A Plan to Decarbonize Europe

After lengthy negotiations, the European Union is one step closer to the goal of becoming carbon neutral within 2050.

Chemical factory in Ludwigshafen Germany
By Paolo DeAndreis
Jul. 18, 2022 20:52 UTC
Chemical factory in Ludwigshafen Germany

Heralded as a new begin­ning in the pur­suit to dras­ti­cally reduce green­house gas emis­sions, the Fitfor55 pack­age has been approved by the gov­ern­ments of the European Union after lengthy and com­plex nego­ti­a­tions.

Initially announced last year, the new pack­age aims to reduce emis­sions within the 27-mem­bers’ block by 55 per­cent by 2030.

The world is not wait­ing. The cli­mate cri­sis does not wait. The geopo­lit­i­cal chal­lenges do not wait, and Europe has to show unity, deter­mi­na­tion, global lead­er­ship.- Frans Timmermans, vice-pres­i­dent, European Commission

The agree­men­t’s more ambi­tious goal is to reduce emis­sion vol­umes over time fur­ther and achieve cli­mate neu­tral­ity by 2050, when the E.U. is seques­ter­ing as many car­bon emis­sions as it pro­duced.

One of the most rel­e­vant aspects of the agree­ment is the so-called LULUCF sec­tor reg­u­la­tions, which include land use, land-use change and forestry, com­pris­ing soils, trees, plants, bio­mass and tim­ber.

See Also:Mediterranean Agricultural Biodiversity at Risk, Report Finds

The sec­tor will be asked to achieve 310 mega­tons of net car­bon diox­ide removals, which is 15 per­cent more removals than is cur­rently tak­ing place.

Each mem­ber state will con­tribute a fair share because the ‑310 Mt tar­get will be dis­trib­uted among them based on the recent level of removals or emis­sions and the poten­tial to increase removals fur­ther,” the com­mis­sion wrote in a white paper.

By 2023, the com­mis­sion will also present a pro­posal to limit non-CO2 emis­sions pro­duced by agri­cul­tural activ­i­ties.

The pro­posed reg­u­la­tion will lead to cli­mate-neu­tral food and bio­mass pro­duc­tion, improve the resilience of forests to cli­mate change, facil­i­tate the restora­tion of degraded ecosys­tems and pro­mote the bio-econ­omy through the use of durable bio-prod­ucts, in full respect of eco­log­i­cal prin­ci­ples fos­ter­ing bio­di­ver­sity,” the com­mis­sion stated.

One of the crit­i­cal deci­sions of the new agree­ment is the cen­tral role attrib­uted by the mem­ber states to the E.U. Emission Trading System (ETS), a car­bon mar­ket set up in 2005 and con­sid­ered by the European Commission to be a cor­ner­stone in the strug­gle against cli­mate change. It aims to com­pen­sate for car­bon emis­sions from energy-inten­sive indus­tries and the power gen­er­a­tion sec­tor.

The core of ETS is a cap and trade prin­ci­ple, where the cap is the max­i­mum amount of emis­sions that an instal­la­tion cov­ered by ETS can pro­duce.

Those instal­la­tions can trade the ETS allowances they might have in excess among them­selves. But, at the end of each year, they risk heavy fines should their allowances not be suf­fi­cient to cover their emis­sions.

The new agree­ment pro­vides a one-time reduc­tion of allowances and fur­ther reduces them by 4.2 per­cent every year.

Approximately 40 per­cent of E.U. power and energy-inten­sive plants cur­rently oper­ate within ETS. By 2030, E.U. gov­ern­ments believe that the sec­tors cov­ered by ETS will have reduced their emis­sions by 61 per­cent.

Sectors not cov­ered by ETS, such as agri­cul­ture, domes­tic mar­itime trans­port, waste and small indus­tries, will be required to slash emis­sions by 40 per­cent com­pared to the 2005 mea­sure­ments. The non-ETS sec­tors are cred­ited for 60 per­cent of the over­all emis­sions within the union.

One of the most con­tro­ver­sial areas of the pack­age is the Social Climate Fund, a €59 bil­lion E.U. fund designed to shield vul­ner­a­ble house­holds from the impact of car­bon costs as prices for build­ings, trans­port, and more will be affected by the new poli­cies.

The fund will pro­vide finan­cial sup­port to mem­ber states to finance the mea­sures and invest­ments iden­ti­fied in their plans, to increase the energy effi­ciency of build­ings, the ren­o­va­tion of build­ings, the decar­boniza­tion of heat­ing and air-con­di­tion­ing in build­ings and the uptake of zero-emis­sion and low-emis­sion mobil­ity and trans­port, includ­ing mea­sures pro­vid­ing direct income sup­port in a tem­po­rary and lim­ited man­ner,” the E.U. Council wrote.

Other aspects of the agree­ment require cars man­u­fac­tured after 2035 to pro­duce no CO2 emis­sions, while other reg­u­la­tions will push for emis­sions reduc­tion in avi­a­tion and mar­itime ship­ping sec­tors.

The agree­ment is now on the Agenda of the European Parliament, which will dis­cuss the deci­sions of the E.U. gov­ern­ments, pro­pose even­tual mod­i­fi­ca­tions to the pack­age and then vote on the whole project.

We now have a com­mon posi­tion on these major issues from the Council, from the European Parliament, which will give us the pos­si­bil­ity to start the nego­ti­a­tions with a very short dead­line. And we need that,” Frans Timmermans, European Commission vice-pres­i­dent in charge of the European Green Deal, told EuroNews.

The world is not wait­ing,” he con­cluded. The cli­mate cri­sis does not wait. The geopo­lit­i­cal chal­lenges do not wait, and Europe has to show unity, deter­mi­na­tion, global lead­er­ship.”

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