In her monthly column, Angeli Mehta looks at rising concern about the adequacy of policies to reduce emissions in the EU, Germany, France and the UK
May has seen the climate plans of European nations come under renewed scrutiny – and to be found wanting. Even at the EU level, several measures that underpin the bloc’s new targets have been heavily criticised by both environmental groups and its own advisers.
As part of Europe’s Green Deal, the Commission has announced plans to reduce air, noise, water and soil pollution by 2030, with the ultimate goal of preventing any pollution by 2050. “It is high time to ‘reverse the pyramid’ of action and rethink the way goods and services are designed, produced, delivered, performed and/or used and disposed of. This means that, first of all, pollution should be prevented at the source,” the Commission says.
There’s little detail on the “how”, but by 2024, the Commission says it will reward cities that are making the most progress, and will develop a scoreboard reflecting the performance of regions. It wants to see a race to zero pollution, and anticipates it will create new tourism and business opportunities.
Vans are the fastest-growing source of EU road transport emissions
A starting point could be the tightening of emissions targets for van makers, which campaign group Transport & Environment says are wholly inadequate. Vans are the fastest-growing source of EU road transport emissions, but unambitious targets to reduce emissions mean manufacturers have no incentive to sell electric versions, T&E says. Just 2% of vans sold last year were electric, while one in 10 cars sold was an electric vehicle.
While the Commission says its action plan will guide all relevant policy, it has already decided that burning woody biomass will count as sustainable under its Sustainable Finance Taxonomy, which was unveiled in April. This is despite concerns that it reduces biodiversity and capacity of forests to soak up carbon, and increases particulate emissions, which are damaging to health.
The carbon price in Europe’s ETS reached €55 per tonne this month, almost double pre-pandemic levels, triggering concern amongst industrial groups that a border tax adjustment will be needed sooner rather than later in order for them to remain competitive. Trading in the UK’s new carbon market got under way, with prices opening slightly higher at just over £50 (€57) per tonne.
There were climate protests across France after the parliament’s lower house passed an environment bill that activists denounced as inadequate. The bill outlaws future airport expansion or building, bans domestic flights under 2.5 hours (where a train can be taken instead), and prohibits the sale of cars emitting more than 90gCO2/km by 2030. The government’s own climate advisory body had already said the measures didn’t go far enough and in any case, the country had exceeded its 2013-2018 carbon budget by 61 million tonnes.
The annual reductions in the current plan are nowhere near the 7% required to meet the Paris commitment. Earlier this year a French court ruled the country must do more. Its target of cutting emissions by 40% by 2030 (compared with 1990) is already overtaken by the EU’s goal of 55% cuts by 2030.
Germany lifts ambition but remains under pressure over coal
A mere six days after Germany’s highest court ruled that the country couldn’t leave action on climate to younger generations and must introduce post-2030 targets before the end of next year, Berlin obliged, saying that Germany will be climate-neutral five years earlier than planned (by 2045) and cut emissions by 65% by the end of the decade. This greater ambition was spurred, no doubt, by electoral pressure from the Green Party, who are ahead in the polls.
It also furthers the EU’s aim of having some members reach net zero earlier than 2050, to buy time for states, such as Poland, that are lagging when it comes to the energy transition. But pleas from the UK and from former UN Secretary-General Ban Ki-moon for Chancellor Angela Merkel to increase her government’s contribution to the Green Climate Fund, to help developing countries to adapt to climate change, were rebuffed.
Merkel told the Petersberg Climate Dialogue (the annual summit in the runup to UNFCCC climate talks that she set up 12 years ago) that Germany’s pledge was “a fair amount and a fair contribution” to the $100bn that wealthy nations have pledged to raise annually. Best- case estimates suggest funds might have reached $80bn in 2018, but many campaigners think that’s optimistic. Her government has, however, committed almost $100m to kick-start a public-private fund aimed at raising $1bn to protect biodiversity in some of the planet’s most important areas.
The next opportunity to persuade industrialised nations to boost adaptation finance will come at the G7 in June, which is being hosted by the UK. Boris Johnson told the Petersberg summit he hoped to “secure a substantial pile of cash” as part of the hard work needed ahead of COP26.
“If we want others to leapfrog the dirty technology that did so much for us, then we have a moral and a practical obligation to help them do so.”
