Ambitious EU Plan for Reducing Greenhouse Gas Emissions
A bold plan was unveiled today in Europe for reducing greenhouse gasses emissions before 2030 by 55% compared to the levels recorded in 1990. The plan is detailed in a package of proposals known as “Fit for 55” which will be negotiated by the twenty-seven member countries and the European Parliament before becoming a law.
The part of the plan that would be immediately affecting future sales of electric vehicles defines a complete stop of sales of internal combustion- and diesel-powered engines in just 14 years. Other proposed initiatives relate to Europe’s reliance on extracting and using fossil fuels. For automakers, this makes the use of steel challenging since the current production of steel from iron ore is fossil-fuel dependent. Commercially, the plan proposes a border carbon adjustment tax, which will impose tariffs associated with products imported from outside the EU, protecting companies from goods produced in countries in which climate protection laws are less stringent. This tax is anticipated to affect raw materials and products in the automotive value chain, which will be predominantly geared towards EVs. More details on the plan are described in this article published today by The New York Times, which also includes references to background information on similar initiatives and global goals.
The United States' goal for the same timeframe (by 2030) is to reduce emissions by 40% to 43%. While the timing has been described as coincidental, the very same day when the carbon adjustment tax was proposed in the EU, a tax on imports from countries with weak climate change policies was included in the current administration’s $3,5 trillion budget blueprint.
These recent news draw a narrower and better-defined timeframe for the shift to EVs globally and strengthen our need to accelerate the development of effective programs to support the repair side of the industry this decade.