The European Union has established a well-deserved reputation as a global leader on climate policy. However, in the wake of the Paris Agreement’s entry into force, the EU’s climate policy has not yet effectively responded to the 1.5°C limit in the Paris Agreement, which goes beyond the former 2°C goal agreed in Copenhagen.
The EU’s present 2030 target represents only a slight increase in the rate of climate action compared to the preceding quarter-century at exactly the time when there needs to be a significant acceleration in order to achieve the necessary decarbonisation by mid-century. Neither the historical—nor the projected—rate of emissions reduction will allow the EU to meet its 2050 goal of decreasing total GHG emissions by 80–95% below 1990 levels, which was itself set several years prior to the adoption of the Paris Agreement. Only the high end of this range—a 95% reduction by 2050—is consistent with the Paris Agreement’s long term warming goal.
The EU also recognises that it is not on track to meet its 2030 target with currently implemented policies, and is discussing a large package of measures aimed at achieving the target. It is crucial that the EU and its member states use the present opportunity to accelerate the decarbonisation of the power sector and increase the effectiveness of the EU Emissions Trading Scheme (EU ETS).
CO2 emissions from coal accounted for 18% of EU emissions in 2015, and decreased in 2016 after a switch to gas in the UK. To meet Paris Agreement-compatible emissions targets, C02 emissions need to be reduced to close to zero by 2030. Right now, only Austria, Denmark, France, Finland, Italy, Portugal, Sweden, the Netherlands and United Kingdom—accounting for 26% of EU coal capacity—have set phase-out goals that would achieve this, whereas the two largest coal emitters, Germany and Poland, accounting for close to half of EU coal capacity, have yet to address this issue.
There has been a slowdown in the development of renewable sources of energy within the EU that may threaten the achievement of its unambitious 2030 emissions target: renewable energy capacity installed in the years 2014–2016 is 40% lower than the capacity installed in the period 2010–2012, going completely against global trends where renewable capacity growth is accelerating.
Along with measures to reverse the slowdown in renewable energy development, there also needs to be a step-change in meaningful action in the transport and buildings sectors. On electric vehicles, only two member states—France and the Netherlands—have set goals, but the EU as a whole has not yet addressed this issue, and now appears to be falling behind developments in China, India, Norway and California.
The EU’s target of “at least 40% domestic reduction in GHG emissions by 2030 compared to 1990”—to which the EU and its member states committed themselves in their NDC—is not consistent with limiting warming to below 2°C, let alone with the Paris Agreement’s stronger holding warming well below 2oC, 1.5°C limit. Therefore we rate this target “Insufficient.”
While there is a move within the EU to increase its 2030 target to reflect the Paris Agreement, this has yet to bear fruit. There are also concerns over the EU’s proposed accounting of land-use, land-use change and forestry activities, which could be used to reduce action on fossil fuel emissions and other industrial greenhouse gas emissions and, at the same time, exempt some forest sector emissions from such measures, which could create a highly adverse precedent for the Paris Agreement accounting rules that are currently under negotiation.
On 6 March 2015, the EU submitted its Intended Nationally Determined Contribution (INDC) to the UNFCCC (European Council 2015) formally putting forward a binding, economy-wide target of at least 40% domestic greenhouse gas emissions reduction below 1990 levels by 2030. The EU ratified the Paris Agreement on 5 October 2016 following the completion of its fast-track procedure. All member states have now also ratified the Paris Agreement. The INDC became the EU’s NDC with the same emissions reduction target.
A positive element of the EU’s NDC is that it includes economy-wide emission reduction goals and is defined as a domestic target. Less positive is the statement that the target includes emissions/removals from land use, land-use change and forestry (LULUCF), which were not included in the 2020 target.
The accounting rules for the LULUCF calculation are yet to be agreed. In July 2016 the European Commission presented a proposal for a regulation that provided member states with some flexibility concerning the accounting of emissions from the LULUCF and allowed using credits for emissions reduction in the LULUCF sector in the non-ETS sectors (European Commission 2016i). After the European Parliament (European Parliament 2017b) and the Council (Council of the European Union 2017) adopted separate positions, the final version of the proposal will be discussed in inter-institutional negotiations. The proposed flexibility in transferring emissions reduction between the LULUCF and other sectors poses a threat that would significantly weaken the EU’s emissions reduction target for 2030.
