HomeCarbon Credits7 Key Takeaways from The EU’s New Green Deal

7 Key Takeaways from The EU’s New Green Deal

The European Union has published its strategy for meeting stronger 2030 climate objectives and eventually eliminating emissions by mid-century.

There are hundreds of new measures for lowering carbon across the economy. But here are some major aspects of the so-called “Fit for 55” package the EU’s effort to reduce emissions by at least 55 percent from 1990 levels.

While several years of negotiations are needed before the proposed legislation goes into effect, there are significant changes in the works for individuals and industry.

Here are some of the most significant, ranging from the cost of an airline ticket to the expense of heating your house.

1. System of Emissions Trading – Reduce emissions as soon as possible.

Overview: The EU intends to utilize its world-leading carbon market to reduce emissions sufficiently to meet its new 2030 objective. To that end, it intends to accelerate the rate at which emission caps are reduced each year, requiring businesses, electricity companies, and airlines to reduce their carbon footprint more quickly.

Importance: This will be the most significant revamp of the Emissions Trading System to date, impacting everything from the cost of flights to the cost of your power bill – however there will be a social fund to assist the most vulnerable. Following the announcement of the plans, carbon prices momentarily rose on Wednesday.

2. Mechanism for Adjusting the Carbon Border – Ensure that Europe is not undercut.

Overview: In a world first, the EU intends to charge imports of steel, cement, and aluminum from nations with lower environmental standards. Importers will be required to purchase special certifications at a price linked to the Emissions Trading System, which will essentially be a penalty for bringing in such commodities, which will also include fertilizer and power.

Importance: The EU understands that an ambitious climate strategy has drawbacks, such as making its firms susceptible to competitors outside the EU who are not subject to the same rigorous environmental regulations.

This is an effort to mitigate that danger, and it has global implications, perhaps pushing other nations to increase their own climate efforts. However, the system will be sophisticated in order to maintain compliance with global trade norms, and even the most thorough design will not eliminate the danger of diplomatic schisms with EU trading partners ranging from the United States to Russia or China.

3. Shipping and aviation – Remove exemptions for some of the more polluting industries

Overview: For the first time, the shipping industry will be involved in the Emissions Trading System, while airlines, who are currently participating, will ultimately have to pay for all of the pollution produced by their planes. The Commission also wants to see more sustainable aviation fuel blended into conventional jet fuel, and it is proposing a fuel-tax regime that would impose minimum taxes on both the shipping and aviation sectors.

Importance: Despite the enormous emissions of the transportation industry, shipping and aviation have been mostly spared from the most stringent environmental laws until recently. The new restrictions may be especially difficult for low-cost airlines, and consumers may face increased ticket prices as a result. However, the rules may benefit the region’s rail business as tourists choose for cleaner choices and the budding sustainable-fuel industry.

4. Emissions Regulations for Automobiles – Get rid of the Internal Combustion Engines.

Overview: The EU proposes that emissions from new automobiles decline by 55% by 2030 and reach zero by 2035. This is a considerable tightening of current objectives, which call for a 37.5 percent reduction from 2030, albeit it falls short of the projected 65 percent decrease.

Importance: Passenger vehicles account for around 12% of overall EU CO2 emissions, so reducing that production will be critical to meeting the bloc’s targets.

The legislation will increase demand for electric vehicles, and automakers are preparing. Volkswagen AG, the region’s largest manufacturer.

For example, anticipates that by 2030, more than 70% of its namesake brand sales would be electric. The legislation may help improve infrastructure by requiring member states to construct charging stations at regular intervals along important routes.

5. Renewable Energy Goals – increase % of energy derived from Renewable Sources.

Overview: The EU executive proposes increasing the EU’s renewable’s objective to 40% of the energy mix by the end of the decade, up from the current 32% target. It also intends to increase the use of clean fuels in transportation.

Importance: In order to reach its targets, Europe must increase the proportion of power generated from renewable sources. The new legislation will benefit renewable energy providers, which has already surpassed fossil fuels as the primary power source in Europe’s electric system.

6. Energy Conservation – Conserve More Energy

Overview: The Commission intends to encourage energy efficiency in a variety of industries, ranging from construction and agriculture to transportation and communications. It intends to require all public entities to remodel their facilities in order to spend less energy.

Efficiency standards will have to be taken into account in public bids, and governments will have to focus on boosting energy savings among vulnerable customers, therefore assisting in the alleviation of energy poverty.

Importance: The EU barely met its 2020 energy efficiency target owing to “exceptional circumstances,” a clear allusion to the pandemic’s economic impact. Current national climate and energy plans for 2030 are insufficient, with 29.4 percent reductions in energy use throughout the continent, falling short of the present EU target of 32.5 percent efficiency.

7. Forestry and Land Use – Absorb more carbon from the atmosphere

Overview: The EU intends to raise the amount of carbon dioxide absorbed by “sinks” like forests and grasslands to 310 million tonnes per year by 2030, up from approximately 270 million tonnes now.

The EU is also developing a system of carbon-removal certificates, which would help reduce agricultural emissions by allowing farmers to offset their pollution.

Importance: The EU understands that it is not only about cutting emissions, but also about absorbing what is currently out there. The ideas would necessitate higher forest protections, but the real cost is very low: between five and ten euros each tonne of CO2 absorbed from the atmosphere.

Adapted from: https://www.bnnbloomberg.ca/the-seven-elements-of-the-eu-green-deal-you-should-care-about-1.1628856

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