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EU unveils strict climate rules and pollution taxes to foreign companies

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The European Union has unveiled sweeping new legislation to help meet its commitment to cut emissions of the gases that cause global warming by 55% during this decade.

The measures include a controversial plan to tax foreign companies for the pollution they cause.

Proposals from the European Commission, which is the executive branch of the EU, range from the de facto elimination of gasoline and diesel cars by 2035 to new national limits on gases from heating buildings.

They will involve an overhaul of the bloc’s emissions trading system where companies pay for the carbon dioxide they emit and will introduce taxes on maritime and air fuels for the first time.

The new legislation will include a dozen major proposals – most building on laws already in place to meet the EU’s former target of a 40% reduction in gas emissions by 2030, compared to 1990 levels – and must be approved by all 27 countries and EU lawmakers.

World leaders agreed six years ago in Paris to keep the increase in global warming below 2 ° C, and ideally no more than 1.5 ° C by the end of the century.

Scientists say both targets will be largely missed unless drastic action is taken to start cutting greenhouse gas emissions.

“The principle is simple: CO2 emissions must have a price; a CO2 price that encourages consumers, producers and innovators to choose clean technologies, to move towards clean and sustainable products, ”said European Commission President Ursula von der Leyen.

The European Commission wants to harness public mood for the change brought about by the Covid-19 pandemic.

It is already channeling more than a third of a massive stimulus package aimed at reviving European economies ravaged by coronavirus restrictions towards climate-focused goals.

According to commission officials, the aim of the “Fit for 55” legislation is to wean the continent off fossil fuels and take better care of the environment through policy design, rather than being forced into desperate measures at some future climate tipping point – when it’s almost too late.

“The hells and hurricanes that we have seen over the past few weeks are just a very small window into what our future might look like. But by acting now, when we still have political choices, we can do things differently, ”von der Leyen told reporters.

European Commission Executive Vice-President Frans Timmermans said that by not acting now, “we will be abandoning our children and grandchildren who in my opinion, if we do not address this, will wage wars for water and food ”.

European Commission President Ursula von der Leyen, center, and European Commissioner for the European Green Deal Frans Timmermans, left, speak at a press conference at EU headquarters in Brussels (Valeria Mongelli / AP)

Given the implications, the proposals will certainly be the subject of intense lobbying from industry and environmental groups as they go through the legislative process at least next year.

They will also encounter resistance due to the very different energy mixes of the member countries, ranging from Poland dependent on coal to France dependent on nuclear power.

Among the most controversial elements is a draft “Carbon Frontier Adjustment Mechanism”.

It will impose taxes on foreign companies, and thus increase the price of certain goods, in particular steel products.

The objective is to ease the pressure on European producers who reduce their emissions but find it difficult to compete with importers who do not have the same environmental constraints.

The question is how the EU – known for its staunch defense of open trade – will ensure that the carbon tax complies with World Trade Organization rules and is not seen as a protectionist measure.

Another concern is the need to help people likely to be affected by rising energy prices, and the commission proposes to set up a multibillion-euro “social climate fund” to help those who could be hardest hit.

“This fund will support incomes and support investments aimed at fighting energy poverty and reducing bills for vulnerable households and small businesses,” said von der Leyen.

It is likely that many will not be able to afford zero-emission cars after 2035.

Under Fit for 55, a drastic acceleration in sales of battery cars is likely, as the EU targets a 100% reduction in automotive CO2 emissions.

The new measures will begin to take effect in the coming years, with a 55% reduction in the fleet’s average carbon dioxide emissions by 2030 compared to 2021.



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