Poland pushes back over cost of EU’s climate targets
The EU’s richer and poorer member states have clashed over how to distribute the burden of ambitious emissions targets over the next decade, increasing tensions over the cost of decarbonisation.
At a summit in Brussels on Tuesday, Mateusz Morawiecki, Poland’s prime minister, led the charge against forthcoming plans to extend Europe’s carbon price, arguing that it would impact on poorer countries and their citizens the hardest, diplomats told the Financial Times.
Poland’s position won support among neighbours such as Romania, Bulgaria and the Baltics, while Sweden, Denmark and Germany argued in favour of imposing higher emissions targets on eastern economies to help the union meet its net zero goal by 2050.
Disagreements meant that leaders were forced to drop language on how to share the burden of carbon reductions from a joint summit communiqué. Instead, the conclusions said that the European Council wanted the commission to provide an “in-depth” examination of the environmental, economic and social impact of the measures.
In July, the European Commission will propose including consumer-facing sectors like the car and building industries into the bloc’s emissions trading scheme (ETS) under which companies have to buy credits to cover the cost of polluting.
The plans have sparked a backlash from member states which are concerned about the regressive impact of increasing pump prices and fuel bills for consumers who cannot afford to shoulder the cost of Europe’s record carbon price.
The debate has laid bare deep divisions inside the EU about how to manage the distributional impact of climate change between member states and within countries. Earlier this month, the bloc finalised an agreement to accelerate emission reductions from 40 per cent to 55 per cent by 2030 compared to 1990 levels.
Ursula von der Leyen, the European Commission president, said Brussels intended to plough ahead with the planned extension of the ETS but would initially set up a separate system for these sectors to minimise the impact on consumers. A qualified majority of the EU’s 27 member states and MEPs will need to approve the revamp of the ETS.
She insisted that the scheme would be coupled with a clear structure to compensate those who lose out. The commission recognises that “lower incomes cannot carry the burden”, von der Leyen said.
“The burden has to be carried by those who are on the producing side, on the industry side, and on the higher incomes, without any question,” she added. “This transformation has to be socially just. It has to be fair, otherwise it won’t take place.”
The commission’s proposal would closely mirror Germany’s mini-ETS for car fuels and heating set up at the start of 2021.
Von der Leyen did not specify whether the new system would impose a lower carbon price than the current record ETS price of above €50 a tonne of carbon.