The European Union Commission adopted a wide-ranging set of energy and climate proposals July 14 aimed at creating a "concrete roadmap" to reach climate neutrality by 2050.
The proposals provide the legislative tools needed to deliver on carbon emission reduction targets, said EC President Ursula von der Leyen.
Those targets include an intermediate target of reducing net greenhouse gas emissions by at least 55 percent by 2030, compared to 1990 levels.
The proposals will considerably speed the rate of progress being made towards reaching these targets, as calculations show that, without the package, under current EU climate legislation, Europe would require another 20 years to meet its targets.
The EU's existing climate and energy legislation has been shown to work. Greenhouse gas emissions have been reduced by 24 percent compared to 1990, while the EU economy has grown by around 60 percent in the same period. While this legislative framework forms the basis of the present legislative package, the 13 proposals include eight revisions of existing legislation and five completely new proposals.
They include an application of emissions trading to new sectors and a tightening of the existing EU Emissions Trading Syste, increased use of renewable energy, greater energy efficiency, a faster rollout of low emission transport modes and the infrastructure and fuels to support them, an alignment of taxation policies with the European Green Deal objectives, measures to prevent carbon leakage and tools to preserve and grow Europe's natural carbon sinks.
One of the major changes involves an expansion of the Commission's plan to expand the European Emissions Trading Scheme (ETS), which puts a price on carbon and lowers the cap every year. Implemented 16 years ago, that program has since successfully brought down emissions from power generation and energy-intensive industries by 42.8 percent.
Now the plan will, among other things, phase out free emission allowances for aviation and for the first time include shipping emissions.
A separate new emissions trading system will be set up for fuel distribution for road transport and buildings to address the failure of those sectors to reduce emission rates. The Commission is calling for a dedicated part of the revenues from the new system for road transport and buildings to be used to address the possible social impact on vulnerable households, small businesses and transport users.
"We're putting a price on carbon and a premium on decarbonizing technologies," said European Commission Executive Vice President Frans Timmermans.
Energy production and use accounts for 75 percent of EU emissions, so the Commission is also emphasising the importance of transitioning to a greener energy system. The new Renewable Energy Directive will set an ambitious target to produce 40 percent of energy from renewable sources by 2030.
At the same time, sustainability criteria for the use of bioenergy will be toughened, requiring member states to adhere to the cascading principle of uses for woody biomass. As well, the public sector will be required to renovate 3 percent of its buildings each year to drive the renovation wave, create jobs and bring down energy use and costs to the taxpayer.
The end of the combustion engine car is also in sight, with average emissions of new cars to come down by 55 percent by 2030 and all new cars registered as of 2035 must be zero emission.
Member states in the EU must also increase the number of charging and fuelling points in line with zero-emission car sales, and install charging and fuelling points at regular intervals on major highways: every 60 kilometres for electric charging and every 150 kilometres for hydrogen refuelling. The aviation and shipping sectors are also targeted under the proposals with a requirement to switch to more sustainable fuels.
The tax system for energy products will be overhauled to align the taxation of energy products with EU energy and climate policies, promoting clean technologies and removing outdated exemptions and reduced rates that currently encourage the use of fossil fuels.
Finally, a new Carbon Border Adjustment Mechanism will put a carbon price on imports of a "targeted selection of products" — likely to include iron and steel, aluminium, cement, fertilisers and electricity — to ensure European emission reductions contribute to a global emissions decline, instead of pushing carbon-intensive production outside Europe.
Sharing the burden fairly
While in the medium- to long-term, the benefits of EU climate policies clearly outweigh the costs of this transition, climate policies risk putting extra pressure on vulnerable households, small businesses and transportation systems in the short run.
"We're going to ask a lot of our citizens. We're also going to ask a lot of our industries, but we do it for good cause," Timmermans said. "We do it to give humanity a fighting chance."
The action comes even as others have expressed fears that the plans will result in unrest similar to those in France where protesters wearing yellow jackets in 2018 took to the streets claiming that a disproportionate burden of the government's tax reforms were falling on the working and middle classes.
To combat that, the EC announced plans to create a "Social Climate Fund" to provide dedicated funding to member states to help citizens finance investments in energy efficiency, new heating and cooling systems, and cleaner mobility. The Fund would mobilize a total of 144.4 billion euros ($170.5 billion) for a socially fair transition.