ that need to be fulfilled before money flows to Poland, the commission shows that it has . . . given up any leverage to reinstall the rule of law in Poland.”

“The EU values are a fundamental cornerstone of the Union and are not for sale. If the von der Leyen commission no longer fulfils its role as guardian of the treaties, Parliament should withdraw its confidence,” they conclude.

What to watch today

1. European parliament debates eight proposals of the “Fit for 55” package

2. Ursula von der Leyen fields questions from MEPs on approving Poland’s recovery plan

3. Belgian king visits Congo for the first time since his coronation

Notable, Quotable

The whole thing is bad for Sweden’s reputation. They allowed a tyrannist, a despot, an Islamist regime to decide which kind of politicians are in the government

• No compromise: A far-left Kurdish MP and former Peshmerga fighter who could decide the fate of Sweden’s government in a parliamentary vote today has warned it against compromising with Turkey over the country’s application to join Nato.

• Long war: Estonian PM Kaja Kallas criticised “premature calls for a ceasefire” in Ukraine issued by other EU leaders, telling the FT that the bloc has to be “prepared for a long war”.