Germany is "fine" with the European Commission's proposal to oblige EU states to spend 50pc of their national revenue from the bloc's emissions trading system (ETS) on decarbonisation measures, climate minister Carsten Schneider said on Friday. But other countries are less convinced, with Sweden remaining "sceptical" about spending more money at the EU level.
EU climate and environment ministers held a first informal meeting in Dublin today, discussing the commission's proposals for ETS reform. Schneider gave clear support to the commission's proposed minimum 50pc share of national ETS revenue being reinvested into decarbonising ETS sectors. "We already do that, so it's fine for us," Schneider said. Decarbonisation first-movers should be protected by "strong" price signals over the coming years for both the existing ETS and the upcoming system covering road transport and heating fuels (ETS 2), Schneider said.
But Sweden is not convinced about earmarking 50pc of ETS revenue for industrial decarbonisation. "It's better that the market solves these things than that we collect money and then distribute them again," Swedish climate secretary Daniel Westlen said, while noting that Stockholm has not yet formed its position.
Credits under the Paris climate agreement's Article 6 mechanism should be spent globally at an earlier stage rather than "very late" in the late 2030s, Westlen said. The commission has proposed the central purchase of 250mn international credits in 2036-40 as part of its ETS review. And Westlen is "frustrated" by the "lowering" of ambition in the commission's proposal, which rewards those "who didn't do their homework".
Belgium's climate minister Jean-Luc Crucke said the 50pc conditionality for national ETS revenue is going in the "right direction". He also called for Europe to speak a few "truths" at the UN Cop 31 climate conference in Turkey this year. "We can't loosen purse strings without restraint while others continue to keep them tightly closed," he said.
For Warsaw, the 50pc conditionality is a "very difficult" topic because the finance minister "usually knows" what is best to invest the money in, Poland's climate state secretary, Krzysztof Bolesta, said. The topic would also be "problematic" for those countries with insufficient projects to reinvest the money in, Bolesta said. But the commission's ETS proposal is a "good" start, Bolesta said, while adding that he still wants to see increased support measures. "Transition is expensive," he said. Poland is transitioning very fast, decreasing the share of coal in its energy mix to 50pc from 90pc in 10 years, according to Bolesta.
Chairing the discussions was Irish climate minister Darragh O'Brien. Dublin will try to reach agreement on a common position between EU states in December "if at all we can", he said, noting it will be a "challenge".
EU states and the European Parliament will have to negotiate a final legal text for implementing ETS reforms after they have reached their own internal positions.
