The EU triggered a revolutionary climate change plan. It has announced on Wednesday its detailed proposal of climate change measures that will help the bloc to be carbon neutral by 2050 and reduce greenhouse gas (GHG) emissions by 55% compared to 1990 levels by 2030.
The bloc released an array of proposals at the European Commission that will have to be approved by the 27 member states and the EU parliament. Even though the final corrections are still in progress, the measures invoked passionate reactions at the EU Commission.
The proposals billed as the EU’s most ambitious plan yet to tackle climate change, are called the Fit for 55 Package as they would put the bloc on track to meet its 2030 goal of reducing CO2 emissions by 55% from 1990 levels.
So far the EU has managed to cut its GHG emissions by 24% by 2019 compared to 1990 levels. The emissions emitted by the members were 5.7 gigatons of CO2 equivalent in 1990. They would need to drop down to 2.5 gigatons of CO2e by 2030 for the EU to achieve its target.
EU New Climate Change Plan
The proposed measures include:
- expanding the bloc’s Emissions Trading Scheme
- phasing out free emission allowances for the aviation industry and including shipping in the ETS for the first time
- Europe to ban diesel cars by 2035 – that involves forbidding the sale of all petrol and diesel powered vehicles by 2035
- the introduction of a carbon border adjustment mechanism – or known as an environmental tax
- taxing jet fuel
- installing charging points on major highways – EV charging stations on every 60 kilometers and hydrogen refuelling on every 150 kilometers
- producing 40% of EU energy needs via renewable sources by 2030
- renovating buildings that are not deemed energy efficient
“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,” said EU Commission President Ursula von der Leyen.
The automobile sector is deemed seriously hit by the new rule. In theory, all new cars and vans will need to be zero emissions by 2035. Tough negotiations are expected to be ahead between member countries.
One of the most remarkable proposals is an EU carbon border tax on importing goods from outside the union like steel, cement, and fertilizer. The tax aims to make sure that the cost would be the same as if the goods were made in the EU. That would also make the carbon permits competitive. However, the proposal is deemed controversial and could spark a trade war with China and the US.
The US climate envoy John Kerry said in March that the carbon border tax would have serious implications for economies and trade, describing it as a “last resort” tool. However, the bloc aims to gradually introduce this tool starting with cement, iron, steel, aluminum, fertilizer and electricity sectors, and then other sectors are planned to follow.
One of the proposals also called for updated taxation on electricity, motor and aviation fuels. The rule, also known as the Energy Taxation Directive, was last placed in 2003. According to the Commission, the current rates are outdated and not in line with the bloc’s green agenda.
How To Tackle The Extra Costs
Some of the critiques has been that the higher fuel costs would make airlines pass it on to consumers. The same would be true for heating bills for households. However, the EU Commission seems to be aware of that problem, so it plans to exclude vulnerable and energy-poor households from taxation on heating fuels.
Member states will also receive funding to invest in energy efficiency. One of the funding mechanisms for those initiatives would be the revenues from the Energy Trading Scheme.
What comes next for the member states and the new climate change policy are months of tough negotiations. Countries like Poland, Czech Republic and Hungary are particularly worried as they are faced with massive costly changes that they need to undertake to adhere to the new rules.
The EU Commission is betting on support from citizens that are willing to pay the price for the transition instead of protests. However, that picture is unlike the disruptions in France, which brought the nation to a standstill in late 2018 and early 2019, due to the protests from the introduction of the green tax on fuel.