Additionally concerning is the Council’s proposed amendment, which would allow member states to leave some forestry emissions unaccounted for, thereby creating and asymmetric accounting system where sinks are credited and some sources of emissions are omitted from the accounting system. Apart from the intrinsic problems with this, it would create a highly adverse precedent for the development of the Paris Agreement’s accounting architecture.
The 40% emissions reduction target is significantly behind what is necessary and achievable by the EU. Between 1990 and 2015 the EU’s emissions decreased by 23.6%, or slightly above 0.9% per year (European Environment Agency 2017). As a result, from now until 2030, emissions need to decrease by about 1.1% annually to achieve a 40% by 2030 emissions reduction goal. A continuation of this trend would lead to emissions reductions of only about 62% below 1990 levels by 2050. A significant acceleration of climate action is therefore essential to meet the EU’s long-term 2050 emissions reduction goal of 80–95% below 1990 by 2050. The EU also needs to increase its long-term goal to reflect the Paris Agreement’s temperature increase goal - with 95% reductions by 2050 being consistent with the Paris Agreement. Slowing down now will require much faster—and therefore more costly—action than would otherwise be necessary in the post 2030 period.
Failure to increase the effectiveness of the EU Emissions Trading Scheme (EU ETS) and the slowdown in the development of renewable sources of energy may threaten the achievement of even the unambitious 2030 target. The additional RES-E capacity installed in the years 2014–2016 was over 40% lower than the capacity installed in the period 2010–2012 (WindEurope 2017), which flies in the face of global trends where renewable capacity growth is accelerating.
In relation to 2020, the EU has signed up to the second commitment period of the Kyoto Protocol (2013–2020) with a QELRO equivalent to a 20% reduction from 1990, averaged as a carbon budget over the second commitment period. Given the downward trajectory of emissions, this translates to a 28–30% reduction in GHG emissions below 1990 levels in the year 2020. Currently implemented policies indicate that the EU is on track to meet its second Kyoto commitment period target. Domestically, this target has been divided into 21% emissions reduction in the EU ETS sector, and 10% emissions reduction in the non-EU ETS sector, with 2005 as the base year for both sectors.
Paris Agreement targets
In October 2014 EU leaders agreed on a 2030 climate and energy policy framework, putting forward a legally binding EU target of at least 40% reduction in domestic emissions by 2030 in comparison to 1990 (European Council 2014). In contrast to the period before 2020 it will also make no use of international credits, as it refers to domestic emissions reductions only. However, the 2030 target is different from 2020 in that it includes LULUCF, for which the details of the accounting rules have yet to be decided.
On 6 March 2015, the EU submitted its INDC to the UNFCCC committing to a target of “at least 40%” domestic emissions reductions below 1990 by 2030 (UNFCCC, 2015). With the ratification of the Paris Agreement by the EU and its entry into force in November 2016, the INDC became the EU’s first NDC.
The uncertainty around LULUCF accounting
Although the NDC confirms the inclusion of LULUCF accounting in the 2030 GHG mitigation target, it doesn’t clarify to what degree, and which emissions from this sector will be included in its emissions accounting in the base and target years. It also remains unclear whether this target is set with a fossil fuel and industrial greenhouse gas emissions baseline in 1990, as under the Kyoto protocol, or whether LULUCF emissions and/or removals are to be included in the base year, and if so, how. The choices here have substantial implications for the environmental integrity of greenhouse gas reduction targets, due to the significant uncertainties associated with monitoring of LULUCF emissions and sinks, and the risk of asymmetric accounting when the base year includes LULUCF, but the target year does not.
In July 2016, the European Commission published a proposal for a regulation that was designed to clarify the inclusion of emissions or removals from the LULUCF sector in the 2030 emissions targets (European Commission 2016i). It weakened the 2030 target by allowing emissions reductions in the LULUCF sector to be counted towards the target in sectors not covered by the EU ETS - such as agriculture, building and transport - to up to 280 MtCO2 between 2021–2030 (European Commission 2016i). The European Parliament and Council have both published positions on this proposal without changing this aspect.
