Critically Insufficient4°C+
NDCs with this rating fall well outside of a country’s “fair share” range and are not at all consistent with holding warming to below 2°C let alone with the Paris Agreement’s stronger 1.5°C limit. If all government NDCs were in this range, warming would exceed 4°C. For sectors, the rating indicates that the target is consistent with warming of greater than 4°C if all other sectors were to follow the same approach.
Highly insufficient< 4°C
NDCs with this rating fall outside of a country’s “fair share” range and are not at all consistent with holding warming to below 2°C let alone with the Paris Agreement’s stronger 1.5°C limit. If all government NDCs were in this range, warming would reach between 3°C and 4°C. For sectors, the rating indicates that the target is consistent with warming between 3°C and 4°C if all other sectors were to follow the same approach.
Insufficient< 3°C
NDCs with this rating are in the least stringent part of a country’s “fair share” range and not consistent with holding warming below 2°C let alone with the Paris Agreement’s stronger 1.5°C limit. If all government NDCs were in this range, warming would reach over 2°C and up to 3°C. For sectors, the rating indicates that the target is consistent with warming over 2°C and up to 3°C if all other sectors were to follow the same approach.
2°C Compatible< 2°C
NDCs with this rating are consistent with the 2009 Copenhagen 2°C goal and therefore fall within a country’s “fair share” range, but are not fully consistent with the Paris Agreement long term temperature goal. If all government NDCs were in this range, warming could be held below, but not well below, 2°C and still be too high to be consistent with the Paris Agreement 1.5°C limit. For sectors, the rating indicates that the target is consistent with holding warming below, but not well below, 2°C if all other sectors were to follow the same approach.
1.5°C Paris Agreement Compatible< 1.5°C
This rating indicates that a government’s NDCs in the most stringent part of its “fair share” range: it is consistent with the Paris Agreement’s 1.5°C limit. For sectors, the rating indicates that the target is consistent with the Paris Agreement’s 1.5°C limit.
Role model<< 1.5°C
This rating indicates that a government’s NDC is more ambitious than what is considered a “fair” contribution: it is more than consistent with the Paris Agreement’s 1.5°C limit. No “role model” rating has been developed for the sectors.
1.5°C Compatible< 1.5°C
This rating indicates that a government’s NDCs in the most stringent part of its “fair share” range: it is consistent with the Paris Agreement’s 1.5°C limit. For sectors, the rating indicates that the target is consistent with the Paris Agreement’s 1.5°C limit.


According to pre-COVID-19 estimates, policies adopted by the EU member states were to decrease by 32% in 2030 in comparison to 1990 (European Commission, 2019c). Implementation of the EU’s renewable energy and energy efficiency goals would result in 2030 emissions being almost 48% lower than in 1990 (European Commission, 2019d). Emissions reductions in the last two years fell between these two ranges: after a decrease of almost 2.3% in 2018 (excl. LULUCF and international aviation), emissions in 2019 are expected to have decreased even further. According to early estimates by Eurostat, CO2 emissions from energy consumption, which constitute 75% of the EU27+UK GHG emissions, decreased by 4.3% (Eurostat, 2020c). This drop was mainly driven by a 9% decrease in emissions from stationary installations which are covered by the EU ETS (European Commission, 2020d).

Due to the pandemic, a much deeper, but temporary fall in emissions is expected for 2020. According to some estimates, CO2 emissions from the use of fossil fuels and production of cement in the EU27+UK in the first five months of the year fell by 14.6% in comparison to the same period of 2019 (Carbon Monitor, 2020). Despite progress in decoupling economic growth from emissions, the scale of the COVID-19 induced recession, and subsequent rebound will also have a significant impact on emissions in 2020 and 2021. According to our estimates, emissions in 2020 could be between 10 and 11% below the pre-COVID-19 estimates.

The economic impact of the pandemic is likely to have minimal impact on EU emissions in 2030. According to our estimates, emissions reflecting the already implemented policies (the upper bound of our current policy projection) will be at around 3.6 GtCO2 or around 4% lower in 2030 than in the pre-COVID-19 scenario. The lower bound of our current policy projection reflects the achievement of the renewable energy and energy efficiency goals. Achievement of these goals would result in emissions reduction of almost 48%. The COVID-19 induced economic crisis will make it easier to achieve these goals. Unless strengthened, their impact on emissions will remain the same.

