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Home Finance & Regulations New emission reduction target makes CEE countries fear a not-so-just transition

New emission reduction target makes CEE countries fear a not-so-just transition

The European Commission has recently decided to increase the 2030 emission reduction target from 40 to 55 per cent. We saw it coming. At this pace, Europe is not on track to become the first climate-neutral continent by 2050.

As pointed out by Simone Tagliapietra, Research Fellow at Brussels-based think tank Bruegel, from a climate action standpoint, this represents good news. 

“However, the Union must be aware that this is a long journey, and the road ahead will not necessarily be smooth,” he wrote.

Indeed, countries from Central and Eastern Europe are already raising their concerns that the just transition won’t be that fair after all.

“There is no more urgent need for acceleration than when it comes to the future of our fragile planet,” said President Ursula von der Leyen during her first State of the Union speech.

She drew the attention to the homes evacuated due to glacier collapse on the Mont Blanc, to the fires burning through Oregon, to the crops destroyed in Romania by the most severe drought in decades. Very good examples to show that Europe needs to go faster and do things better.

Mrs von der Leyen herself recognised that the proposed increase would be too much for some and not enough for others and many countries from CEE are considering it unrealistic.

According to the Commission’s impact assessment, both the economy and industry could manage this increase. However, early in July, the Visegrad Four (Hungary, Poland, the Czech Republic, Slovakia) together with Romania and Bulgaria had sent a letter to the Executive Vice-President of the European Commission, Frans Timmermans, calling for a more realistic impact assessment.

“In our opinion, it is important for the impact assessment to have a credible baseline, based on the collective efforts of Member States as expressed in the NECPs [National energy and climate plans] and to take into account the current pandemic as well as Brexit,” read the letter.

Mrs von der Leyen promised once again the European Union will not leave anyone behind.

“By next summer, we will revise all of our climate and energy legislation to make it fit for 55,” she said. “We will enhance emission trading, boost renewable energy, improve energy efficiency, reform energy taxation. But the mission of the European Green Deal involves much more than cutting emissions.”

CEE’s fears of a not-so-just transition

Poland’s Ministry of Climate welcomed the reference to the role of the Carbon Border Adjustment Mechanism (CBAM), as it could potentially be one of the most important mechanisms increasing global ambitions in the fight against climate change. However, it also expressed serious concerns regarding the new emission reduction target.

“We can assume with a high degree of certainty that the burden will not be evenly distributed among all countries, but will be greater for countries with higher emissions, such as Poland,” reads a press statement from the Ministry of Climate.

It also noted that in the speech of Mrs von der Leyen there was no reference to the specific action plan and the required support. No information has been given on how the EU would achieve the above-mentioned goal and what specific tools, apart from the Just Transition Mechanism (JTM), shall be used.

“The JTM itself as a tool is not sufficient to bring about such a fundamental change in the economies of the EU,” the Ministry pointed out.

Also, the Czech Deputy Prime Minister and Minister of Industry and Trade Karel Havlíček, considered it unrealistic for the Czech Republic to reduce its greenhouse gas emissions by 55 per cent by 2030. In his opinion, if the country wants to maintain its energy self-sufficiency, it will reach the target a little later.  

“We understand the EU’s environmental ambitions, however, it is important how they affect individual countries,” said Mr Havlíček. “Each has a different industrial, energy and transport infrastructure. The vision must not only be ideology and desire but must be based on concrete measures in each country. It should also be realistic given the current situation where the whole of Europe is dealing with the effects of the pandemic. For us, 55 per cent in 2030 is unrealistic. It certainly will happen, but a little later, if we want to maintain our energy self-sufficiency and not destroy the industry in the years to come.”

Estonia, which already one of the most ambitious countries in the EU with a goal to reduce greenhouse gas emissions by 70 per cent by 2030, is also insisting on a fair transition

“If Europe raises its target and devotes more resources to it, it will also support us,” commented Estonia’s prime minister Jüri Ratas. “This would certainly increase the demand for new technological solutions that create new opportunities for companies, including Estonian ones.”

However, he reminded that it must be also assessed the impact of possible changes on Estonian residents, companies and the country as a whole.

“It is important for us to take into account the specificities of each country and their current dependence on fossil fuels,” he highlighted. “The transition to a climate-neutral economy must be fair.

The target proposed by the Commission will now go through the European Parliament and the European Council for its final approval. Some members of the Parliament are actually pushing for higher targets (as high as 65 per cent) so a 55 per cent reduction target is likely to be approved. Later, the Commission would better start working on updating the current legislation so that all the countries (including the Members-to be, as the Western Balkans) could easily reach the same target at the same time.

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