EU Climate Plan May Keep Main Goals in Passage of Parliament

(Bloomberg) -- The European Union’s proposals to strengthen its carbon market and promote a green transition in everything from cars to heavy industry will likely avoid drastic changes in Parliament, according to key lawmaker Pascal Canfin.

The political debate on EU climate and energy reforms -- aimed at aligning the economy with a tighter emissions-reduction target for 2030 -- is closely watched by investors. The European Parliament, which has the right to propose amendments to the package of draft laws put forward in July, may hold its first votes early next year, said Canfin, who chairs the environment committee.

“Apart from the specific hot topic of the creation of a new carbon market for buildings and transport, I don’t expect a lot of change,” the French liberal member said in an interview. “I expect a lot of amendments. I expect real changes from the Parliament, but not massive new things.”

The package includes the biggest overhaul to-date of the EU carbon market, which imposes pollution caps on thousands of manufacturers, utilities and airlines. The European Commission proposed increasing the rate at which emissions limits shrink each year, while maintaining a strengthened reserve that automatically reduces a glut of permits.

While lawmakers are likely to request a faster phase-out of free permits to emit carbon dioxide, potential changes to the main parameters of the reform should be limited, according to Canfin.

“Massively unchanged? Yes I think so,” he said. “Marginally changed, that’s always feasible.”

Combustive Issue

Members of the EU Parliament are also likely to endorse the Commission’s proposal to ban new combustion-engine cars by 2035, he said. Tougher emissions-reduction standards for cars are one of the thorniest issues in the reform debate. 

“There will be amendments for 2030, for 2040, but I think both will lose and we will remain with a majority supporting 2035,” Canfin said.

The draft laws in the so-called Fit for 55 package require support from both the Parliament and national governments in the Council of the EU to be approved. The challenge for the two institutions is not only their content but also the logistics -- the proposals are often intertwined and changes to one law may require adjusting another to avoid discrepancies.

The Parliament will probably decide around December on whether to allow the proposals to be legislated in a package or as individual files in a sequence, according to Canfin. Each law has a lead lawmaker assigned and in the first step those lawmakers will need to draft reports to be voted by the relevant committees.

“What looks like a credible scenario would be voting committees in February-March,” Canfin said. That would be followed by a plenary vote by the entire Parliament, which could potentially take place between March and April, he said.

(Adds Canfin’s comment on new carbon market in third paragraph.)

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