Much greater potential for emissions reductions in 2030 comes from recovery measures being channelled to green uses (Climate Action Tracker, 2020a). The EU heads of state made the European Green Deal (EGD), which had been announced in December 2019, as one of the three major drivers of recovery – alone with fostering a “digital revolution” and resilience. The European Green Deal seeks to move towards a “resource-efficient and competitive economy where there are no net emissions of greenhouse gases in 2050” . The Deal was accompanied by a roadmap indicating changes to almost all legislation concerning climate action and energy transformation. In addition, new initiatives are to be presented, e.g. strategy for smart sector integration or proposal for carbon border adjustment mechanism (European Commission, 2019a). Most of the initiatives are to be proposed in 2020 and 2021, and in some cases have already been tabled.

In January 2020, the European Commission presented the first elements of the EGD: the Just Transition Mechanism. Its goal is to mobilise at least €100 billion between 2021-2027 to mitigate the negative impacts of transition to low-carbon economy. Part of this funding will come from the Just Transition Fund, one of the three pillars of the Just Transition Mechanism. This Fund was initially set to total €7.5 billion. This amount is to be matched with at least the same amount from the other European funds and complemented with additional national resources.

In the framework of the NGEU recovery fund, the initial amount of €7.5 billion was increased by an additional €10 billion. Countries that fail to commit to implementing the goal of climate neutrality by 2050 will only be allowed to use 50% of the national allocation in the framework of the Just Transition Fund (European Commission, 2020h; European Council, 2020). This applies exclusively to Poland, which is currently the only EU member state that did not agree to implement the goal of climate neutrality, while agreeing to its adoption at the EU level.

In March 2020, the Commission presented its proposal for the European Climate Law, which would establish a governance framework for achieving the 2050 “climate neutrality” goal as well as set intermediary targets towards meeting that goal. In September 2020, the Commission recommended that the EU adopted a domestic emission reduction of at least 55% below 1990 levels by 2030 including LULUCF (European Commission, 2020l). The national measures aimed at reaching the respective emissions reduction goals will be listed in the National Energy and Climate Plans (NECPs) submitted by the member states in the framework of the amended Governance Regulation. The first wave of the NECPs for the period 2021-2030 has already been submitted by all EU member states and should be updated by mid-2023. NECPs for the subsequent decade 2030 should be submitted by 1 January 2029 and every ten years afterwards (European Commission, 2020j).

Commission’s proposal of the European Climate Law has already been discussed by the European Parliament’s Environmental Committee (ENVI Committee). The amendments suggested by the bill’s rapporteur, Jytte Guteland, include increasing the goal of the 2030 emissions reduction target 65%, making the goal of net emissions neutrality by 2050 binding not only at the EU but also the national level. After 2050 GHGs emissions should be exceeded by their removal, thus resulting in negative net emissions (ENVI, 2020). In September 2020 the ENVI Committee agreed to a 60% emissions reduction goal (European Parliament, 2020).

While the level of the EU27’s emissions reduction goal for 2030 is still open, in July 2020 the European Council agreed to spend at least 30% of EU27’s expenditures in the framework of the Multiannual Financial Framework (MFF) and NextGenerationEU recovery fund (NGEU) on climate action that would contribute to achieving this goal. Combined, this would result in investment of at least €547 billion from the European funds on climate mitigation. The EU Parliament, that must ratify the budget, has called for more.

The impact of these expenditures will be strengthened by the requirement to, in some cases, double the contribution by the member state governments. The plan to spend a large share of the funding in the early 2020s will allow the economic recovery to shift to a low-carbon economic growth path. These expenditures are to take place on the basis of the resilience and recovery plans to be submitted by the member states. It must be ensured that these plans do indeed fulfil the criteria of the Climate Target as enshrined in the Council’s agreement and are consistent with the Paris Agreement objectives (European Council, 2020).

Energy supply

In 2018, emissions from electricity and associated heat generation in the CHP plants contributed 22% of the EU27+UK’s total emissions (excl. LULUCF). Between 1990 and 2018, emissions from this sector decreased by 34% - the fastest reduction of any sector (European Environment Agency, 2020a).

Early estimates indicate emissions decrease from this sector by 15% in 2019, compared to 2018, mainly due to a collapse in power generation from coal and the increasing share of renewables (Agora Energiewende and Sandbag, 2020). This decrease would indicate a 44% emissions reduction from the power sector between 1990 and 2019 (European Commission, 2020e). A significant drop in emissions from the sector is also expected in 2020. In the first quarter of 2020 emissions fell by 20% compared to the same quarter of 2019 (European Commission, 2020k).

