FRANKFURT – Cars with internal combustion engines will disappear from European showrooms by 2035. Steel producers and cement manufacturers will pay for every tonne of carbon dioxide emitted by their factories. Freighters may not be able to dock in ports like Rotterdam or Hamburg unless they are running on cleaner fuels. Commercial airliners will need to refuel synthetic fuel produced with green energy.

The European Union’s plan to cut its greenhouse gas emissions by more than half by the end of the decade will affect almost every industry in the trade bloc, with profound consequences for jobs and the economy. block economy. European leaders said the climate package presented on Wednesday could put Europe at the forefront of new technologies such as electric car batteries, offshore wind power generation or hydrogen-powered aircraft engines.

But the transition will also be painful for some consumers and businesses, increasing the cost of a wide variety of goods and services, like video monitors imported from China, a vacation flight to a Greek island, or even a tank of gas. Companies that make obsolete products, such as parts for internal combustion engines, have to adapt or close their doors.

The proposals could reshape polluting industries like the steel industry, which directly employs 330,000 people in the European Union.

“It’s a truth that needs to be told,” said Akio Ito, senior partner at Roland Berger, a Munich-based consulting firm. “One way or another, we as consumers will have to pay the price for green transformation. “

Mr Ito said the new proposals would challenge industries in several ways. Businesses should switch to cleaner energy sources, like hydrogen, which are likely to be more expensive. There is a risk that European companies will start to relocate some of their most polluting activities, such as iron manufacturing, outside the borders of the European Union, he said.

Frans Timmermans, the EU commissioner responsible for the so-called Green Deal, acknowledged on Wednesday that “some sectors will benefit more than others”. He said it was up to the European Commission to show that the burdens and rewards could be shared fairly.

The European Commission’s plan, “Fit for 55”, calls on its 27 member states to reduce their greenhouse gas production by 55% by 2030, compared to 1990 levels.

The European Union’s target is more aggressive than that of the United States, which has committed to reducing its emissions by 40 to 43% over the same period, but behind Great Britain, which has committed to a 68% reduction. China, the world’s largest emitter, has only said it is aiming for a peak in emissions by 2030.

Here’s how the plan would affect industries in Europe.

Car manufacturers

Most automakers have announced plans to switch to electric vehicles, but many have refused to set an expiration date for fossil-fueled vehicles, which still generate the most profits. The European Commission’s plan would effectively require all new cars to be emission-free by 2035, removing any flexibility for companies like Volkswagen, Mercedes-Benz or Renault to continue to sell certain gasoline or diesel vehicles, including hybrids. .

The board’s plan also includes some provisions that benefit the industry. Public funds will be used to help build charging stations every 60 kilometers, or 36 miles, on major highways, a move that will encourage sales of electric cars. The commission will also help fund a network of hydrogen refueling stations, benefiting companies like Daimler and Volvo that plan to build long-haul trucks that run on fuel cells that convert hydrogen into electricity.

The association representing European car manufacturers said the charging networks envisaged by the commission were not dense enough and complained that it would be wrong to ban internal combustion engines altogether.

The European Union should “focus on innovation rather than imposing, or effectively banning, a specific technology,” said Oliver Zipse, CEO of BMW and chairman of the Association of European Automobile Manufacturers , in a press release.

Aircraft are major producers of carbon dioxide emissions, but are also difficult to convert to emission-free operations. According to the committee’s proposals, airlines would be forced to start blending synthetic fuel with the fossil fuels they currently use, and they will no longer receive tax breaks on fossil fuels. In other words, they will have to pay more to pollute.

Airlines for Europe, an industry lobby group representing Air France-KLM, easyJet, IAG, Lufthansa Group and Ryanair – Europe’s largest low-cost airlines – said its members support a green transition but they are would look for regulations and Support.

“The taxes siphon money from the industry that could support emissions reduction investments in fleet renewal and clean technology,” said Willie Walsh, chief executive of the International Air Transport Association, in a statement. communicated.

Airbus, the world’s largest aircraft manufacturer, has asked airlines for subsidies to renew their fleets and support for technologies that use sustainable fuels. The European giant, whose main stakeholders are the French, Spanish and German governments, has announced its intention to develop carbon-neutral planes within five years and recently unveiled a zero-emission concept aircraft powered by hydrogen.

Shipping

The agreement distinguishes companies that ship goods by water, charging them more for the emissions they generate to encourage their transition to cleaner energy. Most of the ships that ply the seas today use substandard oil and are big polluters.

Lobbyists in the shipping industry have previously complained that it was not clear how the plan would be implemented and which shipping routes would be affected. “Will it only be European trade, or half of the trade between China and the EU?” S&P Global Platts said in a note.

Heavy industry

The European Commission’s plan would increase the cost of pollution by strengthening the European trading system, which forces companies to pay efficiently for the dangerous carbon dioxide they release into the environment. Anticipation of changes has already helped drive up the price of credits by around 50%.

Steelmakers have warned that the proposals could further erode their competitive advantage over Chinese producers and discourage the investment needed to switch to lower emissions.

“We will face increased carbon costs – that will be the ultimate result,” said Koen Coppenholle, managing director of Cembureau, a cement industry trading group.

Energy

Power producers will be pushed to accelerate the switch to wind, solar and hydroelectricity from coal. Renewable energies already represent 20% of the electricity produced in Europe. The goal is to increase that figure to 40 percent by 2030, largely by increasing the penalty that utility companies pay for electricity produced by fossil fuels, which would make wind and solar power. more financially attractive.

Given the number of business interests at stake, the plan is at risk of furious lobbying from industry representatives as it progresses through the legislative process in Brussels. The committee’s proposals must be approved by the European Parliament and the leaders of European national governments before they become law, a process which is expected to take around two years.

Supporters of the commission’s plan can benefit from the deep support of Europeans increasingly alarmed by forest fires, record hot summers, severe storms and other hard evidence of the toll of climate change.

“We have seen tornadoes in the Czech Republic. Who would have ever thought of that? said Mr. Timmermans. “Anyone who wants to deny the urgency of the climate crisis should look again. “

Monika pronczuk contributed to reports from Brussels.