The European Commission on Wednesday adopted a package of proposals to make the European Union's climate, energy, land use, transportation and taxation policies fit for reducing net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels – dealing yet another blow to fossil fuel industries.
The Commission’s proposals are said to enable the necessary acceleration of greenhouse gas reductions in the next decade.
Touted initiatives include measures to prevent carbon leakage; tools to preserve and grow Europe’s natural carbon sinks; the application of emissions trading to new sectors and a tightening of the existing EU Emissions Trading System (ETS); the increased use of renewable energy; and greater energy efficiency.
'Towards a decarbonised economy'
“The fossil fuel economy has reached its limits. We want to leave the next generation a healthy planet as well as good jobs and growth that does not hurt our nature,” said EC president Ursula von der Leyen.
"The European Green Deal is our growth strategy that is moving towards a decarbonised economy.”
Energy production and usage account for 75% of EU emissions, so accelerating the transition to a greener energy system is crucial, according to the Commission, which added that The Renewable Energy Directive would set an increased target to produce 40% of its energy from renewable sources by 2030.
“Europe was the first continent to declare to be climate neutral in 2050, and now we are the very first ones to put a concrete roadmap on the table. Europe walks the talk on climate policies through innovation, investment and social compensation,” said von der Leyen.
The EU ETS, which puts a price on carbon and lowers the cap on emissions from certain economic sectors every year, is claimed to have reduced emissions from power generation and energy-intensive industries by 42.8% over the past 16 years.
The Commission is now proposing to further lower the overall emissions cap and increase its annual rate of reduction. It is also proposing to phase out free emissions allowances for aviation and to include shipping emissions for the first time in the EU ETS.
'Make-or-break decade'
“This is the make-or-break decade in the fight against the climate and biodiversity crises. The European Union has set ambitious targets and today we present how we can meet them,” said executive vice president for the European Green Deal, Frans Timmermans.
To complement the substantial spending on climate in the EU budget, member states were told they should spend the entirety of their emissions trading revenues on climate and energy-related projects.
Member states also share responsibility for removing carbon dioxide from the atmosphere, so the Regulation on Land Use, Forestry and Agriculture sets an overall EU target for CO2 removals by natural sinks, equivalent to 310 million tonnes of CO2 emissions by 2030.
National targets will require member states to care for and expand their carbon sinks to meet this target, said the Commission.
Meanwhile, to reduce overall energy use, cut emissions and tackle energy poverty, the Energy Efficiency Directive will set a more ambitious binding annual target for reducing energy use at EU level.
It will guide how national contributions are established and almost double the annual energy saving obligation for member states.
Fossil fuel incentives shakeup proposed
Also, the tax system for energy products must safeguard and improve the Single Market and support the green transition by setting the right incentives, added the Commission.
A revision of the Energy Taxation Directive proposes 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.
“We are updating our two-decades old energy taxation rules to encourage the use of greener fuels and reduce harmful energy tax competition. And we are proposing a carbon border adjustment mechanism that will align the carbon price on imports with that applicable within the EU,” said Commissioner for Economy, Paolo Gentiloni.
“This is the ultimate now or never moment. With every passing year the terrible reality of climate change becomes more apparent: Today we confirm our determination to act before it is really too late.”
Carbon price on select imported products
The new carbon border adjustment mechanism will put a carbon price on imports of a targeted selection of products to ensure that ambitious climate action in Europe does not lead to "carbon leakage".
This will ensure that European emissions reductions contribute to a global emissions decline, instead of pushing carbon-intensive production outside Europe.
It also aims to encourage industry outside the EU and the bloc's international partners to take steps in the same direction, noted the Commission.
The European Green Deal, which the Commission presented in December 2019, set out the goal of making Europe the first climate-neutral continent by 2050.
The European Climate Law, which enters into force this month, enshrines in binding legislation the EU's commitment to climate neutrality and the intermediate target of reducing net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels.
The EU's commitment to reduce its net greenhouse gas emissions by at least 55% by 2030 was communicated last December to the United Nations Framework Convention on Climate Change.
“As a result of the EU's existing climate and energy legislation, the EU's greenhouse gas emissions have already fallen by 24% compared to 1990, while the EU economy has grown by around 60% in the same period, decoupling growth from emissions,” the Commission said on Wednesday.
“This tested and proven legislative framework forms the basis of this package of legislation.”
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