In a proposal issued on Wednesday 2 July, the European Commission confirmed its objective of reducing the European Union’s net greenhouse gas emissions by 90% by 2040 compared to 1990 levels. The climate ambition has been maintained, but in view of the concerns shared by some Member States, a number of flexibilities have been built in.
It was a combination of reasons that led to the publication of the amendment to the 2021 ‘Climate Law’, while Brussels was suffering from a heat wave. The European Commissioner for Climate Action, Wopke Hoekstra, reminded the press that 85% of Europeans say they are worried about climate change, according to the latest data from Eurostat (https://aeur.eu/f/hob ).
Climate roadmap. First, legal constraints. The ‘Climate Law’ (Regulation (EU) 2021/1119) stipulates that the Commission must submit a proposal within six months of the first global stocktake of the Paris Agreement, at COP28 in Dubai (United Arab Emirates) in November 2023. Up until now, a communication providing an impact study had been published in February 2024 (see EUROPE 13344/1), in preparation for the current proposal.
According to one European official, over and above the institutional reason, investors and citizens also need to be given greater predictability in order to maintain confidence in the EU’s climate trajectory. The official added that the aim of the proposal is neither to increase nor to reduce the climate ambition, but to maintain course towards carbon neutrality by 2050.
The proposal published on 2 July also comes ahead of COP30, which will be held at the end of the year in Belém (Brazil). An international meeting where stronger European leadership will be expected, at a time when the United States is backing away from any climate commitments.
The Danish Presidency of the Council of the EU hopes to reach an agreement within the Council on the 2040 climate target at an extraordinary ministerial meeting on Thursday September 18. This agreement, which requires a qualified majority of Member States, will enable the EU to present its Nationally Determined Contribution (NDC), i.e. its climate commitment for 2035, before the United Nations summit.
Why -90%? The -90% target is based on scientific data, including that provided by the European Scientific Council, the Commission assured. According to one senior official, this objective would be necessary, achievable and beneficial for the EU’s competitiveness and the implementation of the Paris Agreement.
Flexibility. In order to achieve this objective, the support of the most reluctant Member States is needed, and the Commission is proposing a number of flexibilities to obtain it.
These include the limited integration of 3% of international carbon credits, as requested by Germany. This rate will correspond to emission reductions financed in developing countries, on the basis of Article 6 of the Paris Agreement. Legislation will be introduced in 2026 to establish strict quality criteria and provide a framework for this mechanism, which can be progressively activated starting in 2036.
The Commission justifies this 3% threshold as a balanced compromise, making it possible to encourage cooperation with third countries without weakening internal efforts. International credits will not be integrated into the European Emissions Trading System (ETS), according to the European Commission, which is committed to learning lessons from previous schemes, such as the Clean Development Mechanism.
Wopke Hoekstra argued that this was in response to a willingness to make the link between climate, competitiveness and industrial sovereignty, with greater emphasis on clean technologies. Without going back over past policies, the European Commissioner stated that efforts had sometimes been too targeted.
This latitude on the part of the Member States has been denounced by a number of non-governmental organisations, as it could delay national efforts, cost several billion euros and undermine the credibility of the EU as an entity at the forefront of the climate issue.
Other flexibilities are also planned. The Commission announced the inclusion of carbon offsets in the ‘ETS’, allowing Member States to compensate for any difficulties in one sector, such as land-use planning, by making greater progress in others, such as waste or transport.
Beyond 2030. According to the Commission, achieving the 2040 target also means achieving the 2030 target (-55%), i.e. a 55% reduction in emissions compared with 1990. The Commission pointed out that the latest assessments of the national energy and climate plans (NECPs) show a positive trajectory, with a reduction of 54%, provided that current efforts are maintained (see EUROPE 13650/7).
Implementation of the Clean Industrial Deal. The Clean Industrial Deal (see EUROPE 13588/1) is part of these efforts. This is why the Commission also published a communication on 2 July listing the projects already set up in this area.
It also highlights the new framework for State aid, which is expected to support investment in clean technologies and the decarbonisation of the economy (see EUROPE 13667/26), and the simplification work underway, which should contribute to the transition.
In addition, the Commission published a number of guidance documents for Member States and regulators on: - the deployment of renewable energies; - dedicated network and storage infrastructure zones; - network pricing methodologies.
CBAM. Highly anticipated on this subject, the Commission is also clarifying its intentions regarding support for exports at risk of carbon leakage, once the Carbon Border Adjustment Mechanism (CBAM) is in place. It plans to publish a proposal by the end of the year to redistribute part of the CBAM revenues to European producers of CBAM products who export to countries without carbon pricing.
According to Wopke Hoekstra, this only amounts to some €70 million for exporters: “The figure will rise a little, but it will be limited in relation to CBAM as a whole”.
In its communication, the Commission specifies that this use of resources is without prejudice to the proposal on new own resources (see EUROPE 13641/8).
It also announces a high-level dialogue, which will feed into the consultation work on this subject. (Original version in French by Nithya Paquiry and Léa Marchal)