Whether one can describe investments in nuclear power plants as “sustainable” is one of the rather minor questions in climate policy. The dispute over the taxonomy in which such definitions are made is only a first sign of the conflicts that Europe will face in the coming months.
In the summer, the EU Commission presented its ideas on climate protection. It is no longer regarding new climate targets – once morest which nobody protests. Now it’s regarding how to achieve the goals. That will inevitably lead to arguments.
The first amendments to the major climate protection package “Fit for 55”, which is to reduce greenhouse gas emissions by 55 percent by 2030, are currently being tabled in the European Parliament. The Dutch social democrat Mohammed Chahim made a real declaration of war last week.
He is working on the delicate project of the CO2 border adjustment. In Brussels one speaks of “Cbam”, which stands for “Carbon Border Adjustment Mechanism”. The instrument is intended to protect European industry from cheap products from abroad if CO2 prices rise in this country.
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Anyone who wants to import energy-intensive goods into the EU should pay CO2 taxes on them, as local companies also have to do during production. At the same time, the freely allocated CO2 certificates for European companies will expire.
The steel industry warns
Chahim’s proposal goes well beyond the proposals of the EU Commission. This wanted to hit the goods steel, iron, aluminum, fertilizer, cement and electricity. Chahim wants to add organic chemicals, hydrogen and polymers, which are plastics, to the list.
He also wants to introduce the border adjustment faster and allow the free certificates to expire faster. Instead of until 2036, companies should only receive free allocations until 2028. In theory, this shouldn’t be to the detriment of industry.
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The energy-intensive companies are supposed to pass the higher costs on to the customers; the border adjustment protects them from undercutting from abroad. The profits might stay the same. So much for the concept.
But there are doubts as to whether this will work in practice. The steel industry warns that foreign competition can bypass the border adjustment and that Europeans are no longer competitive. The chemical companies see their export business at stake.
Discussion is likely to be heated
Because of this danger, the industry should pay attention to every sentence that is changed in the law on border adjustment. Every year and every percentage can cost industry billions as a result.
The discussion is likely to be correspondingly heated. This also applies to other laws from the package, such as emissions trading. The CO2 emissions are said to become more and more expensive for the industry. In addition, there is to be a new emissions trading scheme for buildings and traffic. Heating oil, gas, diesel and petrol will then inevitably become more expensive.
With this at the latest, the climate discussion will also reach those who have so far hardly shown any interest in it. The resistance will be clear, as will the will of environmentalists. Only in Germany can one be relatively relaxed because the building and traffic tax has already been introduced here.
Other countries are to be appeased with money from a new climate social fund. It is intended to help those who have to buy a new car or a new heating system because of the high prices. But people in Brussels do not believe that this is enough to reassure motorists.
More: How the EU taxonomy also reroutes tax money
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