We estimate the impact of including LULUCF accounting on reductions of industrial greenhouse gas emissions to be in the range of 1–4% of 1990 emissions in 2030, depending on the exact accounting rules applied. This range tries to capture the flexibilities in accounting between the LULUCF and other sectors, and is based on estimates for the pre-2020 period and projections for the whole LULUCF sector in 2030 (see Pledge Data sources and assumptions).
2020 pledge and Kyoto target
Under the Copenhagen Accord, the EU committed to reducing emissions by 20% below 1990 levels. Should other developed countries commit to comparable efforts, and developing countries contribute according to their capabilities, the EU offered to increase its 2020 emissions reduction target to 30%. By 2050 the EU wants to achieve a reduction of 80%–95% below 1990 levels.
In May 2012, the EU submitted a provisional QELRO (Quantified Emission Limitation or Reduction Objective) level equivalent to 20% reduction from base year over the second commitment period. This target is to be fulfilled jointly by the EU and its member states. In 2015 the EU and Iceland signed an agreement to jointly fulfil the second phase of the Kyoto Protocol (European Commission 2015a). In 2008 the EU member states agreed on the 2020 Energy and Climate Package that included a number of measures that would make the achievement of the 20% emissions reduction target possible. These measures included the Effort Sharing Directive specifying national emissions targets for the EU member states, amendment of the EU’s Emissions Trading Scheme and Renewable Energy Directive aiming to increase the share of renewables to 20% by 2020.
In February 2011, based on the former 2°C warming limit agreed in Copenhagen, EU leaders endorsed the objective of reducing Europe's GHG emissions by 80–95% below 1990 levels by 2050 (European Commission 2011b) conditional on necessary reductions to be collectively achieved by developed countries in line with the Intergovernmental Panel on Climate Change (IPCC). However, the Paris Agreement’s long term temperature goal is significantly more ambitious than the former 2°C Copenhagen target, and requires more rapid—and deeper—emissions reductions, so that only the more ambitious end of the EU’s 2011 2050 goal (95% reduction by 2050) is consistent with the Paris Agreement.
 The QELRO, expressed as a percentage in relation to a base year, denotes the average level of emissions that an Annex B Party could emit on an annual basis during a given commitment period.
 This QELRO is inscribed in the amendments agreed in Doha in December 2012. The EU has yet to ratify these amendments.
The EU’s climate commitments (NDC) in 2030 fall between two categories: “Insufficient” and “Highly insufficient.” Our rating for the EU’s NDC 2030 is based on its “at least 40% domestic reduction in greenhouse gas emissions by 2030 compared to 1990” target. Whereas a 40% emissions reduction falls between the “Insufficient” and “Highly insufficient” categories, we rate the EU “Insufficient” for three reasons:
The “Insufficient” rating indicates that EU’s climate commitment in 2017 is not consistent with holding warming to below 2°C, let alone limiting it to 1.5°C as required under the Paris Agreement, and is instead consistent with warming between 2°C and 3°C. If all countries were to follow the EU’s approach, warming would reach over 2°C and up to 3°C. This means the EU’s climate commitment is at the least stringent end of what would be a fair share of global effort, and is not consistent with the Paris Agreement’s 1.5 ?C limit, unless other countries make much deeper reductions and comparably greater effort.
The range of the EU’s current policy pathways lies mostly in the “Highly insufficient” range, with only 19% of the range in the “Insufficient” category. Therefore, we categorise the EU's current policy pathways as “Highly insufficient” in terms of meeting the Paris Agreement's temperature goal.
The CAT ratings are based on climate commitments in (I)NDCs. If the CAT were to rate EU’s projected emissions levels in 2017 under current policies, we would rate the EU “Highly insufficient,” indicating that EU’s current policies in 2017 are not consistent with holding warming to below 2°C, let alone limiting it to 1.5°C as required under the Paris Agreement, and are instead consistent with warming between 3°C and 4°C: if all countries were to follow EU’s approach, warming could reach over 3°C and up to 4°C. This means EU’s current policies are not in line with any interpretation of a “fair” approach to the former 2°C goal, let alone the Paris Agreement’s 1.5°C limit.
