Daily News Analysis

Europe plans laws to phase out fossil fuels



  • European officials are preparing legislation to wean one of the world’s biggest and most polluting economies off fossil fuels far more quickly than other nations have pledged to do.
  • The proposals could include phasing out coal as an electricity source as well as imposing tariffs on polluting imports — an idea with the potential to set off global trade disputes.
  • It is designed to swiftly reduce the emissions of planet-warming gases and meet an ambitious climate goal.
  • The 27-nation bloc has said it will cut its emissions of greenhouse gases by 55% by 2030, compared with 1990 levels.
  • The legislation is expected to be in sharp contrast to vague aspirations by various other countries to neutralize their emissions by midcentury.


“Fit for 55,”

  • The proposals, known as “Fit for 55,” will take many months to negotiate among the 27 member countries and the European Parliament before becoming law.
  • It will most certainly invite scrutiny of Europe’s own reliance on extracting and burning fossil fuels in its own territories, from oil and gas drilling in the North Sea to coal mining in countries like Germany and Poland.


Border carbon adjustment tax

  • The most contentious element is border carbon adjustment tax, that would impose tariffs on the greenhouse gas emissions associated with products imported from outside the European Union .
  • It would protect European companies from goods made in countries with less stringent climate policies.
  • Among the products that it could target steel, cement, iron and fertilizers.
  • It could not only shake up global trade and invite a dispute over protectionism in the World Trade Organization, but it could also create new diplomatic fault lines before international climate talks taking place in Glasgow.


Response of other countries:

  • China and India have publicly criticized the idea of a carbon border tax.
  • Japan isn’t keen.
  • United States
    • It has said it is evaluating the idea of its own carbon border tax. It is in a tricky position with respect to a prospective European border tax.
    • It is keen to restore trans-Atlantic alliances, including on climate change. With no prospect of carbon pricing legislation in the United States, several U.S. companies could be vulnerable.
  • European Union
    • It would be contentious within the European 27-country bloc
    • Efforts to phase out the sales of new internal combustion engine cars for instance are likely to face objections from some European carmakers.
    • Efforts to phase out coal from electricity generation are likely to face opposition from countries with large coal operations, like Poland and Hungary.