COP26 Countdown: EU leaps in with Ambitious European Green Deal Rules
Unveils new law to cut emissions 55% by 2030. Ditch combustion engine by 2035.
Welcome to EarthWatch, the independent environmental news and opinion newsletter for people interested in the latest climate research and environmental thinking —compiled and written by me, Jerry Bowles, an ancient journalist who has been around the Sun a few times and thinks that while we may not need a weatherman to know which way the wind blows we do need climate science to save our future from ourselves.
Ideas, tips, and feedback: jerry.bowles@gmail.com
The European Commission rolled out last week a comprehensive basket of new and amended EU laws, rules, and policies mandating that the 27-nation EU bloc reduce its greenhouse gas emissions by 55% by 2030, compared to 1990 levels, and creating a legal requirement for the EU to get to climate neutral by 2050. An amendment to the current Renewable Energy Directive increases the target to produce 40% of energy from renewable sources by 2030.
In an accompanying statement, European Commission President Ursula von der Leyen declared:
“The fossil fuel economy has reached its limits. We want to leave the next generation a healthy planet as well as good jobs and growth that does not hurt our nature. The European Green Deal is our growth strategy that is moving towards a decarbonised economy. Europe was the first continent to declare to be climate neutral in 2050, and now we are the very first ones to put a concrete roadmap on the table. Europe walks the talk on climate policies through innovation, investment and social compensation.”
The cornerstone of the plan is a cap and trade mechanism called the EU Emissions Trading System (ETS), which was actually established in 2005 but has been widely criticized because Brussels gave away so many free emissions allowances at the time that virtually nobody was deterred. That has changed dramatically over the past three years as rules have been tightened and permit prices have gone up as the cost of carbon has risen to about EUR50 a ton. ETS was the world’s first major carbon market and is still the largest, covering all EU member states plus Iceland, Norway, Liechtenstein, and United Kingdom.
The amended ETS will continue to govern the cost of emitting carbon for the heating, transport and manufacturing sectors as before but also add a new emissions trading system for transportation and buildings. The proposal explains:
The EU Emissions Trading System (ETS) puts a price on carbon and lowers the cap on emissions from certain economic sectors every year. It has successfully brought down emissions from power generation and energy-intensive industries by 42.8% in the past 16 years. Today the Commission is proposing to lower the overall emission cap even further and increase its annual rate of reduction. The Commission is also proposing to phase out free emission allowances for aviation and align with the global Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) and to include shipping emissions for the first time in the EU ETS. To address the lack of emissions reductions in road transport and buildings, a separate new emissions trading system is set up for fuel distribution for road transport and buildings. The Commission also proposes to increase the size of the Innovation and Modernisation Funds.
To complement the substantial spending on climate in the EU budget, Member States should spend the entirety of their emissions trading revenues on climate and energy-related projects.
The plan to create an (ETS) for transport and buildings has attracted considerable blowback from nations who are afraid the real costs will be borne by consumers. Pascal Canfin, chair of the European parliament’s environment committee and a key ally of French President Macron denounced it as “politically suicidal,” “a huge political mistake” and “a very bad idea.”
To avoid penalizing less wealthy or coal-dependent nations with unfair emissions targets, the new law contains an Effort Sharing Regulation to make sure that…
…these targets are based on their GDP per capita, with adjustments made to take cost efficiency into account, assigns strengthened emissions reduction targets to each Member State for buildings, road and domestic maritime transport, agriculture, waste and small industries. Recognising the different starting points and capacities of each Member State, these targets are based on their GDP per capita, with adjustments made to take cost efficiency into account.
Simone Tagliapetra, a senior fellow with the Brussels-based Bruegel think tank, shares the math in a tweet:
The plan proposes that in 9 years Germany cuts by 50% its emissions in road transport, buildings, agriculture, SMEs & waste compared to 2005. 47% effort for France, 43% for Italy, 38% for Spain - down to only 10% for Bulgaria.
A new Carbon Border Adjustment Mechanism will put a carbon levy on a targeted selection of polluting imports (such as cement, steel, and aluminum) to ensure there is no evasion of the ETS through ‘carbon leakage' from foreign manufacturers.
