Committee on Industry, Research and Energy Ordinary meeting
Legend
Transcript markers
- text Sentence being played
- text Search result
- text Intervention cited by the link you opened
Click a sentence to play the video from that moment. Select text to quote it with the speaker, timestamp and link.
More options
ITRE European Parliament
Follow its sittingsBorys Budka
And your colleagues, I'd like to briefly report back on our recent mission to Japan, which took place from
The 30 May to the 3 April in Tokyo. It was a very successful mission and an important opportunity to strengthen our ties with one of the European Union's closest partners. Japan and EU face many to say of.
The same challenges: global competition, energy security, digital transformation, supply chain resilience, and the need to keep our industries strong. During all our meetings, one message was clear: Europe and Japan should work more closely together. We met representatives of the Japanese government and members of the Japanese diet. We discussed industrial policy, economic security, innovation, and the role of trusted partners in a changing global environment. There was strong interest in deeper cooperation with the European Union.
We also visited leading Japanese companies and research centres. At Rakuten, we discussed the future of telecoms and digital infrastructure. At Sony, we exchanged views on semiconductors, artificial intelligence, and cybersecurity. At Toyota and Panasonic, we focus on clean mobility, hydrogen, batteries, and strategic supply chains. We also visited JACSA, the Japanese space agency, where we discussed space technologies and research cooperation.
At JackMech, we learned more about Japan's approach to security of access to critical raw materials. This is highly relevant for Europe. Finally, at Rapidos and RIKEN, we saw Japan's strong ambition in semiconductors and quantum technologies. These are areas that will shape the future economy, and Europe must remain competitive. Colleagues, this mission showed that Japan sees the European Union as a strategic and reliable partner.
It also showed that Europe must continue to invest in innovation, competitiveness, and secure technologies. And of course, let me finish by thanking all members of the delegation for their excellent engagement, the committee secretariat for the preparation of the mission, and all staff who contributed to the success of this visit. I must underline that this mission was excellent, well prepared. We were just in time on every one of our meetings, and I was really impressed of the effort of our secretariat and also cooperation between our secretariat and our representation in Japan. So, thanks a lot on the hand of Peter, but for Cindy and Przamek for being with us all the time.
And really, thanks for all members who took part in this event. Thanks a lot. And I can't, ah, okay. So, any questions? No.
So we've got the next mission to report. It was the mission to France, and I can see Juergen Warborn, one of the core reporters in this topic, and I will give the floor to you. Thanks.
Jörgen Warborn
Thank you, chair. I'll be happy to report back on our missions to France and especially on the second day, which I chaired. Here, our delegation traveled to the Provence Alcotassure region to engage with stakeholders in one of Europe's key industrial and energy hubs. At the Marseille Port Complex, we met with a wide range of industrial actors, including CMA CGM Group, ArcelorMittal Mediterraney, Energy, and RDF Group. These exchanges illustrated the scale of the transformation required to decarbonize energy-intensive industries and the need to do it smartly in a cost-efficient and technological-neutral way in order for the industries to remain globally competitive.
We also visited the Jupiter Mill, where they convert wind power into hydrogen to go into the gas pipeline network. This is a very good example of how hydrogen technologies can enable the transition to low-carbon energy systems. In Marseille, we met with the Regional Council of Provencal Cotassure, where the discussion highlighted the important role of regional authorities in supporting industrial transformation and infrastructure development. On the third day, the mission concluded in Cadarache with visits to ITER and the CEA, showcasing Europe's long term commitment to research and innovation in the next generation energy technologies. This, I think, really was the highlight of the mission to see the fantastic technological advancements happening in nuclear energy, both in fission and fusion.
ITER brings together top-notch researchers and experts from around the world. Their work will contribute to the EU's upcoming fusion strategy, helping position Europe at the forefront of global fusion development and accelerating the path towards commercial fusion energy in the EU. As a former mayor in Sweden's number one nuclear power municipality, I'm.
Jörgen Warborn
Course strongly convinced about the need for much more nuclear energy in Europe so that we can switch away from fossil imports and become carbon neutral while not depending on the forces of the weather. When we combine nuclear and renewables, we'll have clean, affordable, and reliable homegrown energy. And it was really nice to see the progress they are making in the nuclear field. The visit served as a strong example of what Europe needs more of if we are serious about combining competitiveness with decarbonization. Clean, secure, and reliable energy, including nuclear and SMRs, supported by the right mix of industrial demand, infrastructure, research, and technological expertise.
In my home country, Sweden, we are currently laying the groundwork for a new generation of nuclear power as well as preparing for future SMR development. We need more of this in Europe. Let me end by thanking the Secretariat, our advisers and all the colleagues and the companies that we visited during this mission that was very well organized and a very good information for all of us, I could say. Thank you.
Borys Budka
Thank you very much. And our core reporter, dear chair Georgiou Gori, the floor is yours.
Giorgio Gori
Okay. Thank you. Thank you, Joergen, and sorry for the delay. Now we go back to the first day of the mission. And before that, I want to also thank the ITRE secretariat for the excellent organization of the mission, which covered a wide range of strategic sectors and stakeholders.
