Wednesday, October 27

Energy price surge reveals EU rift over climate push


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BRUSSELS — Surging energy costs stoked tensions between European Union countries over their green transition on Wednesday, with wealthy member states saying it proved the need to press on with new climate change policies and some poorer ones wary.

As European gas prices hit record highs on Wednesday, the bloc’s environment ministers sat down for their first talks on a major package of green proposals, including taxes on polluting fuels and a 2035 end-date for combustion engine car sales.

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Wealthier western and northern states said high energy prices should spur Europe to quit fossil fuels faster, both to curb greenhouse gas emissions and shield consumers from the volatile price of imported hydrocarbons.

“We need that not just for climate reasons, but to protect our people in an insecure fossil fuel world,” Irish environment minister Eamon Ryan said in the meeting, which was publicly broadcast.

Poorer central and eastern countries, already nervous that new green policies could inflate consumer bills, urged caution on the plans put forward by the EU’s executive.

“The Commission’s proposals may significantly worsen the situation,” Poland’s undersecretary of state for climate Adam Guibourge-Czetwertynski said, referring to high energy costs.

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Analysts have said gas prices are the main driver of European electricity costs, while the soaring cost of permits on the EU carbon market has contributed around a fifth of the power price increase.

Opposition to plans to extend carbon trading to cover the transport and heating sectors drew opposition from both wealthy and less affluent states concerned it would mean more pollution fees being passed on to consumers.

Countries including Cyprus, France, Ireland, Lithuania, Luxembourg, Poland and Slovakia raised concerns about the proposal on Wednesday, with some categorically opposed. Finland and Denmark were among the few to voice support.

The Commission has pledged to accompany the new emissions trading system (ETS) with a multi-billion-euro fund, to help low-income households cope with any resulting costs.

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The CO2 price in the EU’s existing ETS, which covers power plants and factories, has more than doubled this year to reach record highs above 60 euros per tonne.

That has increased the cost of polluting for businesses.

It has also raised nearly 11 billion euros ($12.69 billion) in revenues for governments this year – money Brussels has urged countries to spend on helping consumers to invest in measures such as home renovations to cut their energy bills.

EU climate policy chief Frans Timmermans said emissions from Europe’s transport sector are on a rising trend. Left unchecked, that would thwart the EU goal to cut net greenhouse gas emissions by at least 55% by 2030.

“If you have a better proposal that will help us achieve the same results, the Commission will embrace it,” Timmermans said. ($1 = 0.8671 euros) (Reporting by Kate Abnett Editing by John Chalmers and Barbara Lewis)

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