The European Climate Law unleashes a legislative earthquake that forces the tightening of more than 50 regulations on transport and energy

The European Union does not want to cede leadership in the fight against climate change now that the US has returned to this battle with Joe Biden. The European Commission has turned this struggle into an identity flag and after the recent agreement reached by the EU institutions on European climate law, 54 EU rules will have to be reviewed and tightened, with tremendous repercussions for sectors such as transport, energy, construction and international trade. “Every procedure is going to be a battle,” warns MEP Pascal Canfin, president of the European Parliament’s Environment Committee, which 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 “hard, 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 sales of gasoline and diesel vehicles in just 15 years, to an orientation of agricultural subsidies towards greener productions, or the renovation of the real estate 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 climate 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 before the UN. All signatories to the Paris Agreement, the international climate pact, are required to submit 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 have to be tightened 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 team of MEP Canfin:

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 EU’s greenhouse gas emissions, forces around 11,000 factories and plants to pay for the gases they emit into the atmosphere. The system wasn’t 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],” explains Canfin about a system in which they have already exceeded 40 euros per ton.

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 maritime transport will also be forced to enter the ETS market. In addition, changes are planned for airlines to pay more for the carbon dioxide they emit.

Transport. While the penetration of renewables in the electricity sector has already come a long way, the electrification of European transport does not seem to have begun to take off so far. “We are at the beginning of a radical transformation of our mobility,” says Canfin. The Commission is due to present in June a revision of carbon dioxide emission standards for cars and vans that has to align with the new targets included in the Climate Act. “Electrification is accelerating and that is why I advocate that a deadline be set to eliminate combustion vehicles in 2035,” says Canfin. Many countries and manufacturers are already aiming for that date and even a few years earlier for the end of new diesel and gasoline cars. It is also planned, but by 2022, the revision of the same emission standards of heavy vehicles, where electrification is even more complicated and other formulas such as hydrogen are thought.

Also next month, a review of European legislation is planned to determine more ambitious targets for alternative fuel infrastructures, “such as recharging points for electric cars or hydrogen refuelling stations,” the study said.

Tariffs. In many cases, European moves 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 so-called carbon leakage: that climate taxes could lead to a relocation of some industries. The Commission plans to present its proposal for a “carbon border adjustment mechanism” next month, which would involve a tax on more carbon-intensive imports. “This will protect European industries from possible climate dumping of their competitors,” says the study on the EU 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. A little more than a decade ago there was already a similar confrontation when the EU tried to make all international flights pay a fee for their emissions, a project that Brussels finally had to put on hold.

More renewables. When Europe put on the table in 2014 its goal of cutting its greenhouse gas emissions by 40% by 2030, it set sectoral targets as well; for example, it pledged to reach 32% of all EU final energy consumption from renewable sources by the same date (now around 20%). In June, the Commission will revise this target upwards, which in turn will mean that the Twenty-Seven will also have to adjust their renewable energy implementation plans. It is also hoped that Brussels will be able to put tougher efficiency targets on the table.

NEW TRADE POLICY

“We are going to change almost everything, industrial policy, mobility, agriculture… and we will also change our trade policy,” says Canfin. That includes, for example, the Paris Agreement becoming a fundamental clause of European trade agreements. This has already had an effect on the non-ratification of Mercosur. “I believe that Mercosur cannot be ratified in its current version. I know that Spain and Portugal maintain a strong position in favor that I can understand, but there is no majority in the European Parliament to ratify the agreement as it is because it implies more deforestation, more negative impact on the climate, “says this MEP.

Source: The Country