Electricity emissions intensity

The acceleration in emissions reductions before the COVID-19-induced lockdown and economic recession has been caused by the increasing role of renewables and decreasing role of coal which, in many cases, has been replaced by natural gas. The decreasing costs of renewables and increasing price of emissions allowances were the main drivers of these developments. The following subsections looks at the impact of these factors on future emissions.

EU Emissions Trading Scheme

Contrary to the economic crisis of 2008/2009, which resulted in a collapse of the price of emissions allowances (EUA), the COVID-19 crisis led to a comparatively moderate decrease, especially in comparison to other commodities. Unlike in 2009, it continued increasing through to mid-year, and exceeded €30/tCO2 in mid-July, before falling to mid-€20s in August (Investing, 2020).

To a large degree, this stability results from moving a certain share of the oversupply of emissions allowances to the Market Stability Reserve (MSR). Between 2019 and 2023, every year an amount of allowances corresponding to 24% of their oversupply currently in the market will be moved to the MSR. Subsequently, this number is set to decrease to 12%, but further revisions to the MSR are still possible. In 2018 the oversupply amounted to 1.6 billion allowances, equivalent to total EU ETS emissions in that year. It remained roughly the same in 2019 before falling to 1.4 billion allowances in early 2020. As a result, between January 2019 and August 2021, allowances corresponding to over 995 MtCO2 – equivalent to 64% of the annual emissions from the EU ETS sector in 2019 - have or will soon be taken off the market (European Commission, 2018b, 2019b, 2020f).

Further allowances are expected to be removed from the market as the oversupply exceeds the 833 million threshold. One of the major drivers of this continuous oversupply is the slow decrease in the emissions cap. Between 2013 and 2020, it decreased by 1.74% annually, much slower than the decrease in emissions in the EU ETS sector. The aforementioned 15% decrease in emissions in 2019 is twice as high as initially projected by the member states for the whole 2018-2030 period (European Environment Agency, 2019a). The slight acceleration of the cap decreases to 2.2% annually post-2020 will not substantially mitigate the situation. As part of the European Green Deal, a revision of the EU ETS directive is planned for June 2021. This revision may mitigate the issue by significantly accelerating the rate at which the emissions cap decreases and by increasing the uptake of emissions allowances by the MSR.


In 2019, the share of renewables in the EU27+UK power sector increased by 1.8% and reached 34.6% overall. Most of this increase resulted from increased generation in wind power plants (+1.8% increase) and solar power plants (+0.3%) with a stable contribution from biomass and decreasing energy generation from hydro power plants (Agora Energiewende and Sandbag, 2020). In the first half of 2020 the share of renewables in the power sector in the EU27+UK reached 40% and for the first time exceeded the share of fossil fuels. Slightly more than half of that share was coming from wind and solar (Ember, 2020)

With an additional 9.6 GW of onshore wind energy in the EU27+UK, the new installed capacity in 2019 was 28.2% higher than in 2018 and reached 170 GW. However, only four countries installed more than 1 GW of onshore wind in 2019: Spain (2.3 GW), Sweden (1.6 GW), France (1.3 GW) and Germany (1 GW). The remaining 24 countries contributed combined less than 34% of the total installed capacity.

Nine member states that joined the EU in or after 2004, didn’t add any new capacity in 2019. The new offshore wind capacity amounting to 3.6 GW in 2019 was even more centralised: new offshore wind power plants have only been installed in the UK (1.7 GW), Germany (1.1 GW), Belgium, and Denmark, with both around 370 MW. In total 22 GW of offshore wind had been installed by the end of 2019, three quarters of which were in only two countries: the UK and Germany (Wind Europe, 2020). On a positive note, the second offshore floating wind turbine in the world, with a capacity of 8.4 MW, has been installed off the coast of Portugal (OffhsoreWind, 2020).

