EU

European Commission President Ursula von der Leyen has indicated her mandate for the next four years is to continue to pursue the goals of the European Green Deal (EGD), but will focus on implementation rather than increasing ambition. The EU has made significant progress in adopting the measures of the European Green Deal bringing it closer to achieving its 2030 target, but more action is required to close the gap.

However, the EU is not fully on track to meet its 2030 target to reduce emissions by at least 55% below 1990 (including LULUCF). The CAT therefore rates the EU’s overall climate action and current 2030 emissions reduction target as ‘Insufficient’.

The Commission's proposed 2040 target is a net 90% reduction in emissions below 1990, which represents the least ambitious end of the 90–95% range proposed by the European Scientific Advisory Board on Climate Change (ESABCC).

The EU does not yet have a target specifically for 2035 emission reductions. Based on modelled domestic pathways, the CAT would recommend a 2035 emissions reduction target of at least 74% (excl. LULUCF), or a 78% reduction (incl. LULUCF) below 1990 levels, along with substantially increased climate finance and other support for developing countries.

The CAT finds that the EU’s proposed 2040 target of at least 90–95% reduction (including LULUCF) results in an emissions reduction of 85% when excluding LULUCF. This emission reduction target for 2040 would be consistent with 1.5°C modelled domestic pathways. There remains an open question however as to whether or not the emission pathway of the European Union from 2030 through 2040 is 1.5° aligned as whole and that can only be assessed once the European Union has submitted the relevant targets.

The EU has signalled that it recognises the importance of scaling up international climate finance and while it has been increasing its contributions, it would need drastically increase its financial support to achieve its own commitments. Positively, the EU has worked to mobilise more private finance, through for example the EU Taxonomy and Sustainable Finance Disclosure Regulation to make sustainable investments more transparent. The latter is currently being assessed to address its shortfalls around its sustainability criteria.

In 2023 at COP28, the EU called for a global phase-out of “unabated” fossil fuels and fossil fuel subsidies not used for a just transition, however the European Union has not yet moved to establish concrete domestic phase out targets for fossil fuels which would be needed to operationalise the transition away from these fuels as a matter of urgency. As a major importer of fossil fuels this will be an important initiative.

The EU has made significant progress over the past four years with the European Green Deal. Prior to the EGD, in 2019 the EU’s planned policies were projected to achieve only a 33% emission reduction by 2030 below 1990 levels. With its current planned policies, it is on track to achieve a 52% reduction. In 2024 alone, the EU successfully adopted key proposals under the EGD. Some of the major accomplishments included the revisions of the Energy Performance in Buildings Directive, the Gas Regulation and Directive and the Methane Regulation. Positively these packages:

• Establish more ambitious mandates for renovating Europe’s buildings to be more efficient than before and signal a shift to move away from fossil fuels.
• Establish a framework for a hydrogen market, enabling the scaling up of hydrogen to support the decarbonisation of certain sectors such as industry and shipping.
• Introduce new requirements for the fossil fuel industry to monitory and report methane emission and to take appropriate mitigation measures to abate their emissions.

While these are positive steps in the right direction, many gaps and loopholes in these regulations remain and in some cases were missed opportunities to establish fossil fuel phase out and sector specific targets. To continue improving its climate action, the EU should:

• Stop investing in additional fossil gas infrastructure and focus its efforts on the renewable energy transition. This would also entail closing loopholes which make exceptions for fossil fuels, particularly LNG, to prevent the risk of long-term lock-in investments,
• Agree to a full phase out fossil fuels across all sectors, with coal phased out altogether by 2030, and fossil gas by 2035,
• Strictly limit its dependence on carbon capture and storage through to 2050 to only those sectors where there is no reasonable alternative to abatement at source or whole of system changes that could be deployed to eliminate CO₂ emissions without the application of CCS. The EU should not allow CCS in the power sector as the sector can decarbonise completely without this technology,
• Agree on an ambitious 2035 target of at least 78% below 1990 levels (incl. LULUCF) and including fossil fuel phase-out dates,
• Substantially increase its climate finance contributions, including through returning revenues from the new Carbon Border Adjustment Mechanism (CBAM) to support decarbonisation in developing countries, and
• Update its long-term strategy for reaching its net zero target, especially given that the EU Commission has assessed Member States’ progress towards the EU’s climate neutrality target as insufficient.

The CAT rates each country’s targets and policies against (1) its fair share contribution to climate change mitigation considering a range of equity principles including responsibility, capability and equality, and (2) what is technically and economically feasible using modelled domestic pathways which in absence of a better method are based on global least-cost climate change mitigation.

