(Bloomberg) — The European Union unveiled its Green Deal five years ago with the aim of making it the cornerstone of the bloc’s growth and setting the agenda for the world. Fault lines have now replaced fanfare and risk handing leadership of the clean industrial age to the US and China.
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Despite the growing climate crisis, a rightward shift in European politics has fueled opposition to the plans and threatens to slow progress. The target of the pushback is transport and heating policies, which will affect the bloc’s 450 million residents more directly than anything before it.
That’s an opening for some member states and Europe’s embattled auto industry to demand changes that would put the EU’s emissions targets virtually out of reach and leave the region behind.
“By far the biggest challenge for the new commission is to prove that it puts people at the center of the energy transition,” said Krzysztof Bolesta, deputy climate minister for Poland, which takes over the EU’s rotating presidency in January. “We expect real adjustments, not a rebranding.”
As she begins her second term in office, European Commission President Ursula von der Leyen has pledged to stay the course towards the goal of achieving climate neutrality by 2050. At the same time, she has indicated that she is open to adapting the reform to help industry and vulnerable households. That’s already evident from the EU’s decision to delay a landmark law to combat global deforestation, and opponents are looking for more.
How far Europe’s green ambitions have weakened was evident in the city of Brussels. Authorities in the EU capital this month made a U-turn on a plan to phase out diesel engines.
A campaign by local politicians cited the concerns of owners of some 35,000 vehicles, and the city government sided with them on air quality problems for hundreds of thousands of people. As a result, one of Europe’s most prosperous regions agreed to delay enforcement of restrictions on older diesel vehicles from a low-emission zone by two years until 2027.
Along with Slovakia and the Czech Republic, Poland is reluctant to implement steps that have already been agreed, setting up a possible confrontation with Brussels. The fronts are getting harder as important deadlines approach, making the coming months crucial.
At stake is not only achieving the EU’s 2030 target of cutting greenhouse gas emissions by 55% compared to 1990 levels, but also the larger issues of competitiveness in the global race for clean technologies – and credibility .
The bloc’s green reforms span the entire economy and relaxed policies in one sector would require tighter restrictions elsewhere. Such horse trading would create new rifts and undermine the legal certainty required of investors.
In the early stages of the EU’s climate overhaul, the bloc focused on companies, but the next steps will be trickier. The Green Deal includes an expansion of carbon pricing tools that will impact consumers – already under pressure from post-pandemic inflation and a spike in energy prices due to Russia’s war in Ukraine.
That eventual pain should be offset by a stronger EU economy. But the hoped-for benefits, such as new jobs and a future-proof industry, remain elusive amid troubling news such as plans for job cuts and factory closures at former big names like Volkswagen AG.
Against this backdrop, any policy seen as an additional burden is open to attack, said Linda Kalcher, executive director of the Brussels-based think tank Strategic Perspectives.
The new emissions trading system, known as ETS2, is a major target. From 2027, a pollution price will be imposed on road transport and heating fuels. That will inevitably have an impact on the general population, even if a special fund is established to protect the most vulnerable – estimated at at least €87 billion ($95 billion) from 2026 to 2032.
“Almost half of EU countries have elections when ETS2 starts and that risks a new wave of resistance to green measures,” Kalcher said.
Of the 27 Member States, only Austria managed to meet the end-June deadline to introduce domestic measures for the new carbon market. Although it is part of European law, some are demanding changes.
Poland’s Bolesta said he hoped the EU would reconsider the measure before making “a mighty European blunder”. Czech Prime Minister Petr Fiala told his country’s parliament that he will try to get ETS2 postponed. Slovakia’s Environment Minister Tomas Taraba last month called on the committee to reconsider the measure and signaled his intention to seek a broader coalition on these issues.
Patriots for Europe has also proposed a repeal of the expansion of motor fuel and buildings to protect consumers, said Silvia Sardone, the leading lawmaker of the right-wing Patriots for Europe group on the European Parliament’s environment committee.
“The European Union’s green strategy must not just be revised, but completely destroyed,” she said. “Goals and timelines must be revised in line with competition in international markets and, above all, sustainable for businesses and families.”
Road transport emissions account for almost a quarter of the European total and remain stubbornly high. Labels to help people choose cleaner vehicles have had little effect. The EU is about to become stricter, but here too there is resistance.
The aim of the block is to sell only emission-free new cars by 2035, which will effectively put an end to the combustion engine. As part of the process, emission standards will become stricter from 2025. But the plan, which comes on top of ETS2, is now leading to calls from car companies for a postponement. German manufacturers in particular are under pressure.
Under current rules, carmakers would either have to halt production of around 2 million cars or face fines of up to €13 billion, the European Automobile Manufacturers’ Association said in an informal draft document seen by Bloomberg last month.
While automakers blame tepid demand for electric cars and unfair competition from Chinese manufacturers for their trouble meeting regulatory demands, some policymakers and environmental researchers point to short-termism, with the industry trying to sell SUVs and other high-margin models to maximize profits before setting stricter targets. kick in.
The Transport and Environment think tank expects all car manufacturers to increase their range of electric vehicles, with sales rising from 14% in the first half of this year to 24% of the market.
Still, the sector is weighing heavily and its concerns are likely to be echoed in the European Parliament when it begins hearings on candidates for new EU commissioners next month. The ground is being prepared for a fierce battle.
The centre-right European People’s Party, the largest political group in the assembly, called for a review of the 2035 ban on the combustion engine, arguing the measure will endanger automotive jobs and make driving unaffordable for some. Sardone of the Patriots for Europe called the EU’s electric car strategy “economic suicide” for the region.
Giving in to fear and diluting climate policy weakens the signal that companies should make the clean transition a priority, said Julia Poliscanova, senior director at Transport and Environment.
That’s not just about meeting local regulations, but about being better positioned to compete with global rivals, she said, adding that politicians would be better served by tapping EU funds to support clean manufacturers and promote greener mobility options.
“It’s also a matter of mentality and the world is constantly changing,” Poliscanova said. “These things need to be planned ahead and that’s what I think is missing.”
–With assistance from John Ainger and Daniel Hornak.
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