EU executive proposes emissions cuts, climate bonds for green Europe

The European Commission on Wednesday proposed plans to significantly toughen the EU’s emissions target, aiming to achieve at least a 55-per-cent cut in greenhouse gases by 2030.

“Too much for some…

This would be a significant step up from the current 40-per-cent target, based on 1990 levels.

“While much of the world’s activity froze during lockdowns and shutdowns, the planet continued to get dangerously hotter,” European Commission President Ursula von der Leyen said in a speech to EU lawmakers in Brussels.

“I recognize that this increase from 40 to 55 is too much for some, and not enough for others,” she said. “But our impact assessment clearly shows that our economy and industry can manage this.”

The European Parliament and EU leaders still have to agree to the 2030 plan.

With this new proposal, the German centre-right politician hopes to speed up progress towards climate neutrality, one of the European Union’s declared goals for the continent by 2050.

Discussions over the new target have been highly charged, with some countries rejecting bigger cuts and pointing to their economic reliance on high-polluting sectors such as the coal industry.

Poland’s Climate Ministry has for one expressed “concern” over the proposal, and claimed it did not take into account the economic and societal impact on particular member states.

The financial burden of cutting emissions would disproportionately fall on Poland, the ministry said in a statement.

To overcome the differences, German Environment Minister Svenja Schulze said she had invited European climate and environment ministers to Berlin to discuss the proposal at the end of September.

“I hope that we can find common ground at this meeting,” she said.

…and not enough for others”

Von der Leyen’s proposal also met criticism from both climate activists and industrial players.

While environmentalists generally welcomed the increased targets, many on Wednesday said that this fell behind the 65-per-cent cut they say science prescribes to reach the goal of climate neutrality.

So far, emissions have only dropped by 25 per cent compared to 1990, according to commission figures.

Citing the commission’s plan for achieving the new goal, set to be released on Thursday, climate activists accused the commission of fudging numbers.

Instead of looking at real emissions reductions, they warned, the commission proposed to include emissions absorbed by forests and soil in the calculations.

EU Parliamentarian Delara Burkhardt, of the centre-left German Social Democratic Party, said this accounted for about 3 to 5 per cent of emissions, meaning that the total emissions reduction only came to between 50 to 52 per cent, not 55.

“The proposed new EU climate goal for 2030 is a deceptive package,” she said.

Director of Climate Action Network Europe Wendel Trio meanwhile said the new target had to be considered a “baseline” and warned “the world needs is real emission reductions, not accounting tricks.”

Impact on companies in several industries

Sceptics on the other side, meanwhile, argue that the EU targets are unrealistically high or called for companies to be allowed to reduce emissions voluntarily.

A summary of an impact assessment by the commission seen by dpa suggests car emissions would have to be reduced by 50 per cent if the 55 per cent overall goal is to be achieved. Current legislation only prescribes a 37.5-per-cent drop by 2030.

Hans Juergen Kerkhoff, president of the German Steel Federation, meanwhile said that the target meant companies would require “extensive financial assistance” to create incentives to invest in low carbon technologies.

The EU would also have to ensure that this did not pose a threat to the European steel industry’s worldwide competitiveness, he said.

Not all company representatives rejected the goals, however, with 150 business leaders urging European leaders on Tuesday to agree to a target of at least 55 per cent of greenhouse gas reductions.

These include the CEOs of Philip Morris International, Coca-Cola European Partners and Deutsche Bank.

Von der Leyen also proposed that the EU’s 750-billion-euro (890-billion-dollar) coronavirus economic recovery fund – which still needs to be adopted by EU institutions – should be 30-per-cent financed by so-called green bonds.

Green bonds are financial instruments designed to raise funds for environmentally friendly projects.

Much of the debate surrounding the EU’s recovery fund and long-term budget has centred on how to fund them.

Another proposed way of raising money would be through a carbon border tax for high-polluting imports into the EU.

“Carbon must have its price – because nature cannot pay the price anymore,” von der Leyen said in her speech.

This would, she said, ensure a level playing field between foreign producers from countries with less stringent environmental regulations – and therefore lower costs – and EU producers.