So I led the mission on the first day, on Monday. We began in Paris with a visit to Dassault Aviation, where discussions highlighted the importance of strengthening Europe's industrial and defense capabilities in a rapidly evolving geopolitical context. We also met with Mistral AI, which provided valuable insights into the development of artificial intelligence in Europe. The exchange underlined both the dynamism of the sector and the challenges related to the infrastructure, financing, and talent, as well as the importance of ensuring European digital sovereignty. Our program on Monday concluded in Paris with a visit to the Assemblée Nationale, where we held a constructive dialogue on industrial policy, energy strategy, and the importance of coordination between national and European levels.
Thank you very much.
Seán Kelly
Yeah. Thanks to colleagues for the reports. I just want to ask one or two questions, maybe. You pointed out the French system of decarbonizing, which makes sense because, as you said, you can't depend solely on weather, solar or renewables. You need a backup, and the French seem to have got it right in terms of nuclear.
So he also mentioned, though, hydrogen. And we often hear here that hydrogen is a bit of a pipe dream that is too costly, etc. So what takeaways did they have from that experience? And how applicable would they be in the rest of Europe, does he think? And going back to Japan, I was interested in what they said about the semiconductors.
That's a big issue for us here. So, again, the same, do they see any lessons we can learn from it? And also, what was the Japanese impression of the free trade agreement with the European Union and how it's panning out? Thanks very much. And, yeah, sorry, I just finalized by saying, it just shows the value of missions like this for members, particularly who wouldn't be experienced in these areas in their own countries because they wouldn't have them, and particularly when it comes to legislating properly at the end of the day.
So those who organized the mission and went on the mission, I think they deserve great thanks. Thank you.
Borys Budka
Thank you, Sean. And we've got one more question from Mariator Savi Valdini.
Are we speaking to? I
Mariateresa Vivaldini
Don't have a question. Actually, I thought I was doing a report on the mission. It's not a question, because I was there. So I know precisely what happened. It was a great visit.
We visited some real strategic places that are investing in infrastructure and computational capacity. We visited one of the main industrial logistics hubs. So it was really beautiful, although, unfortunately, it was an Italian agency that relocated there. Nevertheless, we need to learn from these situations. And then, a project that showed the potential of power to gas to produce renewable hydrogen and synthetic methane, at low emissions.
And then Cadarache, one of the most important centers in the world where they're looking at fusion, the reactor, at 70 showed that, well, this can't be replicable because the costs are huge, but we've seen studies showing that nuclear can actually be used. Therefore, I think that this mission has given us a huge responsibility, which is to construct a Europe that protects companies, invests in technologies, and doesn't delegate the future to others. I'd like to thank the secretariat and my excellent colleagues who came with us, also the interpreters and the staff. Thank you very much. Thank you.
Borys Budka
You would like to be the first to answer our colleague. Ah, okay. So I can see the crystal. Yeah. The floor is yours, the last question.
Thank you very much.
Christophe Grudler
Much, Mr. Scher. As I was participating also to this mission, I just want to say thank you to the ITRE secretariat for this organization. It was a very technical mission. It was very interesting regarding all the files that we need to study here, especially for me, with the Accelerator Act because in the Port of Marseille, clearly see that all the investors are waiting for clear signal to invest in the carbonization.
And there is a lot of projects in this area. Maybe I just want to give a short answer to the question of hydrogen in France. There is a way to produce cheaper hydrogen in France. It is low carbon hydrogen. It means using the electricity from the grid.
And you know that in France, the electricity of the grid is 70% nuclear energy, means that it is low carbon hydrogen. We have no statutes for that with the delegated act on low carbon hydrogen, and it is cheaper. You know that for transportation, for example, for a plane, hydrogen was supposed to be 10 times the price of common fuel. And now it can maybe decrease by half of the price only with low carbon hydrogen produced only when the grid does not need electricity. And instead of stopping a nuclear power plant, you can use it to store as hydrogen, of course, to have hydrogen use.
Thank you.
Borys Budka
Okay. Thank you very much. And to answer, our colleague, Sean, yeah, during this mission, we were impressed by how fast they could have built the semiconductors factory, in fact, on Hokkaido Island, and we were under the impression how it was supported by the government. And also, there is the same problem in Japan as in Europe that to be independent and to have to be to compete with the other world players. They need to have their own semiconductor industry.
So, and also, they underline that for Europe, it should be also crucial to have this connection with Japan or to either have our own semiconductors industry just to be prepared for the future in case of any problems. And also, they underline how important it is to have this free trade agreement, as you mentioned, because this is crucial for building the real cooperation between EU and Japan. And, I was really impressed how much effort they did to show us also this their point of view, how nowadays, with this political situation, global political situation, is to cooperate with European Union. It was, in my opinion, very honest. They also underlined that their geographical position, when you see China, Russia, and North Korea, is such that, in fact, they are so dependent on the help of allies.
So it is also crucial to have this good cooperation with the European Union. And of course, last but not least, was the energy security because they depend on the fossil fuels from the other countries. And of course, they underlined the problems after Fukushima that they must rebuild their nuclear sector, but it is also the political and social problem in Japan. Thank you. Okay.
No other questions. So thanks a lot for these two reports. And now we will go to the item eight and nine. I was asked to have them together because we have got the same reporter. I got the, yeah, the email yesterday evening that our rapporteur, Mister Salini, has to leave before eleven.
