Brussels unveils sweeping plan to reduce Europe’s carbon footprint

Brussels set out sweeping plans on Wednesday for the EU to become the world’s first mover on achieving net zero emissions in order to limit global warming, with a strategy targeting all sectors of the economy and trade.

The European Commission unveiled 13 policies designed to address climate change by ensuring the continent meets its goal of reducing average greenhouse gas emissions by 55 per cent in 2030 and net zero by 2050, compared to 1990 levels.

“Europe is the first continent with a comprehensive architecture to meet our climate goals”, said Ursula von der Leyen, commission president. “Our package aims to combine the reduction of emissions with measures to preserve nature and to jobs and social balance at the heart of this transformation”

The plan risks a backlash from poorer EU countries and parts of industry which argue that the pace of change and increased regulations will become a financial burden. The measures will also be examined closely by the bloc’s trading partners as their companies face penalties on exports of carbon-intensive products such as steel and cement.

The centrepiece of the EU’s master plan is to expand the Emissions Trading Scheme, a system that makes companies pay for the cost of polluting. Brussels wants to go further to include emissions from the car industry and from heating buildings to quicken the pace of decarbonisation.

The commission hopes to ward off a political revolt over the creation of a separate carbon market for cars and buildings by using part of the revenues to fund a €70bn facility to help governments alleviate energy poverty for households who may face higher fuel and heating bills.

Frans Timmermans, the commission’s executive vice-president in charge of green policy, said the measures would only succeed if they proved to be fair. “The onus on the commission is to prove that this is fair. It’s going to be bloody hard”, he said.

The plan will be subject to fierce negotiations among the bloc’s 27 member states and members of the European Parliament that will take years to complete. The US and the UK will follow keenly how the EU’s efforts play out as they attempt their own ambitious net zero emissions goals.

One of the most anticipated measures is an EU carbon border adjustment mechanism (CBAM). This will force importers of steel, cement, aluminium and fertiliser to pay for the soaring carbon costs faced by European industry. The prospect of the levy has raised alarm from Russian businesses who say they will be worst hit.

Europe’s transport sector faces the biggest shake-up as Brussels seeks to curb the carbon footprint of an industry whose emissions have been steadily rising since 1990. 

The car industry is included in the ETS and new vehicles will be subject to stricter CO2 reduction standards over the next 15 years. The commission’s targets will amount to a de facto ban on the sale of new diesel and petrol cars by 2035. This will be accompanied by new rules to increase the availability of charging points and encourage the switch to electric cars. 

Aviation and shipping are due to be penalised for polluting, with plans for a tax on aviation and maritime fuels proposed for the first time. The shipping industry will also fall under the expanded ETS to cover intra-EU journeys and 50 per cent of journeys outside the bloc from 2023.

Brussels admits that extending the ETS will have an impact on the poorest households who spend more of their income on heating bills and cannot readily afford to adopt greener forms of transport.

The proposals have already generated opposition from some governments and members of the European parliament. Pascal Canfin, a French MEP and head of the parliament’s environment committee, warned about the political consequences of the “mistake of extending the carbon market to heating and fuel”. 

“We experienced it in France,” he said, referring to the populist revolt against planned petrol rises in France in 2018. “It gave us the yellow vests (gilets jaunes).”

The commission will also raise its renewable energy targets to make up 40 per cent of its energy mix by 2030, set rules to boost the availability of electric charging points across Europe, and increase the size of the EU’s carbon sink that is made up by forests and soil.