Through the Paris Agreement, all countries have committed to reduce their emissions and adapt to the impacts of climate change. The European Union decided to become a leader in this transition and to be the first continent to achieve climate neutrality. To this end, by 2030 it expects to reduce Greenhouse Gas (GHG) emissions by 55 % compared to 1990 levels, and by 2050 it expects to achieve neutrality.
The European Green Pact (PVE), or Green Dealis the strategy that the EU has drawn up to achieve the 2050 climate neutrality goal. This ambitious plan is made up of a number of policy initiatives that set the Union on the path to a green, multi-sectoral transition, while benefiting people, the planet and the economy. The objectives pursued by the plan are:
- Climate neutrality by 2050emissions: Decreasing by 55 % in 2030, and reaching climate neutrality in 2050, compared to 1990.
- Clean and affordable energyThe EU is committed to the following goals: decarbonisation of energy, increased energy efficiency, and universal energy access.
- Elimination of pollutionZero Pollution Plan for air, water and soil, to eliminate the toxic substances emitted.
- Biodiversity preservationBiodiversity Strategy.
- Sustainable and circular industry.
- Energy and resource efficiency in the construction.
- Sustainable and efficient mobility.
- Farm-to-table food: Healthy feeding of short circuits.
- Research and developmentTo transform production and financial models.
The EU is translating the EVP's climate ambitions into legislation, with the "Climate Package".Fit for 55"and other instruments. Political ambition is thus transformed into a legal obligation. This package plans the pace of emission reductions up to 2050, taking into account the pace of business, citizens and other stakeholders. European legislation will be reviewed and updated and new initiatives will be put in place to bring its policies in line with the agreed climate targets.
So, which sectors does the European Green Pact impact?
In summary, we can say that the EVP will impact on all sectors and actors It is multi-sectoral in nature and aims to address climate change from all its perspectives. However, the Pact focuses on a few specific areas, which are the weatherthe environmentthe energythe transportthe agriculture and the sustainable finance. Therefore, all companies involved to a greater or lesser extent in these areas can expect changes in legislation, both in the private and public sector.
And in what ways can the Pact have an impact?
The EVP is expected to represent an opportunity for companies to become more competitive and to achieve sustainable development by decoupling economic growth from the consumption of raw materials and the emission of pollutants.
In line with the objectives outlined above, the main obligations and opportunities arising from the European Green Pact are as follows:
- EU Emissions Trading Scheme (EU ETS)Emissions trading: Currently, this tool represents the main mechanism for reducing emissions, and restrictions are expected to be extended to achieve climate neutrality. It triggers an energy transition towards renewable energy sources and an increase in energy efficiency, as it is cheaper than buying emission allowances.
- Coal taxesIn the same way, taxes will be imposed on the import of products into the EU to protect our industry and encourage other countries to reduce their emissions in the manufacture of products.
- Circular economyThe Circular Economy Action Plan foresees measures on sustainable product design and the circularity of production processes. The industrial sector will have to transition to this new business model, implementing tools such as servitisation and digitalisation, promoting the "right to repair", and constructing buildings with modular, removable and reusable components.
- Discontinuation of fossil fuel subsidiesThis will be an incentive for the production and use of alternative fuels.
- Innovations in agriculture, livestock and fisheriesThese actors are key to achieving the goals, and their climate actions will be driven by economic rewards, creating great opportunities for these sectors.
- Development of sustainable chemical alternatives for a toxicity-free environment.
- Financing Sustainable EuropeIn order to achieve the objectives, the European Commission has defined an economic package of 17.5 billion euros that will finance projects carried out by companies that demonstrate that they collaborate with the decarbonisation objectives of the Pact. This support can be received through ERDF, ESF, and programmes such as LIFE or Horizon Europe.
In short, the EU is striving to meet very ambitious targets that will undoubtedly bring about a change in the business model of all companies. It is important to remain alert to all emerging regulations in order not to be left behind and to comply with them, but also with the funds and subsidies, which generate opportunities for innovation and transformation for companies, and will bring both environmental and economic benefits.
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