So, our colleague asked to have these two topics together. So we start with our rapporteur, then shadows, and then to summarize the core rapporteur, Mr. Khajipantala. Okay. So the floor is yours. Thank.
Massimiliano Salini
you. Yes. We asked to put the two together for time reasons and scope, because the two files are connected, and I think it's quite useful to deal with them both at the same time. The main argument with regard to the first point is the extension of the scope of CBAM. The extension of this scope, in our view, is a requirement. At the start of experimentation on it, we've been seeing this.
We've got a lot of downstream sectors. I hope that people agree with this. Lots of products need to be included in the scope of CBAM, and the introduction of the measure should reduce the effect on the entire value chain. This is a point that will probably involve a significant extension of the scope, at least in the initial phase. Another central point, quite controversial, has to do with article 27 of the commission's proposal, where the commission talks about the possibility of excluding certain goods from the CBAM scope.
There have been lengthy debates on this, and we're quite critical of this article. Nevertheless, we think that we could come up with some kind of mediation proposal that would maintain the scope, but significantly limit it as a final resort for a limited time. And then there's an issue linked to the underlying rules, CBAM discipline to radically restrict that risk of illusion. We think we need to limit the commission's timelines with regard to certain products. And the idea would be to not use the effective data provided by the third countries directly, but rather for particular risk cases to introduce compulsory data for calculation purposes. And then there's another critical point.
It's also political. Accelerated procedures to remove certain third countries from the scope. We are well aware that there's a critical situation of a country such as Ukraine. Nevertheless, the commission's proposal is too lengthen uncertain, and the industrial sector and the institutions, in my view, need greater predictability in areas such as this. So for the time being, we think that this proposal cannot be accepted, and it needs to be amended, radically amended, or taken out entirely.
Finally, the commission needs to pinpoint clear indicators related to all imports connected to the CBAM measure. In the initial phase, in particular, we really need to understand the true positive impact of the measure on our markets. And where there aren't positive effects, we need to think that probably if there aren't positive measures, we would need positive impacts, we'd need to suspend the block that we foresaw to compensate for the advantages of CBAM. So where there aren't advantages, there should be fewer exclusions or a block on these free quotas. Now the second point, the temporary decarbonization fund.
This is a good proposal. In the initial discussion phase on CBAM, we asked not only for intervention on imports, but also on exports. So, on the global markets, European producers face significant competition. Nevertheless, the fund takes into account a very reduced field, 25% maximum of revenue from CBAM, and then some have to go towards administrative activities. Therefore, we think that we need to assess ongoing verification of the measures so as to adapt the economic dimension, because for the time being, it will be far below what's expected.
Then I'd like to add a point. It's more strategic. The commission has rightly decided to use this measure for sectors, particularly involved in exports, and therefore, this is for an export field. But we need to carry out a more in-depth assessment, because if a sector today isn't specifically involved in exports because the products aren't innovative, for example, that's one thing. But if the lack of presence on global markets is because of the negative impact of this fund, well, then perhaps they should be included in the use of the temporary decarbonization fund.
Now it's quite simple. We need to support exports. That's correct, not only for people who are already exporting, but also for people who don't export for reasons included in the effects that we're talking about. So we've come up with a proposal here that we hope will be the most peaceful possible. Thank you.
Thanks.
Massimiliano.
Thank.
Annalisa Corrado
Thank you very much. I'd like to thank the reporter for that very peaceful cooperation. It's extremely constructive. Competitiveness and decarbonization are heading in the same direction. That's where the industrial future of Europe is going to be played out.
CBAM is an instrument, a fundamental mechanism, because it guarantees fair conditions among companies and for export, avoiding the danger of carbon leakage or restricting it. Downstream extension is a good idea. It eliminates distortion, and it strengthens the value change. We're working on technical aspects, having to do with scrap and credits, and the implementation so as to strengthen the situation rather than weaken it. And Article 27, as proposed by the commission, in our view, includes too much uncertainty and can have negative effects on investment, Cleantech, which is so strategic for our future.
The scope is also strengthened. The proposals are a starting point, and they are being implemented in a good way. Now as to the fund, we think we need to work constructively to ensure that the tool, even though it's limited, is implemented. There is the issue, however, of how resources are used. The experience of the ETS has shown how important it is to ensure that these tools have concrete effects on the actual economy.
The fund needs to support who is really involved in transforming production processes, and that involves strengthening monitoring and assessment mechanisms. At the same time, the fund needs to respond to actual pressures facing companies, particularly when it comes to the export market. In this regard, it's important to look at industrial dynamics and competitiveness without introducing rigid criteria related to export quotas, which we think would affect the chain. Thank you very much.
Thank.
Julie Rechagneux
thank you very much. All I can say is that since the beginning, we've been against this temporary de decarbonization fund. We rejected it, then we're registering it now. Why? Because right from the beginning, it didn't come forward with the right conception.
The result of all of this is that it doesn't protect. It penalizes. It was in the midst of the Green Deal's regulatory frenzy. Nowadays, it's more expensive, and it's just more advantageous, profitable to invest elsewhere. And that's the exact opposite of what we intended.
