Decarbonisation

«Net zero emissions» target

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Europe has set itself an energy action programme with a very clear and determined goal: to achieve zero emissions into the atmosphere within the next 30 years. From the Green New Deal to «Fit-for-55», the package of proposals for decarbonisation and meeting the 2030 targets sees industry as one of the sectors most affected.

One of the paths industry needs to take in terms of energy is decarbonisation. A project launched by Europe with the European Commission’s Green New Deal that is now becoming more difficult but even more urgent because of what is happening in geopolitical terms, due to the war unleashed by Russia, and in terms of energy strategy.

European projects

If before the surge in energy prices at the beginning of 2022 and the conflict in Eastern Europe at the end of February, the decarbonisation path was urgent and difficult to implement, it is even more so now.

The Green New Deal, which was then transposed into the commitments of the European Member States in terms of reducing emissions, provides for a new pact for the environment and specific objectives for 2030, i.e. a 55% reduction in emissions compared to 1990 levels, to then arrive at 2050 with total decarbonisation and the achievement of «net zero emissions».

The Commission’s work continued even during the period of the Covid-19 pandemic, explained Alessandro Bertoglio, head of Assocarta’s Energy and Transport section, at Miac 2021, and led to the Environmental law, which implemented the commitment to reduce emissions. Finally, July 2021 saw the publication of «Fit-for-55», the package of proposals for achieving the 2030 targets.

«It is a very complex package that includes an adjustment of the Emission Trading Scheme (ETS) Directive», says Bertoglio. «Again, in order to meet the new targets, the ETS will have a further increase to 2030 compared to the previous trajectory, with a target of -61% and a whole series of other changes concerning benchmarks and an increase in the CO2 reduction gradient along the way, as well as other proposals concerning e.g. energy efficiency and instruments to further support the development of efficiency and co-generation, and other instruments that also concern energy taxation». He finally adds that «there is a proposed programme for a comprehensive review of energy taxation».

A firm commitment to decarbonisation

Amidst revised targets, prospects for programme implementation and difficulties linked to contingencies, the guiding thread of European energy policy remains firmly in place: «making the greatest possible effort to reduce CO2». A project that, comments Bertoglio, «is certainly not without its question marks. As Assocarta, the association representing the interests of the sector, we will be highlighting these points – as we are already doing – at the various European working tables, bringing forward the requests of our companies». Instances, he explains, concerning the peculiarities of Italian industry. «Our country has an economy based mainly on natural gas. This means that, as a nation, we are already strongly oriented towards the use of a fuel with a lower environmental impact, which does not mean that we should not improve, but that this further improvement will be more difficult for us, since we do not have those sources with a high polluting impact that can be easily replaced with gas and thus already give a quick result in terms of lower emissions».

Certainly, Bertoglio emphasises, the process of reducing climate-changing emissions and increasing the efficiency of industry, which began with the adoption of the first Emission Trading Scheme directive, is still one of the main focuses of European energy and environmental policy, «but we must not forget that we still have pockets of efficiency in terms of reducing emissions that are very large and concern, above all, the transport sector», which the package involves.

So Europe’s long journey towards zero emissions is continuing. And while the current difficulties have made it urgent to take action on other fronts, first and foremost on the security of energy supplies, the Union’s energy and environmental policies have not changed, assures Bertoglio, «the objectives of the ‘Fit-for-55’ are not under discussion, indeed the idea is to try to speed up».

The CBAM mechanism

As part of the fight against climate change, Europe is also seeking to regulate its relations with non-European countries. With this in mind, in mid-March 2022, the European Council approved the proposal for a CBAM regulation, the carbon border adjustment mechanism, presented by the European Commission in the summer of 2021.

The mechanism is part of the «Fit-for-55» package and aims to avoid the risk of carbon leakage generated by the climate policies of third countries that are often less ambitious than those of the European Union.

Spefically, the CBAM covers imports of carbon-intensive products and affects the industrial sectors of cement, aluminium, fertilisers, power generation, iron and steel. While fully respecting international trade rules, the intention of the mechanism is to ensure that Europe’s efforts to reduce climate-changing gas emissions are not undermined by imports of products produced in other parts of the world where climate change policies are different from those of the EU and do not have such high and challenging targets.

At the same time, this measure is intended to be an incentive for Europe’s partner countries to develop policies that set a price on carbon in order to combat climate change. Last but not least, it also wants to help prevent not only the import of carbon-intensive products but also the relocation of production.