The plans will be discussed over the coming months by the European Parliament and national governments.

  1. The Commission is proposing an end date for the internal combustion engine from 2035, mandating a 55 percent fleetwide CO2 emissions cut from 2030 on the way to 100 percent target five years later. Accompanying legislation on alternative fuels infrastructure would compel nations to start building out charging points and hydrogen refueling stations that can cater for the uptick in demand in zero-emissions vehicles. 
  2. The plan for Carbon pricing calls for a tightening of the number of permits issued and expanding the scheme to hit shipping and tighten requirements for the aviation industry. The “most controversial” part of the whole package will be the Commission’s proposal to create a second Emission Trading System (ETS) that covers fuels used for road transport and building heating. Costs are likely to be passed on to consumers.
  3. The Commission  plans to create a Climate Social Fund, which will direct 25 percent of revenues from the ETS and funds from the EU budget to help drivers buy zero-emissions vehicles or homeowners insulate their homes. National governments will have to submit plans for how they’ll spend the money to the Commission for approval and match the EU financing with their own cash. The fund is expected to swell to €72.2 billion.
  4. The Commission will tax imports of iron and steel, cement, aluminum, fertilizers and electricity, lumping them with a tariff equivalent to what EU producers pay under the home carbon market. If other countries have similar measures, their companies won’t get hit. As the levy is phased in from 2026 — after a mock run from 2023 to 2025 — free pollution quotas that are currently part of the EU system will be decreased gradually and eventually phased out over a decade, ending in 2035.  The revenues will feed into the EU’s budget, and be partly used to repay the EU’s multibillion-euro recovery package. 
  5. The Commission wants governments to increase greenhouse gas emission reductions from the road transport and building sectors, agriculture, and industry and waste plants by 11 percentage points to help reach the bloc’s tougher 2030 climate goal.  
  6. The Commission is proposing to increase the targets for wind, solar and other clean power sources. The revamped Renewable Energy Directive sees the current bloc-wide target of having 32 percent of energy come from renewables by 2030 raised to 40 percent, and it also sets the benchmark of having renewables account for 49 percent of the energy used in buildings by 2030.
  7. The new package requires nearly half of the energy to be renewable by 2030. EU countries will also need to increase the share of renewable energy used in heating or cooling buildings by 1.1 percent each year. The Commission also wants countries to renovate public buildings at all levels at a rate of 3 percent each year. And a new standalone Emissions Trading System for buildings ramps up pressure on governments to speed up the pace of energy-efficient renovations.
  8. The Commission aims to make cleaner fuels and renewables more attractive by changing the way energy is taxed. Currently, fuels and electricity are mostly taxed on volume rather than energy content but the reform would ensure the most polluting fuels are taxed the highest. It also updates minimum rates, which have remained unchanged for 18 years, and axes tax exemptions and rate reductions offered by national governments.
  9. The Commission will require all but the smallest EU airports to provide greener jet fuel to airlines by 2025. The Commission also wants to apply emissions trading to maritime transport, covering all emissions from trips between EU ports and half of the trips beyond Europe. The package also includes a push to get rid of tax exemptions for shipping fuels and boost the uptake of sustainable fuels.
  10. The Commission wants to use the bloc’s forests and peatlands to absorb some 7 percent of current annual emissions — and plans to lean on the agricultural and forestry sectors for help. It set an overall EU target of removing 310 million tons of CO2 equivalent in 2030. To that end, a proposed revision to its land use, land-use change and forestry regulation (LULUCF) will set binding annual national targets for CO2 removals for 2026 to 2030. It also wants to set a climate neutrality target for the land sector — including the LULUCF and the non-CO2 agricultural sectors — to reach by 2030. The Commission also committed to plant at least 3 billion more trees within the decade and wants to incentivize farmers to take up practices that help trap carbon on their land under the new Common Agricultural Policy. 

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