What is the European Green Deal and its Yields?

What is the European Green Deal and its Yields?

What is the European Green Deal and its Yields?

European Union, which is known with its sensitive attitude towards the environmental and social sustainability issues such as combat against climate change, reduction of greenhouse gas emissions and use of renewable energy, has taken these sensitivities a step forward on November 2019 and presented a package of initiatives that pledges definite and ambitious steps to be taken by the Union in environment and sustainability: European Green Deal.

The Deal had significant repercussions among all public, international organization and private sector actors that have economic, political and geographic connections with the EU. Because the Deal which is composed of the standards that EU sets for its member countries also has the potential to affect the relationship of EU countries with third parties. This brings the necessity of a good understanding of the Deal by everyone considering the wide commercial and diplomatic ties that EU has.

What is European Green Deal?

YGreen Deal is the newly defined growth strategy of the EU that has the main goals of zero net greenhouse gas emissions by 2050, decoupling economic growth from resource use and leaving no person or place behind. So, the Deal will create job opportunities and increase life standards while decreasing emissions.

Within the set goals, the growth strategy is constructed under 7 policy areas:

i) clean energy,

ii) sustainable industry,

iii) building and renovating,

iv) from farm to fork,

v) eliminating pollution,

vi) sustainable mobility,

vii) biodiversity.

EU is also building some plans and mechanisms for the actors to be guiding and act as tools during the transformation that is aimed within the Deal. These are,

i) ) European Green Deal Investment Plan which acts as a framework to manage necessary investments for the Deal,

ii) Just Transition Mechanism which is constructed to prevent negative impact of the Deal on the zones and communities that have the risk of being socioeconomically harmed by the process (such as the ones in the fossil fuel value chains),

iii) European Climate Law which aims to eliminate the national differences of applications that might intercept with the goal of Europe being climate-neutral by 2050,

iv) European Industrial Strategy which aims to support industries and SMEs through green and digital transformation and

v) Circular Economy Action Plan which aims the adaptation of sustainable production and consumption practices within the Union.

It is possible to get the signals of this change led by the Union countries spreading to whole world in the upcoming years from the fact that many public, private and non-governmental organizations from different parts of the world are already discussing the ways to adapt to the Deal. It is necessary for Turkey too, in order to cooperate with EU, to follow the developments, improve the ability to adapt to standards quickly and understand the regulations in agriculture, electronics, packaging, plastics, textile and construction (including the manufacturing branches providing input to construction) sectors which are the ones that are expected to go through alteration and transformation the most.

How will the Green Deal Affect Which Businesses?

The EU is preparing to introduce legal regulations such as the Paris Agreement and the Carbon Tax to reduce emissions from international trade. The current carbon taxation in Europe is EUR 30 per tonne of emissions. After the Paris Climate Agreement and the Green Deal, this amount is expected to be 50 euros per tonne of carbon emissions.

Which Sectors will Mostly Affect the Green Deal Action Plan?

Almost every sector will be affected by the Green Deal Action Plan. However, textile; Industries with high carbon emissions by nature, such as agriculture, food, industry, cement and construction, retail and energy, are expected to be affected to the maximum extent by the carbon tax.

How Can You Prepare for the Paris Climate Agreement, Green Deal and Carbon Tax?

Some restrictions are on the agenda for companies from countries that do not comply with the Paris Climate Agreement and Green Deal Action Plan and do not fulfill their commitments.

-Increasing the carbon tax, which is currently 30 euros per tonne in the European Union, to 50 euros per tonne of emissions

-Exclusion of these companies from the new free trade agreement

-Extra tax to companies that do not meet the conditions within the scope of the carbon tax application at the border

-New standards and eco-labeling system for tradable products

These studies, which are planned to be implemented, directly affect our agriculture, textile, food, industry, cement and construction, retail and energy companies that trade with the European Union.

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