The European Union has identified the challenge of tackling climate change as a central plank of its future economic policy and plans to lead a political and legal process with universal environmental, economic, and social effects. This is why, accompanied also by an increasingly deep-rooted social sentiment among the population, it is pushing boundaries with its legislative measures for the future.
The best example of this is the European Climate Law, whose primary aim is to achieve zero emissions by 2050. The main objectives set out in it are: the establishment of a fair and cost-effective pathway to climate neutrality by 2050, the creation of a system to monitor progress, predictability for investors and economic actors, and the guarantee of an irreversible transition.
Among the necessary steps set out in the Law to achieve a climate-neutral economy and society, the Commission has launched the "2030-2050 EU-wide trajectory", through which it aims to provide predictability for businesses in order to help them manage the potential greenhouse gas reduction consequences. In addition, it requires all 27 Member States to implement adaptation strategies to reduce the vulnerable consequences and strengthen resilience from climate change.
EURADA is aware of the short and long-term implications that this law, together with the European Green Plan, may have for the business sector. The legal consequences for SMEs of the binding obligation to reduce greenhouse gas emissions by at least 55% (compared to 1990 levels) by 2030 are strong. EURADA supports SMEs through various initiatives and projects and is committed to putting its efforts into the green transition.
As the Commission has already announced, in the short term we will need to strengthen real collaboration with different sectors to draw up sectoral roadmaps to plan the way ahead to ensure that the climate neutrality plan is implemented in different areas of the economy.
In this whole process of change, we must consider the Just Transition Mechanism (JTM) as a guarantee for SMEs to help them cope with the green transition. The JTM is part of the European Green Deal Investment Plan within the framework of cohesion policy. This initiative, which focuses on the social and economic effects of Europe's carbon-intensive industry, aims to boost sustainable development in the affected regions by the promotion of public investment. It has around €65-75 billion to ensure support for the most affected industrial regions over the next period 2021-2027.
Since the European Commission presented its proposal for the European Climate Law on 4 March, and since its adoption by the Council of the European Union, many agreements have been formalised. This is the beginning of a new period focused on a total environmental commitment through very ambitious regulations. EURADA will keep an eye on all the new regulations and agreements that will be approved in relation to the European Climate Law and its economic repercussions.
More info
For more information about the European Climate Law: https://ec.europa.eu/clima/policies/eu-climate-action/law_en
Information about Council of the European Union adoption: https://www.consilium.europa.eu/en/press/press-releases/2021/06/28/council-adopts-european-climate-law/
Just Transition Mechanism (EU): https://ec.europa.eu/info/strategy/eu-budget/performance-and-reporting/programmes-performance/just-transition-mechanism-performance_en
European Green Deal: https://ec.europa.eu/clima/policies/eu-climate-action_en
