Automakers and airlines warn EU’s climate plan endangers innovation

After Brussels announced an ambitious plan to halve EU emissions by 2030 to curb global warming, Europe’s most polluting companies accused the EU of endangering investment and innovation.

Automakers, airlines, and heavy industries have all expressed dissatisfaction with these proposals, including the de facto ban on new diesel and gasoline vehicles from 2035, taxation of aviation and marine fuel, and the decision to phase out allotments to the EU from 2026 Emissions trading system.

ETS, which sets a price for pollution, also expanded to the shipping industry for the first time.

Just a few hours after the EU announced its plan, many companies and trade agencies are preparing to lobby their governments to reject the plan, which shows that the European Commission will face an uphill battle in negotiating with member states to make the road map into law.

European automakers in particular have expressed opposition to stricter vehicle and truck emissions targets over the next decade, including requiring all new vehicles to achieve zero emissions from 2035.

The Spanish automobile industry is the second largest automobile industry in the EU after Germany. It stated that this industry is separately classified as unfavorable treatment, although other industries between them generate more than two-thirds of the EU’s greenhouse gases. It urged the Spanish government to “consider its position.”

The German car manufacturer lobby group VDA stated that these measures are “anti-innovation”, saying that these measures are “nearly impossible” for companies including suppliers. However, Volkswagen, Europe’s largest automaker, which is investing 35 billion euros in electric vehicles, welcomed the plan.

In the aviation industry, Lufthansa agrees that ambitious climate protection and carbon prices are “both correct and necessary,” but said it will be at a disadvantage compared to global competitors.

It stated that the phasing out of carbon credits and binding quotas for sustainable aviation fuel, especially kerosene taxes, will hinder the development of European airlines.

The German airline said it should establish a financing mechanism to help pay for sustainable fuel that is several times more expensive than kerosene. “Only in this way [the road map] Keep the competition neutral. “

The head of the global aviation trade group Iata is even tougher. Willie Walsh, the former chief executive of the aviation group IAG, accused Brussels of its “own goals” for the taxation of jet fuel based on fossil fuels.

He said: “Taxing taxes to make jet fuel more expensive is a’own goal’ in terms of competitiveness, and it will hardly help accelerate the commercialization of sustainable fuels.”

The European aviation trade agency A4E has also joined the opposition, saying that these measures will make it more costly for passengers to fly.

Cement, steel, fertilizer and aluminum producers and other industries that are difficult to decarbonize have also complained about plans to phase out free carbon credits by 2036.

What is ETS

The emissions trading system requires large industrial polluters to purchase carbon credits to pay for their emissions. Industries covered by the system will receive free subsidies. These credits are traded in the financial market.

These sectors and electricity production account for 45% of the EU’s emissions trading system and will be included first in the new system, which will impose carbon taxes on imports from countries that do not have equivalent carbon pricing.

The so-called carbon boundary adjustment mechanism will help fair play The company said it opposes cheaper imported products, but there are still problems.

Cedric de Meeus, Vice President of Public Affairs at Holcim, One of the largest cement producers in Europe, Believes that the industry’s carbon credits must be phased out cautiously. “You don’t want an economic shock that no industrial sector can withstand.”

European Metal producer Also joined the call to strengthen protection.

The European Iron and Steel Association stated that the phasing out of free carbon allowances in the medium term will increase industry costs and reduce the financial resources available for investment in decarbonization technologies.

Tata Steel agreed that the new framework will lead to increased operating costs. “But we also recognize the measures that support our decarbonization transformation.”

What is the carbon boundary adjustment mechanism

Impose tariffs on imported goods based on carbon content

Aluminum producer It was sought to be excluded from the pilot phase of carbon border taxation, but it was not approved. Eurometaux, which represents a European metal producer, said that although it was disappointing in this regard, it was “happy” that indirect emissions were excluded from the plan.

Indirect emissions, called Scope 2, are emissions related to the production of purchased electricity. Aluminum is one of the most energy-consuming production materials.

This Occupy the shipping industry The EU’s plan has caused some frustration, and the carbon trading system has been extended to all journeys within the EU and 50% of journeys to and from countries outside the EU.

Guy Platten, secretary general of the International Chamber of Shipping, criticized these proposals as “pure money grabs” to support the EU’s recovery from the pandemic.

The reaction of Maersk, the world’s largest container shipping company, is more balanced.

Simon Bergulf, head of supervisory affairs at Maersk, said that the framework is “the right idea”, even if he is concerned that these policies may alienate non-EU countries.

In stark contrast to other industrial sectors, energy companies are basically positive on the roadmap to stimulate renewable energy.

BP CEO Bernard Rooney said that this will stimulate consumer demand for low-carbon energy and create huge business opportunities.

Utilities that switch to renewable energy are also optimistic. Markus Krebber, CEO of German RWE, said that this is a “good day” for the environment and companies. “[It] It opens up new possibilities for accelerating the expansion of renewable energy and promoting the development of the hydrogen economy. “

Some energy company executives cautioned that although they broadly support the EU’s goals, they may Counterattack, If they feel that their design is bad or bear unfair costs.

Ignacio Galan, the executive chairman of Spain’s Iberdrola, regarded as a leader in renewable energy, said that member states will have to “review their planning and licensing processes to ensure that projects can be delivered within the necessary time frame.”

Reported by Peggy Hollinger, Harry Dempsey, Daniel Dombey (Spain), Joe Miller (Frankfurt), Sylvia Pfeifer, Neil Hume, David Sheppard, Peter Campbell, Richard Milne (Norway), Gill Plimmer and Guy Chazan (Berlin)

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