Europe’s Green Deal, Unveiled

New European Commission President Ursula von der Leyen presented on December 11 a plan to make the bloc the first climate-neutral continent by 2050. The Green Deal consists of a roadmap to address environmental challenges while, at the same time, promoting an efficient use of resources.

“This is Europe’s man on the moon moment,” von der Leyen said at the European Commission. “The European Green Deal is very ambitious, but it will also be very careful in assessing the impacts at every single step we are taking.”

Through 54 practical actions, the EU hopes to change its economic model “for the sake of this planet and life on it.” The Green Deal covers all sectors from transport to energy, agriculture, buildings and industries such as textiles, construction, electronics and plastics.

“Our goal is to reconcile the economy with our planet, to reconcile the way we produce, the way we consume with our planet and to make it work for our people,” von der Leyen said. “Therefore the European Green Deal is on one hand about cutting emissions and on the other hand about creating jobs and boosting innovation. I am convinced that the old growth model, based on fossil fuels and pollution, is out of date and out of touch with our planet.”

To reach net-zero over the over the next 30 years, it will already be necessary to reach a 50-55% cut in greenhouse gas emissions by 2030 but the actual bar will be set only after an impact assessment.

For this scope, new policies will include the Renewable Energy Directive, the Energy Efficiency Directive, the Emissions Trading Directive, the Effort Sharing Regulation, and the land use LULUCF directive. Additionally, a new Climate Law is set to be presented in March 2020.

For instance, a more efficient use of buildings will be encouraged—with the objective to at least double the current 1% renovation rates, as well as the electrification of mobility—with 1 million public charging points across Europe by 2025, effective road pricing, extended emissions trading to the maritime sector and reduced free allowances to airlines.

In terms of production, the new EU industrial strategy will push a Circular Economy Action Plan in March 2020. “A key aim will be to stimulate the development of new markets for climate neutral and circular products,” the report says. “The decarbonization and modernization of energy-intensive industries such as steel and cement is essential.”

As for now, member states have just failed to sign off on the draft deal on the so-called taxonomy regulation to standardize what constitutes sustainable investments and what does not. The agreement should help avoid “greenwashing,” but it is still waiting for approval. 

“The Carbon Trust applauds the EIB's doubling of its climate target to 50% by 2025,” Gina V Hall, investment director and global head of sustainable finance at the Carbon Trust, told Forbes.com. “This can only be achieved through greening the activities the bank finances—as opposed to simply divesting—and sends a strong signal for other financial institutions to take action.”

The protection of land and ecosystems is another priority of the Commission, which is emphasizing the necessity of a toxic-free and zero-pollution environment. A new biodiversity strategy will also be presented in March next year, before the UN biodiversity summit of October 2020. Similarly, a Farm to Fork Strategy is going to be out next spring and will make sure that European food is “safe, nutritious and of high quality” and “produced with minimum impact on nature”.

To achieve this, “national strategic plans for agriculture should fully reflect the ambition of the European Green Deal.”

That’s also why a total of €100 billion is targeted to finance the just transition process. Financing will be used to boost green investment and will be provided through three instruments: a just transition fund from the EU’s regional policy budget, the InvestEU program from the European Investment Bank (EIB) and also a part of the EIB’s own capital. The state aid guidelines will be reviewed on a regular basis and a  technical assistance will be provided.

“We all have an important part to play and every industry and country will be part of this transformation,” executive vice-president Frans Timmermans added. “Our responsibility is to make sure that this transition is a just transition, and that nobody is left behind as we deliver the European Green Deal.”

The EU won’t hesitate to defend the Green Deal with diplomatic efforts and countries may deploy some forms of carbon border ‘mechanisms’ (rather than a tax, which would require unanimity among member states) as measures to defend companies from unfair competition.

Asked about the proposal while at the COP in Madrid, Timmermans said he hoped the rest of world will comply with the Paris Agreement. But, “then of course, at some point, we will have to protect our industries," he added.

According to the proposed timeline, the EU’s increased 2030 climate target will be presented by summer 2020. However, this timeline may leave little time for member states to negotiate and endorse it.

“Now, EU Member States have a big responsibility to agree on a much higher 2030 climate target at the European Council in June 2020,” the director of CAN Europe Wendel Trio said. “It would be the only way to be prepared for the EU-China Summit in September where a successful outcome on enhanced climate action would be crucial to build up international momentum ahead of the UN Climate Conference, COP 26, in November next year in Glasgow.”