Dark day for the climate as Council position on Fit for 55 turns into loophole-fest

Posted on June, 29 2022

After long hours of negotiating and a pretty ugly display of horse-trading, EU Environment Ministers have failed to deliver a strong position on the Fit for 55-package, significantly watering down Commission proposals that were already insufficient to reach the 1.5°C target in the Paris Agreement.
Ministers were negotiating the Council’s positions on laws critical to the EU cutting its net emissions by at least 55% by 2030 - including the EU Emissions Trading Scheme (ETS), the Effort Sharing Regulation (ESR) and the Regulation on emissions and removals from land use, land use change and forestry (LULUCF) - and a new law establishing a Social Climate Fund (SCF) to help low income households adapt to higher fuel costs. On all files, the positions agreed by Ministers would postpone much of the effort needed for the EU’s commitment to reach climate neutrality to after 2030, and do little to stop the risk of triggering runaway climate change in the next decade.

“It seems EU Environment Ministers have agreed not to 'pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels', as required by the Paris Agreement. And so are committing their citizens to a very dangerous future,” said Alex Mason, Head of Climate & Energy at WWF European Policy Office. “Instead of strengthening the Commission’s feeble proposals they’ve done their best to water them down, and have added every loophole and exemption they can think of to try and wriggle out of taking action. Industry lobbyists will be sipping champagne but today is a dark day for the climate and for people.”

On one of the most contentious issues, the Social Climate Fund, the Council decided on a smaller and weaker fund. One that threatens to become an empty box as it neither excludes fossil fuels nor obliges Member States who want to access it to have adopted net zero targets. The SCF is an essential part of the ‘Fit for 55’ package and crucial to ensuring that no one is left behind. To do this it needs to be big, involve the people most impacted in the planning and start early enough to deliver transformative change.

“Member States have sold their most vulnerable citizens down the river, while committing to keep lining the pockets of big, polluting industries. Not only have they weakened the Social Climate Fund by capping its budget - even if the carbon price goes up - they’ve also effectively halved the budget and prevented it from having real impact by allowing existing national measures to be financed by the fund, leaving less money for much needed new initiatives,” said Katie Treadwell, Energy Policy Officer, WWF European Policy Office.

Emission Trading System 
To make a fair contribution to meeting the 1.5°C goal of the Paris Agreement, the revised ETS must aim at reducing emissions by 70% by 2030 compared to 2005. But today,  the Environment Council followed the Commission’s weak proposal of only 61%. Even worse is the outcome on the phase out of free pollution allowances to industries covered by the upcoming CBAM, which is even slower than in the European Commission’s proposal: polluting industries would still receive more than half of their current level of free ETS allowances in 2030, which will seriously reduce incentives for industrial decarbonisation.

“If an industrial sector is covered by the CBAM it should stop receiving freebies.Throwing money at big industries for another 13 years and trusting blindly that it will be spent in the right way is not only naïve, but it comes at a huge cost to our climate, citizens and the public purse. The money would be better spent on energy efficiency, innovation and a socially just transformation.” said Camille Maury, Industrial Decarbonisation Policy Officer, WWF European Policy Office.

Land Use, Land Use Change and Forestry
Alongside cutting emissions we urgently need to increase the amount of carbon that is removed from the atmosphere. And the best way to do this is to protect and restore forests, peatlands, and other natural ecosystems, and promote changes to forestry and farming practices that are a win-win for climate and nature. That’s why the LULUCF Regulation is so important. 

Even though Member States did not change the overall 2030 target of -310 million tonnes proposed by the Commission, they have done their best to weaken everything that sits underneath it, by inserting multiple exemptions and loopholes, meaning that the real EU sink in 2030 could be well below that level.

Alex Mason, Head of climate and energy at WWF European Policy Office, said: “This position shows that what really matters to Member State Ministers is their farming and forestry industries, not the climate emergency. Combined with the appalling decisions they made on bioenergy on Monday this means pretty much business as usual, rather than the increase in carbon rich landscapes that we urgently need.”
Smoke from a factory chimney, Copenhagen, Denmark.
© WWF / Fernando Zarur