The European Green Deal: How will it affect you?

After EU leaders agreed on reducing the EU carbon footprint by 55% by 2030, and achieve carbon neutrality by 2050, the European Commission has launched on Wednesday the Fit for 55 Package, or the European Green Deal. The package consists of a raft of legislative proposals covering all aspects pertaining to reducing carbon emissions. These proposals will now be discussed by Member States at the Council of the European Union and the European Parliament. While the overall objective of achieving carbonneutrality is shared by all Member States, the methods to be used to achieve this target will prove to be contentious, to say the least. went through the details of the package, to see how it will affect Maltese and European citizens.

  • An end to petrol and diesel cars by 2035

Yes, that’s right. The European Commission is proposing an end to combustion engine vehicles by 2035. Car manufacturers have 15 years to produce viable and efficient electric cars, at reasonable prices. Some are already front-runners while others are still at research stage. Hand in hand with this proposal is a set of rules for road infrastructure, such as electric charging points.

  • A new emissions trading scheme

New costs for the most polluting fuels. The new scheme will now include roads and buildings. Buildings have to be insulated properly so that they would require less energy to keep them warm in winter, and in our case, to keep them cool in the sweltering summer months. Therefore, in terms of our carbon emission targets, roads and buildings will now form part of the formula.

  • Additional Funds to compensate for the ETS cost

Knowing full well that the new ETS scheme is more likely to attract criticism, the European Commission is proposing additional funds that Member States can tap into to alleviate the costs of introducing the changes required under the new ETS scheme. The funds available will most likely total over €72 billion.

  • Carbon Border tariff

Under the proposed plan, import of polluters such as steel, aluminium, cement and fertilisers from outside the EU are going to be levied, so that their costs would be equivalent to the cost European producers pay.

  • An update of the Effort Sharing Regulation

The regulation already exists and deals with Member States’ carbon emission reductions targets. The updates require a further reduction of 11% in carbon emissions, over those already agreed by 2030. 

  • Renewable energy target

The energy that is derived from renewable sources have to increase to 40% from the current 32% across the bloc. This means that demand for renewable sources will increase exponentially.

  • Renovation

The European Commission requires that all public buildings, including social housing, are renovated in terms of electricity consumption and heating/cooling. Governments will have to renovate public buildings at a rate of 3% annually to reach the targets.

  • Taxing energy

Another proposal hits energy taxation. Currently, energy is taxed according to consumption. However, the proposal envisages that fuel and electricity will be taxed according to fuel content, i.e. the higher the emissions, the higher the taxes levied. The proposal sets out minimum rates and eliminates exemptions and reductions. This could be the most contentious of all proposals as Member States do not want the European Commission to encroach on their national competence i.e. taxes, especially since many Eastern Member States who are heavily reliant on heating in the winter months, will have an uphill struggle to reach these targets.

  • Aviation and shipping

Plans for carbon emission reductions did not spare the aviation and shipping industries. The European Commission is proposing to make fuel used for aviation and shipping more expensive through taxes. Fuel alternatives cost three times higher than normal fuel, however, the European Commission is forecasting a reduction in the prices of alternative fuels due to an increase in demand.

These proposals are not cast in stone as discussions will now commence within the Council of the EU. Member States are currently analysing the proposals and will have to find an agreement on all of them, probably with a number of amendments. This might lead to a head-on clash with the European Parliament, which had originally proposed more ambitious targets.   

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