Opening and Closing Remarks EVP Timmermans at European Parliament Debate on ETS and Fit for 55

(Source: European Commission)

“Check against delivery”

Opening Remarks

Thank you, Madam President, merci beaucoup madame la ministre, Honorable Members,

It is a year since you have decided to adopt the Climate Law. A historic decision, but it’s only the beginning of the beginning of a very difficult process. And therefore, today, I believe we’re faced with some really, really difficult choices that will determine whether we stay within the legal boundaries we have set ourselves. Reduction by 55% by 2030 and climate neutrality by 2050 is not just a wish; it is a legal obligation. And I think that should be the starting point of our discussion today.

Parliament was also quick to rightfully call what we’re in a climate emergency. We saw what the floods did last year in Germany, in Belgium and even in the Netherlands: killing people, levels of destruction we have never seen. We had a tornado in the Czech Republic – never before. We have completely erratic weather patterns: snow in Spain when you don’t expect it, droughts and floods all over the place when you don’t expect it. I don’t think there’s any European citizen we need to convince that we’re in the middle of a climate crisis. It’s not a crisis that will be coming down the road. It is here already.

What we need to do is make this transition happen. The war is only accentuated the importance of making this transition happen as quickly as possible. Money spent on renewables in Europe, is money that stays in Europa. Money spent on fossil fuel bought in Russia is money that disappears and Putin’s pockets and is then used to wage a war against his peaceful neighbors. This reality is the reality that should dictate the urgency of the measures we need to take.

Today, I would like to plead for two things. I would urge you to vote for a consistent package to reach our climate targets and also I would urge you to make sure that in doing this, we leave no one behind. Our policy will be just or there just will not be a policy.

I have to admit with all the admiration I have for what parliament has done so far, some of your positions do worry me. First, emissions trading for fuels and road transport and buildings. This is an incredibly important extra tool to tackle emissions and buildings and transport. In transport, emissions are not just rising gradually. They’re shooting up instead of going down. In buildings, we need to double our effort to reduce consumption of energy. This helps our citizens reduce their energy bills, delivering better quality homes, reducing air pollution that still kills prematurely 400,000 Europeans every year. It is urgent.

And then of course, we need this instrument to fill a Social Climate Fund that could help us help vulnerable households. If you look at what’s happening, this is what we need to help vulnerable households to switch to clean forms of heating and mobility. Now, many members now want to reduce the new ETS to commercial buildings and transport, at least for the beginning. This will take two-thirds of the emissions out of the system. Instead of delivering 45% of emissions reductions in buildings and transport, it would only deliver 10%.

We agreed in the first European Climate Law to put ourselves irrevocably on the path towards climate neutrality. This is what Parliament asks for every time. Parliament also says ‘the earlier the better’. We know it can’t be denied: the change must urgently happen in road transport and buildings. We know that member states have not delivered the reductions in the past. And yet you plan to weaken an instrument that can deliver the emissions reductions in a socially fair manner.

 

Here I would like to address the members from member states with many vulnerable households. Please, please make the right comparison. Look where you are now. You’re paying astronomical amounts of money for gas and oil to Russia and other countries. That money disappears. With our proposal for emissions trading and a Social Climate Fund, you would not only keep more money, but you could use it help your vulnerable households and you could do so before the effects of emissions trading are felt. First the Climate Social Fund and only then the emissions trading’s effects will be felt. That is socially, I believe, the right thing to do.

It is only fair to ask those driving on petrol to pay a carbon price; those driving electric already pay that price. It’s only fair that those polluting more, pay more. The heating and mobility of the 20% poorest in society only produce 9% of emissions. The 20% richer households emit 32% of emissions. A Social Climate Fund that uses revenues from the wealthy who could change their habits in order to help the vulnerable who cannot, is a fair way of redistribution. Yet, your proposal could cut the Social Climate Fund by half. This won’t be enough to ensure a fair transition. We will have to discuss this in the trilogues.

Members try and compensate with more ambition for heavy industry and maritime transport. But don’t think that this will shield the vulnerable. This too will have consequences. Power plants could lose an extra 16% of their free emission allowances. This would increase energy prices for citizens and this time without help for vulnerable households. And obviously it would impact jobs in industry too. We don’t want jobs to get lost in industry, we want more jobs in industry.

