European Parliament needs to swiftly adopt ambitious positions to truly decarbonize Europe

Yesterday, the European Parliament rejected the proposal of the Environment Committee on the EU ETS. The EP Plenary decided that the Committee should come back with new proposals on the EU ETS, CBAM and Social Climate Fund. Hydrogen Europe urges the members of the Parliament to swiftly find a compromise on those major files in the coming weeks. There is no time to lose. And the ambition of the European Commission’s proposals cannot be watered down.

The final rules should create the right framework for a fast decarbonisation across sectors, adequate carbon leakage risk protection, and sufficient funding volumes to support the rapid adoption of clean technologies. Using a part of the ETS revenues to support Carbon Contract for Differences can be a game changer, enabling the uptake of renewable and low-carbon hydrogen. Uncertainty on the ETS schemes and the number of allowances will only delay other key policy discussions.

For the establishment of a truly Fit for 55 package, Hydrogen Europe advocates for

1) the fast introduction of a wider sectoral coverage to aviation and maritime under ETS I, and road transport and buildings under ETS II,

2) the coverage of all hydrogen production types under the ETS and clear rules ensuring free allowances eligibility for small scale renewable hydrogen production (> 5tpd) and phasing out of free allowances for carbon-intensive hydrogen,

3) the zero-rating of RFNBOs under the ETS and across all EU legislations with pragmatic emissions accounting at capture stage under the ETS in the EU and equivalent schemes abroad, and

4) the implementation of a WTO-compatible CBAM phasing out free allowances while providing the necessary level-playing field for the EU industry against risks of carbon leakage, including for EU exporters.

It is now up to the Parliament to be up to the challenge of aligning our laws to the EU Green Deal’s ambition!