‘Raucous day’ Von der Leyen’s energy reform ‘defeated’ in split EU vote – ‘Victory’ for US

EU carbon border tax vote result 'not predicted' says expert

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In a string of votes in the European Parliament, MEPs rejected three pieces of legislation to reform the EU’s carbon energy market. The vote split into two main political groups: a conservative coalition that sought to defend the industry from more burdensome climate measures and a left-wing bloc rejecting a slower pace of decarbonisation. In the wide-ranging reform, the most salient measure was a carbon border tax on imports based on the number of carbon emissions resulting from the production of the product in question. While the left-leaning group came out in favour of slashing carbon emissions by 67 percent this decade, the conservative group sought to water it down to a 63 percent target. Eventually, the climate reform ran aground and will be reviewed in committee – dealing a blow to Ursula Von der Leyen’s proposal.

France 24 reporter Dave Keating told France 24 viewers: “Well, this was a raucous day at the European Parliament. And this was really not predicted, what happened this afternoon.  

“There were three pieces of climate legislation rejected here but the most important is the carbon border tax.

“This is the infamous proposal by European Commission’s Ursula Von der Leyen that would put a levy on goods imported into the EU from countries that don’t have as stringent climate legislation as the EU does.

“And therefore, the imported goods have a higher carbon footprint than the European goods. Now, what was added here during the course of this voting this afternoon by the Conservatives was something related to the related emissions trading system legislation that would give companies longer to have free allowances in the system.”

Mr Keating said: “The whole deal with this carbon border tax, or the carbon border adjustment mechanism as the Commission calls it, is that was supposed to guarantee competitiveness for European industry, and make sure there’s no carbon leakage so that companies don’t go outside of Europe to produce goods. 

“But that is exactly what the free allowances in the emissions trading scheme that we’ve had until now were also supposed to do. So, the Greens and the left MEPs said this isn’t unfair. Companies are going to get double compensation with both free allowances in the ETS and this punishment for their competitors who are making goods in less environmentally and climate-friendly way. We can’t abide this.”

“So, the vote was defeated. This now is going to go back to committee and it’s going to be delayed. Now, this is actually good news for Washington which has been lobbying EU lawmakers really intensely over the past weeks to slow down on this legislation.

“Because the US says it wants to adopt their own version of a carbon border tax. They want this to be coordinated with all the G7 countries”, Mr Keating added. 

“The EU on their part has been burned by US promises of future legislation in the area of climate many times before. And they’re not really excited about the idea of holding up on their legislation for some promise of some future US legislation at a time when it’s very hard to pass any legislation in the US.”

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“So, I think this development today means that this law is going to be significantly delayed. And that is exactly what Washington and London wanted”, Mr Keating concluded.

US lawmakers have been calling on the EU to delay its EU carbon tax so that the measures can be coordinated among the G7. But EU lawmakers worry the carbon border tax could face political polarisation and never pass in the US Congress.

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