The EU’s plan to decarbonize its economy and achieve net-zero emissions by 2050 was supposed to be Europe’s “moonshot moment.”

But four years after it was announced, parts of the EU Green Deal have been watered down or delayed amid fierce opposition from industry, farmers and companies facing high inflation and rising energy costs following Russia’s full-scale invasion of Ukraine.

Environment Commissioner Virginijus Sinkevičius said the Green New Deal was now past its “glory days when the streets were full of people asking us to take action on climate change” because it had reached the point where it had to be implemented policy period.

Given that the EU relies on Chinese imports for many clean technologies such as solar panels, batteries and rare earths, Brussels’ latest move to launch a countervailing investigation into Chinese electric vehicle manufacturers could further complicate the EU’s green transition if Beijing retaliates. Required for wind turbines and electric vehicles.

Several EU diplomats warned that such a hostile stance could have unintended consequences and trigger a response from China, which has imposed export controls on gallium and germanium, key materials used in chip manufacturing.

Other diplomats questioned whether countervailing investigations would be effective in protecting European manufacturers from unfair competition.

“The global race for a Green New Deal is on, and it must be a fair race. If not, it is legitimate for us to defend our interests,” said Pascal Canfin, a liberal lawmaker close to French President Emmanuel Macron.

Pascal Confin
Pascal Canfin: “The global race for a Green New Deal has begun, and it must be a fair race.” ©Olivier Horslet/EPA/Shutterstock

Competition from across the Atlantic is also hampering investment in Europe’s emerging green technology industries. Washington last year provided a $390 billion tax credit and subsidy program for companies pursuing clean technology in the United States, a program that has been praised by investors for prioritizing funding over regulation.

Last week, when European Commission President Ursula von der Leyen announced a countervailing investigation into China, she refocused her policy objectives for the remainder of the period ahead of EU-wide elections in June. Many industrial issues.

She said the council would engage in a series of “clean transition conversations” with businesses, with its “core aim being…”. . . Support various sectors to establish business models for industrial decarbonization”.

Her speech marked a renewed focus on the Green New Deal, which when she took office in 2019 was hailed as the biggest and most ambitious green transition plan on any continent.

Ursula von der Leyen
Ursula von der Leyen said last week that the commission’s core aim is to “support every sector in building business models for industrial decarbonisation” © Julein Warnand/EPA/Shutterstock

However, according to analysis by Canfin, chairman of the European Parliament’s environment committee, policymakers and activists have noticed that the revision of more than 70 pieces of legislation under the “Green New Deal” may have slowed down.

Some politicians and senior officials say this is nothing more than a series of goals that member states and businesses cannot achieve.

Ann Mettler, vice president of Europe at Breakthrough Energy, a sustainability-focused venture capital firm owned by Bill Gates, said: “So far, the Green New Deal has been largely divorced from economic goals, even though it was supposed to It’s a new growth strategy.”

“We now have a comprehensive regulatory framework in place, but it does not currently constitute a business case for transition.”

Inès Van Lierde, president of EU manufacturing body Aegis Europe, said the industry “firmly supports” the Green Deal but is “extremely concerned about the apparent deindustrialization of the continent”.

Number of Green Deal-related laws (by state) 2019-2023 Bar chart shows EU’s Green Deal is far from the finish line

With EU elections approaching in June, agreement on new proposals is becoming increasingly difficult to reach. According to Canfin estimates, about 20% of the committee’s original proposals will not be adopted before the election.

Two of the six laws yet to be proposed by the European Commission are likely to be severely watered down or shelved, while revisions to the EU’s main chemicals regulations have also been delayed, according to officials with knowledge of Brussels’ plans.

In order to attract European industry, von der Leyen appointed Maroš Šefčovič, a former EU energy commissioner responsible for accelerating natural gas infrastructure, to take over as head of the EU Green Deal. Sefcovic will represent the committee’s policies at the United Nations this week.

Maros Sefkovic
Maroš Šefčovič will take over as head of the EU Green Deal. ©Olivier Matisse/EPA/Shutterstock

However, resistance to climate legislation is also growing in various countries.

Von der Leyen’s own political group, the centre-right European People’s Party, has made cutting the burden of climate regulations a key element of its election message next year.

Poland, which is due to vote in October, is challenging three Green Deal provisions at the European Court of Justice, arguing they threaten the country’s energy security and will exacerbate social inequality.

Warsaw also opposes an EU deal reached at the United Nations climate change conference COP28 in December to cut emissions by 55% to 57% from 1990 levels, according to diplomats involved in the negotiations.

José Delbeke, chair of climate policy at the European University Institute and a former director-general of the European Commission’s climate unit, said he was surprised the EU’s environmental agenda had not been pushed back earlier, given the scale of Brussels’ ambitions.

He added that the EU’s climate targets “are profoundly changing its economic model, at least in terms of energy and technology”. “It’s not entirely surprising that their implementation has encountered some obstacles.”

climate capital

Where climate change meets business, markets and politics. Explore the FT’s coverage here.

Are you curious about the Financial Times’ commitment to environmental sustainability? Learn more about our science-based goals here

Svlook

Leave a Reply

Your email address will not be published. Required fields are marked *