For further information about the risks and impacts associated with the temperature levels of each of the categories click here.
Emissions in the EU28 have been decreasing since 1990. In 2015, emissions (excl. LULUCF) were 24% below 1990 levels. After a steep decline in 2009 due to the recession, and an upward spike following the recovery in 2010, they dropped continuously until 2014. Emissions grew again by 0.5% in 2015, mainly due to higher road transport demand and higher heating demand (European Environmental Agency 2017a). To some degree, this rise was lessened by an increasing role of renewables, which allowed savings of 436 MtCO2 (European Environmental Agency 2017c).
Initial projections for 2016 indicate an emissions decrease by 0.4%, resulting mainly from a significant decrease in emissions from the power sector of 4.5% (Eurostat 2017), primarily driven by a switch from coal to gas, half of which happened in the UK, where coal plant closures - driven by the increase in carbon price support - led to a 58% decrease in coal power production. At the same time, power generation from coal decreased only slightly in Germany (-4%) and Poland (-1%) and increased in the Czech Republic (+2%) (Agora Energiewende and Sandbag 2017).
According to our analysis, the future emissions projections under the EU’s currently implemented policies continue the past downward trend with similar—or slightly decreasing—reduction rates each year, depending on the scenario adopted. While emissions decreased by an average of 1.1% per year between 1990 and 2014, they are projected to decrease by between 0.9% according to the EEA’s estimates and 1.4% according to the PRIMES projections per year until 2020. For the period to 2030 the projected decrease is 0.6% and 1.4% per year respectively. According to the two scenarios, emissions are estimated to be between 3.9 and 4.0 GtCO2e (a 28–31% reduction below 1990) in 2020 and between 3.4 GtCO2e and 3.8 GtCO2e (31–40% below 1990) in 2030. The share of renewables projected by PRIMES (slightly over 24% in 2030) is below the EU target of 27%.
Current policy projections include the EU ETS, the Effort Sharing Directive, the Energy Efficiency Directive and a wide range of other EU wide regulations influencing GHG emissions such as the Renewable Energy Directive. It also includes the most important national policies. However, these scenarios do not include the effects of policy proposals currently being discussed in the EU. These proposals, which will determine the European energy and climate framework for the period after 2020, can be grouped in three streams:
The reform of the ETS - the EU’s flagship climate policy mechanism - aims at increasing its effectiveness in emissions reduction in the power and industry sectors during Phase 4 (2021–2030). This is necessary to achieve emissions reductions in the energy and industry sectors in 2030 by 43% below 2005 levels (48% below 1990 levels). Between 2005 and 2016, emissions from the sectors currently covered by the EU ETS decreased by 26% (European Environmental Agency 2017b). This has led to a further increase in the oversupply of allowances, which in 2016 was estimated at almost 3.2 GtCO2, equivalent to almost 180% of the projected emissions in the EU ETS in that year (AgoraEnergiewende & Sandbag 2017).
To reach the “at least 40% from 1990” emissions reduction target, in October 2014 the European Council agreed that emissions in the non-EU ETS sector would have to decrease by 30% by 2030 below 2005 levels (35% below 1990). Different from the EU ETS, for which targets are set at the European level, in the non-EU ETS sector each member state will be given a binding emissions reduction target between 0 and 40% below 2005 levels. This will affect numerous sectors, especially transport and buildings.
The main weakness of the European Commission’s proposal is that it uses the average emissions in 2016–2018 as the 2020 starting point for the emissions reduction trajectory (European Commission 2016j). Since the emissions in 2020 are projected to be 3% lower than in 2016–2018, according to some estimates this would inflate the total emissions budget by 532 MtCO2 (CAN Europe 2017). The European Parliament has strengthened this proposal suggesting the calculation of the trajectory starts in 2018 or using the 2020 value—whichever is lower (European Parliament 2017a). In its position from October 2017 the Council supported the Commission’s proposal of using the average emissions between 2016–2018 as the starting point for emissions reduction trajectory in 2020. It has also suggested additional flexibilities that could further increase the emissions budget (European Council 2017). The negotiations between the Council and the Parliament will determine the level of ambition and the speed of emissions reduction in the non-ETS sectors.
