The Position Paper “Pricing Greenhouse Gas Emissions” deals with EU legal acts, which are primarily geared to reducing greenhouse gas emissions. AK supports the target of EU-wide decarbonisation by 2050 and regards the Commission’s aim to secure that the process towards climate neutrality is just and in accordance with the needs of employees (“Just Transition”) as particularly positive. The goal is a fair distribution between Member States with higher and lower economic output, between industry and households, and finally a fair distribution between richer and poorer households. According to AK’s position, the consideration of social effects and distribution issues must be included on a permanent basis and become a key element of climate and energy policy. This concerns in particular measures for employees in CO2-intensive sectors, who are negatively impacted by the transformation. Hence, it is necessary to create a professional and financial future prospect for all affected by the structural change.

However, AK clearly rejects the Commission’s proposal to include heating fuels and motor fuels for households in an EU-wide quota system in form of a separate Emission Trading System (ETS-2). Heating and hot water are basic needs, whose pricing must not be left solely to a market mechanism, which may lead to uncontrollable price fluctuations. This also applies to individual mobility in case of insufficient public transport provision.

AK supports the introduction of the Carbon Border Adjustment Mechanism (CBAM) for steel, cement, aluminium, artificial fertiliser and electricity, which shall be an efficient and effective protection against the exodus of companies due to too high CO2 prices. CBAM shall replace the existing free allocation system, which until now distributed pollution certificates to industrial companies without charge, which – because of too high CO2 costs in the EU - would have possibly moved their production to third countries. However, the expiry of this free allocation is currently strongly opposed by business at Brussels level.

The proposal to establish a Social Climate Fund shows the Commission’s new stronger focus on social equality. Its resources shall be used for Member States’ programmes, which specifically fight the negative impact of the ambitious climate policy on low-income households and micro-enterprises. Improving energy efficiency of buildings and tackling energy poverty of vulnerable people is vital. Even though AK welcomes the establishment of a Social Climate Fund, it rejects the proposed financing mechanism, as the Fund is to be fed from the revenues of the ETS-2 income. Austria is eligible to receive 0.9 % of the 72,2 billion Social Climate Fund; this is equivalent to an allocation of ca. 650 million Euro during the 2025 to 2032 period. Similar to the Just Transition Fund, Poland will get the highest allocation of funds, namely 18 % of the entire Social Climate Fund.

Further information:

EU Commission: EU economy and society to meet climate ambitions

AK EUROPA Position Paper: “Fit for 55” Package I: Pricing Greenhouse Gas Emissions

Further AK EUROPA Position Papers on the “Fit for 55” Package

AK EUROPA: Factsheet Just Transition