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The lobbying war over cutting EU emissions

STRASBOURG — An industry lobbying blitz helped derail a key climate vote in the European Parliament this week, according to centrist and left-wing lawmakers. 

On Wednesday, the center-right European People’s Party (EPP) joined other conservative factions in backing a slate of industry-friendly amendments to Parliament’s reform of the EU’s carbon market, prompting the center-left Socialists & Democrats to kill the final text. 

The vote, which set off a chain reaction ending in three pieces of the EU’s climate package being sent back to committee for redrafting, marked a setback for the bloc’s efforts to slash emissions. 

The resulting delay may be short — MEPs are aiming for a rerun in two weeks’ time — but the adoption of amendments aimed at granting more latitude to Europe’s dirtiest sectors showed that a narrow majority of lawmakers favor a conservative approach to climate action. 

MEPs who had supported more ambitious targets said intense lobbying from heavy industry was partly to blame, with many describing being inundated by messages in the weeks leading up to the vote. 

The center right has shot back that listening to industry is a key part of the legislative process.

Mohammed Chahim, S&D vice president and the lawmaker in charge of drafting Parliament’s position on the introduction of a carbon border tax, said in recent days he had been unable to even walk the institution’s corridors without being accosted by lobbyists. 

“I’m spending a lot of my time countering the information from the lobby,” he added. “That’s what’s happened the last weeks — every element in the deal was attacked, and in my group meetings and individual meetings, I needed to counter old arguments.” 

A decision in the environment committee in May to put tough restrictions on free carbon market credits unleashed a lobbying storm from industry that have come to rely on them. 

Currently, the EU’s Emissions Trading System covers some 11,000 power plants and energy-intensive industrial plants — in sectors like steel, cement or ceramics — as well as some flights, together responsible for about 40 percent of the bloc’s emissions. 

The ETS generally works as a cap-and-trade system: Emitters have to buy one credit for every ton of carbon dioxide they emit. Credits can be traded, and the overall amount available on the market is gradually reduced, which in turn restricts emissions. 

But to protect Europe’s heavy industry against competition from countries without carbon pricing, these energy-intensive sectors currently receive most of their credits free of charge — effectively a pollution subsidy. And as emissions in the energy sector, which doesn’t get free credits, have declined, industrial emissions have stayed largely flat over the past decade. 

Fighting for free emissions

With the EU planning to introduce a carbon border levy to deal with the competition problem — taxing imports from countries without carbon pricing — it wants to phase out these free handouts as keeping them could fall afoul of World Trade Organization rules.

But much of Europe’s heavy industry would prefer to keep the free permits for as long as possible; EU steel association Eurofer has argued that a fast phaseout would endanger the sector’s green transition as companies would have less money to invest after spending more on carbon credits.

Pascal Canfin, a French centrist who chairs the environment committee, has spoken of a “lobbying tsunami” in recent days and singled out Eurofer as trying to water down the legislation.

“Behind speeches that are very favorable to climate action, when it comes to getting into the hard part of changing the rules of the game some of the companies … launch an anti-climate offensive,” he wrote in a Le Monde op-ed naming Eurofer, among others. 

Axel Eggert, director of Eurofer, said the accusation was “complete nonsense,” adding that the association had signed up to an emissions reduction target of 55 percent.

Canfin noted that there were also some companies — albeit fewer — lobbying for ambitious targets. But nonprofit InfluenceMap found that it was mostly groups and firms opposed to a faster phaseout of free credits that met with MEPs. 

German steel giant Thyssenkrupp had 12 meetings with key MEPs working on the ETS proposal, including five with EPP lead lawmaker Peter Liese; Eurofer and the Federation of German Industry also each held 12 meetings, including five each with Liese, according to InfluenceMap’s compilation of MEP records, seen by POLITICO. 

HydrogenEurope, which supports a faster phaseout, came in at seven meetings, including two with Liese.

Liese rejected arguments that the vote had been significantly influenced by industry lobbying. 

“Of course there was lobbying but from all sides, and that’s legitimate,” he said. “That’s normal. Shouldn’t we listen to industry voices at all anymore? Is everything NGOs say right and everything industry representatives say wrong?” 

His EPP colleague Daniel Caspary, who organized a meeting with Thyssenkrupp days before the vote, said the S&D’s faster phaseout of free credits would prevent the firm from financing its transition to low-carbon steel production. He also said there had been plenty of lobbying from green groups.

“Why did I invite them? I know them, I know what their interests are, I know who pays them, I know what they want, they’re very transparent,” he said of Thyssenkrupp. “All those NGOs, you often don’t know who’s behind them.”  

But Greens lawmaker Michael Bloss, who described the lobbying effort as “more influential than expected,” said it wasn’t fair to equate the two. 

“Of course, NGOs also sent their positions,” he said. “But industry — the money they’re investing in this, NGOs can’t keep up.” 

Karl Mathiesen contributed reporting.

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