Emissions in those sectors will also be affected by the Winter Package which included proposals of four directives dealing with energy efficiency, energy performance in the building sector, renewable energy and the functioning of the power market. Departing from the initial suggestion of the Council (European Council 2014) the Commission proposes to increase the energy efficiency target for 2030 from 27% to 30%. This would correspond to a drop in final energy use by 17% compared to 2005 (European Commission 2016g). It is unclear whether this strengthening of the energy efficiency target would yield additional emissions reductions beyond the overall 40% goal—but it is likely to make it easier to achieve this goal.
Emissions from the energy sector are influenced to a varied degree by the development of renewables, fuel switching and decreasing energy use resulting from improvement of energy efficiency. Around 18% of EU emissions are coming from the combustion of coal (Beyond Coal 2017). To be compatible with the Paris Agreement temperature limit this needs to be reduced to close to zero by 2030 (Climate Analytics 2017).
To achieve emissions reductions in this sector and in parts of the industry sector, in 2005 the European Union introduced an emissions trading scheme (EU ETS). Due to the significant and growing oversupply of emissions allowances, which has led to low prices, the EU ETS has been ineffective in helping decarbonise the power and industry sectors. To increase its efficiency the European Commission tabled a proposal in July 2015 that will reform this mechanism for Phase 4 of its operation (2021–2030) (European Commission 2015b).
Since then, the European Parliament and Council have intensively debated this proposal. One of the main topics of the EU ETS reform debate has been the speed of the emissions cap’s annual decrease, which is determined by the annual linear reduction factor, and which is due to increase from 1.74% annually until 2020 to 2.2% afterwards (European Parliament 2017). A point of disagreement between the two institutions was the amount of allowances that should be transferred to the Market Stability Reserve (MSR). This instrument, which is planned to become operational in 2019, will be used to deal with oversupply or shortage of allowances. So far it has been agreed that in case of an allowances oversupply exceeding 400 million, 12% of the allowances in circulation will be transferred to the MSR. However, to speed up the reduction of the oversupply of allowances, until 2023 the amount of allowances being transferred to the reserve should be increased from 12% to 24% of the oversupply. This decrease is urgently needed as the oversupply of allowances exceeded 3 billion by the end of 2016 (Sandbag 2017).
It remains unclear, however, whether the reform will lead to an increase of the price of emissions’ allowances high enough to accelerate the process of decarbonisation of the power sector and energy intensive industries. Releasing the allowances from the MSR could decrease their price, but cancelling them instead of transferring them to the MSR would send a stronger message to investors and strengthen climate action.
In addition to the EU ETS reform, emissions from the energy sector will also be influenced by the negotiations over the proposals for the renewable energy directive (European Commission 2016h). The current proposal reflects the goal adopted by the European Council in October 2014 of setting an EU-wide target of generating 27% of energy from renewable sources by 2030 (European Council 2014). However, higher targets have been introduced into the negotiations, such as a target of at least 35% by the European Parliament’s Committee on Industry, Research and Energy (ITRE Committee 2017) and of 40% by the European Parliament’s Committee on the Environment, Public Health and Food Safety (ENVI Committee 2017). The latter is more consistent with the Paris Agreement-compatible pathway that would require at least 45% share of renewables by the end of the next decade (CAN Europe 2015). In any case, the impact of the renewable energy target will depend on the effectiveness of the measures introduced by the national governments to reach this target in the respective member states.
A related set of measures with significant impact on emissions in the short term are the considerations or commitments of some governments to phase out coal from the power sector: France and Sweden by 2022, Denmark by 2023, the United Kingdom, Italy, and Austria by 2025, Finland and Portugal by 2030s. Closing all five remaining coal-fired power plants by 2030 is also part of the coalition pact of the new Dutch government (Reuters 2017). These phase out positions cover 26% of present EU coal capacity. However, member states with the highest share of coal-fired power plants such as Germany and Poland have not yet taken similar decisions, and cover about 50% of EU coal capacity.
