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The European New Green Deal

On 11th December, the European Commission (EC) presented its long-awaited communication regarding the EU New Green Deal (EGD). It contains a long list of political initiatives to bring Europe to zero net global warming emissions by 2050. The climate policy is to become the European growth strategy.

Europe wants to be a leader in the climate-friendly clean technology industry. This is the EGD's ultimate objective. Climate neutrality will be enshrined in law. The EC plans to review all EU provisions and regulations in order to adapt them to the new climate goals. The European Commission is to present a draft of the European Climate Law by March 2020, which will include legal obligations for the EU to achieve climate neutrality by 2050. By October 2020, the EC will present a comprehensive plan to responsibly raise the EU emissions reduction goal from 40 to 50-55 % by 2030.

By March 2020, a new action plan for the CE is expected to be in place aspart of a broader EU industrial strategy. Both of these documents are supposed to regulate a sustainable product policy aimed at how to manufacture products using less material and ensure their reuse and recycling. The sustainable product initiative will focus on the sustainable interaction of non-energy related product value chains.

The revision of the Construction Products Regulation has also been announced. The renovation of buildings is to be one of the most important EGD programmes. The aim is to double or even triple the renovation rate of buildings, which is currently at 1%.

The European Commission wants to achieve the goal of a completely pollution-free environment by 2050, and the initiatives which are to help achieve this are to include a chemical strategy for a “non-toxic environment”. Specific measures will be taken to counteract water pollution, including the development of research methods and measures targeting sources of emerging pollution such as micro-plastics.

A new strategy for the protection of ecosystems and biodiversity will be presented in March 2020. It shall include measures to tackle soil and water pollution, as well as a new forestry strategy. A new strategy for agriculture is expected in spring 2020. It will include plans to significantly reduce the use of chemical pesticides, fertilisers, and antibiotics.

A sustainable transport strategy will also be created in 2020. The officials in Brussels want the strategy to contain the implementation of higher standards for CO2 emissions from internal combustion engines, the inclusion of maritime and land transport in the EU ETS, and the reduction of free emission permits for airlines (currently 85% of permits are granted free of charge). However, it is not yet clear when these changes would come into effect. Sustainable alternative fuels, biofuels, and hydrogen, will be promoted in aviation, sailing, and heavy road transport, where electrification is currently not possible.

The EC proposes a fair transition mechanism to help regions most dependent on fossil fuels. The proposed EUR 100 billion instrument has three pillars:

Just Transition Fund, which will mobilise resources from the EU regional policy budget;
• The “InvestEU” programme, in which funds come from the European Investment Bank;
EIB financing provided by the EU Bank’s equity capital.

With a proposed budget of EUR 100 billion over the next 7 years, the “Horizon Europe” R&D and Innovation Programme is expected to contribute to the implementation of the EGD. 35% of EU research funding will go to climate-friendly technologies. The most ambitious research effort in the EU will focus on environmental goals.

The document mentions the introduction of the Carbon Border Tax, a tax on the carbon footprint of imported goods. It also provides for a revision of the EU directive on the taxation of energy products in order to bring it into line with the more ambitious climate goals. These would also be included in the annual assessment of the fiscal policy of the EU countries.

Krzysztof Żarnotal

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