EU publishes 'Fit for 55' climate recommendations

Building on the Green Deal launched at the end of 2019 and the European climate law coming into force this month, the European Commission on 14 July 2021 concreted its long-awaited goal to put the EU at the highest level of the political bloc on climate change.
cutting edge
.

The 13 recommendations presented in Brussels call for a 55% reduction in average European-wide greenhouse gas emissions by 2030 and a "net-zero" carbon footprint compared to 1990 levels by 2050
.

To meet the committee's agenda of "Fit for 55" -- meaning a few years after net-zero emissions -- many chemical producers are already developing their own "greening" strategies
.
Going forward, they will ensure that their own targets are aligned with the latest EU recommendations, although some of their concerns appear to have been taken into account, judging from recent statements by industry leaders
.

One of the most important discussions will revolve around the Commission's plan to expand the European Emissions Trading Scheme (ETS), which puts a price on carbon and lowers the cap each year
.
EU figures show that ETS has reduced emissions from power generation and energy-intensive industries by almost 43 percent since it was implemented 16 years ago
.
In its future iterations, its scope will be expanded to include the transport sector under a separate framework in order to achieve decarbonisation targets faster
.

To complement the massive spending on climate control envisaged by the EU, the Commission wants member states to reinvest all of their emissions trading revenues into climate and energy-related projects
.
The new Renewable Energy Directive will set an ambitious target of producing 40% of energy from renewable sources by 2030, just nine years from now
.
At the same time, the sustainability criteria for the use of bioenergy will be more stringent
.

In addition, the tax system for energy products will be realigned to support a "green transition"
.
This will require aligning taxes with the EU's energy and climate programmes, promoting clean technology, and removing "outdated exemptions and tax breaks that encourage the use of fossil fuels" -- all goals that environmental NGOs have been advocating for some time.
of
.

Finally, a proposed new carbon border adjustment mechanism would attach a carbon price to "selected" imports, which would include fertilizers as well as steel and cement
.
This "will ensure that Europe's ambitious climate action does not lead to carbon leakage," the committee said
.

Commission Chair Ursula von der Leyen said: "Europe is the first continent to have a comprehensive framework to meet our climate goals
.
Our package aims to combine emissions reductions with measures to protect nature, and balance employment and society as At the heart of this transformation
.
"

European chemical industry joins in

Commenting on the proposals, BASF CEO Martin Brudermüller, who is also chairman of the European Chemical Industry Council (CEFIC), called the "Fit for 55" package a key step for Europe to lead the world towards climate neutrality by 2050.

" "There is a need to ensure that 'massive' renewable and low-carbon energy is available as soon as possible," he said
.
"

CEFIC director-general Marco Mensinger expects plans to expand the ETS "probably the most critical change", warning that "we have to get it right"
.
He agreed with the EU's own assessment that to help invest in breakthrough technologies, all revenue generated by the scheme needs to be returned to the economy to support emissions reductions
.

Mensinger also praised the Commission's efforts to accelerate the development of the hydrogen economy, saying that Europe is already a leader
.
The CEFIC director said chemical producers welcomed the proposed increase in the size of the innovation fund, as well as the introduction of supportive instruments such as carbon contracts for difference (CCfDs), in which companies could be compensated for additional costs of key low-carbon technologies
.

The latter is a concept close to the heart of European industry
.
With the backing of several multinational chemical producers, the German business advocacy group Foundation 2°, with the help of think tank Agora Energiewende and consultancy Roland Berger, has included CCfDs in the regulator's comprehensive "wish list"
.

The German Chemical Industry Association (Verband der Chemischen Industry, or VCI) commented slightly more cautiously on the committee's recommendations
.
Wolfgang Große Entrup, president of the association, said that while the VCI companies agreed on the need to tackle climate change, they could only do so if the conditions were right
.
Export-oriented chemical producers are concerned that the carbon border adjustment mechanism has the potential to send the wrong signal to international customers, which could backfire
.

Consultancy Wood Mackenzie is more optimistic
.
They said: “Not cutting CO2 emissions sooner means we will need to turn to expensive, unproven technologies to get CO2 out of the atmosphere later this century
.
The roadmap laid out by the EU gives investors a start The drive to build projects also gives consumers the drive they need to start changing their behavior
.
”