EU presents its plan to achieve carbon neutrality

The European Union detailed on Wednesday how it will reduce greenhouse gas emissions in the coming years, with the plan potentially revolutionizing many sectors from air travel to shipping. The 27-member bloc has vowed to become carbon neutral by 2050 and to reduce its greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels.

In a wide-ranging proposal, the European Commission, the executive arm of the EU, outlined on Wednesday how that can be achieved. “The fossil fuel economy has reached its limits. We want to leave the next generation a healthy planet as well as good jobs and growth that does not hurt our nature,” European Commission President Ursula von der Leyen said in a statement as the blueprint was released.

The main policy change is to expand the bloc’s Emissions Trading Scheme — this allows businesses to trade allowances so that the total number of greenhouse gas emissions for installations and aircraft operators stays within a certain cap. The commission wants to phase out free emission allowances for the aviation industry, and to include shipping for the first time. Separately, the executive arm of the EU also wants a new emissions trading system for fuel distribution for road transport and buildings.

The autos sector is one of the hardest hit by the new rules, with the commission proposing a de-facto ban on diesel and gasoline cars by 2035. A senior EU official, who did not want to be named due to the sensitivity of the talks, said on Wednesday that all new cars and vans would have to be zero-emission vehicles by 2035.

This means that charging points will need to be regularly available on major highways: every 60 kilometers for electric charging, and every 150 kilometers for hydrogen refueling. The same official added that while there will be incentives, these will be discontinued from 2030. “We will be monitoring (this sector) very closely,” the source said. In addition, the latest plans aim to see EU nations producing 40% of their energy needs via renewable sources by 2030.

EU presents its plan to achieve carbon neutrality. Here’s what you need to know, CNBC, Jul 15