October 16, 2021

Brussels Is Armed To Make 55% Cut In CO2 A Reality

5 min read

Brussels is armed to make the 55% cut in CO2 a reality. The European Commission presents this week the so-called ‘Fit for 55’, a dozen legislative proposals that will affect transport, energy, taxation or international trade. Among the plans is a new carbon adjustment mechanism to avoid unfair competition and that European and imported products pay the same for CO2.

Reducing “at least 55%” greenhouse gas emissions by 2030 compared to 1990 levels, a step prior to achieving climate neutrality in 2050, will not be an easy task. The goal, shielded in the climate law passed this year , will require drastic changes in the way we eat, drive, heat our homes or produce.

To achieve the objective, the European Commission will present this week the long-awaited ‘Fit for 55’ , a battery of twelve legislative proposals aimed at accelerating a “just” energy transition in sectors such as energy, transport, climate, taxation or international trade .

The goal: to reduce dependence on fossil fuels, boost renewable energy and energy efficiency, accelerate the expansion of the electric car, expand the emissions trading system to buildings and road transport and a new carbon adjustment mechanism at the border, which will tighten the conditions of access to the market for products from third countries with less ambitious climate objectives.

“It is a holistic approach to the problem and we believe that this is the best balance we can create to get us where we need to be”, defends the Executive Vice President of the European Commission, Frans Timmermans , aware of the battlefield that the long-awaited blade will become. of climatic route.

“It is time to fulfill the ambition and for this ‘Fit for 55’ is a unique opportunity. If it is designed well, it will bring many benefits to consumers, ”says Monique Goyens , general director of the European Consumers Association (BEUC) , cautiously but hopefully . Not all organizations see it with the same expectations. “It is a fireworks display on a garbage can. It may seem impressive, but when you get closer you start to smell ”, critic Jorgo Riss , director of Greenpeace EU. These are the key elements of the package.

ETS system review
Created in 2005, it is one of the pillars of current policy to curb global warming and the world’s first carbon market . The system, which seeks to reduce emissions by 40% by 2030 compared to the level of 2005, establishes a price in the emissions – in May it reached a record price of € 56 per ton – of some 11,000 industrial and electrical installations and European flights for limit the volume of greenhouse gases that can be emitted.

With the reform, Brussels aims to raise ambition by limiting free allowances and creating an additional regime to include new sectors not included until now, such as maritime transport .

In addition, Brussels will propose the creation of a similar system for road transport and buildings , predictably from 2025, which will include a new social fund to cushion the economic and social impact and convince the most reluctant Member States.

According to the Commission’s draft, “at least 50%” of the profits generated by the ETS system will be diverted to this new fund so that Member States can offset the cost of the transition in the most vulnerable groups. Monique Goyens, the inclusion of this fund is a “sign” that the current system is not fair.

Brussels will also review the regulation on effort sharing, which establishes binding annual targets for greenhouse gas emissions in most sectors not included by the ETS, such as transport, buildings, agriculture or waste, responsible for 60% of emissions, as well as regulations on the use of land and forestry.

Carbon tax at the border
The new border carbon adjustment mechanism (CBAM), one of the great novelties of the new legislative package, will make companies that produce in third countries less ambitious in terms of climate matters and with more lax rules, pay a border tax for their products so that all European or imported pay the same for CO2 and there is no unfair competition at the environmental level.

“It will guarantee that the price of imports more accurately reflects their carbon content” and will comply “with the rules of the World Trade Organization”, says the Commission on a mechanism called to guarantee the balance between the applied carbon price policy. in the domestic market and that applied to imports.

According to the draft regulation, products such as steel, aluminum, cement, fertilizers and electricity will be covered – the European Parliament has asked to expand to other sectors such as oil refineries, paper, glass or chemical products – and it would begin to apply from 2023. Companies that produce in countries that already have a carbon price system will be exempt. This is not the case in countries like India, Russia or Turkey.

Greener mobility
One of the key elements to achieve changes in the way we move and reduce emissions from transport – a quarter of all CO2 emissions – will be to review the regulation on emission standards for new vehicles . The new Brussels plans will aim to toughen standards and force manufacturers to increase the emission reduction target with penalties for noncompliants, a way to discourage the manufacture of fossil fuel vehicles and accelerate alternatives such as the electric car .

A commitment that also requires reviewing the regulation on charging infrastructures to increase the available points – the EU’s goal is to reach one million charging points in 2025 and 3 million in 2030 – and promote greater price transparency and facilitate cross-border payments, two key elements according to BEUC to accelerate the transition to the electric car.

“Recharging an electric car has to be as easy as filling a tank,” they argue from BEUC. Brussels also includes in its plans new measures to end incentives for fossil fuels in aviation and boost the use of sustainable fuels(renewable hydrogen, sustainable fuels and biogas) as well as proposals to decarbonise the maritime sector, which accounts for 11% of emissions from the transport sector in the EU.

To do this, it will propose to review the directive on energy taxation, a move that is always complicated since it will require the unanimity of the Twenty-seven.

More renewable and clean energy
The Brussels plans also include the revision of the directive on renewable energy and energy efficiency, two key elements also to achieve neutrality in 2050. The EU established in 2018 a target of 32% renewables in the energy mix by 2030. The The intention now is to raise that ambition to 38-40% of consumption while allowing some flexibility.

Regarding energy efficiency , current regulations establish a non-binding saving target of 32.5% for 2030. According to European sources, the plan will make the target mandatory. According to the European consumer association, the new legislation should not only include efficiency targets but also technical instruments to lift the obstacles that prevent many consumers from renovating their homes and especially those affected by energy poverty.

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