Commission, the only solution they have is to protect downstream what's weakened upstream. And tomorrow, every single sector is going to be asking to be exempted. So it's unmanageable, and that's quite ironic for a system that was supposed to simplify things and protect things. On the TDF, it's the same idea. Supposed to increase investment, but there's nothing that pushes forward efficiency.
There's no visibility for those investing, and there's just extra complexity. And this, I think, makes it difficult to use. At best, this will be a partial correction of the CBAM's negative effect, and therefore, we're clear. CBAM revenues have to be fully reallocated to member states because they are best placed to support their industries and enable genuine productive investments. Thank you.
Borys Budka
Merci beaucoup. And now we've got two core reporters, two shadow reporters from the ECR. So first of all, I will give the floor to mister Alessandro Ciliani.
Alessandro Ciriani
Thank you. Chair will speak in Italian. We
Are going to be pragmatic here. The objective of the commission can be shared. But if we want to avoid production moving outside Europe, it's not enough to intervene on the raw materials. We also need to look carefully at the entire value chain. Then we need to look at the reality of European industrial chains.
The otherwise, we'll be paying for carbon while people can import the end product without supporting the same objectives. We need to extend the definition. We need to reduce commission intervention times, reduce obligatory values for goods at high risk. These are technical instruments, but they're fundamental to avoid triangulation, customs issues, and ensure the efficiency of the CBAM. We'll be putting forward amendments focusing on strategic chains in our production system with regard to the most exposed sectors.
We need a safeguard clause. The commission absolutely has to be able to suspend temporarily the implementation of the application of CBAM. In conclusion, we need to ensure that the CBAM protects competitiveness, work, and production in Europe. Otherwise, this could lead to deindustrialization. Thank you.
Thank.
Beata Szydło
Thank you very much. I'm quite critical with regard to these solutions because this is an attempt on the part of the commission to adjust to the crisis that has been triggered because this decarbonization fund is supposed to be supporting and leading to a solution to the problems that stemmed from this ideological climate policy after ETS and CBAM. So if we want European industry to be competitive, if we want to avoid problems for companies, we need to review the ETS system and not introduce ETS 2, the commission has said that it's going to be taking these decisions. But in the meantime, this is all somewhat illusory as to the decarbonization fund itself. I would like to thank the rapporteur for his work and echo what he said.
The fund would not be in accordance with the needs of industry, and it would only support some companies. In the meantime, operators that don't have that support will have to support the costs of the environmental policy. Secondly, I've got some doubts with regard to the entry into force of the fund in two years' time. What are we going to do in the meantime? How can losses be compensated?
That's why I agree with the rapporteur. We do need to extend the scope, and obviously, our group will send in amendments.
Sigrid Friis
Missus Sigrid Friss.
Thank you, and thank you to the rapporteur for the words here today and for the peaceful approach that you have laid out for us. I appreciate that. First, let me start by saying that for SIBAM, SIBAM must remain an environmental tool. It's not a punishing tool, and it certainly should not be a tool full of loopholes. This means we cannot support weak international credit.
They are often low quality, cheap, and divert CBAM revenues away from the member states. That's not the way to go. We're also concerned about the crisis exemptions because if the rules can disappear when political pressure becomes too strong, why would companies invest in following them in the first place? Companies need certainty. They need to know that the framework will hold.
And at the end of the day, CBAM cannot drive green investment if everyone knows that there is a backdoor and an emergency exit. We also want the techs to be stronger on electricity imports. Here, actual emission data matters. Right now, neighboring countries are decarbonizing too. If electricity is produced from renewables or if the power system is getting cleaner, C-band should recognize that.
This is even more important now, given that we are, unfortunately, in yet another energy crisis. We need to make sure C band does not become a tool, making it harder for Europe to buy green electricity from neighboring countries. For this, let's make sure that reporting better reflects the real consumption mix, the relevant market time units, and, where possible, the technologies used for exports to the EU. Because CBAM should not just prevent carbon leakage, CBAM should also reward real decarbonization. Moving on to the decarbonization fund.
I think the transitional phase of CBAM has shown two things. First, the instrument is relevant, and second, it still needs to work better. For certain sectors, the risk of carbon leakage is still massive, especially as free allowances are gradually phased out under the ETS and European producers face cost pressures that competitors abroad may not face. Enter the temporary decarbonization fund. But for us, there are two priorities for this fund to be successful.
Support should go to the share of the production that is actually exposed to carbon leakage on markets outside the EU, not to the full production of a company regardless of where it's sold. Otherwise, we risk that CPAM revenues are spread too widely instead of being targeted where the risk is real. And that is also why strong green conditionality matters. Companies should receive support because they are exposed to carbon leakage, and because they meet climate conditions. What we need is a fund that actually encourages us to decarbonize.
Because if we price carbon, those revenues have to help channel investment into real industrial decarbonization, making sure the money stays in the same system. Thank you. Look forward to the further work on both of these files.
Borys Budka
Thank you very much, Sigrid. And now, on behalf of the Greens, missus Isabella Louvain.
Isabella Lövin
Thank you, chair. I would like to first thank colleague Salini for the work on his draft opinions. CBAM is an essential instrument for the European Union to drive decarbonization efforts beyond our borders. It plays a key role in also creating a level playing field and ensuring that our climate ambition does not come at the expense of the European industry. We, therefore, welcome the extension of the scope to downstream products.