One of the most contentious proposals in the new proposals calls for a phase-out of new internal combustion engine vehicles by 2035, mandating a 55 percent fleetwide CO2 emissions cut from 2030 and meeting a 100 percent target by 2040. New alternative fuels infrastructure laws would compel nations to start building charging points and hydrogen refueling stations to meet the demand for zero-emission vehicles.
Perhaps the thorniest issue of all may be a proposal to change the existing EU Energy Taxation Directive, created in 2003, which contains incentives for fossil fuel usage instead of cleaner alternatives. Explained Simone Tagliapetra, a senior fellow with Bruegel in a blog:
Because of the political sensitivity of this framework, and the requirement that EU countries agree unanimously on tax measures, previous reform attempts have consistently failed.
With Fit for 55, the Commission proposes an overhaul of the framework based on the general principle that taxation of energy products and electricity should be based on both their energy content and environmental performance, and that different minimum levels of taxation should be allowed for motor fuels, heating fuels and electricity in order to promote greener choices.
In particular, an EU-wide minimum tax rate would be applied to polluting aviation fuels – except cargo-only flights – as well as to polluting boat and ship fuel, including fishing vessels. These minimum tax rates would be introduced over 10 years, starting in 2023.
To soften the blow from new emissions regulations for the EU’s most vulnerable citizens, the new law contains a Climate Social Fund proposal, which will direct 25 percent of revenues from the ETS and funds from the EU budget to help citizens buy zero-emission vehicles or improve the energy efficiency of their homes. The CSF will be distributed through national governments who will have to submit plans for how they’ll spend the money to the Commission for approval and match the EU financing with their own cash. If all goes as planned, the fund is expected to grow to at least €72.2 billion.
Kudos to the EU which now becomes the first big economy to try to translate its climate goals into concrete climate laws and regulations. By the time the package is debated and voted on over the next two years, there will no doubt be provisions that don’t survive in the final product. Expect intense lobbying from the more polluting member states, lots of input from businesses and poorer countries who want to avoid jumps in the cost of living. EU climate policy chief Frans Timmermans remains optimistic, however:
We are not going back to business as usual. You see it everywhere in your countries. We all see that we cannot just recover on the basis of where we were before. Restructuring will be an essential part of all the efforts we do, nationally and at the European level. So let us make sure that restructuring goes into the right direction, so that there will be jobs for our kids, sustainable jobs, so that we will limit the rise of the temperature to 1.5 degrees and so that we will save biodiversity in Europe and worldwide. Let us also make sure that we will lead with a circular economy and other parts of the economy in the world, so that we become an example for transition also elsewhere.
The transition will be hard, he admitted at a news conference, but we must do it.
“It's also an obligation because if we renounce our obligation to help humanity, live within planetary boundaries, we would fail, not just ourselves, but we would fail our children and our grandchildren."
The price of failure, he added, was that they would be "fighting wars over water and food".
So, on that truly frightening note, there you have it. The EU has created a comprehensive climate mitigation roadmap for other countries and economies to match or beat. Can we do it? Let the real work begin.
Dig Deeper
European Green Deal: Commission proposes transformation of EU economy and society to meet climate ambitions (European Commission)
Delivering the European Green Deal (European Commission)
Amendment to the Renewable Energy Directive to implement the ambition of the new 2030 climate target
Fit for 55 marks Europe’s climate moment of truth (Simone Tagliapietra)
EarthWatch is a free newsletter but a few nice people who like it and want to support the effort have become paying subscribers. If you want to be a nice person, please take advantage of my lowest price ever offer below.
If you’d like to become an EarthWatch sponsor and regularly reach 1000 of the most influential climate scientists and journalists in America, send me a note: jerry.bowles@gmail.com
The EU is apparently not the only economy to think of a border carbon tax on polluters. Lisa Friedman of the New York Times writes today that U.S. Democrats are proposing a similar levy. (Paywall) https://www.nytimes.com/2021/07/19/climate/democrats-border-carbon-tax.html