European deal on climate took the European ministers until well into the night

It hasn’t saved the climate right away, but politicians in Brussels have at least achieved their own goal of agreeing on most of the climate laws proposed last year by European Commissioner Frans Timmermans before the start of the summer vacations. French President Emmanuel Macron in particular was in a hurry to meet the deadline. On July 1, his presidency of the European Union ends and he had made forging the climate agreement under his leadership a matter of honor.

It took a marathon meeting of European climate ministers in Luxembourg that lasted well into the night from Tuesday to Wednesday. It wasn’t until 2:30 a.m. that Timmermans appeared before the press. He called it a deal ‘against all odds’. So exceptional, he said, is it for member states to agree on a European Commission proposal within a year.

Of course, there are differences between member states, of course, all member states had to accept things that they would rather not have accepted. But they all understood, most of them, almost all understood, that this is the way forward for us collectively.”

European diplomats tell us afterward that a number of unnamed member states voted against the proposal. But because unanimity is not required in climate policy, there was ultimately enough support for the compromise texts drafted by the French. The new laws will eventually apply throughout the EU, including the countries that voted against them.

According to Timmermans, the package enables the European Union to meet the legal targets for reducing CO2 emissions: “This will allow us to get a reduction of at least 55% of our emissions by 2030 and this will really set us on a trajectory to climate neutrality by 2050.”

The plans that will have the greatest impact on the daily lives of citizens and entrepreneurs are the reforms of the emissions trading system, the introduction of a European Social Climate Fund, and the abolition of the internal combustion engine. On a number of issues, the Member States differ from the European Parliament. There are therefore still some difficult negotiations on the agenda before the climate plans become truly final.

For example, it is striking that the member states also want citizens to pay for the CO2 that is released when homes are heated and when cars are driven. The European Parliament wants to spare citizens for political reasons. European diplomats, however, emphasize that exempting citizens will make it impossible to achieve the targets. Particularly in road transport and, as it is called in Brussels’ terms, in the built environment, sustainability is lagging far behind.

If the member states get their way in the negotiations with Parliament, then emitting CO2 for private individuals will cost money from 2027 onwards. With part of the proceeds, a new Social Climate Fund of 59 billion euros will be established. This money will be divided among the member states via Brussels and will be available as subsidies to families who do not have enough money to buy an electric car on their own or to make their homes more sustainable.

There will be little discussion left between the member states and the Parliament about abolishing the internal combustion engine. Both bodies agree that no new cars emitting CO2 can be sold from 2035 onwards. By 2030, the car industry must meet the interim target of at least 55% CO2 reduction.

The hope of politicians is that by setting a hard target, clarity will be created for the industry and that now the investments in the development of cheaper electric cars will really shoot up.

From Germany in particular, there was resistance until the very end to completely banning the internal combustion engine. But a proposal to replace fossil fuels with synthetic fuels produced in a climate-neutral way had no success. In the eyes of politicians, such synthetic fuels are only an option for aircraft, heavy trucks, shipping, and agricultural machinery.

The member states do want the European Commission to assess in 2026 whether the industry is well on its way to the production of electric passenger cars. If this turns out not to be the case, politicians still want to be able to intervene.

After this night it is also certain that the free emission rights that entrepreneurs currently have for part of their production will disappear. The Parliament already agreed and now the member states also support the proposal of the European Commission.

The decision is linked to the introduction of an import levy for CO2. That levy will tax emissions released from products imported into Europe from outside the European Union. It is a way to protect European producers from competition from China or the United States where climate standards are less strict than here.

Such a levy on foreign operators is permissible under international trade rules only if the free emission rights for European producers disappear. That will happen, but it is still unclear how. The member states want to take more time than the European Parliament. What kind of compromise will result from this is still unknown.