However, the scope should be further expanded to include additional products in order to ensure consistent treatment. Otherwise, we risk seeing new import patterns. So we agree with the repertoire that we need to expand those. However, the proposal of a possible introduction of a new emergency brake mechanism, we find highly problematic. While flexibility may at times be necessary, this will create a risk of legal uncertainty and undermine the predictability of a key EU climate instrument. We're also deeply concerned about the inclusion of carbon credits under Article 6 of the Paris Agreement to ensure consistency with the EU ETS and safeguard environmental integrity.
Such credits should not be eligible for deduction. Regarding the decarbonization fund, it's essential that it remains both fair and effective. Financial support must be clearly linked to concrete decarbonization efforts by companies. At the same time, consideration must be given to earmarking parts of the CBAM revenues to support decarbonization efforts in third countries, reinforcing both their effectiveness and the fairness of the CBAM. More broadly, C band must be implemented in a consistent, predictable, and credible way to achieve our climate objectives while, of course, strengthening the European industrial base.
I look forward to working with you constructionally on this space.
Thank you, chair. I will speak in Dutch.
Rudi Kennes
Well, when it comes to this new proposal, we are dealing with change of things that should have been changed before. But, I think you're going for protectionism rather than ambition, commission to deal with the environmental crisis. This string this strict, criteria is supposed to stick to these criteria, but we're not actually the worst emitters, worldwide. So we're not looking at the consequences of what these measures we're bringing in. And therefore, I think it's key that all countries around the world deal with emissions.
And we have to look at the different capacities and levels of decarbonization in other countries and have that reflected in these proposals. I think that approach would help to guarantee that this would lead to worldwide emissions reduction, and that would allow us to close a circle. So getting rid of article 27, that would provide exemption for some products. I think this would undermine trust in the whole proposal. When it comes to decarbonization fund, well, it's great now that we are looking at how shortsighted we've been, you know, looking at steel and automotive sectors.
Well, there are far too many state subsidies used there. But when it comes to the dividends, they are handed out to private entities outside the e. And who loses? Workers. Arcel Mittal, for example.
So you have to make sure that the funding is linked to production, and make sure the devin dividends come back to where they've been sent. And all of this has to be coupled with transition plans that are developed with the trade unions. You can't treat all companies the same. You have to allow companies to invest and to change the ways of production. We have to look at smaller companies that haven't been able to take advantage of this funding.
And for those that did invest early in transition, they can't be treated in the same way as those that left it to postpone things to later. You need to make sure that the subsidies are handed out to these sorts of investments. And my last two points, this is to deal with difficulties in the European industry. We're not supporting upcoming industries to deal with the environmental change. We need to contribute to environmental funding and make sure that everybody can profit similarly.
Thank you.
Borys Budka
Thanks a lot. And now in the CTI procedure, we've got Mister Jens Geyer from SND. The floor is yours. Thank.
Jens Geier
you much indeed, chair. Well, thank you very much indeed to the rapporteur, first of all, for this presentation. I am concerned about the whole situation, and I think we've seen, you know, there is a will to invest in these sorts of measures. There is an urgency, a need to do this, but the financial basis, the background, given the energy price shocks we're seeing and the difficult geopolitical situation, given the manipulation of competition on the world market. This has led to a great part of our industrial basis falling behind in Europe.
So when it comes to it, I think it's our task here in this situation to protect the industries we're talking about. Don't think CBAM does that enough. When it comes to exemption for downstream products, we can support that, but there are production chains, chemicals, for example, where we see surpluses. And I'm not sure there's any specific tool that could deal with the complexity of these supply chains. I would like this committee to look at the effects of CBAM, that we continue to monitor them and to go for instruments measures when we see the effects being disadvantageous to European industry.
I think there is an alternative for CBAM from the German research. I think we should have a look at that. Thank you.
Elena Donazzan
Thank you.
It's great that we deal with these issues in the committee, and that the commission has understood that we're at risk of deindustrialization. I remember when Mister Sergei came a couple of months ago saying, we've already lost some 200,000 jobs, and there are several thousand at risk. Today, talking about the protection of the entire chain is something essential. The colleague said that the chains have different problems. I'd like to make a proposal here to increase our hearings here, because it would be extremely useful besides the initiatives that we undertake as MEPs.
Yesterday, I had one of the steel producer representatives here, ArcelorMittal, one of the major steelworks in Europe, ThyssenKrupp, and there are producers and clients from the entire chain. Everybody is saying that we need a European defense alliance. Extending protection measures to the entire sector is essential because these people have to produce abroad because of the situation. And our companies, when they need to come up with a price, since only steel is protected, for example, they are going to produce in the Far East where costs are lower. So it's essential that we extend protection and carry out the most precise analysis possible.
Borys Budka
I don't see any other colleagues in the CAT DI procedure. So in the end, I will give the floor to the rapporteur for this file, mister Najjipantala. The floor is yours.