Aside from finance, the other big issue to be faced before COP26 is coal, something that was underlined by a new report from the International Energy Agency arguing, for the first time, that there should be no new development of oil and gas, as well as no further financing for unabated coal if the world is to escape the worst impacts of climate change. (See ESG Watch: IEA report calling for end to new oil and gas puts wind in the sails of investors)
The European Parliament has agreed a €17.5bn Just Transition Fund, which will help coal-dependent nations switch to clean energy
COP26 President-elect Alok Sharma says it’s his “personal priority” to end international financing for coal. “The science is clear that to keep 1.5 degrees alive, coal must go.”
Germany has committed to phasing out coal by 2038, though this is considered far too late by environmental campaigners, who say the German state also provides too much compensation to coal plant operators.
It has already held three auctions that will compensate power plants to retire their capacity as early as the end of this year. The European Parliament has agreed a €17.5bn Just Transition Fund, which will help coal-dependent nations switch to clean energy.
South Korea, too, is under renewed pressure to phase out coal, following its commitment at last month’s Earth Summit to end public financing of coal abroad. The country is still constructing coal plants, with a 2.1GW facility set to open in 2024. More ambitious 2030 emissions targets are promised for COP26, and its climate envoy Yoo Yeon-chul has told the Financial Times that it will “take bold measures” to meet its obligations under the Paris agreement.
UK ‘falling short’ on climate legislation
The UK’s stated intention is to stop relying on coal power by 2024 but Sharma’s impassioned calls for a “consistent and concerted effort” to cut emissions in this next decade remains at odds with UK policymaking. A planning inquiry into whether a coking-coal mine in Cumbria should go ahead won’t begin until September.
New regulations to limit the burning of peatland came into force in the UK this month, but environment groups say they’ll protect just a fraction of this valuable carbon-storing resource. Around 80% of the UK’s 3m hectares of peatlands are degraded, contributing some 5% of greenhouse gas emissions. Restoration immediately stops CO2 emissions, with carbon sequestration beginning again after around 10 years – so protecting them is critical for achieving the UK’s net-zero ambition.
A new report from the British Ecological Society also highlights the value of peatlands in flood defence and preserving biodiversity. The government now says it will restore 35,000 hectares of peatland over the next four years, while the Scottish government began a 10-year 250,000 hectare programme last year.
Conservationists have been urging the government to immediately ban sales of peat compost, but will have to wait until the end of the parliament and a public consultation. A voluntary phaseout, which was intended to be complete by 2020, has been an “abject failure” they say.
This month’s Queen’s Speech marking the new parliamentary session had nothing to say about delivering net-zero ambition beyond a promise of investment in new green industries to create jobs and the return of the repeatedly delayed Environment Bill. Much criticised for its inadequacies, there is nonetheless deep concern that an improved version might not reach the statute books before COP26, so risking squandering an opportunity to show leadership on reversing the devastating decline of the natural world.
The Treasury’s review of the net-zero target is also eagerly awaited. Parliament’s Treasury Committee has called for it to include “clear sectoral pathways towards decarbonisation” and to “address the key policy decisions as to the future of high-carbon industries”.
Viridor has announced plans to join the HyNet North West consortium, which will capture 10m tonnes of CO2 each year
The UK has begun to articulate how it will support carbon capture and storage infrastructure, with a “user pays” revenue model and upfront capital grants. Government grants have already been awarded to progress engineering design in nine projects. What the business models look like will determine whether the green light is given to plans like the newly announced SSE Thermal and Equinor joint venture to build a gas-fired power station with CCS in the north-east of Scotland.
In another development, energy-from-waste company Viridor announced plans to join the HyNet North West consortium, led by Progressive Energy, which will capture 10m tonnes of CO2 each year from 30 industrial sites across the north-west and Wales from 2025 and store it in depleted oil and gas reservoirs in Liverpool Bay. (See Is this breakthrough moment for carbon capture and storage?)
Across the North Sea, the Dutch government has awarded €2bn to a consortium that includes Royal Dutch Shell, Exxon and Air Liquide to capture and store emissions from factories and refineries around the Port of Rotterdam.
This article is part of this month’s web-only Sustainable Business Review. See also: