EU leaders set for spat on distribution of carbon-cut burden
European Union leaders are poised for a wrangle over how to distribute the burden of the EU’s plan to stem climate change.
The bloc’s heads of government will discuss how to calculate national emissions-reduction targets outside the EU carbon market at a two-day summit that began on Monday in Brussels. With emissions prices surging to records, they will also debate an idea considered by the European Commission to extend carbon trading to heating and transport, an initiative under fire from some lawmakers, industry and consumer organizations.
The meeting will set the scene for a package of measures that the Commission is due to propose in July to align the EU’s economy with a stricter climate target for 2030 - the Green Deal, which seeks to make everything from cars to power production and trade more sustainable.
“The European Council invites the Commission to swiftly put forward its legislative package together with an in-depth examination of the environmental, economic and social impact at Member State level,” the EU leaders say in a draft statement seen by Bloomberg News.
Sharing the burden is likely to expose the divide between the richer western countries and poorer eastern members as the 27-nation EU seeks to reinforce its position as a global leader in reducing pollution.
On Monday, the leaders agreed to add more sanctions against Belarus and to impose an effective flight blockade over the country due to the forced landing of a Ryanair Holdings Plc plane.
Poland, Romania and other eastern countries that largely depend on fossil fuels want the EU to stick to its methodology of setting individual emission-reduction goals for member countries outside the carbon market. The targets are based on gross domestic product, with less-affluent nations having less ambitious objectives.
Under the EU’s existing target of cutting greenhouse-gas emissions by 40% by 2030, Bulgaria has to keep emissions unchanged from 2005 levels and Poland has to lower them by 7%. That compares with a 40% cut for Sweden and a 38% goal for Germany.
As part of the Green Deal, the bloc will toughen its carbon-cut goal to at least 55% by 2030 from 1990 levels. Western nations, including Denmark, Sweden and Luxembourg, would like the methodology to take into account cost-effectiveness, a move eastern countries fear would disproportionately shift the burden onto poorer member states.
A potential expansion of the bloc’s carbon market is also likely to be divisive. The EU Emissions Trading System, which imposes shrinking pollution caps on manufacturers, utilities and airlines, covers around 40% of the bloc’s greenhouse gases. The commission is mulling a parallel cap-and-trade program for heating and road transportation, which fall under national targets.
The idea has already drawn criticism from lobbies and policy makers, including the Green group in the European Parliament, the European consumer organization BEUC and the Climate Action Network environmental lobby.
Member countries are largely opposed, too, fearing that such a measure would boost the costs for consumers, fueling inflation and leading to energy poverty, according to three diplomats with knowledge of the matter, who asked not to be identified.
“All sectors need to see substantial emissions reductions, but they need to be based on the right measures and we don’t believe that the Emissions Trading System is the right measure for all sectors,” said Wendel Trio, director of Climate Action Network Europe. “Instead, we say that we need national policies and measures adapted to national realities.”
©2021 Bloomberg L.P.
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