Michalis Hadjipantela
Colleagues, thank you, President. I will speak. I will be speaking on behalf of the APP group, mister Salini, because mister Salini has other commitments. Let me first address the CBAM scope extension. The proposal to broaden coverage to additional downstream products is not about reopening the regime arbitrarily, but about correcting gaps created by the current methodology. We need to add CN codes for goods that are clearly exposed to international competition and carbon cost, yet were immediate, in order to safeguard the competitiveness of European producers.
At the same time, we must close loopholes. Article 27a, which allows the commission to exclude quotes from CBAM, should only be used as a last resort for a limited period and only where no effective and less restrictive alternatives exist. We also need a more robust definition of circumvention, shorter processing times, and mandatory default values for countries and goods at high risk of resource shuffling to prevent reallocation of low carbon residual volumes just for the European Union market. Several elements of the commission proposal go too far or in the wrong direction. The new fast-track exemptions based on undefined serious and unforeseen circumstances should be deleted.
The existing exemption procedures are sufficient. Pre-consumer steel scrap should not be treated as a high carbon precursor because aligning its footprint with blast furnace materials will penalize electric arc furnace producers and risk driving more scrap exports out of the European Union. Instead, we should reject this change and protect our circular steel industry. Finally, must be evidence-based. The commission should define and publish annual KPIs on imports and the European Union production of CIPAN goods.
If the data show that CIPAN is not delivering its intended effect or is causing serious adverse impacts, the phase out of the free TS allocation for these sectors must be halted. On the temporary decarbonization fund, our line is equally clear. We reaffirm the absolute need for a permanent export solution for the most exposed CBAM sectors, and recognize that this fund is limited in scope and duration and cannot replace the ATS revision. Free allowances must remain in place until CBAM adequately addresses export-related leakage. Given the uncertainty on carbon leakage risk and the fund's modest financial envelope, we are calling for an early comprehensive review of its effectiveness, including whether the eligible sectors and the level of resources are sufficient, and, if necessary, a legislative proposal to adjust them.
In addition, we propose a new article mandating a thorough assessment of barriers the European Union, ETS, covered companies face when assessing foreign markets. Within one year, the commission should present an analysis of this economic structure and obstacles, their impact on competitiveness and growth beyond the internal market, and based on that, a legislative proposal for a possible union level support mechanism, including financial instruments to help our industry compete globally.
Borys Budka
Thank you very much. Thank you very much. And there is the deadline for amendment for both of these files, and it is May 8 at 5PM. Thanks a lot for these two items. And now, we will have a twenty minutes break because our next item, item 10, will start at 11:25.
Your colleagues, please take your seats, and it's time for our item 10. But I must check if we have our colleagues. So we've got a rapporteur here.
Yeah.
Borys Budka
We get our rapporteur, core reporter from Okay. But we are on time. So now we start item 10, establishing a budget expenditure tracking and performance framework. So I will give the floor to our reporter, Miss Angelica Vincik, for the presentation of the report.
Angelika Winzig
Thank you, chair. I'm speaking, chairman.
Management at EU levels needs two conditions to be fulfilled. First of all, we need to understand how the EU budget is implemented and what our goals are. And secondly, we need to know what and how the funds are spent. We need reliable, accessible data not only for parliamentary scrutiny, but also for well-founded political decisions and for the confidence of our people. At the same time, the proposal falls in the context of simplification, which is important.
But we have to say very clearly that simplification should happen not only within the commission, it needs to happen within the beneficiaries in the regions. It needs to trickle down. Given our competitiveness and access to EU funds, particularly for SMEs, it is of great significance. We also very much welcome the number of indicators being reduced from 5,000 to 900. That's an important step.
At the same time, this reduction should not mean that significant information falls by the wayside. Against this backdrop, in our draft opinion, we are proposing sectoral legal acts containing the possibility to provide for additional indicators where it is essential. This is important because these programs for the new MFF are in parallel negotiations. We need to ensure that their specific goals and structures, at the end of the day, are correctly reflected in the performance framework. At the same time, additional indicators should only be aligned with the goals and not create any additional red tape.
The horizontal goals are already laid down in the budget regulation. The performance framework should not redefine them, but cover the corresponding expenditure. Double creation in two different legal acts creates unnecessary complexity. We're particularly critical of the far-reaching powers of the Commission on Central Elements of the Performance framework through delegated acts. According to the current framework, for example, in Annex 3, the commission would be able to make changes without involvement of the co-legislator.
We need to preserve the institutional balance, and the role of Parliament and Council needs to be protected. I'd like to thank the shadow rapporteurs for their very valuable input. Although this is a very technical file, we should not forget that this regulation is one of the cornerstones of the MFF and is, therefore, of great political significance. I'd also like to remind you that the deadline for amendments is tomorrow, May 7, at 5PM. Thank you very much.
Borys Budka
And now our core report our shadows. And Daniel Atard is not there still. Paul, yeah. Paolo, the floor is yours. Thank you.
Paolo Borchia
Thank you very much. Allow me to get the floor in, in Italian.
The first point isn't the lack of funds, but rather access to financial instruments. Currently, SMEs in Europe represent above 99% of all of our production sector, but they're still the most penalized. Productivity of SMEs is a major issue. Something I think that we need to look at is that it's estimated that each SME should have some 228 work hours every year on administrative issues. And so these are resources that are taken away from other activities. I think what we need to do is to be sufficiently lucid to send out a small because there were some significant obligations introduced over the past few years.
