EU's Green Deal must be at Covid-19 recovery's core, France and Germany say

18 May 2020 12:00 am by Giulia Bedini

The EU steel, transport and construction industries should be at the forefront of an “acceleration” of initiatives aimed at curbing emissions, France and Germany said today in statement that gave a boost to plans for green policies to be at the core of economic recovery from Covid-19.

The EU executive's Green Deal plans provide “an encompassing framework” for a sustainable and innovative regeneration of European economies ravaged by the pandemic, the two EU heavyweights said.

The Franco-German statement comes as the European Commission is preparing a plan to drive the bloc’s economy out of the crisis triggered by the novel coronavirus outbreak.

Speaking in the European Parliament last week, the commission’s president, Ursula von der Leyen, said that plans for EU countries to become climate neutral by 2050 will remain among the priorities to be considered when channeling support to struggling countries and companies.

Today's French and German statement on the Green Deal came as the two countries presented an "initiative for Europe's economic recovery after the [Covid-19] crisis" today.

“France and Germany welcome the commission’s commitment to focus European funds on breakthrough innovations and green projects and call for financing projects related to the industrial strategy and the Green Deal as a part of the recovery plan for Europe,” the statement reads.

“The deployment of sectoral industrial initiatives identified in the Green Deal and the EU industrial strategy must be accelerated,” the Franco-German statement adds, referring to pre-announced commission plans to cut greenhouse emissions in steelmaking, aviation and car manufacturing. It also reads that EU plans for “green” data centers “must be furthered” as part of the EU recovery plan.

“Energy efficiency actions could play a major role in order to promote climate objectives as well as economic recovery,” France and Germany also said, expressing support for the commission’s plan to prompt a "renovation wave“ in the construction sector as a way to boost local jobs as well as energy savings.

Other than transforming the bloc’s industry, reaching net-zero emissions by 2050 will require that greenhouse gas emissions across the EU, and if possible in all G-20 countries, are priced “in all relevant sectors of the economy,” the two countries note, advocating for a minimum carbon price as well as a revision of the EU Emissions Trading System’s market stability reserve, a mechanism that prevents the oversupply of carbon permits on the market.

The two countries also pitched the need for a green recovery to advance their longstanding call for changes to the bloc’s state-aid regime.

“To foster a recovery consistent with the Green Deal and the industrial strategy, we call for an adaptation of the European state aid framework in order to facilitate support to companies engaged in the decarbonization of the economy and allow the development of a significant number of Important Projects of Common European interest in this field,” the statement reads.

In the joint initiative on the recovery, they further pushed for an increase the EU emissions reduction target for 2030 together with a “package” of effective measures to prevent carbon leakage. “The commission's announced proposal on a carbon border adjustment mechanism must be complementary to existing instruments and be in line with WTO law,” they said, pledging future work for the introduction of a “cross-sectoral” EU ETS.

The two countries also said that they will develop a “roadmap for environmental recovery” for every sector, including, where appropriate, climate and environmental targets and/or conditions.

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