Net Zero Industry Tracker 2024

Policy summary (continued) TABLE 3 Policy namePolicy typePolicy objectivesKey pointsSector/technology coverage EU Carbon Border Adjustment Mechanism (CBAM) (2023)Market- based (push) –Aligned to EU’s Fit for 55 package target, i.e. reducing net GHG emissions by 55% by 2030 –Prevent carbon leakage –Encourage global decarbonization –Focused on taxing carbon emissions –Transitional phase (2023-2025): During the transitional phase, importers are required to report the emissions embedded in the covered goods without having to pay any financial adjustment. –Full implementation (from 2026): From 2026 onwards, importers will need to purchase and surrender CBAM certificates to cover the emissions embedded in their imports, fully aligning with the EU ETS carbon price. –Iron/steel –Cement –Fertilizers –Aluminium –Hydrogen –Electricity –(To be expanded further from 2026 onwards) EU ETS (2005) Market- based (push) –At least a 55% reduction in EU’s GHG emissions compared to 1990 by 2030, and net zero by 2050 –Cost-effective reduction of GHG emissions –Focused on taxing carbon emissions –“Cap and trade” principle, where the cap refers to the limit set on the total amount of GHG that can be emitted, and this cap is reduced annually. This cap is expressed in emission allowances with one allowance giving right to emit one tonne of CO2e. –Power generation and heat production –Steel –Cement –Chemicals –Refineries –Glass –Aviation –Shipping China’s 14th Five Year Plan (2021) and Action Plan for Energy Saving and Carbon Reduction (2024)Mandate- based (pull) –Reduce energy intensity by 13.5% and emissions intensity by 18% by 2025 from 2020 levels –Control of coal consumption, optimization of oil and gas use, increased non- fossil energy consumption, and energy savings and carbon emission reductions across industries –Reduce emissions from existing coal plants through biomass co- firing, green ammonia co-firing and CCUS technologies –Steel –Petrochemicals –Metals –Buildings –Transport India’s National Action Plan on Climate Change (2008)Mandate- based (pull) –Reduce GHG emissions by enhancing renewable energy production and improving energy efficiency –Focused on expansion of solar energy use and improvement of energy efficiency –Renewable energy (especially solar) –Agriculture Japan GX (Green Transformation) Policy (2023)Incentive- based (pull) –Achieve 46% of emissions reduction compared to 2013 levels by 2030 and net zero by 2050 –Includes a 10-year roadmap outlining the allocation of JPY 150 trillion (Japanese yen) of public-private investment for various sectors and technologies –A carbon levy starting from 2028 and the emissions trading system introduced in the future –Focused on fading out inefficient coal- fired thermal power generation, including promotion of hydrogen/ammonia co- firing and direct combustion, as well as investment in upstream liquified natural gas (LNG) development in cooperation with Asian countries –Promotes investment and development in electric furnaces and hydrogen reduction steelmaking –Goal of 100% EVs in new passenger car sales in 2035 –Renewable energy –Iron and steel –Automotive sector Sources: U.S. Department of the Treasury. (n.d.). Inflation Reduction Act; European Commission. (n.d.). Net-Zero Industry Act; European Commission. (2024). Carbon Border Adjustment Mechanism; European Commission. (n.d.). EU Emissions Trading System (EU ETS); Climate Cooperation China. (2024). China Issues Action Plan for Energy Saving and Carbon Reduction (2024-2025); Climate Action Tracker. (n.d.). India; InfluenceMap. (n.d.). GX (Green Transformation) Basic Policy and Roadmap. Net-Zero Industry Tracker: 2024 Edition 38