And therefore, I think that our colleague, Miss Fincic, is headed in the right direction. Perhaps we might be more decisive, however, in terms of do no significant harm. I think we need to be realistic also when it comes to the thematic targets, without forgetting about the fact that the parliament's work, well, we don't want it to be affected by delegated acts by the commission. So I think that the objective should be that of constructing an ecosystem to improve the capacity of our SMEs. And what we need to do is have the strength and the lucidity to make investments in the results that some European policies have led to over the past few years.
Borys Budka
Sandy, and I give the floor to Missus Lina Galves on behalf of Mister Daniel Atar to the shadow rapport.
Lina Gálvez
Thank you, chair. Sorry, the break makes our a bit complicated to reach just in time. So on behalf of MEP Daniela Tarr, I speak on her behalf. I'm table amendments to make the performance framework regulation deliver real results while safeguarding its horizontal principles. These principles are the framework's backbone.
Without them, European Union spending misses climate and social targets entirely. The amendments ensure strong enforcement of do not harm on gender equality, social conditionality and climate resilience target electrification boosts with new indicators for airports and 100% climate mitigation target from inland and maritime ports. Of these changes, anchor European Union spending in core social climate TFEU priorities, while contributing to the overall well-being of European citizens. I urge colleagues to back and cosign this amendment to deliver a performance framework that embeds horizontal principles while protecting investment with zero excess burden. Thank you.
Sigrid Friis
Thank you. Thank you for the floor. On the performance regulation, I have to say, I am quite surprised by the direction taken by Raboteau. At a time when competitiveness is on everyone's mind and we are at the same time asking our citizens to contribute more to a larger EU budget, this is exactly the moment when we should ensure trust in how we spend EU money, not weakening that. And yet, all references to horizontal targets have been removed.
We hear again and again from companies and industry that fragmentation across EU programs is a real problem they are facing. Different rules, different requirements, creating legal uncertainty, complexity, higher compliance costs. And as always, who has hit the hardest? It is the SMEs. This file was supposed to bring clarity, bring coherence, harmonize how we assess whether EU funding is actually making a difference.
This is why we want to keep horizontal spending targets and the do-no-significant-harm principle in the text. Because more harmonization means more certainty. And certainty is good for competitiveness, especially in a geopolitically challenging time. At the same time, we also want to see more granularity in the annex. Not every intervention field has the same climate or environmental impact across sectors.
A good example is military mobility, where road, rail, aviation, and maritime infrastructure do not have the same footprint, so they should therefore not be tagged in the same way. I look forward to continuing the work in trying to bring more trust to the spending of EU money by bringing coherence, consistency, and horizontal spending targets.
Ville Niinistö
Thank you, chair. Thank you, colleagues. I'm also surprised by the direction taken by the draft opinion of the rapporteur, because this is not a technical exercise. The performance regulation is actually a way to make sure that the MFF is supporting the values of the pro European majority and the majority that will vote for the MFF and the majority that will work, on the basis of that of the MFF. And, we can't get rid of the standards and the measurements that make sure that our values are reflected in how the spending is being done during the MFF period.
So this is a tool to make sure that every euro spent under the MFF supports our long-term goals and that our policy goals are achieved in the simplest and most effective way. We have also heard a lot about simplification from the EPP. This is actually the time and place to do it. Having one performance regulation is a lot easier to implement than having loads of different regulations on the horizontal targets in different regulations separately in the negotiations. I understand that in the current geopolitical context, some of our political priorities may have shifted more towards security and competitiveness, but we cannot forget that advancing the clean transition and tackling climate change, and also promoting social fairness and gender equality, is also necessary to strengthen Europe's resilience.
These targets go hand in hand. So we have to make sure that when we spend money, all of these targets are promoted. From the green side, we will put forward amendments for a stronger climate and environment contribution from the MFF, full compliance with the do no significant harm principle, and a clear requirement to exclude fossil fuel financing that are necessary to boost Europe's competitiveness and decarbonization. Overall, I see that this is the direction that will support Europe's role in the world in making sure that our values are well reflected in the European development. So I hope we can move in this direction in the negotiations.
Thank you very much.
Rudi Kennes
Thank you, chair. I will speak in Dutch. This.
New proposal has a few positive points, taking up gender mainstreaming and do no significant harm principle. We agree with all of that. Also, the principle of the harmonized framework for reporting, we agree with all of that. But there are some comments I need to make. When it comes to military funding, that is, cannot be seriously accepted when we're looking at the crisis we're going through in Europe.
That must remain a national competence. And when it comes to climate targets, the monies allocated aren't enough. There need to be more guarantees when it comes to social and labor conditions. We need to be focusing on good jobs in the next MFF, and we need specific criteria for a just transition for workers. I think there is a lack of parliamentary control mentioned here in the next MFF.
And it gives the commission the power to lay down priorities, and therefore, parliamentary monitoring needs to be resumed. When it comes to the mainstreaming of specific important questions, we need guarantees. We need specific budgets and targets. Thank you.
Borys Budka
Thank you. And now in the catch-the-eye procedure, we've got two colleagues. So first, Missus Yutta Paolo. No, she's not there. Okay.
