Published 2020-03-24

This post is also available in Swedish

Mistra Carbon Exit’s view of ways forward for EU climate work

The EU’s Green Deal is a step in the right direction for the Union’s climate ambitions, but it remains unclear how the vision will be implemented in practice. So says Lars Zetterberg, Programme Director of Mistra Carbon Exit. Recently, the research programme held a seminar to discuss how the Green Deal may affect Swedish industry.

In December, the European Commission presented the European Green Deal, an ambitious climate package intended to bring about net-zero emissions in the EU by 2050. To achieve this, the Commission proposes a list of measures to be implemented. One of the proposals attracting most attention is to introduce import duties. This would impose a fee on the import of climate-intensive products into the EU — primarily steel, cement and aluminium.

Lars Zetterberg. PHOTO: IVL Swedish Environmental Research Institute

‘The Commission has put forward a proposal to introduce protective duties, but we don’t know whether they’ll happen,’ says Lars Zetterberg, Researcher at IVL Swedish Environmental Research Institute and Programme Director of Mistra Carbon Exit.

Mistra Carbon Exit recently presented a policy brief outlining the implications of three alternative ways of introducing protective duties. In general, tariffs are inappropriate for small, export-dependent countries that are friendly to free trade, such as Sweden, Zetterberg states. However, imposing a climate charge on imported goods also entails major practical challenges, one being the risk of contravening the World Trade Organization’s (WTO) free-trade rules.

‘As long as the EU has an emissions trading system that grants industry unrestricted allocation of rights to release carbon dioxide, protective duties on imported steel would mean a competitive advantage for European industry.’

If protective duties are imposed on all goods, on the other hand, the EU must also impose customs duties on goods leaving the Union. This would limit the scope of the climate policy so that it applies only as long as the goods remain in Europe, Zetterberg says. He thinks the more you study the issue, the more problems arise.

‘The greatest benefit of protective tariffs is probably that they’re used as a threat, to make the rest of the world accelerate its shift to lower climate emissions. In that case, the proposal never even needs to be implemented.’

Green Deal affecting Sweden’s industry

In February, Mistra Carbon Exit invited industry spokesmen to a breakfast seminar to discuss how the Green Deal will affect Sweden’s industry. Besides Zetterberg, the panel comprised Thomas Hörnfeldt, SSAB’s Sustainability Manager, and Katarina Areskoug Mascarenhas, Head of the European Commission’s Representation in Sweden.

‘Sweden’s highly dependent on EU policy. Many of the issues we see as important in Mistra Carbon Exit are also included in the EU’s Green Deal agenda.’

According to Zetterberg the EU’s Green Deal, overall, is a distinct step forward in the Union’s climate ambitions, particularly because it tightens the climate target to net-zero emissions by 2050, but also because it represents progress in how the work is organised, he says.

‘Commission Vice-President Frans Timmermans is being given overall responsibility for implementing the Green Deal, and he’ll also get a strong influence over other directorates, for instance in business and innovation.’

The seminar included a discussion on how EU emissions trading will be affected in the future. In this area too, Mistra Carbon Exit has recently produced a policy document. Going forward, emissions trading is likely to include more sectors than today. As part of the Green Deal, the EU proposes including shipping in the trading system, from 2026 at the earliest.

‘Shipping accounts for a minor part of the EU’s total emissions and won’t have a major impact on the EU’s climate vision. But it’s an important step in principle, because it’s a hard industry to regulate. International maritime transport isn’t subject to ordinary environmental legislation,’ Zetterberg says.

Carbon capture and storage are another area of interest for joint EU action. Here, Mistra Carbon Exit is planning to produce policy support documentation in 2020. In the future, Zetterberg also expects to also publish decision support concerning issues of green public procurement, as a means of pushing for net-zero emissions by 2050.

‘In this area Sweden’s ahead of the EU, and at Union level there’s huge interest in green procurement. There’s good experience here in Sweden for them to draw on,’ Zetterberg says.

Text: Henrik Lundström