Some countries are planning to increase the role of offshore wind in their future energy mix. In May 2020, Germany increased its 2030 goal for offshore wind from 15GW to 20GW installed capacity (ZfK, 2020). Denmark announced its plans to build two “energy islands” consisting of offshore wind turbines with a combined capacity of 4GW, and a potential to further increase this installed capacity to 10 GW (REcharge, 2020). According to the European Commission, between 240 to 450 GW installed capacity in offshore wind will be needed to reach the 2050 emissions neutrality goal (European Commission, 2020i). Achieving this goal will be challenging due to numerous exclusion zones, especially in the North Sea. As a result, only up to 112 GW can be built cost effectively (WindEurope, 2020).

To mitigate this issue, in October 2020, the European Commission will publish its Offshore Wind Strategy to facilitative cooperation between member states in developing this source of energy (European Commission, 2020i). According to older estimates, the installed offshore wind capacity in the EU27+UK by 2030 will reach between 49.5 and 99 GW (WindEurope, 2017). More recent assessments indicate an increase of installed capacity to 89 GW by 2030 might be realistic. These estimates of installed capacity at the high range of the earlier estimates result from the fact that this industry has been less impacted by the COVID-19 crisis. Should these plans materialise, offshore wind may in fact become an important part of the economic recovery (GWEC, 2020).

Solar PV registered a much more spectacular growth in 2019 than wind energy, with additional capacity more than doubling in the EU27+UK from 2018, reaching 16.7 GW. More than quarter of that has been installed in Spain: the additional 4.8 GW has been the result of implementing auctions and removing the so-called Sun Tax that inhibited the development of small, prosumer installations in the country.

The projections by the solar industry for solar PV indicate expected annual compound growth of 21% between 2020 and 2024 in Spain, 17% in France, and 10% in Germany. However, due to the COVID-19 induced recession the overall newly installed capacity in the EU is set to fall below the 2019 level in the early 2020s (Solar Power Europe, 2020).

Solar and wind can play an important role in supporting post-COVID-19 recovery. Due to their distributed scale and comparatively short realisation time, especially in the case of solar energy, these sources of energy offer the potential to create up to 400,000 new jobs by 2025, most of them in less industrialised areas (Climate Action Tracker, 2018). Developing the manufacturing capacity needed for the deployment of wind and solar energy and energy storage also offers the opportunity to create new jobs in areas affected by the COVID-19-induced economic crisis. This potential has already been recognised by the representatives of nine EU member states who sent a letter to the Commissioners for Internal Marker and Energy called for the launch of a Renewable Energy Industry Alliance and to define projects leading to an increase of local content in the RES supply chain as ‘Important Projects of Common European Interest’ (Politico, 2020).

Coal phase-out

In 2019, the share of coal in electricity generation decreased in the EU27+UK to 14.6% - almost 4.4 percentage points lower than in 2018. Nonetheless, emissions from coal-fired power plants still constituted 56% of total power (and associated heat generation) emissions (Agora Energiewende and Sandbag, 2020). The decline of coal continued in 2020, with generation decreasing by 30% in the first quarter of the year, even before the full impact of the COVID-19-induced decline in electricity generation materialised (European Commission, 2020k). This decrease was mostly due to the aforementioned increase in the price of emissions allowances, implementation of coal phase out plans in some countries, and closure of coal power plants due to air pollution requirements.

So far, 11 member states have adopted plans to phase out coal in the electricity generation. Some of these plans were accelerated in the first half of 2020. Sweden and Austria switched off their last remaining coal power plants in April, earlier than initially planned (electrec, 2020b; Europe Beyond Coal, 2020). At the end of June, Spain switched off seven coal power plants with a combined installed capacity of 4.6 GW – almost half of its total installed coal capacity (electrec, 2020a). To avoid an oversupply of allowances resulting from the coal phase-out, and thus emissions increasing in other countries, it is essential that the allowances corresponding to the future emissions from the switched-off coal power plants are taken off the market, as permitted by the EU ETS directive (European Parliament and the Council of the European Union, 2018c).

Seven EU member states are not planning to phase out coal by 2030; however, these countries currently operate 43% of the installed coal power capacity in the union. This includes Poland, which makes up half of the EU total installed coal capacity. In September, Poland’s Ministry of Climate presented a draft of the Polish Energy Policy until 2040, which projects decreasing electricity generation from coal from current 80% to between 37-56% in 2030 and between 11-28% by 2040 (Ministry of Climate, 2020). Germany, the second largest coal consumer in the EU, plans to reduce its coal installed capacity to 17 GW by 2030 and phase it out completely by 2038 at the latest (German Government, 2020).