The role of coal in the European power sector may also decrease due to the adoption of the new “Best Available Technique (BAT)” conclusions for Large Combustion Plants by the European Commission in July 2017 (European Commission 2017a). These new standards, issued by the Commission in accordance with the Industrial Emissions Directive (European Parliament and the Council of the European Union 2010b), and which all coal-fired power plants in the EU need to meet by 2021, are currently exceeded by 82% of the installations. The combined cost of their upgrade amounts to between €8-14.5 billion (DNV GL-Energy 2017). Faced with such a cost, and increasing competition from renewables, many operators may decide to shut down their plants instead of upgrading them.
 Minimum estimate assumes costs of either NOx or SO2 reductions taking the higher number of the two single measures (SO2 for EU). Maximum estimate assumes cost of NOx, SO2 and dust without cost overlap.
As the EU ETS covers all installations with annual emissions exceeding 25 ktCO2, it also includes emissions from the energy intensive industries, such as cement, steel and chemicals. However, to decrease the threat of carbon leakage, conditional on the fulfilment of additional criteria, companies in these sectors receive free allowances up to the average emissions of the 10% most efficient in the sector or subsector in the years 2007–2008 (European Parliament and the Council of the European Union 2014a). The proposal for the EU ETS reform post 2020 aims at adapting the benchmarks for free allocation of allowances to reflect the technological improvements since 2007–2008 (European Commission 2015b). Reflecting more recent improvements in energy efficiency of the best 10% of installations would also decrease the amount of free allowances received, thus increasing the pressure to increase investment in energy efficiency.
Building on the experience with the NER300 funding program, financed from the sale of 300 million allowances, in its EU ETS proposal the Commission has also proposed the establishment for Phase 4 of an Innovation Fund. While the significant majority of the funding from the NER300 went to renewable energy investment (European Commission 2016e), the Innovation Fund should make it easier to finance low-carbon innovation in the industry sector (European Commission 2015b).
The European Union has a number of policies influencing emissions from the transport sector. The Renewable Energy Directive from 2009 introduced a 10% target for energy from renewable sources in transport by 2020 (European Parliament and the Council of the European Union 2009b). Due to the potentially negative impact of the first generation of biofuels on emissions from the LULUCF sector in other countries, in 2015 the role of certain biofuels and bioliquids in achieving this target was limited to 7%, with the rest having to be met by advanced biofuels and greater use of electricity in the transport sector (European Parliament and the Council of the European Union 2015). The EU regulation from 2009 (amended in 2014) introduced efficiency and CO2 emissions standards for new passenger cars, with annually increasing stringency until 2020 (European Parliament and the Council of the European Union 2009c, 2014c). Separate efficiency standards have also been introduced for vans (European Parliament and the Council of the European Union 2011, 2014b).
Despite increasing efficiency, emissions in the transport sector, excluding aviation, increased by almost 16% between 1990 and 2015 (EEA 2017a), driven by increasing activity in road transport, both for passengers and freight (European Environmental Agency 2017a). This trend runs contrary to the EU’s goal of reducing emissions by 60% below 1990 by 2050 adopted in the Roadmap of the European Commission from 2011 (European Commission 2011a) and despite decreasing emissions intensity of passenger cars (European Commission 2017c).
In July 2016, the Commission presented the “European Strategy for low-emission mobility”, which suggested a number of measures aimed at accelerating emissions reduction in the transport sector. These measures include increasing the use of digital technologies in the sector, fairer taxation that would improve the competitiveness of railways, and development of infrastructure that would speed up the market uptake of alternative modes of transport, such as electric recharging points, natural gas filling stations and hydrogen filling stations. It has also proposed new and more stringent tests for emissions from cars and vans (European Commission 2016a).