Comparing a country’s fair share ranges and modelled domestic pathways provides insights into which governments should provide climate finance and which should receive it. Developed countries with large responsibility for historical emissions and high per-capita emissions, must not only implement ambitious climate action domestically but must also support climate action in developing countries with lower historical responsibility, capability, and lower per-capita emissions.

The CAT rates the EU’s climate targets, policies and finance as “Insufficient”. The “Insufficient” rating indicates that the EU’s climate policies and commitments need substantial improvements to be consistent with the Paris Agreement’s 1.5°C temperature limit.

We rate the EU’s NDC target as “Insufficient” compared to its fair share contribution and to modelled domestic pathways. To improve its rating, the EU should strengthen its domestic emissions reduction target for 2030 to at least 62% (excluding LULUCF and international aviation) below 1990, close gaps and remove loopholes in existing policies prolonging fossil fuel use, and significantly increase its support for climate action in developing countries in line with its fair share contribution to climate change mitigation.

The EU’s policies and action are also rated “Insufficient”. With the full implementation of the EU’s planned policies under the Fit for 55 and REPowerEU initiatives the EU will come close to meeting its NDC target for 2030. However, not all proposals under the Fit for 55 package have been adopted. Targets and measures under available member states’ National Energy and Climate Plans are also failing to meet the EU’s targets, and half of member states have not submitted these plans. The overall lack of ambition of the EU’s 2030 NDC target will mean that it will need to adopt more rapid and deeper emission reduction measures later, in order to achieve a 1.5°C compatible pathway to climate neutrality by mid-century.

Current and planned policies will not be enough for the EU to reach its NDC target. The CAT rates the EU’s climate policies and action against modelled domestic pathways as “Insufficient”. This represents no change from the previous assessment as there have been no major new policy developments.

Since our last assessment (February 2024), the EU has adopted several proposals, such as the Energy Performance in Buildings Directive. However, others are still on the table, most notably the 2040 climate targets and Energy Taxation Directive, which we consider under our updated planned policies projections.

The upper bound of our policies and action emissions projection range is based on policies reported by member states in 2023, which would result in an emissions reduction of around 43% (excl. LULUCF) below 1990 by 2030. The bottom end of the range is based on policies adopted at the EU level, including the stronger binding renewable energy target (42.5%), which would result in reducing emissions by 49% (excl. LULUCF).

Our updated planned policies projection shows the EU comes close to achieving its NDC if all its proposals under the Fit for 55 and REPowerEU packages are implemented, achieving a 51% emissions reduction from 1990. The projection includes the EU’s indicative renewable energy goal (45%) and additional measures planned.

The full policies and action analysis can be found here.

In October 2023, the EU submitted an updated NDC with a target of reducing emissions by at least 55% below 1990 levels by 2030 (incl. LULUCF and international aviation) - which is the same as the previous EU NDC from December 2020. However, the EU has increased its land sector target by 85 MtCO₂e, implying that it is aiming to reduce net emissions by more than 55%. Excluding LULUCF and international aviation, the 2030 target equates to 52% below 1990 levels.

The CAT rates this target as “Insufficient” when compared to the level of emissions reductions needed within the EU’s borders. The “Insufficient” rating indicates that the EU’s NDC target in 2030 needs substantial improvements to be consistent with limiting warming to 1.5°C. If all countries were to follow EU’s approach, warming would reach over 2°C and up to 3°C.

When measured against a fair share emissions allocation, we rate the EU’s 2030 NDC target as “Insufficient”. The “Insufficient” rating indicates that the EU’s NDC target in 2030 needs substantial improvement to be consistent with limiting warming to 1.5°C.

The EU’s target is at the least stringent end of what would be a fair share of global effort, and is not consistent with the 1.5°C limit, unless other countries make much deeper reductions and comparably greater effort. Some of these improvements should be made to the domestic emissions target itself, others could come from supporting additional emissions reductions achieved in developing countries in the form of finance. If all countries were to follow the EU’s approach, warming would reach over 2°C and up to 3°C.

The EU’s international public climate finance contributions are rated as “Insufficient”. To improve its rating, the EU needs to ramp up the level of its climate finance contributions in the period post-2020 and accelerate the phase-out of international fossil finance.

The EU’s climate finance is not sufficient to improve the fair share target rating, and the CAT rates the EU’s overall fair share contribution as “Insufficient”.

The EU’s climate neutrality target performs moderately in terms of its architecture, transparency, and scope, including a legally-binding review and assessment process. At present, a finalised clear separation of the contributions from emissions reductions versus removals is missing but indicate assumptions are provided in the proposed 2040 targets but these are yet to be formalised. We evaluate the net zero target design as “Acceptable”.

The full net zero target analysis can be found here.