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The European Union is walking a tightrope between environmental ambition and economic reality as many countries struggle to come anywhere close to achieving their targets.

 

On Tuesday July 1, the European Commission unveiled a revised Climate Law proposal that aims to slash greenhouse gas emissions by 90% before 2040, but with a twist: the new plan includes significantly more flexibility than previous versions.

 

This shift is a bit of a strategic retreat from Brussels and is in response to mounting pressure from member states. Countries are somewhat divided on climate policy and in day-to-day terms, businesses are struggling with the costs of going green.

 

The compromise means that the EU is trying to maintain its climate improvement plan while acknowledging the practical challenges of such an enormous transformation.

 

The most significant change involves allowing countries to use "mechanisms such as high-quality international credits," commonly known as carbon credits, starting in 2036. These certificates represent the reduction or elimination of one tonne of carbon dioxide from the atmosphere and can be earned through projects like reforestation, renewable energy installations or carbon capture technologies.

 

Previously, the EU had been sceptical about these international credits, but the new proposal permits them as part of the Emissions Trading System, though limited to 3% of total reductions. This opens the door for countries to offset their emissions by financing sustainable projects elsewhere, potentially making the targets more achievable.

 

The revised plan also introduces what Brussels calls "sectoral flexibility." This means a member state could compensate for poor performance in one area, such as land use, by excelling in another, like waste management or transportation. It's essentially allowing countries to play to their strengths while still meeting overall targets.

 

To a limited extent, this is already in use. Spain, for example, was supposed to start charging drivers on high-capacity roads last year but the EU has allowed the government to improve rail infrastructure and push train travel as a sustainable alternative to driving instead.

 

Overall, this approach rightly recognises that different nations face different challenges. A country with limited forest cover might struggle with land-use targets but could excel in renewable energy, while another might have the opposite situation.

 

"Agreeing on the 90% climate target provides us with a clear beacon to guide our future actions. We are responding to the European people, who remain strongly in favour of climate action," said European Commission Vice-President Teresa Ribera.

 

"That is why we have decided to move forward with our climate policies, as they are essential to achieving other social and economic policy objectives, such as the security and prosperity of our citizens and businesses. We are not choosing between the economy and the green agenda, we are choosing both. Europe reaffirms its commitment to a fair, ambitious and competitive green transition," she added.

 

Brussels insists that its roadmap remains unchanged. This objective, aligned with the political guidelines for the 2024-2029 period, seeks to strengthen the continent's energy security, guarantee stability for investors, boost industrial innovation and maintain Europe's climate leadership.

 

"With our 2040 target, we're staying on course for the clean transition. We know why we're doing this: for economic, geopolitical, and security reasons. And we have a plan to make it work: a strong enabling environment, the Clean Industrial Deal and three high-impact flexibilities," said European Climate Commissioner Wopke Hoekstra, who added the new plan "provides industry and Member States with clear direction and supports their investment plans, while ensuring Europe stays firmly on track to achieve climate neutrality by 2050."

 

 

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