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On track to green EU transport?

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Written by Marketa Pape.

The EU aims at becoming a carbon neutral economy by 2050, an ambition outlined in the European Green Deal and enshrined in the EU Climate Law. To achieve climate neutrality, the EU transport sector has to cut its CO2 emissions by 90 %. This requirement contrasts with the fact that transport is the only sector in which greenhouse gas emissions have continued to grow in recent years, albeit with a short pause due to coronavirus-related restrictions on travel and movement.

In December 2020, the European Commission put forward a strategy outlining how it intends to transform the EU transport sector to align it with the European Green Deal, by making it green, digital and resilient. This sustainable and smart mobility strategy has become the blueprint for the Commission’s legislative and support activities. It contains 82 initiatives in 10 key areas, with specific milestones to be achieved by 2030 and 2050.

While the Commission is the key actor in preparing and proposing the legislation needed, the overall impact of this ‘green and digital fabric’ depends on when, and with what amendments, each legislative proposal gets passed into law by the European Parliament and the relevant ministers of EU Member States. And, crucially, how coherent the whole strategy remains.

Since the publication of the strategy just over a year ago, the Commission has progressed and put forward a number of legislative proposals. The EU co-legislators are discussing how the proposals should be amended and are getting ready to negotiate. The European Parliamentary Research Service (EPRS) tracks the progress of these legislative files with dedicated briefings, the most relevant of which are listed below.

In the July 2021 Fit for 55 package, several proposals target transport or modify some key related aspects, such as the energy needed. Here, the Commission proposes to ramp up the production of renewable energy, raising the target of energy from renewable sources from the current 32 % to 40 % by 2030, and to change the rules for energy taxation, replacing the volume-based approach to energy taxation with one based on energy content and environmental performance. For road transport, the Commission proposes to set stricter CO2 emission performance standards for new passenger cars and light commercial vehicles (vans) and allow only zero-emission vehicles from 2035. To support the roll-out of the necessary alternative fuels, a draft regulation on alternative fuels infrastructure proposes binding targets for electric vehicle charging points and hydrogen refuelling points, electric charging for stationary aircraft at airports and onshore power supply for ships at ports. Two specific sectoral proposals, on sustainable aviation fuels and on sustainable maritime fuels, focus on how to ensure sufficient quantities of cleaner fuels for airplanes and ships.

In terms of CO2 emissions, the Commission not only proposes to tighten the existing EU Emission Trading Scheme (EU ETS), but also to extend it to maritime shipping and establish a separate, self-standing emissions trading system for fuel distribution for road transport and buildings. Both these sectors, however, remain included in the Effort Sharing Regulation, so that national policies would continue to support their decarbonisation. Reviewed rules for aviation are dealt with separately, with a proposal to end allowances from 2027 and integrate the global market-based Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), applicable to international flights, into the revised ETS.

These ‘Fit for 55’ proposals are interlinked and also need to be understood against the background of the EU’s efforts to determine which investment counts as green. While the basic ‘taxonomy’ legal act is already in force, the process of establishing detailed criteria on how to classify activities as ‘green’ is ongoing. For transport, the key issue is whether natural gas and nuclear power will be regarded as sustainable or not.

The ‘Fit for 55’ package also includes a proposed new social climate fund (SCF), meant to help vulnerable households, micro-businesses and transport users meet the costs of the green energy transition in the buildings and road transport sector.

While negotiations on these files are expected to start in 2022, the Commission is already preparing further proposals. It will debate the way forward with transport experts at the 7th annual Future of transport conference on 23 March 2022, together with the most pressing issues facing the European transport sector, such as supply chain disruptions and digital transformation and road safety.

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