Dutch European Commissioner Frans Timmermans (who will be responsible for climate issues) wants to introduce a CO2 tax at the outer border of the European Union. This is in order to avoid products that have not been manufactured in a climate-neutral way. He announced this measure during his approval hearing at the European Parliament. There they are appointing the new European Commission which will take up office next month. According to Timmermans, this is the only way to get the European climate law passed which he is to present this spring. The exact date on which this border tax is to come into effect should be revealed in this climate law. It will apply to all Member States.
A 55% reduction by 2030
This climate law ought to include information on how the Member States will make their economies climate-neutral. CO2 emissions must be reduced by 55% by 2030, Timmermans announced. That is 10% more than what was originally agreed to. By 2050, CO2 emissions need to zero out on balance. With that commitment, in two weeks’ time he will start his mandate as European Commissioner for Climate Change. His most important task will be to deliver a so-called ‘Green Deal’. The new climate law is an important part of this. Along with that, he wants to overhaul legislation on greenhouse gas emissions and energy.
The problem is not that achieving CO2-neutral production is not technically possible, says Erik Klooster. He is managing director of VNPI, a Dutch association which brings together the major petrochemical companies (together with the chemical and metal industries, who are the main producers of CO2), such as Shell and Esso. “It is,” he states. The problem is that making the industry CO2-neutral makes manufacturing much more expensive. This makes the industry less competitive compared to industry in countries that are not implementing any climate measures. If there is no such border tax, European industry will be forced out of business. “Esso has been calling for this kind of carbon adjustment or carbon border tax for years,” says Klooster. “It is the only way to make Europe climate-neutral.”
A leading role
That is also what Commissioner Timmermans told the European Parliament, who will have to approve his new climate legislation next year. “We shouldn’t want to bring in products that are cheaper because they have not taken the environment into account. I think that such a CO2 border tax will be subject to an assessment from the WTO. If, for example, a country such as China or India also starts to produce in a CO2-neutral way, we will drop that tax on their products.”
Also read: Former Secretary of State of the United States: Quadruple the CO2 price and let the polluter pay
Empty gas fields
That’s also the purpose of such a levy, says Klooster. “The EU’s share in global CO2 emissions is relatively small. So we don’t have to do it for that sake.” The EU, and the Netherlands in particular, can play an important pioneering role by involving other countries in the world such (as India and China) in the production of clean energy. “Industry in the Netherlands is geographically close to each other. There are enough empty gas fields available in the next few decades for storing CO2 that has been emitted and captured. It is therefore cheaper to build a pipeline for CO2 transport to an empty gas field than it is in England, for example. Industry is scattered all over the country there.
Extracting CO2 from air
Another method of achieving CO2-neutral production is to capture the greenhouse gas and bind it to hydrogen via a chemical process. This creates a synthetic fuel that can be reused. This is also a way to ensure that aircraft that don’t fly electrically and therefore continue to emit CO2 will still be able to operate in a climate-neutral way, says Klooster. “You can extract the amount of CO2 that an aircraft produces out of the air, and then store or process it.”
Also read: Aviation industry to European Commission: ‘money is needed to develop zero-emission aircraft’
The question is whether national parliaments are prepared to sign the climate legislation that Timmermans will be proposing. For example, the Polish Member of the European Parliament Anna Zalewska ( from the Conservatives and Reformists faction) said at the Timmermans hearing prior to his appointment as European Commissioner for Climate last month, that she feared it would destroy Polish industry. Much of it runs on coal. “Hundreds of billions of euros are needed to make the transition possible. We just don’t have that.”
Money for Poland en Greece
Timmermans replied that money had to be sent to countries such as Poland and Greece because they are unable to pay for the energy transition themselves. “My grandparents were miners in Heerlen. When the mines were still open, Heerlen was the second richest city in the Netherlands. After the closure of the mines, Heerlen changed into one of the poorest municipalities in the Netherlands. We must make sure that we prevent this from happening in the European regions that are currently dependent on coal.”
Timmermans stressed that there is absolutely no future for the coal industry. He wants to work together with national and local authorities, the European Investment Bank and make use of existing EU funds for this transition by diverting them towards making the EU climate-neutral.
Cost: 200 billion euros per year
An important part of the money needed to make poor, coal-dependent regions climate-neutral should come from richer EU countries such as The Netherlands and Germany. Their national parliaments must approve the new climate law, including the redistribution of financial resources. Commissioner Timmermans predicted that it would take in total €200 billion a year over the next five years to make the EU climate-neutral. “But the Member States are almost as stingy as the Dutch,” he said. “They have to open their wallets.”