So the Commission reserves its position ahead of the vote and we’ll stand in trilogues for a package that is complete, coherent and socially fair. I am really grateful to Parliament for moving the package towards trilogues. Let’s agree that ultimately, we want to transition in line with the Climate Law, the Climate Law which is binding on all of us.

I want to ed by telling you I was in Poland, last week, talking to people who are faced with incredible price spikes, not just for oil and gas, but also for coal. Coal is also unattainable for many people. Everybody is saying: ‘How can I get my hands on solar panels? Where’s the heat pump I can install?’ That country is transforming itself at lightning speed. If you see how many solar PVs you see on rooftops everywhere. So, let’s assist citizens who know they need to do this by giving them the right incentives and by protecting the vulnerable against the consequences.

Thank you.

 

Closing remarks

Mr. President,

With all the political differences we have, with all the different angles you could have on this issue, my plea before you today would be: at least let’s agree on the science. At least, let’s agree that what the International Climate Panel has written is extremely alarming. At least, let’s agree that whatever our difficulties may be, the climate crisis is not going to go away. It is going to intensify and the longer we procrastinate, the more intensive it will be.

That is not ideology. Ladies and gentlemen, that is science. Then, ideology comes in and you make the choices you want to make, but I would hold before you today: denying science, that’s ideology. Denying science, that is using ideology to deny our children and grandchildren a safe future, by so-called ‘protecting what you have today’.

Who will suffer most if we procrastinate? It is the poorest people in society. It is the people who have nowhere else to go. It is the small businesses. It is the farmers. These people will suffer most the longer we take to do what is needed. Rich people can always find a different place to live, can always find a way out. Ordinary people cannot. That’s why I believe we need to act. Parliament knows full well, I respect the fact that you found a compromise on the dedicated ETS system. I don’t agree with that compromise as you know, and we will see what happens in the trilogue.

My fundamental point here is: look, try and create as much transparency as you can, about where the costs will fall. Of course, there is a cost involved in introducing a price on carbon. But if you combine that with the Social Climate Fund, that will mitigate those costs for those most vulnerable or those who are hit most by this, then I think this is justified. If you put the cost elsewhere, which is what the compromise of Parliament does, then you have to also be honest, that cost, sooner or later, will also end with the same people. And then you need to ask yourself: is the Social Climate Fund big enough to really mitigate those costs? But we’ll get there I guess in the trilogues when we revisit the issue.

Now another element, which for me is extremely important and which was raised by many. As far as European industry is concerned, they want one thing and that’s clarity. Clarity, predictability and reliability. So, let’s not fudge things. Let’s not introduce the idea that there could be also in the future fuels that would be clean etc. No, for cars and vans that’s nonsense. The car industry has made its choice. Don’t confuse them if they are already on board for electric mobility for cars and vans. Don’t make it more difficult for them. And don’t postpone 2035. Many carmakers are even on a sooner trajectory. 2035 is not science fiction. Some would even argue it is not ambitious enough, but I think this is where we could all land. And those car manufacturers that might have difficulty because they make smaller cars or are in a different position. They can profit from support from the Just Transition Fund to make the things happen more quickly. But don’t create a fudge with a so-called 90%, or with these fuels that are way too expensive to ever form a solution for cars and vans. And by the way, we will need them in aviation but that’s a different discussion all together.

All in all, Mr. President, I think we live in the most transformational time arguably that humanity has ever experienced. One could say that the first industrial revolution was also transformative. True, but it took a long time, and it didn’t happen everywhere at the same time. This industrial revolution combined with a climate crisis is the biggest challenge humanity has ever faced. And the bad news is we are coming late to this challenge. The good news is we can still fix it. If we act now. If you vote tomorrow to let us fix it.

The rest of the world is already following us. Yes, we are only responsible for 8% of global emissions. But the Chinese are copying our ETS system. The Americans are very interested in what we’re doing on CBAM and looking whether they could have the same system. The circular economy that we are creating is copied everywhere in the world.

Like it was with the internal market, like it was with environmental legislation, like was every time we took a step higher on the levels of our protection, parts of industry will say ‘this is the end of industry’, ‘this is the end of employment’, ‘so many million jobs will disappear’. The reality is that every time Europe ups the ante, our economy grows, our employment grows, and the rest of the world follows our lead. Let it be the same here again.

Thank you.

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