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EU Commission’s Climate Plan Two Steps Forward, One Step Backwards

The European Commission’s 2030 Climate Target Plan reiterates positive elements from the European Green Deal such as strengthening the EU carbon market and reducing free pollution permits to airlines. But the plan to rely on carbon sinks to reach the target waters down the overall ambitious plan and needs to be changed.

Today the European Commission published its “2030 Climate Target Plan” on how the EU will achieve its new “at least” 55% climate target along with an impact assessment on what the new target means in practice.

The new target is an improvement but falls short of a 65% target which is scientifically[1] recommended to avoid catastrophic climate change. The European Parliament earlier this week voted for a 60% reduction goal.

Furthermore, unlike the previous 40% target, the new target allows the inclusion of CO2 removals from the land use sector (like forests, croplands and grasslands)[2].

Sam Van den plas, policy director at Carbon Market Watch said, “Relying on forests to reach climate targets sends the wrong signal that it’s ok to keep polluting because the land will absorb it. As climate scientists have been saying for years, to avoid a climate disaster, we need to both cut CO2 pollution AND protect forests that act as carbon sinks. It’s now up to the European Parliament and the EU governments to make sure that this decade is about real climate action, not accounting tricks.”

The Commission foresees a proposal to revise the EU emissions trading system (EU ETS) by June 2021. This will include increasing the pace at which pollution is reduced annually (the linear reduction factor LRF) and strengthening the market stability reserve.

Sam Van den plas, “We need to double the pace at which emissions are cut and phase out free pollution permits to finally kick-start the green transition of Europe’s industry. Just as important will be to ensure that governments spend the auctioning revenues in further climate action instead of recycling them back to the heavy polluters.”

Carbon Market Watch criticises the plan to expand carbon pricing to road transport and buildings. Introducing carbon price onto these sectors would have a very small impact on their emissions while risking to undermine existing legislation such as the effort sharing regulation (ESR).

Sam Van den plas, “The covid-19 pandemic has shown how vulnerable the EU carbon market can be to external shocks. While the prices have now recovered from the massive slump in the spring, it doesn’t make sense to risk further instability by for example including the very volatile emissions from buildings under the scheme. There are other measures in place already to drive the decarbonisation of buildings and road transport that are more effective, though they also should be strengthened.”

The Commission avoids taking a strong stance on including international shipping under the EU ETS and bringing international flights back under its scope, citing global measures and processes. Earlier this week, the European Parliament voted to bring international shipping under the EU ETS from 2022 as a response to lack of progress at the UN shipping agency climate talks.

The plan does reiterate that the Commission will reduce the number of free pollution permits handed out to airlines.

Gilles Dufrasne, policy officer at Carbon Market Watch said, “Since the beginning of the pandemic, EU governments have poured over 32 billion euros public money into saving airlines that pay no VAT or fuel taxes. Europe will not reach its climate target without taking decisive action to cut carbon pollution from flying. Reducing the number of free pollution handouts is a start that is long overdue.”

The plan also confirms the Commission’s intention to propose a carbon border adjustment mechanism “for selected sectors” as an alternative to the existing measures to avoid so-called carbon leakage.

Sam Van den plas said, “Carbon border taxes can help push EU’s international partners to take more climate action. As the Commission reiterates, they will need to replace the current, unsustainable system of pollution subsidies under the carbon market".

The proposal can still be amended and will need to be approved by the European Parliament and the 27 EU member states.

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