After a whole day and night of negotiations, European environment ministers reached agreement, on the morning of Wednesday 5 November, on a target of an 85% reduction in domestic greenhouse gas emissions by 2040 (compared with 1990 levels), with a number of flexibilities, such as a possible 5% contribution from international carbon credits.
This agreement on the revision of European Climate Law was narrowly reached before the official start of COP30 in Belém (Brazil) on 10 November. The Danish Presidency of the EU Council was hoping for an agreement between Member States on the 2040 target, to determine the 2035 target expected internationally.
“What we did yesterday was not just about reaching an agreement. We have worked tirelessly to obtain the broadest possible support”, said Danish Minister for Climate, Lars Aagaard, who acknowledged, however, that the very long negotiations may have been accompanied by frustration (see EUROPE 13745/1).
International carbon credits. The European Commission’s initial proposal on the revision of the Climate Law included a possible contribution of up to 3% from these credits to achieving a target of a 90% reduction by 2040. These credits are governed by Article 6 of the Paris Agreement and enable the EU to finance decarbonisation projects abroad.
Finally, a 5% ceiling is at issue. Moreover, the revision clause of the European Climate Law now includes a possibility for Member States to use more of these credits to achieve “5% of their post-2030 targets and efforts”, as Italy wanted.
The entry into force of the measure has been maintained at 2036, as suggested by the Commission. Nevertheless, a pilot phase has been set for the period 2031-2035, with the aim of initiating “a high-quality and high-integrity international credit market”.
Text adopted “with pain”. The final text largely reflects the position of France, which said it was “extremely satisfied” with the final compromise. The French Minister for Ecological Transition, Monique Barbut, acknowledged that the text had been adopted “with a little bit of pain”, but that it had managed to satisfy the qualified majority of Member States.
Poland, Hungary, Slovakia and the Czech Republic rejected the compromise. Belgium and Bulgaria abstained.
For the Polish Secretary of State, Krzysztof Bolesta, the level of ambition was still too high. “We thought it would be too damaging to the competitiveness of European industry and we voted against it, despite having obtained what we wanted on several of our demands”, he explained after the Council meeting.
For countries such as Spain and Slovenia, on the contrary, the level of ambition could have been raised.
According to the European Commissioner for Climate, Wopke Hoekstra, increasing the contribution percentage for international carbon credits remains a solution “aligned with science”, given that “the planet doesn’t care where we reduce emissions (...)”.
To further address the concerns of several Member States, the final text now emphasises the role of carbon-neutral, low-carbon and renewable fuels in decarbonising transport, including road transport beyond 2030. It also points to the need for concrete measures to “assist heavy duty vehicles manufacturers to reach their targets”.
Other additions concern the recognition of socio-economic impacts, including effects on employment, and the need to take account of geographical balance in supporting innovation and access to innovative technologies.
Timetable for the new carbon market (ETS2). Ministers approved the postponement of the entry into force of ETS2 by one year, from 2027 to 2028, in order to avoid too great an impact on households and businesses. Several Member States argued in favour of a more gradual implementation, taking into account the social and economic context, as Estonia, Slovakia, Malta and Ireland said during the debate on 4 November.
Poland, in particular, had been exerting pressure for several months, citing the risks this would entail for the most vulnerable households and pointing out the need to implement the Social Climate Fund (SCF) before the price signal for fuel and heating came into force.
At the press conference, Wopke Hoekstra stated that the Commission would “propose a review of the fundamental elements of the ETS2 implementation framework by the end of the year to ensure a gradual and controlled entry into force”. The aim of this adaptation is to “respond to the risks of price volatility”.
The European Commissioner also said that the Commission was examining the possibility of Member States anticipating part of the revenue from ETS2, in coordination with the EIB.
Revenue from the ETS will also continue to go to the Social Climate Fund, which supports the fight against energy and transport poverty and helps finance investment in clean technologies produced in the EU.
It should be noted that ETS1, which was supposed to provide the first year of funding for the SCF in 2026, will now do so until 2027, a possibility envisaged as early as 2023 (see other news).
NDC. The EU Council also unanimously approved an updated Nationally Determined Contribution (NDC) for the European Union and its Member States, which will be officially forwarded before COP30.
This update now covers the period up to 2035, and follows on from the 2015, 2020 and 2023 communications.
The NDC, which enables the EU to present itself on the international stage with a quantified revision of its pathway, as expected by the Paris Agreement, reaffirms the existing target of reducing emissions by at least 55% by 2030 compared with 1990 levels, and takes due note of the agreement reached in the Council on a net reduction of 90% by 2040.
It proposes an indicative contribution of between -66.25% and -72.5% in 2035, “on the path towards carbon neutrality by 2050”.
This range was already included in the statement of intent adopted on 18 September, which ensured that the EU did not arrive “empty-handed” at the UN Secretary-General’s climate summit in New York (see EUROPE 13712/2).
“We now have an NDC, with a range that I hope will serve as an inspiration to other countries”, said Danish minister, Lars Aagaard, welcoming the fact that the EU was “sending a strong signal ahead of COP30”.
Wopke Hoekstra added that this margin had been described as “excellent” by the EU’s partners, including Brazil, which had asked for it to be “formalised”. The Commissioner also welcomed “a pragmatic, ambitious and flexible text”. (Original version in French by Pauline Denys and Nithya Paquiry)