Industry steps up lobbying ahead of bumper EU climate votes

Sun, June 5, 2022
By Kate Abnett

BRUSSELS, June 6 (Reuters) - European Union lawmakers have been inundated by lobbyists ahead of votes this week on more ambitious EU climate change policies, with some industries urging them to scale back the proposals.

The European Parliament is set to confirm its position on a raft of proposals to cut planet-warming emissions faster this decade, ahead of negotiations with EU countries on final laws.

Among the measures are an upgrade of Europe's carbon market, a planned tariff to impose CO2 costs on imported goods, and an effective ban on new combustion engine car sales in the bloc from 2035.

Emails to EU lawmakers, seen by Reuters, show a last-minute lobbying push from industries unhappy with positions approved by parliament's environment committee and up for a vote by the full assembly this week.

"We are overwhelmed by requests and solicitations from the lobbies," Green EU lawmaker Marie Toussaint said.

A flashpoint is the committee's plan to speed up the phase-out of the free CO2 permits the EU gives industries to help them compete with foreign rivals that do not pay for carbon emissions and discourage industries from moving to regions with weaker climate policies. It proposes to replace them by 2030 with a carbon border adjustment mechanism (CBAM) - a new levy on imports of carbon-heavy goods like cement, steel and fertilisers.

The European Commission, which drafts EU policies, had proposed a 2036 phase-out and steel industry association EUROFER last week sent lawmakers a statement warning against bringing the date forward.

Signed by 50 CEOs and published online, it urged them to avoid further scaling back of the current system "until the CBAM has proven its effectiveness and a solution for exports is in place."

The EU says free permits must go when its new carbon border charge kicks in to avoid breaching World Trade Organization rules by giving European companies "double" protection.

Higher CO2 costs are a key tool in the EU's plans to fight climate change, by giving businesses a financial incentive to cut emissions. While already-soaring EU carbon prices have hiked costs for polluters in recent years, they have also raised billions of euros for national governments' budgets.

Many industries want to keep their free permits for longer, however. Another statement sent to lawmakers by energy-intensive industries including EUROFER, Cefic and Cembureau also warned against cutting them faster. EUROFER will co-host a "dinner debate" for lawmakers on Monday to present its position ahead of the assembly votes.

A EUROFER spokesperson said Europe's steel firms support EU climate goals and have 60 low-carbon projects underway, but accelerating free permits' phase-out would boost their carbon costs, leaving them with less to invest in decarbonisation.

Farming industry group Copa-Cogeca also wrote to lawmakers, warning that the environment committee's plan was "too ambitious" and would put an "additional burden" on agriculture.

Copa-Cogeca said a faster introduction of the border carbon levy would further hike prices of imported fertilisers, which have soared in recent months amid surging gas and raw materials costs.

Other emails showed auto lobby groups urging lawmakers to oppose plans to end polluting car sales in 2035, while airport groups warned against proposals to hike CO2 costs for flights.

Jytte Guteland, who was parliament's negotiator on the EU's 2030 emissions-cutting target, urged colleagues to keep in mind voters calling for faster action on climate change.

"Society would prefer that we do more for climate," she said.

With some lawmakers still undecided, EU officials said the vote results were uncertain.

 (Reporting by Kate Abnett, additional reporting by Victoria Waldersee; Editing by John Chalmers and Tomasz Janowski)