Brussels, Belgium: The European Union unveils on Wednesday the draft laws that will govern its plan to cut carbon emissions by 55 percent from 1990 levels by 2030.
Here are the main points of the proposals, which will be furiously debated and re-negotiated by MEPs, EU member states, lobbyists, and green activists.
Expanded carbon market
According to a draft seen by AFP, the Commission wants to expand the European carbon market to cover more areas of transport, farming, and industry.
The Emissions Trading System (ETS) would be extended to maritime transport
And the principle of “permits to pollute” would also be applied to road transport and construction in a parallel market with the same CO2 price.
This “separate but adjacent” market has been conceived to “avoid disrupting” the current ETS, according to the EU executive.
A merger between the systems could come “after a few years”.
End of a free quotas
For the sectors currently covered by the ETS, which account for 40 percent of the bloc’s emissions, free carbon allowances are distributed to companies to enable them to compete with imports from third countries.
On Wednesday, the Commission will propose to subject imports in five sectors (steel, aluminum, cement, fertilizer, and electricity) to ETS rules, by imposing paid-for “emission certificates”.
By treating imports and local production equally, Brussels believes it is staying within the bounds of World Trade Organisation (WTO) rules and countering accusations of “protectionism”.
In the sectors targeted by this “border adjustment”, Brussels plans to phase out free quotas for EU companies just as the mechanism penalizing imports is ramped up.
According to specialist news site Contexte, the phase-out may not start until 2026, as opposed to 2023 mentioned in a Commission draft in June, with a ten-year transition.
In other sectors, the distribution of free allowances would be maintained but subject to stricter criteria.
A brake on cars
The European Commission is considering a complete phase-out of car emissions from 2035.
As only battery-electric vehicles will meet this requirement, this will amount to a de facto ban on new sales of petrol and diesel motors.
Carbon doors to neutral
European Commission officials are considering taxing aviation fuel for flights within the EU, gradually ending an exemption for passenger flights. Private jets and cargo planes would remain exempt.
A specific directive will also propose more demanding criteria on the minimum use of “greener” fuel blends containing a proportion of biofuels by airlines.
Some European capitals and airlines fear a distortion of competition with planes in the rest of the world.
According to a draft seen by AFP, the EU’s energy efficiency target could be significantly raised
Final energy consumption should fall by “at least 36 to 37 percent” by 2030 — compared with the current target of 32.5 percent.
The share of the burden of cuts borne by each member state will not be binding, and but the public sector would be required to reduce its consumption.
Out of the woods
Brussels will use the package to promote a target for carbon absorption through the use of natural sinks such as forests and meadows to offset deforestation and intensive agriculture.
Brussels would aim to have 310 million tonnes of CO2 equivalent absorbed per year by 2030 across the EU, and binding targets would be set for each member state from 2026.
Safety net for the poor
To counter the effects of the regulations on the poorest households and to fight against fuel poverty or social inequalities in transport, Brussels will propose a “social climate action mechanism”.
This fund would be financed by revenue from the new carbon market created for transport and construction.