New EU Cimate Target Proposal Concern for German Industry and NGOs
2020-09-16    [Source:CLEANENERGYWIRE]

    German industry, politicians and environmental NGOs have criticised first details of the European Commission proposal for a more ambitious 2030 climate target. Plans for more stringent passenger car emission rules and the inclusion of emissions from the land use and forestry sector in reaching the target are particularly seen with reservations. The European Commission will likely reveal its proposal to increase the bloc’s 2030 climate target to 55 percent on 16 September. What it means for Germany will only become clear over the coming months, but researchers say more legislative work will be necessary – only one year after chancellor Angela Merkel’s government agreed a landmark climate action programme at the end of 2019. Germany therefore faces a new round of difficult talks on additional measures to reach greenhouse gas reduction targets in a federal election year. [The article will be updated as new reactions become available.]

    German politicians and industry have warned that a new, more ambitious EU 2030 climate target could overburden the bloc’s largest economy. Environmental NGOs, on the other hand, said the European Commission’s proposal expected this week is not enough to meet Paris Climate Agreement goals.

    German industry said that the new targets could overburden businesses, especially in the face of an economic crisis caused by the coronavirus pandemic. The Federation of German Industries (BDI) said that the Commission – which is expected to propose raising the greenhouse gas reduction target from 40 to 55 percent – needed to outline its vision for achieving the higher target. “We view the European Commission's proposals for a higher climate target by 2030 with great concern in terms of implementation,” Holger Lösch, BDI deputy director general told Tagesspiegel Background. Lösch called for answers on questions such as “how is this to be financed in concrete terms, how can we make climate protection investments attractive for everyone? And how quickly will we succeed in making all necessary technologies ready for the market?”

    In March 2020, the European Commission proposed the European Climate Law, which would make the goal of climate neutrality by 2050 legally binding. Another element of the law – for now left blank – will be a more ambitious EU greenhouse gas reduction target for the year 2030. This would be Europe’s contribution to global efforts to meet the goals of the 2015 Paris Agreement.

    The European Commission is set to propose the 55-percent target, justifying the rise as needed for “a balanced, realistic, and prudent pathway to climate neutrality by 2050,” it says in a leaked draft document seen by Clean Energy Wire. It says a forthcoming impact assessment will demonstrate “that an emissions reduction of 55 percent by 2030 […] is both economically feasible and beneficial for Europe”, but current policies are insufficient. The European Parliament and – more importantly – member states have yet to debate the target before the EU makes a final decision, planned before the end of the year. 

    The Commission says that the buildings and power production sectors can make the largest and most cost-efficient contribution to reaching a new target, whereas transport would make a smaller contribution. It also plans to fully take into consideration land use and forestry emissions in reaching the new target. The Commission sees emissions trading as a key instrument and aims to expand it from the power sector and certain industry emissions to transport and buildings. Under the current policies, the EU Emissions Trading System (ETS) covers the energy sector and parts of industry and aviation. Climate action in the other sectors is governed by the EU Effort Sharing Regulation, where each member state has been assigned an individual greenhouse gas reduction target.

    Germany’s automakers criticise EU Commission climate plan

    The German Chemicals Industry Association (VCI) said the proposed target is “extremely ambitious” and needed measures to ensure products from European energy-intensive industry remained competitive in the world. On plans to focus on the ETS in raising the target, VCI cautioned: “The higher the EU sets the bar for the ETS sector, the higher the costs for energy-intensive industries like chemicals.”

    Another bitter pill for German industry is a plan to further tighten passenger car emission limits. The Commission is set to propose that in 2030, average carbon dioxide emissions of new cars should be 50 percent below 2021 levels. The bloc’s current plan is for a 37.5 percent reduction in 2030, with respect to 2021 levels.

    Hildegard Müller, president of the Association of the Automotive Industry (VDA), told Handelsblatt that with the “short-term, massive tightening of CO2 targets, Europe is taking a path that is too risky.” She said government interventions that made it impossible to meet “corporate goals” could lead to “painful job losses.” Müller said that it was “regrettable that the EU Commission obviously does not take into account the worsening economic situation of the industry as a result of the corona crisis.” Müller also pointed to bottlenecks in technology, such as charging stations and batteries, saying that anyone who wants to achieve the climate targets should stay open to modern combustion engines, hydrogen and e-fuels.

    Transport minister Andreas Scheuer said a “balance between reason and tightening” targets had to be struck. “I believe that sending the wrong signals to the world with exaggerated values would create uncertainty in the economy,” he told news agency dpa.

    Stephan Weil, Social Democratic (SPD) state premier of Lower Saxony, home to automaker Volkswagen, said existing targets already challenge German industry. “We must not go too far or, in the worst case, large industrial sectors and thousands of jobs will fall by the wayside while CO₂ emissions rise in other countries,” he told Funke Mediengruppe.

