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Europe’s most polluting companies have accused the EU of jeopardizing investment and innovation after Brussels unveiled ambitious plans to halve the bloc’s emissions by 2030 in an effort to curb global warming.
Truck manufacturers, airlines and heavy industry have rejected the proposals, which include a de facto ban on new diesel and petrol vehicles from 2035, a tax on marine and aviation fuel and the decision to eliminate gradually the 2026 pollution-free credits allocated under the EU Emissions Trading Scheme.
The ETS, which sets a price for pollution, has also been extended for the first time to the shipping industry.
Just hours after the EU released its plan, many companies and trade bodies were preparing to pressure their own governments to reject it, signaling a fierce battle ahead for the European Commission when negotiating with member states. to approve the roadmap.
European vehicle manufacturers, in particular, faced tougher emissions targets for cars and trucks over the next decade, including the requirement that all new cars have zero emissions by 2035.
The Spanish engine industry, the second in the EU after Germany, said the sector had been singled out for unfavorable treatment, although other industries among them produced more than two-thirds of the world’s greenhouse gases. EU. He urged the Spanish government to “consider its position.”
The German carmaker pressure group, the VDA, said the measures were “anti-innovative”, calling them “almost impossible to achieve” for companies, including suppliers. However, Europe’s largest vehicle manufacturer, Volkswagen, which invests 35 billion euros in electric vehicles, welcomed the package.
In the aerospace industry, Lufthansa agreed that ambitious climate protection and the price of carbon were “right and necessary,” but said it would be disadvantaged in the face of global competition.
He said the combination of the phasing out of carbon credits, a mandatory quota for sustainable aviation fuels and, in particular, a tax on kerosene would hamper European airlines.
The German carrier said a funding mechanism should be developed to help pay for sustainable fuels, which were several times more expensive than kerosene. “It simply came to our notice then [the road map] be neutral in competition “.
The head of Iata, the world aviation trade group, was more biting. Willie Walsh, the former director general of the IAG airline group, accused Brussels of having a “goal of its own” on plans to tax fossil fuel-based jet fuels.
“Increasing the cost of aircraft fuel through taxation marks a‘ own goal ’in terms of competitiveness that has recently been to accelerate the marketing of sustainable fuel,” he said.
The European air trade body, A4E, joined the heart of the disapproval, saying the measures would make flight more expensive for passengers.
Difficult sectors to decarbonise, such as producers of cement, steel, fertilizers and aluminum, also complained about plans to phase out free carbon credits by 2036.
What is ETS
The emissions trading system requires large industrial pollutants to buy carbon credits to cover the cost of their emissions. Industries covered by the system receive free rights. These loans are traded on the financial markets.
These sectors, together with electricity production, account for 45% of EU ETS emissions and will be the first to be included in a new regime that will impose carbon taxes on imports from countries that do not have a carbon price. equivalent.
The so-called carbon border adjustment mechanism would help level the playing field against cheaper imports, companies said, but still presented problems.
Cedric de Meeus, Vice President of Public Affairs of Holcim, one of the largest cement producers in Europe, argued that the phasing out of carbon credits for industry had to be done carefully. “You don’t want an economic shock that no industrial sector can withstand.”
European metal producers he also joined the call for greater protection.
The European Steel Association said eliminating free carbon quotas would add to industry costs and reduce the financial resources available to invest in decarbonization technologies in the medium term.
Tata Steel agreed that the new framework would lead to an increase in operating costs. “But we also recognize the measures to support our decarbonization transition.”
What is the carbon boundary adjustment mechanism
A tariff on imported goods based on their carbon content
Aluminum producers had sought the exclusion of the pilot phase of taxes at the carbon frontier, but failed to secure it. Eurometaux, which represents metal producers in Europe, said that while this aspect was disappointing, it was “satisfied” with the exclusion of the indirect emissions plan.
Indirect emissions, called scope 2, are those associated with the generation of purchased electricity. Aluminum is one of the materials with the highest energy consumption.
He capture of the shipping industry The EU’s plans caused some consternation, with the extension of the carbon trading system to all travel within the EU and 50% of all travel to or outside countries.
Guy Platten, secretary general of the International Maritime Transport Chamber, criticized the proposals as a “pure money-making” to support the economic recovery of the pandemic bloc.
The response was more balanced by Maersk, the world’s largest container transport company.
Simon Bergulf, Maersk’s director of regulatory affairs, said the framework was “the right idea,” even if he was nervous that policies could alienate non-EU countries.
In contrast to other industrial sectors, energy companies were largely positive in terms of the roadmap that generates renewable energy.
BP CEO Bernard Looney said it would stimulate demand from low-carbon energy consumers and create great business opportunities.
Utility companies that have switched to renewable energy were also optimistic. Markus Krebber, CEO of German RWE, said it was a “good day” for the environment and for business. “[It] it opens up new possibilities for accelerating the expansion of renewable energies and advancing the hydrogen economy. “
Some energy company executives warned that while they generally supported EU targets, there could be elements push against, if they believed they were poorly designed or incurred unfair costs.
Ignacio Galán, CEO of Spain Iberdrola, which considers itself a leader in renewable energy, said member states should “look at their processes to plan and allow projects to be delivered on time.”
Reports from Peggy Hollinger, Harry Dempsey, Daniel Dombey in Spain, Joe Miller in Frankfurt, Sylvia Pfeifer, Neil Hume, David Sheppard, Peter Campbell, Richard Milne in Norway, Gill Plimmer and Guy Chazan in Berlin
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