With the adoption on 14 July by the EU Commission of a raft of energy and climate proposals, ‘a concrete roadmap’ to reach climate neutrality by 2050 has now been put on the table, said President of the European Commission, Ursula von der Leyen. The proposals provide the legislative tools needed to deliver on the carbon emission reduction targets agreed in the European Climate Law, which enters into force this month.
This includes an intermediate target of reducing net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels.
The adopted proposals will considerably speed the rate of progress being made towards reaching these targets, as calculations show that, without the package, under current EU climate legislation, Europe will only achieve a 60% emissions reduction by 2050.
The EU's existing climate and energy legislation has been shown to work: greenhouse gas emissions have been reduced by 24% compared to 1990, while the EU economy has grown by around 60% in the same period. While this legislative framework therefore forms the basis of the present package of legislation, the 13 legislative proposals include 8 revisions of existing legislation and 5 completely new proposals. They combine: application of emissions trading to new sectors and a tightening of the existing EU Emissions Trading System; increased use of renewable energy; greater energy efficiency; a faster roll-out of low emission transport modes and the infrastructure and fuels to support them; an alignment of taxation policies with the European Green Deal objectives; measures to prevent carbon leakage; and tools to preserve and grow Europe’s natural carbon sinks.
Key takeaways
One of the main revisions involves an expansion of the Commission’s plan to expand the European Emissions Trading Scheme (ETS), which puts a price on carbon and lowers the cap every year. Implemented 16 years ago, that scheme has since successfully brought down emissions from power generation and energy-intensive industries by 42.8%. The plan is now, among other things, to phase out free emission allowances for aviation and for the first tome to include shipping emissions for the first time in the scheme. A separate new emissions trading system is to be set up for fuel distribution for road transport and buildings to address the failure of those sectors to reduce emission rates. The Commission is calling for a dedicated part of the revenues from the new system for road transport and buildings to be used to address the possible social impact on vulnerable households, micro-enterprises and transport users.
"We're putting a price on carbon and a premium on decarbonizing technologies," said European Commission Executive Vice President Frans Timmermans.
As energy production and use accounts for 75% of EU emissions, the Commission is also emphasising the importance of transitioning to a greener energy system. The new Renewable Energy Directive will set an ambitious target to produce 40% of energy from renewable sources by 2030. At the same time, sustainability criteria for the use of bioenergy will be toughened, requiring member states to adhere to the cascading principle of uses for woody biomass. As well, the public sector will be required to renovate 3% of its buildings each year to drive the renovation wave, create jobs and bring down energy use and costs to the taxpayer.
The end of the combustion engine car is also in sight, with average emissions of new cars to come down by 55% from 2030 and all new cars registered as of 2035 required to be zero-emission. The current target was to reduce carbon emissions from cars by 37.5% from 1990 levels by 2030.
The member states must also increase the number of charging and fuelling points in line with zero-emission car sales, and to install charging and fuelling points at regular intervals on major highways: every 60 kilometres for electric charging and every 150 kilometres for hydrogen refuelling. The aviation and shipping sectors are also targeted under the proposals; both will be required to switch to more sustainable fuels.
The tax system for energy products will be overhauled to align the taxation of energy products with EU energy and climate policies, promoting clean technologies and removing outdated exemptions and reduced rates that currently encourage the use of fossil fuels.
Finally, a new Carbon Border Adjustment Mechanism will put a carbon price on imports of a ‘targeted selection of products’ - a selection likely to include iron and steel, aluminium, cement, fertilisers, and electricity - to ensure European emission reductions contribute to a global emissions decline, instead of pushing carbon-intensive production outside Europe.
