EU’s green policy bonanza marks start of painful negotiations
‘Fit for 55’ package will face resistance from industries and governments
Fit for 55
The EU’s ambition to become the world’s first and fastest mover on the road to net-zero carbon emissions will be revealed this week, writes Mehreen Khan in Brussels.
The European Commission will on Wednesday unveil its long anticipated Fit for 55 package of more than a dozen policies to decarbonise swaths of the European economy and reduce average greenhouse gas emissions at least 55 per cent over the next decade.
The package will touch on renewable energy targets, a revamping of the bloc’s emissions trading scheme, a foreign levy on polluting imports and measures to finally end the age of the internal combustion engine.
The EU’s philosophical approach to ending its economic reliance on greenhouse gases involves mixing regulation with carbon taxes. The FT has details of plans to raise energy taxes and introduce an EU-wide levy on kerosene for the first time.
This week’s package will start the firing gun on years of complex negotiations over regulations and directives that will touch on all parts of economic life. The laws will need to be agreed and adopted by EU governments and the European parliament.
Legislators will also face feverish private sector lobbying on a scale that is likely to dwarf recent landmark EU legislation such as the GDPR or copyright rules.
New research from InfluenceMap shows how the public, climate-friendly aims of many companies do not always match their private lobbying interests. One of the biggest divides is between the relatively high levels of industry support for the net-zero target of 2050 and for the accelerated ambition of 2030 (chart below):
The discrepancy can be explained by the fact that, as with politicians, companies operate on short- to medium-term investment cycles, where nearer targets are the ones that will bite their business model and profitability.
Having analysed public feedback to the European Commission from industry groups, InfluenceMap found “near-unanimous support for the commission’s net-zero target is accompanied by heavy push back against the commission’s detailed proposals to accelerate greenhouse gas emissions reductions prior to 2030 under the Fit for 55 Package”.
But the picture across industry is mixed. The energy and power sector have led the charge for more ambitious targets, according to the research. On the other hand, sectors such as aviation and shipping have voiced their concerns about being subject to the emissions trading scheme and new carbon taxes on fuels.
Of all the measures, the plan to revamp the ETS is gearing up to be the most contested by European industry. Businesses covered by the tool are fighting to keep hold of their free carbon credits for as long as possible — with some pushing to maintain free allowances once the carbon border adjustment mechanism to protect them from foreign rivals is up and running.
It is a fight that will run for months and even years to come.