Building on these suggestions, in May 2017 the Commission presented a package of initiatives, which included a proposal on monitoring and reporting CO2 emissions from heavy-duty vehicles, and a suggestion to foster e-mobility through the introduction of EU-wide technical specifications. While no new emissions reduction standards have been set for the period after 2020, when the current standards expire, the Commission made clear that such standards would be announced at a later stage (European Commission 2017b). Another measure to promote e-mobility was introduced in the proposal for the recast of the Energy Performance Buildings Directive, which requires that newly built residential buildings with more than ten parking spaces are equipped in a way which allows the installation of recharging points for electric vehicles ((European Commission 2016f)
The impact of the measures announced in the “European Strategy for low-emission mobility” and the “European on the Move” package of proposals on emissions reduction cannot be quantified and therefore it is not clear if they will allow the EU to meet its aforementioned “at least 60%” emissions reduction target for the transport sector by 2050 (European Commission 2011a). Meeting this goal can be facilitated by measures taken by some governments leading to development of e-mobility such as tax credits, premiums and non-financial benefits in the form of free parking or the right to use bus lanes for electric cars. This has led to an increase in the sale of alternative fuel vehicles, which includes electric, hybrid, ethanol and LPG-fuelled vehicles, to over 400,000 in the first half of 2017. The share of such vehicles in the sale of new passenger cars increased from 3.9% in the first six months of 2016 to 5.1% in the following year (ACEA 2017).
Decarbonisation of the transport sector in the EU is further strengthened by the discussions about banning the sale of cars with combustion engines by some member states, e.g. the Netherlands by 2030, the UK and France by 2040 (WEF 2017). But the EU as a whole has not yet addressed this issue, and now appears to be falling behind developments in China, Norway and California.
Emissions from the buildings sector in the EU are regulated by the Energy Performance Buildings Directive (EPBD Directive). As part of the directive, it obliges member states to introduce minimum energy performance requirements and ensure that, from 2021, all new buildings are “nearly zero energy buildings” (NZEB). While defining a NZEB as a building with a very high energy performance, whose energy needs are covered largely from renewable sources of energy, it left the definition of the exact energy consumption level of such building to the member states (European Parliament 2010). According to the Commission’s estimates, the EPBD Directive has already contributed to additional emissions reduction of 63 MtCO2 in 2013 (European Commission 2016d).
A major challenge for the EU is the low rate of deep renovation of the existing building stock that would reduce energy consumption and thus emissions. The current renovation rate amounts to between 1–2% of the total stock, but could be significantly increased: 35% of the EU’s building stock is over 50 years old (European Parliament 2016). The deep renovation rate of residential buildings differs significantly between the EU member states: with 2% in France, 1.5% in Germany, to 0.12% in Poland and 0.08% in Spain (ZEBRA2020 2017). An increase of the renovation rate to 5% would be necessary to make emissions from the building sector compatible with the 1.5°C temperature increase limit (CAT 2016). To increase the renovation rate, in November 2016 the Commission presented a proposal amending the EPBD Directive, which obliges each member state to submit a long-term renovation strategy leading to full decarbonisation of its building stock by 2050, with a specific milestones for 2030 (European Commission 2016f). A report prepared for the European Parliament noted that to increase the rate of renovation it is necessary to raise awareness about efficiency options, raise the ambition of the renovation regulations, and increase the availability of the funding instruments for deep renovation (European Parliament 2016), measures which have not found widespread use so far.
Much more effective has been European legislation dealing with the energy efficiency of household appliances. The Ecodesign and the Energy Labelling directives, adopted in 2009 and 2010, respectively (European Parliament and the Council of the European Union 2009a, 2010a) is set to reduce emissions by 320 MtCO2eqin 2020 (European Commission 2013). The working plan for 2016–2019 includes measures that, combined, would lead to primary energy savings equivalent of over 100 TWh in 2030 (European Commission 2016b).
Emissions from LULUCF have so far not been included in either the EU ETS or non-EU ETS sectors. This is set to change with the Commission’s proposal for regulation that aims at including the GHGs emissions and removals from this sector in its 2030 climate and energy framework. The Commission’s proposal includes a no-debit rule meaning that emissions from deforestation could be offset by either afforestation or improved management of the existing forests (European Commission 2016i). However, this target is weakened by the possibility to use emissions reduction in LULUCF that took place in the period 2021–2025 to offset emissions in the second half of the decade. In addition, net removals can also be used to comply with the targets in the non-EU ETS sectors by up to 280 MtCO2 in the period 2021–2030 (European Commission 2016i).
