Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

EU Kicks Off Biggest Push Yet on Climate, Braces for a Fight

EconomyJul 15, 2021 12:56
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

(Bloomberg) -- The European Union rolled out an ambitious climate plan to transform every corner of its economy on Wednesday, and braced for years of tough negotiations to turn it into reality.

Every industry will be forced to accelerate its shift away from fossil fuels in order to cut pollution by at least 55% from 1990 levels by 2030. To achieve that, the bloc will bring new industries such as shipping into what’s already the world’s largest carbon market; ban new combustion-engine cars by 2035; impose new costs on dirty home heating; and force the aviation industry to emit less and pay more.

As the bloc seeks to position itself as a global leader on climate -- without damaging its own industry -- it also set out a blueprint for a levy on imports such as steel and aluminum from nations with softer environmental rules. That risks stoking trade tensions, with Russia, China and the U.S. in the EU’s sights.

There are already signs of discontent, from both EU members and industry.

“Nothing we presented today is going to be easy. It’s going to be bloody hard,” European Commission climate chief Frans Timmermans said. But he said the “existential threat which is the climate crisis” called for radical steps. He expects measures on transport, cars and home heating to cause the most complaints.

In Hungary, Prime Minister Viktor Orban’s government -- already embroiled in a standoff with Brussels over an LGBTQ crackdown -- flatly rejected the plan, saying it threatened to undo its signature utility price cuts.

“The European Commission’s choice of tools is untenable and unacceptable because it would lead to taxes on real estate and cars instead of making polluters pay,” Cabinet Minister Gergely Gulyas told reporters in Budapest on Thursday. “This would also destroy the results of utility price-cuts. Therefore, this proposal is unacceptable for Hungary in its current shape, and since unanimity is required the EU can’t implement this proposal.”

Massive Experiment

EU officials are at pains to emphasize that the transformation must be fair. The bloc has earmarked 72 billion euros ($85.1 billion) in a new fund to help compensate those who lose out, with the money --which is based on current prices -- coming from the expanded market for carbon emissions.

“Europe is tackling the climate crisis with urgency and optimism,” said Ignacio Galan, chairman and chief executive officer of Iberdrola (OTC:IBDRY) SA, the Spanish renewable energy producer.

The EU’s goals call for about 1.2 trillion euros of clean energy investment to 2030, according to Bloomberg NEF.

“We’re going to see an economy-wide experiment to put climate ambition into action,” said Simone Tagliapietra, a researcher at the Bruegel think tank in Brussels. “So far Europe has focused on a couple of sectors to cut emissions and now we’re really changing gear. Those measures will have a huge impact on the daily lives of families and businesses across Europe, with no exemptions.”

The impact on the rest of the world is more limited. Europe already accounts for a fraction of total fossil fuel use and the continent looks set to remain out in front on climate policies.

That’s why the bloc wants to introduce a levy on certain imports from countries with less strict climate rules. With its long phase-in period, many experts see it as an attempt by the EU to force others to change.

“Implementation could prove to be a logistical nightmare,” said James Whiteside, global head of multi-commodity research at Wood Mackenzie.

Carbon prices -- or the price of polluting -- initially jumped on Wednesday as the measures were rolled out, with more industries set to join the emissions-trading system. The price surged to records this year as financial investors piled in, leading to concerns that consumers will have to bear the cost.

The Commission’s plan to create a new emissions market for heating and road transport fuels is also set to become a divisive topic for member states. The rapid price increases in the current ETS have already led to complaints -- mostly from eastern European countries -- that the soaring costs will undermine their ability to invest in clean technologies.

“The proposal today is just the first chapter of the story,” Tagliapietra said. “We will see a lot of friction and tension over the next two to three years. Europe is set to become a global laboratory for deep decarbonization and the world will have an opportunity to learn how to achieve climate targets.”

 

 

EU Kicks Off Biggest Push Yet on Climate, Braces for a Fight
 

Related Articles

Top 5 Things to Watch in Markets in the Week Ahead
Top 5 Things to Watch in Markets in the Week Ahead By Investing.com - Aug 01, 2021

By Noreen Burke Investing.com – The U.S. jobs report for July will be the highlight in the week ahead with investors on the watch for any catalysts that could encourage the Federal...

Hard-won gains at risk as Delta variant spreads- WHO
Hard-won gains at risk as Delta variant spreads- WHO By Reuters - Jul 30, 2021

By Stephanie Nebehay and Michael Shields GENEVA (Reuters) -The world is at risk of losing hard-won gains in fighting COVID-19 as the highly transmissible Delta variant spreads,...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email