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European Parliament rejects carbon market report

‘No’ vote surprises industry, but sources say it is unlikely that EU ETS proposals for shipping will unravel

Based on precedent, shipowner bodies had expected the plenary vote would be a shoo-in. But in a move Brussels insiders say was without precedent in recent memory, MEPs overwhelmingly rejected the report

THE European Parliament has voted to reject a report on the European Union’s carbon trading system after a day of political friction over the bloc’s Green Deal climate plan.

The delay to adoption of proposals for inclusion of shipping in the emissions trading scheme caught the shipping industry by surprise.

Based on precedent, shipowners’ bodies had expected the plenary vote would be a shoo-in after overwhelmingly being supported by parliament’s environment committee.

But a spokesperson at one of the major national European shipowner associations was “confident” that the proposals would remain intact and win approval when the plans are next submitted to the plenary session, which could be as early as July. Other sources expect will now take place in the autumn.

“There were many other aspects of the report but there were no amendments proposed to the ETS so we are still confident that it will go through,” the source said.

The European Communities Shipowners’ Associations cancelled a webinar that had been scheduled for this week to discuss the plans.

MEPs voted by 340 to 265 to reject the report, with 34 abstentions, and then overwhelmingly supported sending it back to the environment committee in a move that Brussels insiders say was without precedent in recent memory.

Among other proposals, the environment committee’s report had provided for commercial operators to pay the costs of carbon allowances, while 75% of the revenues from the carbon market would go into an Ocean Fund to finance decarbonisation research for the industry.

Transport & Environment shipping officer Jacob Armstrong said the vote was unexpected but not fatal to the ETS upgrade, adding it looked like the kind of political drama seldom seen in the European Parliament.

“It was a bit of a mess,” he said.

Mr Armstrong said the conservative European People’s Party struck an 11th-hour deal with right-wing parties and liberals to weaken the ETS’ general ambition.

EPP and the liberal Renew group voted in favour but left, greens, socialists and the far-right ECR and ID parties voted it down.

The points in question were not the shipping-related aspects of the ETS revision, he said.

Mr Armstrong said while delays were not good, the vote showed the European Parliament “is never going to accept bad governance and bad climate ambition”.

Peter Liese, the lead MEP on the ETS revision, said the proposal would have meant more climate protection in many places.

“However, ‘far-right’, Greens and Social Democrats have wrecked our compromises and thus diminished the influence of the Parliament,” he tweeted. “I hope that we can still correct the mistake.”

Mr Armstrong said the comments were hypocritical, adding Mr Liese had got amendments to the ETS voted through with support of ‘far-right’ parties, although these had later failed before the main vote.


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