Frankfurt am Main – The European Commission’s new climate policy package places enormous pressure on industry and European societies as a whole to adapt. The Commission is now attempting to finally move beyond the superficial debates over targets and back up the 55% goal with concrete measures. This effort deserves recognition. After all, the socio-ecological transformation of our economy is the central challenge of our time. It is both right and necessary to focus all our efforts now on complying with the Paris Climate Agreement.
Whether the Commission’s proposals are already the gold standard in every respect, however, is questionable. The package marks the beginning of the debate and a negotiation process on the right path forward. We see both positives and negatives.
The scarcity of allowances in the emissions trading system for industry and energy poses a major challenge for all participating companies. Yet the system has functioned increasingly well in recent years and has provided incentives. Greater efforts seem appropriate here and are also feasible over time. However, each industry must be examined closely. The steel industry, in particular, continues to rely on the free allocation of allowances. The relatively slow phase-out path—compared to figures discussed earlier—is therefore to be welcomed.
Also welcome is the proposal for a carbon border adjustment mechanism for imported steel, aluminum, cement, fertilizers, and electricity. Together with free allocation—which, contrary to earlier fears, will not be replaced overnight—this can protect the basic materials industries from carbon leakage and eco-dumping. The increased innovation fund within the ETS for measures such as CO2 differential contracts also holds potential. Without these protective measures and without a €10 billion transformation fund by 2030, the steel industry will not be able to make the transition to carbon-free steel production—a transition that represents the industry’s greatest potential for CO2 reduction.
We view the new, additional European emissions trading scheme for buildings and transportation with skepticism. There is reason to fear that this will lead to higher costs for mobility and energy. Renters, commuters, small business owners, and many consumers will face higher energy and mobility costs without having a real opportunity to switch to alternatives in the short term. Furthermore, the scheme is extremely complicated, time-consuming, and its incentive effect is questionable. The social fund intended to support the project appears half-baked, inadequate, and difficult to manage. It is far too meagerly funded for all that has been promised of it. The Commission’s proposal should not be the final word on this matter.
The de facto ban on internal combustion engines by 2035—imposed by the zero-emissions requirement in fleet emission limits—is unnecessary. It underestimates the role that internal combustion technology can still play during the transition. It is unwise to completely shut the door on hybrid technology and the potential use of climate-neutral fuels at this early stage. The tightening of fleet emission limits for the automotive industry is generally premature; the most recent one is barely three years old.
It is welcome that the Commission intends to make the expansion of charging infrastructure in Europe mandatory and that the targets here include both electric charging stations and hydrogen refueling stations. After all, the e-mobility strategy is fundamentally sound, and the charging infrastructure will determine public acceptance of the shift in propulsion systems and thus the success of the transition for passenger cars and trucks. The expansion of renewable energy should also be significantly accelerated; in this area, we can hardly do enough. The expansion of the power grid and ensuring an adequate supply of raw materials for the transition to new propulsion systems also require our full attention.
Above all, however, policymakers at all levels—European, national, and regional—must now pursue active employment and skills development policies, as well as modern industrial and structural policies. The Commission’s proposal still does not make it clear enough how and by what means the transformation is to be supported in terms of social and employment policy. After all, the effects of this package will drive massive structural change and pose significant risks to employment. And if we fail to prepare today’s workers for the jobs of tomorrow and to establish future-oriented industries and new business sectors centered on the digitization of products and production in the affected regions, the entire green transition project will be jeopardized.
Further information and press photos of Jörg Hofmann
