EU Carbon Border Measure, Latest news

CBAM vote postponed over Fit-for-55 package difficulties in plenary

The European Parliament’s rapporteur on the EU’s proposed carbon border adjustment mechanism Mohammed Chahim today announced that he would be postponing the vote on his report, which was due to be held in the institution’s plenary this afternoon.

The move came shortly after MEPs in Strasbourg had dramatically rejected their own report on the reform of the EU’s emissions trading scheme, with which the CBAM is closely linked, with 340 against, 265 in favour, and 34 abstentions.

Both files will now be referred back to the parliament’s environment committee for further consideration.

This delay in the votes may impact the timeline for negotiations with the EU member states who could yet finalise their position later this month under the French presidency.

The CBAM was originally scheduled to launch at the start of 2023, albeit as part of a three-year transition period.

At today’s vote, amendments tabled by the centre left S&D group – the second largest in the parliament – aimed at increasing the environmental ambition of the ETS file were voted down by the centre right EPP group with help from parties from further right along the political spectrum.

The latter grouping had also initially succeeded in prolonging the phase out of free emissions allowances under the EU ETS to 2034, four years later than had been agreed in the environment committee and two years later than a compromise struck last week between the S&D and liberal Renew Europe group.

A further amendment adopted in the ETS report had specified the objective of achieving a 63% emissions reduction target for the EU ETS compared to 61% in the commission’s proposal and 67% as agreed in the environment committee last month.

After the amendments had been passed, the S&D group, dismayed at what they perceived as a watering down of the EU’s climate goals, requested a three-minute break, during which they decided to vote down the entire ETS report with the support of the liberal Renew Europe and far left groups.

Members from the ECR and eurosceptic Identity and Democracy groups – who had earlier backed the EPP position in the ETS vote – also voted against the final text, although their motives were likely to have been to ensure the legislation was not passed in any form.

Emotional responses

It was at this point that S&D MEP Chahim announced that as a consequence he would be postponing the vote on the CBAM.

“We need time to reconcile the proposals. I don’t want to rush the vote through,” explained the Dutch legislator.

Ensuring the timelines of both files are aligned appears logical, given that the arrangements for the phase-in of the border mechanism and the phase-out of free allocation should be broadly aligned.

Today’s vote elicited emotional responses from both sides.

“The #ETS proposal would have meant more climate protection in many places,” tweeted ETS rapporteur Peter Liese of the EPP following the vote.

“However, far-right, Greens & Social Democrats have wrecked our compromises & thus diminished the influence of the Parliament. I hope that we can still correct the mistake now.”

The S&D shadow rapporteur for the ETS Jytte Guteland countered that the EPP cannot “do bad deals for the climate with the right-wing extremists and then trust that we will, in (the) final vote, vote it through in the parliament”.

The next steps for the ETS – and by association the CBAM – are unknown at the time of writing.

Both Chahim and the Green shadow rapporteur on the ETS Michael Bloss have since suggested that the votes on the files could take place as early as the next plenary session on 22-23 June.

However, it is clear that new compromises between the major groups need to be struck on the critical issues before such a vote takes place.

Given the bad blood that now exists between the political groups, such an early timeframe for a vote seems ambitious.

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