The European Parliament’s position goes beyond the “no debit rule”, stressing that forestry should not only offset emissions but exceed them. However, at the same time it has suggested moving the baseline reference levels of forestry from 1990–2009 to 2000–2009, which would allow some EU countries to increase their harvesting rates without having to account for them (European Parliament 2017b). For its part, the Council is calling for even more flexibility to allow countries to increase emissions from the LULUCF sector without having to account for them (Council of the European Union 2017).
Targets for 2020 and 2030 were calculated from the most recent national inventory submissions (CRF, 2016), which do not include emissions from aviation and shipping. We calculated EU's LULUCF accounting quantities for the period 2014-2020 for afforestation, reforestation and deforestation using the current Kyoto rules, and for forest management using a net-net approach with a projected reference level for 2014-2020.
Some EU countries have included a background level for natural disturbances in their submitted Forest Management Reference Level. LULUCF quantities for the period of 2020-2030 have not been calculated because data projections are not detailed enough to allow their accounting. Furthermore, reference levels for forest management have not been set and some additional activities (e.g. wetlands management) may be elected by individual member states thus making the calculation insecure.
The EU provided historical data on forest management and afforestation, reforestation and deforestation for many of its member states. Where members did not submit data it was - wherever available - compiled using the time series data from national inventories (CRF, 2016).
The impact of including LULUCF accounting on reductions of industrial greenhouse gas emissions was initially estimated at between 1–4% of 1990 emissions, depending on the exact accounting rules applied. If the rules for the first commitment period of the Kyoto Protocol were used, EU’s emission in 1990 would increase by 75 MtCO2 thus effectively weakening the 2030 target by 1.4%, or by 1.3% when expressed as a reduction of industrial greenhouse gas emissions against 1990 levels. Another reference could be the likely second commitment period credits, which the CAT has estimated will be roughly 145 MtCO2/a (see assumptions below); effectively weakening the EU’s target by 3.0% (compare “Kyoto targets” with “Kyoto emission allowances” in the figure), or 2.6% of 1990 Annex A emissions. The whole LULUCF sector is expected to be a net emissions sink of ~210 MtCO2/a in 2030 (EC, 2014b), equivalent to as much as 4% of 1990 emissions from all sectors. As details about the ways emissions from the LULUCF sector will be accounted for are still discussed, the initial assessment has been kept unchanged.
Current policy projections
The current policy projections are based on the EU reference scenario 2016 (European Commission 2016c) and the latest projections provided by the EEA (EEA 2017b). The two scenarios were chosen because they represent a ‘bottom-up’ and a ‘top-down’ manner of evaluating the impact of policies in the EU. While the EEA data reflect the implementation of existing measures as put forward by member states, the PRIMES model performs a separate modelling exercise to estimate the effects of policies.
For the upper end of current policy projection for 2020 and 2030 we used the EEA data “with existing measures” scenario which reflects the effects of all adopted and implemented measures at the time the projections were prepared. The figures were then harmonised to the latest inventory historical data (CRF, 2016). This harmonisation was necessary due to the differences between the CRF historic data and the data provided by the EEA.
For the lower end of the current policy projections for 2020 and 2030 we used the EU reference scenario 2016, which includes policies and measures adopted at EU level and in the member states by December 2014 and three additional amendments to three Directives agreed in the beginning of 2015 (ILUC amendment to the RES and FQD Directives and the Market Stability Reserve Decision amending the ETS Directive). The figures were also harmonized to the latest inventory historical data (CRF, 2016).
For both sources emissions from international aviation were deducted. For this purpose, the projected emissions from international aviation provided by the EEA had to be deducted from the overall emissions projected by the EEA. For PRIMES scenario, emissions from international aviation were not provided separately. Therefore, the projected growth in energy consumption in aviation was used to extrapolate aviation emissions from the last available year onwards. Subsequently, the projected emissions from aviation were deducted from the overall emissions provided by the PRIMES scenario.
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