Inflation and war loom over EU votes on climate change policy

© Reuters. FILE PHOTO: A general view of the building of the European Parliament in Strasbourg, France, November 24, 2021. Julien Warnand/Pool via REUTERS

By Kate Abnett

BRUSSELS (Reuters) - The European Parliament votes on Wednesday on eight climate change policies, with the outcome uncertain as concerns about soaring energy costs and inflation collide with Europe's commitments to fight global warming.

The policies are designed to steer the European Union, the world's third biggest polluter, towards its target of reducing net greenhouse gas emissions by 55% by 2030, from 1990 levels.

Lawmakers are split on whether to uphold or weaken the plans, and will consider hundreds of amendments in a series of votes. Those that win a majority will form parliament's position for more negotiations with EU countries on the final laws.

Brussels is touting the policies as a way to swap reliance on Russian fossil fuels for locally-produced green energy, eventually lowering energy prices and avoiding the spiralling costs that failing to tackle global warming would incur.

But some lawmakers cite the immediate pressures of energy costs, the economic consequences of the Ukraine war, and the need to give industries more time to adapt as reasons for a slower approach.

Emails seen by Reuters show some industry lobbies have urged lawmakers to delay or weaken the measures.

One of the most important votes concerns upgrades to the EU carbon market, the bloc's main tool for cutting planet-warming emissions by forcing power plants and industry to buy permits when they emit CO2.

Lawmakers are considering options to toughen the market to deliver a 61%, 63% or 67% emissions cut by 2030.

They will also vote on limiting financial speculators' access to the carbon market, as well as on a 100% cut in CO2 emissions from new cars by 2035 - effectively banning new combustion engine car sales in the EU.

The centre-right European People's Party (EPP), parliament's biggest lawmaker group, wants to weaken that to a 90% CO2 cut.

Lawmakers are also split over whether to scale back or scrap a new EU carbon market to impose CO2 costs on polluting fuels used in transport and buildings.

The EU's world-first plan to place a CO2 levy on imports of carbon-intensive goods such as steel and cement is also up for vote. The Parliament will consider 2030, 2032 and 2034 timelines for replacing the free permits those industries currently receive.