The European Union’s plan to cut its greenhouse gas emissions by more than half by the end of the decade will touch almost every industry in the trade bloc, with profound consequences for jobs and the bloc’s economy.

European leaders said the climate package presented recently could put Europe at the forefront of new technologies like electric car batteries, offshore wind generation or aircraft engines that run on hydrogen.

Key points:

• The proposals could reshape polluting industries like steelmaking, which directly employs 330,000 people in the European Union.
• The European Commission’s plan, “Fit for 55,” calls for its 27 member states to cut their output of greenhouse gases by 55% by 2030, compared with 1990 levels.
• The European Union’s target is more aggressive than that of the United States, which committed to reduce emissions by 40% to 43% over the same period.
• Britain has pledged a 68% reduction.
• China, the world’s largest emitter, has only said it aims for emissions to peak by 2030.

How the plan would affect industries in Europe?

Automakers:

• The European Commission plan would effectively require all new cars to be emissions-free by 2035, removing any flexibility for major companies to continue selling some gasoline or diesel vehicles, including hybrids.

Airlines:

• Aircraft are major producers of carbon dioxide emissions but also difficult to convert to emission-free operation.
• According to the commission proposals, airlines would be compelled to begin mixing synthetic fuel with the fossil fuels they now use, and they will no longer receive tax breaks on fossil fuels. In other words, they will have to pay more to pollute.

Shipping:

• The deal singles out companies that ship cargo by water, making them pay more for the emissions they generate to encourage their transition to cleaner energy.
• Most ships plying the seas today run on low-grade oil and are major polluters.

Heavy industry:

• The European Commission plan would raise the cost of polluting by tightening the European Trading System, which compels companies to effectively pay for the dangerous carbon dioxide they release into the environment.
• Anticipation of the changes has already helped drive up the price of credits by about 50%.

Energy:

• Electricity producers will be pushed to speed up the switch to wind, solar and hydropower from coal.
• Renewables already account for 20% of the electricity produced in Europe.
• The goal is to raise the figure to 40% by 2030, largely by increasing the penalty that utility companies pay for power generated by fossil fuels, which would make wind and solar more attractive financially.

Conclusion:

Given how many business interests are at stake, the plan is likely to face furious lobbying by industry representatives as it makes its way through the legislative process in Brussels.

The commission’s proposals require endorsement by the European Parliament and leaders of European national governments before they become law, a process that is expected to take around two years.

Source: The New York Times / Indian Express