    Agreement with Eastern EU states only possible if Germany significantly raises national target - researcher

    While the EU is on track to overshoot its current emissions reduction target of 40 percent, raising it to more than 50 percent would require significant additional efforts by member states. Talks on the exact target, which the German Council presidency aims to facilitate and bring to a conclusion by the end of the year, could become quite a challenge. Certain Eastern European countries, which rely on traditional polluting industries and face a hard time dealing with the economic and social transition necessary in order to become climate neutral, have been especially sceptical.

     “What exactly lies ahead for Germany will only become clear in the coming months and will remain the subject of intensive negotiations,” said Felix Schenuit, researcher at Universität Hamburg. He emphasises that if Germany supports the EU-wide 55-percent proposal, the government will have to make a greater effort at home, also in order to persuade eastern neighbours. “An agreement with the Visegrad states [Czech Republic, Hungary, Poland and Slovakia] in the European Council is – if at all – only possible if Germany significantly raises its national target of currently 55 percent. It is not least because of the Council presidency that all eyes are on the German government,” Schenuit told Clean Energy Wire.

    Since Germany sits among the more ambitious and wealthy countries in the union, it has been expected to do more than others. Many experts therefore see a national 55-percent target as insufficient contribution to an EU-wide 55-percent target.

    The decision-making process to agree a new 2030 target is complex. It is tied to the climate law procedure, which requires the Commission, member states in the Council and the European Parliament to find a compromise in so-called trilogue talks. The environment committee of the European Parliament has come out in favour of a 60 percent reduction and a full plenary vote is scheduled for October. However, a lot of de-facto decision-making power regarding the exact target lies with the member states.

    A Council spokesperson told Clean Energy Wire the institution hopes that EU leaders agree on an updated 2030 target as early as the European Council meeting on 15 October. “As climate targets are so political and have such far-reaching implications, in the past it was always necessary to get the endorsement at the highest political level (European Council) to be able to agree. We expect it to be the same this time,” the source said. In that case, environment ministers could include the target in a joint position on the full climate law at their next formal meeting one week later (23 October).

    However, it is unclear whether the heads of state and government will already reach an agreement or even talk about the climate target at the mid-October meeting, as dissent is still great and other pressing issues such as Brexit loom large. Talks could well drag on until the end of the year, as the heads of state and government are scheduled to meet again in mid-December.

    "I think it is quite unrealistic for leaders to find an agreement at the European Council in October," said Oliver Geden, senior fellow at the German Institute for International and Security Affairs (SWP) and a lead author of the Intergovernmental Panel on Climate Change IPCC’s Sixth Assessment Report. "Perhaps it is part of the Commission's strategy to publish the impact assessment now, two weeks earlier than originally planned, so that Poland and other countries cannot claim in mid-October that they have not yet had time to assess it," he told Clean Energy Wire.

    NGOs warn against focus on emissions trading, caution regarding inclusion of land use and forest emissions

    German NGOs have welcomed the debate about higher targets and generally called for more ambition than in the European Commission proposal, as 55 percent is not yet in line with Paris Agreement goals. Most organisations have called for an emissions reduction of at least 65 percent  since the Commission published its climate-law draft earlier this year.

    Lutz Weischer, head of policy at Germanwatch, takes issue with the Commission’s choice to strengthen emissions trading at the expense of the current effort-sharing system. “We warn against abandoning the effort-sharing regulation carelessly, because it very clearly defines responsibilities and says what happens if goals are not achieved,” he told Clean Energy Wire. “It is the only instrument with immediate financial consequences. This should not be given up carelessly.”

    However, the choice could also have benefits. SWP’s Geden told Tagesspiegel Background that it could be a “wise approach politically” to bet on emissions trading. Negotiating new fixed reduction targets for the member states in the effort-sharing regulation is considered to be difficult to achieve. "This conflict would then be defused", said Geden.

    Another element NGOs have criticised is the Commission’s plan to include the land-use and forest sector in the new target. While it is yet unclear how exactly this influences the target, it looks likely to take pressure off other areas, as the sector EU-wide today net-absorbs more emissions than in 1990. According to the Commission draft, implementing current policies would lead to an emissions reduction of around 45 percent by 2030 when excluding land-use emissions and absorptions, and around 47 percent when including them. 

    “This 55-percent target is a sham,” said Kai Niebert, president of the umbrella organisation of German environmental NGOs (DNR).  

    “Only a real 55-percent target could be seen as real climate action.”

    Debate over tighter EU 2030 climate target foreshadows tough implementation talks in Germany

    While it is still open what exactly the proposal means for German efforts, one thing seems all but certain: Germany will have to overhaul its 2030 climate action plan, on which it decided only at the end of last year.

    “The agreed climate action plan 2030 already misses the previous, much less ambitious EU target,” said researcher Schenuit. He points to difficult talks in a difficult political landscape next year.

    “The debate is likely to become uncomfortable for coalition members in the federal government - even beyond this year,” he said.  

    “Negotiations on how the target can be achieved in concrete terms will drag on into next year: A federal election year in which the Greens will be considered the kingmakers for the next government.”

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