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European Parliament rejects carbon legislation package

European Parliament rejects carbon legislation package, including more ambitious rules for EU Emission Trading System and new EU Carbon Border Adjustment Mechanism

Executive summary

On 8 June 2022, the European Parliament (EP) voted to reject the package of carbon legislation, including revision of the European Union (EU) Emission Trading System (EU ETS), the new Carbon Border Adjustment Mechanism (CBAM) and the Climate Social Fund. One key item of dispute was the phase-out plan for free allowances for CO2 emissions which are granted to certain industries in the EU as part of the revised EU ETS regulations.

During the vote, the Socialists and Democrats faction and the Greens/European Free Alliance (EFA) faction put forward claims that the regulation did not sufficiently achieve their climate ambitions as set in the context of the European Commission’s “Fit for 55” package. It was asserted that key aspects had been significantly diluted during the intra-ENVI Parliament processing (European Parliament Committee on Environment, Public Health and Food Safety (ENVI)).

Source EY

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