Climate Action: Data shows CO2 emissions from new cars strongly decreased in 2020, with electric vehicles tripling their market share as new targets are applied
Provisional monitoring data, published on 29 June, shows that the average CO2 emissions of new cars registered in the EU, Iceland, Norway and the UK in 2020 have decreased by 12% compared to 2019. This is by far the greatest annual decrease in emissions since CO2 standards started to apply in 2010. It coincides with the phase in of stricter CO2 emissions standards for cars as of January 1, 2020. For the period 2020-2024, the Regulation sets the EU fleet-wide CO2 emission targets at 95 gCO2/km for newly registered cars and at 147g CO2/km for newly registered vans. The main reason for this sharp decrease of CO2 emissions was the surge in the share of electric vehicle registrations, which tripled from 3.5% in 2019 to over 11% in 2020.
Despite the shrinking overall market for new cars due to the COVID-19 pandemic, the total number of electric cars registered in 2020 still increased, reaching for the first time over 1 million a year. The average CO2 emissions from new vans sold in the EU, Iceland, Norway and the United Kingdom in 2020 also slightly decreased. The provisional data shows that European legislation on CO2 emissions standards continues to be an effective tool for reducing CO2 emissions from cars and vans, and that the shift to electro-mobility is underway.
Vehicle manufacturers have three months to review the data and may notify the Commission if they believe there are any errors in the dataset. The final data, to be published at the end of October 2021, will be the basis for the Commission to determine manufacturers' compliance with their specific emission targets, and whether any fines are due for excess emissions. The revision of the current CO2 emissions standards to align them with the EU's higher new climate ambitions will be part of the Commission's Fit for 55 proposals, due for adoption on 14 July. For more information please see here.
Carbon leakage: Prevent firms from avoiding emissions rules
The European Parliament is discussing a carbon levy on imported goods to stop companies moving outside the EU to avoid emissions standards, a practice known as carbon leakage. Society.
As European industry struggles to recover from the Covid-19 crisis and the economic pressure due to cheap imports from trading partners, the EU is trying to honour its climate commitments, whilst keeping jobs and production chains at home.
An EU carbon levy to prevent carbon leakage
EU efforts to reduce its carbon footprint under the European Green Deal and become sustainably resilient and climate neutral by 2050, could be undermined by less climate-ambitious countries. To mitigate this, the EU will propose a Carbon Border Adjustment Mechanism (CBAM), which would apply a carbon levy on imports of certain goods from outside the EU. MEPs will put forward proposals during March's first plenary session. How would a European carbon levy work?
- If products come from countries with less ambitious rules than the EU, the levy is applied, ensuring imports are not cheaper than the equivalent EU product.
Given the risk of more polluting sectors relocating production to countries with looser greenhouse gas emission constraints, carbon pricing is seen as an essential complement to the existing EU carbon allowances system, the EU's emissions trading system (ETS). What is carbon leakage?
- Carbon leakage is the shifting of greenhouse gas emitting industries outside the EU to avoid tighter standards. As this simply moves the problem elsewhere, MEPs want to avoid the problem through a Carbon Border Adjustment Mechanism (CBAM).
The Parliament's objective is to fight against climate change without endangering our businesses due to unfair international competition due to the lack of climate action in certain countries. We must protect the EU against climate dumping while ensuring that our companies also make the necessary efforts to play their part in the fight against climate change. Yannick Jadot Lead MEP
Existing carbon pricing measures in the EU
Under the current emissions trading system (ETS), which provides financial incentives to cut emissions, power plants and industries need to hold a permit for each tonne of CO2 they produce. The price of those permits is driven by demand and supply. Due to the last economic crisis, demand for permits has dropped and so has their price, which is so low that it discourages companies from investing in green technologies. In order to solve this issue, the EU will reform ETS.
What the Parliament is asking for
The new mechanism should align with World Trade Organisation rules and encourage the decarbonization of EU and non-EU industries. It will also become part of the EU's future industrial strategy.
By 2023, the Carbon Border Adjustment Mechanism should cover power and energy-intensive industrial sectors, which represent 94% of the EU's industrial emissions and still receive substantial free allocations, according to MEPs.
They said that it should be designed with the sole aim of pursuing climate objectives and a global level playing field, and not be used as a tool to increase protectionism.
MEPs also support the European Commission proposal to use the revenues generated by the mechanism as new own resources for the EU's budget, and ask the Commission to ensure full transparency about the use of those revenues.
The Commission is expected to present its proposal on the new mechanism in the second quarter of 2021.
Learn more about the EU's responses to climate change.
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