Carmakers and airlines warn EU’s climate plan imperils innovation

Europe’s most polluting businesses have accused the EU of jeopardising investment and innovation after Brussels unveiled ambitious plans to halve the bloc’s emissions by 2030 in an effort to curb global warming. Carmakers, airlines and heavy industry all hit out at the proposals, which include a de facto ban on new diesel and petrol cars from 2035, a tax on aviation and maritime fuel, and the decision to phase out from 2026 free pollution credits allocated under the EU’s Emissions Trading System. The ETS, which sets a price on polluting, has also been extended to the shipping industry for the first time. Just hours after the EU published its plan, many companies and trade bodies were preparing to lobby their own governments to reject it, signalling a tough battle ahead for the European Commission as it negotiates with member states to pass the road map into law.  In the aviation industry, Lufthansa agreed that ambitious climate protection and a carbon price were “both right and necessary” but said it would be disadvantaged against global competitors. It said the combination of the phase-out of carbon credits, a binding quota for sustainable aviation fuels and, in particular, a kerosene tax would hobble European airlines. The German carrier said that a financing mechanism should be developed to help pay for sustainable fuels, which were several times more costly than kerosene. “Only then will [the road map] be competitively neutral.” The head of Iata, the global aviation trade group, was more scathing. Willie Walsh accused Brussels of an “own goal” over plans to tax fossil fuel-based jet fuel. “Making jet fuel more expensive through taxation scores an ‘own goal’ on competitiveness that does little to accelerate the commercialisation of sustainable fuel,” he said. The European aviation trade body, A4E, joined the chorus of disapproval, saying the measures would make flying more expensive for passengers. <br/>