In July the European Commission unveiled its Fit for 55 package aimed at pushing EU member states to reduce emissions by at least net 55% (compared to 1990 levels) by 2030. One of the most widely anticipated parts of the package – at least among policy wonks – is the introduction of the world’s first carbon border adjustment mechanism (CBAM). Intended to level the playing field between domestic and foreign producers of cement, steel, aluminum, fertilizers and electricity, CBAM’s real litmus test will be if it actually reduces overall emissions and incentivizes a greening economy both within and without the EU. But given how controversial and relatively weak the CBAM proposal is out of the gate, critics worry its presence will only distract from more effective climate strategies in the Fit for 55 plan. Worse, despite COP 26 in Glasgow, pushing CBAM could spark an international trade war. Lead blogger Michael Buchsbaum reviews the growing debate. Listen to our podcast on CBAM.
The hydrogen transition – a crucial political, economic and climate initiative for the European Commission – got a massive boost from their newly released Fit for 55 strategy. But despite growing concerns about how dangerous the expanded carbon footprint of H2 produced from fossil gas will be, many policymakers like EU Energy Commissioner Kadri Simson remain firm on backing both “blue” and “grey” H2. Among many incentives in the new policy package is the shielding of this highly polluting sector from having to pay additional carbon taxes under the European Trading System (ETS). In a recent Politico Energy Visions web event sponsored by Shell, Simson batted away all criticisms, stating that during the H2 transition phase “we will need all low-carbon hydrogen solutions.” Lead blogger L. Michael Buchsbaum reviews some of the ways not-so-low H2 benefits under the bloc’s new theoretical pollution prevention plans.
In mid-July, the EU published sweeping cross-sector plans intended to cut emissions by 55% compared to 1990 by the end of the decade. Using rising carbon prices under the Emissions Trading System (ETS) to literally fuel the clean energy transition, the proposed legislation covers a lot of ground: it increases renewable energy targets, sets in place the phase-in of hydrogen, increases energy efficiency and helps encourage housing renovation while ensuring the path of progress is “just.” Beyond helping the bloc reaches its climate objectives, policymakers hope to set an example of global climate leadership in the face of COP26 in Glasgow. In the first of three pieces, lead blogger Michael Buchsbaum breaks down some of the policy’s complexity.
Implementing carbon pricing mechanisms (CPMs) that impose fees on emissions in the power and industrial sectors can be a powerful tool to affect current production and consumption patterns. Under last year’s Sofia Declaration, Western Balkan countries pledged to align their climate change mitigation efforts with the EU targets and programs. Policy makers have declared pricing carbon to be one of the most important instruments in the effort to concretize political promises. However, the Western Balkan region has limited experience with carbon pricing initiatives – and only Albania and Montenegro have taken their first tentative steps so far. Daniel Muth has the details.