Thanks to the S&D Group’s relentless efforts, the European Parliament is set to approve the Emissions Trading System revision (ETS) tomorrow. This will be a crucial tool to reduce greenhouse-gas emissions by at least 55% by 2030 - compared to 1990 levels - as set out in the Fit for 55 package, in line with the European Climate Law’s aim of making Europe the first climate-neutral continent by 2050.

After the troublesome vote of the last plenary in Strasbourg, we managed to reach an important agreement within the European Parliament, which is not as ambitious as we would have wished but is certainly more balanced than the initial text voted in Strasbourg, with a higher linear reduction factor (the annual decrease of allowances provided to the market) and earlier phase-out of free allowances.

We also managed to significantly limit the potential social effects of ETS2 for buildings and transport, while saving funding for the Social Climate Fund.

S&D rapporteur on ETS, Jytte Guteland MEP, said:

“The European Parliament is set to adopt its negotiating mandate tomorrow ahead of the trilogues with the member states. This mandate is much more balanced than the one we voted down two weeks ago. We now have a higher linear reduction factor that will set us on the path to reach climate neutrality sooner. We will also phase out free allowances earlier and faster than the Commission proposal - which was not the case with the amendments put forward at the beginning of June. We of course pushed for higher ambitions and regret that the conservatives did not confirm the original position of the environment committee, but I believe this outcome is the most ambitions we could get.

“Furthermore, many improvements were made compared to the Commission’s proposal in line with the S&Ds priorities for higher climate ambition, fairness to industry and better social inclusion. The maritime sector will be included much faster, with a broader scope of emissions covered, including from smaller ships and eventually 100% of international shipping. We are also strengthening the conditions for the Modernisation Fund, creating more incentives for innovation through a broader Climate Investment Fund and introducing stricter conditionality on industries not doing their homework. All of this will contribute to better fairness throughout industry and create stronger incentives, but also tools, to decarbonise.

“Finally, we also managed to significantly limit the potential social effects of ETS2 for buildings and transport, while saving funding for the Social Climate Fund. With a price cap, a delay for households, an emergency break and requirements on oil majors to bear at least half the cost, we are convinced this will be a win-win situation both for climate and for the fight against energy poverty. We also managed to get the notion of a just transition into the conditions for free allowances: you must respect and work together with workers to get your free allowances.”