EU countries must better embed social justice in climate plans ahead of ETS 2 introduction – NGOs
Clean Energy Wire
EU member states’ national climate plans insufficiently address just transition issues, a crucial deficiency ahead of the introduction of a carbon price on transport and heating fuels from 2027, said a report by NGO network CAN Europe and Germanwatch.
“Most of the plans analysed fail to respond to key EU just transition requirements – thereby undermining their potential to serve as strategic roadmaps for a fair, inclusive transition, while risking the exacerbation of social inequalities,” said the report. It added that some countries (Slovenia, France, Portugal and Spain) at least partially addressed just transition requirements, while others (Hungary, the Czech Republic and Bulgaria) considerably lagged behind.
Every five years, the updated National Energy and Climate Plans (NECP) outline how EU countries intend to reach climate and energy targets, highlighting policies and measures on decarbonisation, energy efficiency, energy security, the internal energy market and research, innovation and competitiveness. The NGOs recommend that the countries better include ministries with indirect competencies – for example housing – early on in the NECP drafting, as well as civil society.
The NGOs highlight the introduction of the new Emissions Trading System (ETS 2), which will put a price on emissions from transport and heating fuels – immediately impacting people’s household finances. Researchers have warned that the planned introduction by 2027 must be well prepared to avoid hardship especially for low-income households. However, “most NECPs have not put in place adequate groundwork for a just transition to the ETS 2,” said the NGO report. For example, only a third of the analysed NECPs had provided energy poverty assessments and associated mitigation targets.
As part of its overall climate policy framework, the European Union decided to introduce a second emissions trading system for the transport and building sectors alongside its successful system for energy and industry. Germany already has a national carbon price for transport and buildings, which will be aligned with the EU system. The risk of price jumps at the time the system kicks in is thus lower than in other countries, which do not yet have this carbon price.
A recent survey in Germany found that most people in the country are clueless how new EU carbon price will affect their heating costs. Aspiring German chancellor Friedrich Merz said that he expects a noticeable price increase in the ETS 2, stressing that this would be the intended effect to reduce emissions. However, a so-called climate bonus compensation payment where citizens receive money made through the pricing scheme back, that was proposed during election campaign, was not included in the prospective coalition government’s treaty of Merz’s conservative Christian Democrats (CDU) and the Social Democrats (SPD).
