EU

The European Commission's proposed new 2040 target, of a net 90% reduction in emissions below 1990, is the least ambitious end of the 90-95% range recommended to it by the European Scientific Advisory Board on Climate Change (ESABCC). The new target, proposed in February 2024, does not include phase-out dates for fossil fuels, and relies heavily on carbon capture and storage (CCS) including in the power sector. Fossil CCS continues dependency on fossil fuel and is absolutely not needed in the power sector.

The EU is continuing to fail to contribute its fair share to global climate action, and should adopt at least a 95% reduction by 2040 and substantially increase its climate finance support to countries in the Global South. The EU missed an opportunity to strengthen its 2030 target in its October 2023 NDC submission, despite making a commitment at COP26 to increase it, and despite the signals it made at COP27 that it would increase the 2030 target to 57%.

This assessment therefore focuses on the EU’s 2030 target, with a full analysis of the EU’s efforts towards achieving its 2030 target. The EU could show climate action leadership by submitting an ambitious 2035 NDC target by COP29, the next step in the NDC cycle, focusing on decarbonising sectors as quickly as possible and not delaying action by relying on carbon capture and storage (CCS). The EU still lacks a proposal for a 2035 target. Based on modelled domestic pathways, the CAT would recommend a 2035 emissions reduction target of at least 73% excluding LULUCF or a 79% reduction including LULUCF from 1990, along with substantially increased climate finance.

The EU is not yet on track to meet its 2030 target to reduce emissions by at least 55% below 1990 (including LULUCF). Having the legislative framework in place to meet its 2030 NDC target is an important step, but rapid implementation of policies and measures at member state level is crucial for it to become a reality. We would recommend at least a 62% reduction (excluding LULUCF) by 2030 domestically with significant international finance or a far deeper cut of 93% to make a fair contribution to the 1.5°C limit. The CAT rates the EU’s 2030 target as Insufficient against both metrics.

After more than two years of negotiations, in 2023 the EU adopted a comprehensive "Fit for 55" policy package and RePowerEU plan with measures in all sectors, to ensure that it has the legislative framework in place to meet its 2030 target. With the regulatory landscape resolved at the EU-level, member states have now submitted drafts of their updated National Energy and Climate Plans (NECPs) outlining how they intend to cut their emissions to meet the EU’s 2030 targets. However, the Commission’s assessment of these plans and comments from civil society groups all point to a lack of ambition in the national plans and, in many cases, failure to align with the EU’s targets.

The EU did not strengthen its target in its last NDC submission of October 2023. The headline target remains the same, but the EU has increased its land sector target beyond what was set in the previous NDC showing that the EU can and should set a stronger overall target. The submission provided further details on how the EU intends to achieve its target, but without a stronger headline target, we do not consider it to have increased ambition.

The CAT’s rating of the EU’s policies and action as well as its NDC target against modelled domestic pathways changed from “Almost sufficient” to "Insufficient" compared to the previous assessment in June 2023. Both elements of our CAT rating have been affected by the update of our modelled domestic pathways to the latest pathways assessed by the Sixth Assessment Report of the IPCC (AR6). This latest evidence shows that the EU needs to cut emissions faster to align with 1.5°C. The change in our methodology for quantifying the lower range of the EU’s current policies and action also contributed to the change in rating. For more details on how we quantify the EU’s current policies and action and NDC, please see the Assumptions tab.

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,
• Agree on an ambitious 2040 target of at least 95% below 1990 levels (incl. LULUCF) and include 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 Global South countries, and
• Update its 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 EU’s 2030 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.

The EU’s 2030 emissions reduction target and its policies and action are consistent with warming that would reach over 2°C and up to 3°C when compared to modelled domestic pathways. The EU is also not meeting its fair share contributions to climate action.

To improve its rating, the EU should strengthen its 2030 domestic emissions reduction target to at least 62% (excl. LULUCF and international aviation) below 1990 levels, adopt policies necessary to reach this goal, and significantly increase its support for climate action in developing countries.

We rate the EU’s policies and action as “Insufficient”. Our rating has fallen by one level since our mid-year update for two reasons. First, we updated our modelled domestic pathways to the latest IPCC AR6 dataset. As a result, the level of action needed by the EU to be consistent with a 2°C level of warming (the “Almost sufficient” rating) becomes more stringent. Second, we improved the way we estimate the EU’s emissions. Based on this new data, the lower end of our policy range (upon which our rating is based), falls into the “Insufficient” category (see the Assumptions tab for more details on our 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 planned policies projection shows the EU coming close to achieving its NDC. The projection includes the EU’s indicative renewable energy goal (of a further 2.5%) and the additional measures planned by member states.

The EU has been adopting elements of its ‘Fit for 55’ package and RePowerEU plan throughout 2023. In March 2023, it adopted the regulations increasing its Effort Sharing targets and amending its LULUCF sink. The directive strengthening the EU Emissions Trading Scheme (EU ETS) was passed in May 2023. The Energy Efficiency Directives was adopted in July 2023. Most recently, in October 2023, it adopted the Renewable Energy Directive.

From 2027 onwards, the EU will establish a second Emissions Trading Scheme (EU ETS II) to cover buildings and transport. Methane from the agriculture sector stands out as a significant contributor to emissions with few reductions achieved to date.

With the regulatory landscape resolved at the EU level, it is now up to member states to implement these measures. Most have submitted their updated plans, including revising renewable and energy consumption targets, which should add up to the EU targets, and given them to the Commission for review. The Commission’s recommendations provided to the member states at the end of 2023 indicate a lack of ambition and, in many cases, failure to align with EU targets. Civil society groups also critiqued the plans for this. Final versions of the plans are due in June 2024.

The full policies and action analysis can be found here.

In October 2023, the EU submitted an updated NDC. The target of reducing emissions by at least 55% below 1990 levels by 2030 (incl. LULUCF and international aviation) 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.

The "Insufficient" rating represents a lower rating from the June 2023 CAT assessment, which ranked the EU as "Almost sufficient". Our rating has fallen by one level since our mid-year update because we updated our modelled domestic pathways to the latest IPCC AR6 dataset. As a result, the level of action needed by the EU to be consistent with a 2°C level of warming (the “Almost sufficient” rating) becomes more stringent. Based on this, the absolute value (excl. LULUCF and international aviation) falls into the "Insufficient" category (see the Assumptions tab for more details on our projections).

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”. The EU has committed to increase its climate finance, but contributions to date have been low compared to its fair share. 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”.

We evaluate the net zero target design as “Acceptable”. The EU’s climate neutrality target performs moderately in terms of its architecture, transparency, and scope, with a regular review and assessment process. At present, a clear separation of the contributions from emissions reductions versus removals is missing, although this is an element that is required of the forthcoming 2040 target.

The full net zero target analysis can be found here.