The recent surge in electricity prices has triggered increased opposition from countries that were already sceptical of the EU’s Fit for 55 carbon pricing expansion plans, including Spain and France, who argue that it will lead to higher energy poverty rates. EU Energy Commissioner Kadri Simson responded by emphasising the urgent need to reduce dependence on volatile foreign fossil fuels.
Certain members of the European Parliament are now considering alternative measures, such as stricter regulations, instead of extending the EU Emissions Trading System (ETS) to the transport and heating sectors.
Pascal Canfin, a French MEP and Chair of the European Parliament’s Environment Committee, expressed doubts about the necessity of extending the ETS and warned that it could potentially trigger social unrest.
Internal EU estimates suggest that imposing a carbon price of €50 per tonne on petrol and heating for buildings would result in a €40 billion cost for affected companies. Canfin suggested that expanding the ETS would be more acceptable if CO2 costs were imposed on commercial buildings instead of burdening domestic tenants. Another option proposed was excluding petrol from the ETS and implementing stricter emissions targets for the automotive industry.
The European Commission (EC) is resisting major changes to its plans, citing the necessity of extending carbon pricing as the only effective means to reduce emissions in sectors that have experienced growth over the past decade. However, the EC’s proposal for a €30 billion Social Climate Fund is facing resistance from the Netherlands and other Nordic states that oppose financial transfers. Meanwhile, southern and eastern bloc countries are advocating for additional financing to mitigate the impact of higher carbon costs. Votes on the key decisions regarding the package are not expected until early next year. In December, MEPs will determine whether to legislate the proposals as a comprehensive package or as individual files.
