While Europe’s drive for carbon neutrality and sustainability will inevitably leave at least some businesses out of pocket, the list of industries currently affected by EU environmental initiatives include those with sustainable interests at heart.
The European Union’s flagship climate policy vehicle, the Green Deal, took another major step forward in December, with a new binding target for a 55% reduction in greenhouse gas emissions by 2030. However, a little over a year after the original deal was first inked, the Green Deal is already accused of failing to ensure no one is “left behind”. At the same time, debate over key pillars of EU environmental efforts continues to play out within the European institutions, with the European Parliament still developing its response to the Commission’s Circular Economy Action Plan and environmental groups pushing for increasingly stringent rules.
While Europe’s drive for carbon neutrality and sustainability will inevitably leave at least some businesses out of pocket, the list of industries currently affected by EU environmental initiatives include those with sustainable interests at heart. Alongside its new and more ambitious targets, will the Commission be able to ensure it fairly distributes the financial support and technical assistance it offers to those most impacted by its dramatic moves towards a green EU? And is it willing to look beyond the headlines to support the sectors doing the heavy lifting on sustainable innovation? The track record thus far is not altogether encouraging.
Recharging the automotive sector
Sustainable mobility is one area underlined for investment by the EC, especially because the transport industry will have to reduce emissions by 90% to meet Green Deal targets. The bloc’s electric vehicles (EV) market is growing rapidly, with 500,000 vehicles sold in 2020. In November, these vehicles accounted for fully 80% of the overall automotive market in Norway. In Germany, the Kraftfahrt-Bundesamt (KBA) motor transportation authority found annual EV sales last year increased third times over.
Nonetheless, this focus on electric cars themselves has detracted from the important question of how to charge them. While the EV industry saw an 110% increase, the rollout of electric charging stations is stalling at just 58% growth. Worse, sustainable independent electric charging stations, which power cars using solar energy and wind power, are being side-lined in favour of EV stations proffered by oil and gas companies along European motorways.
Berlin has dedicated $2.8 billion to charging infrastructure, and will oblige all fuel stations to have an EV charging point. But independent companies like Ionity and Fastned are suffering from unfair systems which favour ‘bundled’ tenders on historic petrol station territory, so that any contender must propose oil and gas pumps as well as service facilities. While Big Oil plugs into new energy portfolios, younger and more sustainable European entrants cannot compete fairly.
This unequal playing field comes to the detriment of smaller, ecologically innovative European players, and it remains to be seen whether the EU’s Alternative Fuels Infrastructure Directive, due out later this year, will effectively address it.
Fight over food packaging and environmental impact continues
Cherry-picked sustainability policies also affect one of the biggest manufacturing industries in the bloc, namely the food and drink industry, which employs 4.82 million people and generates a turnover of €1.2 trillion annually. With restaurants shuttered, the food industry has taken a huge hit during the pandemic. Takeaway and delivery services have become a lifeline for eateries struggling to make ends meet.
Ironically, this small silver lining now leaves European restauranteurs in hot water with the Commission. The current draft guidelines of the EU’s Single Use Plastics Directive (SUPD), a major component of the Circular Economy Action Plan, are in the process of being finalised by member states as well as the European Parliament’s environment (ENVI) committee. As they currently stand, the guidelines place polymer-insulated fibre-based products (such as paper cups and containers) on their blacklist, stating that “single‐use plastic products… fall within its scope also if they are made partly from plastic, regardless of the amount of plastic contained.”
While the European Commission’s attempt to force out plastic is to be lauded, that radically broad definition of ‘plastic’ includes many non-plastic products which include a small amount of plastic lining. It also overlooks the advantages that paper and carton-based disposable products, including cups and cutlery, can bring to the table. A recently published life cycle assessment (LCA) of single-use packaging commissioned by the European Paper Packaging Alliance (EPPA) quantifies the discrepancy between the Commission’s approach and the concrete impact of single-use paper food and drink packaging used in European restaurants, clearly demonstrating how paper can be better for the environment than reusable tableware.
The assessment – carried out by Ramboll, an independent Danish consultancy to the European Commission, and certified by TÜV – demonstrates that energy consumption in the use phase of reusable plastic and traditional tableware (during washing and drying) actually outweighs the environmental impact of disposable paper alternatives. As such, foodservice based on reusable products was found to use 267% more freshwater and 238% more fossil fuel resources compared to paper-based disposables. This resulted in a 177% higher carbon footprint overall – regardless of the material of the reusable packaging and the in-store or out-of-store washing options considered.
Germany still hooked on fossil fuels
Those findings help illustrate how, in the pursuit of fighting plastic pollution, the SUPD is simply threatening to ban or limit the use of many paper-based products altogether, undermining its own objectives of sustainability and recyclability by singling out products which are already recycled 85% of the time. Ramboll’s results pertaining to increased fossil fuel use, for their part, also point to a wider issue undermining environmental policies across the EU.
Take Germany, for example, which has pledged to cut out coal by 2038. All while seeking to meet this target, Berlin is dismantling nuclear power plants quickly in parallel. Ten years into this post-Fukushima policy, the power Germany received from nuclear has paradoxically been replaced mainly by coal, even as the National Bureau of Economic Research estimates Germany bears costs of nearly €10 billion every year from its nuclear phase out.
Germany is not only phasing out coal too slowly, but wind and solar companies were further disappointed after Germany’s Renewable Energies Act reform in early December cut the renewable energy industry off from subsidies after just 20 years. More assertive EU climate law could prevent member states from making knee-jerk reactions by setting individual deadlines for fossil fuel phase out, banning subsidies to fossil fuels, and channelling financial support into renewables. In their absence, even Europe’s most climate-conscious member states are backsliding in important ways.
While the EU’s overall green objectives are vital, stakeholders on all sides feel major policies need rethinking at a time when Greenpeace says “the Commission’s policies should be guided by a true paradigm shift in these systems.” Member states are also coming to resist certain facets of Timmermans’ aggressive approach, such as when the Vice-President created uproar this past autumn by threatening to scrap reforms to the Common Agricultural Policy. To achieve both top-level and grassroots buy-in, the Commission clearly still needs to iron out important inconsistencies.
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