The European Union does not want to give up leadership in the fight against climate change now that the US has returned to this battle at the hands of Joe Biden. The European Commission has turned this fight into an identity flag and after the recent agreement reached by the community institutions on the European climate law, 54 community regulations will have to be revised and hardened, with tremendous repercussions for sectors such as transport, energy, construction and international trade. “Each procedure is going to be a battle,” warns MEP Pascal Canfin, president of the Environment Commission of the European Parliament, who will be in charge of reviewing all these legislative projects.
This French MEP from the liberal group points out that the enormous legislative task in the making “gives an idea of the magnitude of the change that is going to be experienced.” And although he acknowledges that the negotiations will be “tough, difficult”, he is convinced that “by the end of 2022 all the rules will be approved or in the negotiation phase.”
The changes will range from a profound transformation of mobility, which could mean the end of gasoline and diesel vehicle sales in just 15 years, to an orientation of agricultural subsidies towards greener productions, or the renovation of the housing stock to improve the energy efficiency of homes, offices, commercial premises and factories. It will also involve the implementation of fiscal instruments such as a climatic tax for imports.
The agreement reached two weeks ago between the three European institutions – Parliament, Commission and the Governments of the Twenty-seven – to approve the future Climate Law will mean shielding the new emission reduction targets to which the EU has committed itself to the UN. All the signatories of the Paris Agreement, the international climate pact, have the obligation to present plans to cut their emissions. In 2014, Europe already committed to reducing its greenhouse gases by 40% by 2030 compared to 1990 levels. However, the EU has revised its targets upwards and is now committed to reducing its net emissions by 55% . Europe already had a legislative architecture to meet its previous goal, which will now need to be toughened to meet the new commitment and will have to incorporate new instruments. These are some of the 54 most important rules that will have to change according to a study prepared by the Canfin MEP team:
Emissions trading. Europe pioneered in 2005 when it launched an emissions trading system, known by its acronym ETS. This market, which covers around 40% of the greenhouse effect emissions of the entire EU, forces around 11,000 factories and plants to pay for the gases they emit into the atmosphere. The system was not really efficient until a couple of years ago, when it was reformed and the price of a ton of carbon dioxide started to rise and helped drive the closure of coal plants. “We are going to a market with a price of between 50 and 60 euros [por tonelada de CO₂]”, Canfin explains about a system in which 40 euros per ton have already been exceeded.
The European Commission is preparing a new reform of this market to accelerate the expulsion of fossil fuels from the entire energy system, not only from the electricity sector. Brussels is expected to present the changes in June and, among other developments, it is expected that shipping will also be required to enter the ETS market. In addition, changes are planned so that airlines pay more for the carbon dioxide they emit.
Transport. While the penetration of renewables in the electricity sector has a long history, the electrification of European transport does not seem to have started to take off until now. “We are at the beginning of a radical transformation of our mobility,” says Canfin. The Commission should present in June a revision of the carbon dioxide emission standards for cars and vans that has to be aligned with the new targets included in the Climate Law. “Electrification is accelerating and that is why I advocate setting a deadline to phase out combustion vehicles by 2035,” says Canfin. Many countries and manufacturers are already targeting that date and even a few years earlier for the end of new diesel and gasoline cars. The revision of the same emission standards for heavy vehicles is also planned, but for 2022, where electrification is still somewhat more complicated and other formulas such as hydrogen are being considered.
Also next month a review of European legislation is scheduled to determine more ambitious targets for alternative fuel infrastructures, “such as charging points for electric cars or hydrogen refueling stations,” the study points out.
Duty. In many cases, the European movements to tighten their emission standards for the automotive industry and for its industry in general have not been accompanied in other countries by comparable measures. And among companies and community leaders there is a fear of the so-called carbon leakage: that climatic rates could lead to a relocation of some industries. The Commission plans to present its proposal for a “border carbon adjustment mechanism” next month, which would imply a tax on more carbon-intensive imports. “This will protect European industries from possible dumping climate of its competitors ”, points out the study on the community directives that will have to be modified in the coming months.
This proposal has already raised the suspicions of the US and China. But Brussels wants to go ahead with this measure and maintains that it will be compatible with the rules of the World Trade Organization. Just over a decade ago, a similar confrontation was experienced when the EU tried to make all international flights pay a tax for their emissions, a project that Brussels finally had to park.
More renewable. When Europe put on the table in 2014 its objective of cutting its greenhouse emissions by 40% by 2030, it also established sectoral goals; for example, it promised to achieve that by that same date 32% of all final energy consumption in the EU would be from renewable sources (now around 20%). In June, the Commission will revise that target upwards, which in turn will mean that the Twenty-seven will also have to adjust their renewable implementation plans. Brussels is also expected to put tougher efficiency targets on the table.