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View from Brussels: A climate of conundrums - how deep should the green agenda cut?

Europe’s leaders must decide on a new greenhouse gas emissions target by the end of the year. The updated climate benchmark and the underpinning details will be decisive for the rollout of clean and green technologies.

As things stand, the EU will have to cut 40 per cent of emissions by 2030, compared with 1990 levels. According to the latest data, the bloc will easily sail past the target ahead of time, which has pushed the institutions into reviewing and updating their climate commitments.

The EU’s executive branch, the European Commission, ran the numbers and decided that a 55 per cent cut is affordable and will be compatible with the Paris Agreement, an international treaty that aims to curb global warming at a safe level. “Our impact assessment clearly shows that our economy and industry can manage this,” said Commission President Ursula von der Leyen.

However, for some, the target goes too far while for others it is not ambitious enough, and any commitment needs to be approved by the European Parliament and Council. Earlier this month, MEPs voted narrowly in favour of a 60 per cent cut.

Central and Eastern European countries are put off by the increased ambition and flinch at the costs involved, even though the number-crunching shows that GDP will not suffer and, in some cases, especially the clean-energy sector, profits will increase.

A final agreement must be made before the end of the year so the EU can be a good student and submit the new target to the UN.

Politics aside, the final climate game plan will have a big impact on what technological solutions governments pursue. One of the issues on the table is the Commission’s plan to rely on ‘carbon sinks’ like woods and peatlands. “We need to make sure our forests stay healthy, and this is going to be a momentous task,” EU climate chief Frans Timmermans said.

That additional focus on carbon dioxide removals, rather than scrubbing them at source, is controversial as it exposes climate action efforts more to the risk of forest fires. Activist groups such as Greenpeace and WWF say it also grants polluting industries some licence to continue business as usual.

If carbon sinks do end up underpinning the EU’s plan, then it is likely that extra resources will be spent on space hardware to monitor forest growth and on emergency response measures, in case woodlands are threatened by increasingly common wildfires.

Natural carbon removals could also cut government appetite to spend big on scaling-up carbon-capture-storage (CCS) technology, which still comes with huge abatement costs and doubts about its effectiveness in preventing emissions escaping into the atmosphere.

That has not stopped close EU neighbour Norway from spending nearly £2bn on a large-scale installation that will capture industrial emissions and which the government has said will be open for use by other countries.

EU efforts to drag CCS kicking and screaming into profitability have failed so far. A report by the bloc’s auditors in late 2018 warned that lack of coordination between governments and investors had doomed most projects to failure.

Other details still up for debate under the 55 per cent plan include setting up an independent climate advisory body, modelled closely on the UK’s own Committee on Climate Change (CCC), which would make regular reviews of emission-busting efforts.

That has the potential to enforce faster and more sweeping changes on the energy and transport sectors, as well as agriculture, given that normal EU legislative review periods are quite spaced out.

It is transport where one of the biggest spats could happen, as the Commission is thinking about substantially upgrading the current rules on car CO2 standards. The target for 2030 is 37.5 per cent average cuts compared with a 2021 baseline.

Senior officials, who are yet to decide on what direction to take, are considering an increase to 50 per cent. There are also hushed rumours about an EU ban on new diesel and petrol car sales.

Given the powerful auto lobby fought the current benchmark tooth-and-nail until the final round of negotiations in 2018, the mere fact that such a significantly higher target is on the table is a huge development.

Yet the world has changed dramatically over the last two years. Europe’s carmakers have embraced alternative technology like electric battery and hydrogen more than analysts expected, with German marques Volkswagen and BMW being notable examples.

A full ban on the internal combustion engine is very unlikely (EU-wide anyway) but there is scope to wring more out of the CO2 standards, if everyone can agree how deep the green agenda should cut.

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