What was up for vote?

Henrik Kafsack

Business correspondent in Brussels.

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The European Parliament voted on eight laws from the European Commission's "Fit for 55" climate package last July: from emissions trading to the planned CO2 limit tax to limit values ​​for new cars.

With the laws, the EU should reduce emissions by 55 percent by 2030 compared to 1990, as decided, in order to be climate-neutral by 2050.

Months of deliberations in the parliamentary committees preceded the vote.

Unlike usual, the MPs often failed to reach agreement on many points in advance - and that was noticeable on Wednesday.

What happened in Parliament?

The plenary rejected the "report" on emissions trading, the core of the EU climate package.

This has not failed, but must now be renegotiated again in the responsible committees, above all the Environment Committee, before it goes back to the plenary session.

There is no timetable for this yet.

The adoption of the climate package will inevitably be delayed - especially since this also has an impact on other laws in the package.

Why is emissions trading so important?

With emissions trading, the EU has so far capped the CO2 emissions of power generators and industry.

This affects more than 40 percent of emissions.

The companies have to purchase certificates for their emissions.

They are freely tradable.

This gives CO2 emissions a price that increases the scarcer the emission rights become.

Most recently it was 80 euros.

This gives companies an incentive to reduce emissions.

What is at the heart of the dispute over EU emissions trading?

The EU Commission wanted to further reduce emissions so that by 2030 they would be 61 percent below the 2005 level.

That didn't go far enough for the Environment Committee.

He had advocated a reduction of 67 percent.

According to the Greens and others, this is the only way the EU can achieve the 1.5 degree target of the Paris climate agreement.

In the end, however, a compromise that was coordinated with the Social Democrats and Liberals by the responsible member of parliament Peter Liese (CDU) and actually agreed with the Social Democrats and Liberals prevailed would have, in order to then lower the number more sharply later.

But that was not all.

Supported by the right half of the EU Parliament, the Christian Democrats also pushed through

that industry will continue to receive free certificates until 2034.

This is intended to protect them against unfair competition in international competition, but according to the critics it reduces the incentive to invest in green technology.

Who overturned emissions trading?

In the final vote, the Greens, Social Democrats and Left voted against the entire report, even though it would have tightened the Commission's proposal.

Christian Democrats and Liberals voted in favour.

Since the right edge was also against it, that wasn't enough.

What does all this mean for the controversial expansion of emissions trading to buildings and transport?