So, Missus Lina Galves.
Lina Gálvez
Yes. Thank you, chair. Now on behalf of myself, we know that the budget is the main tool for political action priorities. However, the current proposal does not adequately address the challenges people face to date, nor does the proposal of our rapporteur Nibler from EPP, deleting, as it has been said, the horizontal principles, including one I will mention right now, which is gender equality, which is a core principle of the European Union enshrined in our treaties. In a committee such as ITRE, where we are in charge among other things of research and innovation policies or competitiveness, it is really alarming that we are not taking gender equality into account considering we are 10 million more women within the European Union and that in most European countries, 60% of citizens acquiring our university degrees are women.
Moreover, the current MFF tracking method indicates that only 12% of the union budget between 2021 and 2024 supported gender equality, so we cannot lower our standards. If we want to lead on innovation and being competitive, sorry, the European the EPP proposal, draft proposal is contradictory with our main political goals, and to be honest, not very democratic. We cannot sacrifice our democracy for any simplification. I will be tabled amendments to restore a reinforced gender equality and budget expenditures. So, I hope also the members from other groups other than mine, as indeed that also mentioned that these horizontal principles cannot be deleted, we'll be happy to consign these amendments.
Thank you.
Borys Budka
Thank you very much. And just a moment, we've got our colleague, Virgo Strata, in the Catch the Eye procedure, and then I will give the floor to our dear colleague from batch committee, the rapporteur, mister Germain. And then we'll back to our rapporteur, its rapporteur. Thank.
Jean-Marc Germain
Thank you very much, sir. To make progress, we need to measure. We all agree about that, and I think that's the basis of this regulation on performance. If we want to use our citizens' money, we need transparency and assessment. And I can understand that we're not always in line.
We don't always have the same objectives. I know that some people might be annoyed that we have objectives for equality and climate objectives. This could be a political choice or a political decision, but we can't be blind to the fact that we can't resolve matters. Today, we can and have to measure. We have to monitor the performance of our funds.
And it's not just through simplification that we're going to be simplifying the lives of SMEs. If we don't have the same framework, the same performance assessment framework, we have to start from scratch each time with new criteria. So let's not make the mistake today of not using the performance regulation, so that in three years, we need an omnibus to have a general framework to assess our global performance. So, yes, we do need some simplification and transparency, and that is essential.
Borys Budka
Thanks a lot. And now as I mentioned before, I will give the floor to the reporter from the batch committee, mister Germain.
Jean-Marc Germain
Thank you, chair. I will speak in French. First.
Of all, thanks very much for inviting us. My colleague, Mister Herbes, is presenting his report in the budget committee and couldn't attend this meeting, but it's always useful to attend debates that take place in the committees that are providing an opinion on performance. I'm going to make a couple of points. First of all, I was quite concerned when reading the draft report. First, because with my colleague, we decided to take a bottom-up approach to use, first of all, what the committees think about this, particularly relevant indicators in their fields.
And bearing in mind the draft report, we thought it would be difficult to do, but then I heard the debate, and I thought that perhaps after having meetings with the shadows, we might have a more useful report for the budget committee. Now, first of all, we do indeed need the most relevant indicators possible, and these indicators are also used in the NRPP report to be used as a basis for the system of payments for end users. And they should no longer be based on costs, but rather on activity indicators. And those activity indicators are in the annex. So perhaps corrective measures are needed.
But in this case, it's for the payment system for the different funds, in this case, for competitiveness. So it's important that we have from you the most relevant indicators possible. Secondly, with this, I'll conclude. I'm sorry to go on, but it's a complex matter. In terms of the horizontal objectives, this was rightly pointed out by one of our colleagues.
The budget maintains existing aids for aid from the cap, the European Social Fund, and adds €400,000,000,000 for competitiveness through research and different forms of industry aid. And if those 400,000,000,000 can't be explained to the citizens, if we can't explain how they're going to be used for their objectives, which are social and a matter of equality between men and women, well, sustainability, the environment, and the basic principle, which should be that human activity shouldn't destroy nature. Well, there will be no acceptance on the part of our citizens of the budget and the new ambitions. With regard to horizontal targets, this is something that we, the co rapporteurs and the parliament will decide upon in terms of the future of those objectives. And as rapporteur for the budget committee, we need to strongly defend the maintenance of those horizontal objectives, but also the strengthening of these.
Particularly for SMEs, these principles need to be applicable in a simple fashion, and I think that your committee could also make a very useful contribution in that regard. Thank you.
Borys Budka
Thank you very much. And now for the summarizing, I will give the floor to the rapporteur from our committee.
Angelika Winzig
Thank you very much indeed for all of your input. Let me just highlight again, though, that the performance framework isn't going to provide any simplification, and it won't do away with the horizontal principles. We're still within the bounds of the financial framework. So thank you very much, and looking forward to future cooperation. Thank you.
Borys Budka
Thanks a lot. And before I close discussion on this item, I want to announce that the deadline for amendments is May 7 at 5PM. Thanks a lot to all colleagues who took part in our discussion, and now we will have the lunch break, and then we will meet here in this room at 02:30.
Ask anything about this video — I analyse its transcript to answer.