How the EU’s plan to cut emissions will affect businesses
FRANKFURT – The sale of new internal combustion engine cars would be banned in the European Union by 2035 as part of a far-reaching plan to slow climate change that also includes stricter mandates for steelmakers, airlines, power producers and many other industries.
The plan unveiled on Wednesday by the European Commission, entitled “Fit for 55”, calls on its 27 member states to reduce their greenhouse gas production by 55% by 2030, compared to 1990 levels.
The EU’s target is more aggressive than that of the United States, which is committed to reducing emissions of 40 to 43 percent over the same period, but behind Great Britain, which pledged to 68 percent reduction. China, the world’s largest emitter, has only said it is targeting emissions at a peak by 2030.
Here’s how the plan would affect industries in Europe:
Most automakers have announced plans to switch to electric vehicles, but many have refused to set an expiration date for fossil-fueled vehicles that still generate the most profits. The European Commission’s plan would effectively require them to do so by 2035.
Airlines would be forced to start blending synthetic fuel with the fossil fuels they currently use, and steelmakers and other manufacturers would have to pay more for emissions credits.
Power producers will be pushed to accelerate the switch to wind, solar and hydropower instead of coal.
Shipping companies could not dock in European ports unless they switch to cleaner fuels.
The plan also includes financial incentives that could be welcomed by the industry, such as money to build a more comprehensive network of electric car charging stations. The current network is concentrated in Germany, France and the Netherlands and it can be difficult to find a place to charge an electric vehicle, for example in Italy or Poland.
There will also be money for the groups affected by the new mandates. European Union governments will be able to draw on a fund of 750 billion euros, or $ 890 billion, to help farmers, small businesses and low-income households make the transition to cleaner energy .
Given the number of interests at stake, the plan is at risk of furious lobbying from industry representatives as it progresses through the legislative process in Brussels. The committee’s proposals must be approved by the European Parliament and the leaders of European national governments before they become law, a process which is expected to take around two years.
The plan could also meet resistance from major trading partners like the United States and China, as it would penalize imports from countries considered to have lower environmental standards.
Ursula von der Leyen, President of the European Commission, has made the “European Green Deal” one of her main priorities and can benefit from the support of Europeans increasingly alarmed by forest fires, record hot summers, severe storms and other hard evidence of the toll of climate change.
Monika pronczuk contributed to the report in Brussels.