The European Parliament’s three largest groups have struck a compromise deal to save their reform of the EU’s carbon market.
On Wednesday morning, lead negotiators of the European People’s Party, the Socialists & Democrats and Renew Europe announced they had agreed on key points of contention on the Emissions Trading System revision and the planned carbon border tax, overcoming an impasse that brought down three climate bills last week.
One of the major sticking points that collapsed the vote in Parliament was the date when certain industries would stop receiving free pollution allowances under the ETS. Under the deal announced Wednesday, the phaseout will begin in 2027 and end in 2032.
The environment committee had wanted 2026 to 2030, a position that was weakened by the S&D and Renew to 2026 to 2032 ahead of last week’s plenary vote on the ETS reform.
But conservative groups and the industry committee rejected that position and instead voted for an amendment setting a 2028-2034 phaseout timeline — a key factor in the S&D’s decision to vote the entire ETS bill down.
At their respective press conferences, the groups cheered the new deal as a solid base for ensuring a smooth rerun of the vote next week.
It was a classic compromise, lead MEP Mohammed Chahim from the S&D said: “I think the deal is a good deal. No one will claim victory, no one will claim loss.”
The EPP’s Christian Ehler was upbeat. “We have two winners, from my point of view, the climate ambition and the European economy.”
Meanwhile, Greens MEP Michael Bloss released a statement saying the deal showed the Parliament’s “climate compass” was once again pointing in the right direction, but added that the Greens would make specific proposal to increase the ambition of the package.
The plenary will vote again on the ETS revision on June 22, along with the related files of the carbon border tax and the Social Climate Fund, which had to be postponed when the ETS measure was struck down.
Chahim complained after the vote collapsed last week about the influence of lobbyists, who he said had “attacked” the Parliament’s position from every angle.
Ehler pushed back on that. “None of the industry had been saying we should reduce [ambition for the climate],” he said. “All of them had been saying adapt to our investment realities … give us breathing space for investment [in clean technology].”
This article has been updated.