The EU Commission has published a detailed impact assessment on possible pathways to reach the agreed goal of making the European Union climate neutral by 2050.
Establishing a new framework
Based on this impact assessment, the Commission recommends a 90% net greenhouse gas emissions reduction by 2040 compared to 1990 levels, launching a discussion with all stakeholders; a legislative proposal will be made by the next Commission, and agreed with the European Parliament and Member States as required under the EU Climate Law.
This recommendation is in line with the advice of the European Scientific Advisory Board on Climate Change (ESABCC) and the EU’s commitments under the Paris Agreement.
The new communication also sets out a number of enabling policy conditions which are necessary to achieve the 90% target. They include:
- the full implementation of the agreed 2030 framework
- ensuring the competitiveness of the European industry
- a greater focus on a just transition that leaves no one behind, a level playing field with international partners
- and a strategic dialogue on the post-2030 framework, including with industry and the agricultural sector.
According to the EU, setting a 2040 climate target will:
- Help European industry, investors, citizens and governments to make decisions in this decade that will keep the EU on track to meet its climate neutrality objective in 2050.
- Send important signals on how to invest and plan effectively for the longer term, minimising the risks of stranded assets. With this forward-planning, it is possible to shape a prosperous, competitive and fair society, to decarbonise EU industry and energy systems, and to ensure that Europe is a prime destination for investment, with stable future-proof jobs.
- Boost Europe’s resilience against future crises, and notably strengthen the EU’s energy independence from fossil fuel imports, which accounted for over 4% of GDP in 2022 as we faced the consequences of Russia’s war of aggression against Ukraine.
Additionally, the costs and human impacts of climate change are increasingly large, and visible. In the last five years alone, climate-related economic damage in Europe is estimated at €170 billion euros. The Commission’s impact assessment finds that, even by conservative estimates, higher global warming as a result of inaction could lower the EU’s GDP by about 7% by the end of the century.
Establishing the conditions for achieving the recommended target
Achieving a 90% emissions reduction by 2040 will require a number of enabling conditions to be met:
#1 Full implementation of the existing legislation
The starting point is the full implementation of the existing legislation to reduce emissions by at least 55% by 2030. The ongoing update of the draft National Energy and Climate Plans (NECPs) is a key element in monitoring progress and the Commission is engaging with Member States, industry and social partners to facilitate the necessary action.
#2 Trusting alternative sources of energy
The Green Deal now needs to become an industrial decarbonisation deal that builds on existing industrial strengths, like wind power, hydropower, and electrolysers, and continues to increase domestic manufacturing capacity in growth sectors like batteries, electric vehicles, heat pumps, solar PV, CCU/CCS, biogas and biomethane, and the circular economy.
#3 Carbon pricing and markets
Carbon pricing and access to finance are also critical for the delivery of emission reduction targets by European industry. The Commission will set up a dedicated taskforce to develop a global approach to carbon pricing and carbon markets.
Europe will also need to mobilise the right mix of private and public sector investment to make our economy both sustainable and competitive. A European approach on finance will be needed in the coming years, in close cooperation with Member States.
#4 Social policies
Fairness, solidarity and social policies need to remain at the core of the transition. Climate action has to bring benefits to everybody in our societies, and climate policies need to take into account those who are most vulnerable, or face the greatest challenges to adapt. The Social Climate Fund and Just Transition Fund are examples of such policies which will already help citizens, regions, businesses and workers in this decade.
#5 Stakeholder engagement
Finally, open dialogue with all stakeholders is a crucial precondition to delivering the clean transition. The Commission has already established formal dialogues with industry and agricultural stakeholders, and the coming months of political debate in Europe are an important opportunity to secure public engagement on the next steps and policy choices.
The pace of decarbonisation will depend on the availability of technologies that deliver carbon-free solutions, and also on an efficient use of resources in a circular economy.
- Energy sector
The energy sector is projected to achieve full decarbonisation shortly after 2040, based on all zero and low carbon energy solutions, including renewables, nuclear, energy efficiency, storage, CCS, CCU, carbon removals, geothermal and hydro.
The post-2030 policy framework will be an opportunity to develop these policies further and complement them with social and industrial policies to ensure a smooth transition away from fossil fuels, EU notes.
- Transport sector and shipping
The transport sector is expected to decarbonise through a combination of technological solutions and carbon pricing. The EU’s Industrial Carbon Management strategy will support the development of CO2 supply chains and the required CO2 transport infrastructure.
According to the EU carbon capture should be targeted to hard-to-abate sectors where alternatives are less economically viable. Carbon removals will also be needed to generate negative emissions after 2050.
European shipowners welcomed the strong commitment of the Commission to address “barriers to the deployment of low- and zero-emissions fuels including e-fuels and advanced biofuels” in shipping and to give the sector “priority access to these fuels over sectors that have access to other decarbonisation solutions”.
It’s the first time we see such a strong commitment to give shipping priority access to low- and zero-emission fuels such as advanced biofuels and e-fuels. The price gap is immense, as the cost of sustainable fuels can be four times higher compared to fuels currently used in shipping.
… said Sotiris Raptis, ECSA (European Community Shipowners’ Associations)’s Secretary General
The Commission acknowledges that the increased costs of sustainable fuels is a key factor for the competitiveness of shipping and commits to consider regulatory measures to foster their production. In this regard, ECSA supported the introduction of requirements for the fuel suppliers to make these fuels available in the market.
Today, the EU showed the world how you can turn real climate ambition into powerful industrial policy. Industry players at home and outside of Europe can turn to the EU for production and sales of green tech, as they can be assured of a growing market and predictable demand. But this headline goal will fall flat if it doesn’t come hand in hand with a phase out of fossil fuels and new laws cracking down on the oil majors.
… commented Sofie Defour, climate director at climate NGO Transport and Environment