Natural gas

While the role of coal in the EU is shrinking, its member states must avoid increasing - and locking in reliance on - natural gas. While, in the short-term, replacing coal with natural gas can contribute to emissions reductions (depending on methane leakage), even relying on abated natural gas (with CCS) in the longer term is not compatible with the Paris Agreement’s temperature limit (Climate Action Tracker, 2017). In fact, after a 12% increase in gas generation in 2019, its usage decreased in the first quarter of 2020, notwithstanding a significant decrease in gas price. (European Commission, 2020k).

Despite the increasing risks of natural gas infrastructure becoming stranded, there are continued investments in new, cost-intensive projects, especially new LNG terminals, 17 of which are currently being projected or planned and many of them co-financed with EU funds. An example is the almost €380 million expansion of the LNG port in Świnoujście, Poland (Howell, 2019). To avoid carbon lock-in, a complete divestment from fossil fuels, including a commitment to refrain from new investment in natural gas infrastructure, is necessary. The decision of the European Investment Bank to phase out lending for all fossil fuel projects, including natural gas starting in 2021, is a step in the right direction, even if a belated one (Financial Times, 2019).


In 2018, the EU’s industrial emissions contributed to almost 9% of the EU’s emissions, mostly from cement and steel plants. After a decrease of around 2% in 2019 (European Commission, 2020e), a much more significant decrease is expected in 2020 as a result of the COVID-19 induced recession. However, this decrease is likely to be temporary, and emissions are likely to rebound as the economy recovers.

To decouple emissions from economic growth, in March 2020, the European Commission proposed its New Industrial Strategy for Europe with a number of measures that would allow industry contribute to achieving the “climate neutrality” goal. Most of these measures will be further elaborated in subsequent, more detailed strategies, for specific subsectors, e.g. chemicals or zero-carbon steel. The Commission is also planning to support the development and deployment of low carbon technologies in the industry sector with funding from the Innovation Fund, which itself is funded by the sale of 450 million emission allowances, or introducing a requirement that public authorities lead by example by choosing environmentally friendly products and services (European Commission, 2020b).

While emissions from the industry sector are covered by the EU emissions trading scheme and thus are affected by the increasing price of emissions allowances, the impact of this instrument is lessened by the fact that companies producing products on a so-called “leakage list” receive free allowances up to the average emissions of the 10% most efficient installations in the sector, or subsector, potentially affected by the risk of carbon leakage. Increasing stringency of the criteria that need to be fulfilled by a product to be listed as affected by carbon leakage resulted in a decrease in the share of allowances received for free by the manufacturing industry from 80% in 2013 to 30% in 2020 (European Commission, 2020c).

One of the measures suggested in Commission’s New Industrial Strategy, and also referred to in the European Green Deal, is the introduction of a Border Carbon Adjustment (BCA) – an additional charge on energy-intensive products from countries with no or very lax climate mitigation measures. The Commission will make a proposal on the BCA in 2021 and when introduced, it will remain fully compatible with the WTO rules (European Commission, 2020b). While introduction of such a mechanism could be controversial, it would allow the EU to do away with the distribution of free allowances. Spending the proceeds from the BCA on development of low carbon technologies in the industry sector could increase the likelihood that such a measure complies with the WTO rules (van Asselt & Mehling, 2020).

In July 2020, the Commission presented its hydrogen strategy with the goal of realising 40 GW of installed electrolyser capacity in the EU by 2030 to generate green hydrogen from renewable sources of energy. This is to be complemented with a further 40 GW electrolyser capacity installed in neighbouring countries. The combined investment needed to develop this capacity, scale up solar and wind generation, and develop the necessary electricity and dedicated pipeline connections has been estimated to be between €309 and €447 billion. An additional €11 billion would need to be invested in retrofitting the existing hydrogen production plants with carbon capture and storage infrastructure (European Commission, 2020a). While hydrogen can be used in many different sectors, e.g. as storage in the electricity sector, mobility or even heating, its first destination will be the industry sector, especially chemical and petro-chemical, where it is currently used as feedstock. In the future, its role will also increase in the steel sector where hydrogen can be used instead of carbon monoxide in a reduction process (Hydrogen Europe, 2020).

Industry emissions intensity (per GVA) MER


Contrary to the general trend of decreasing emissions, emissions in the transport sector increased in 2018 by 0.1% and were 19.6% higher than in 1990. As a result, also the share of emissions from this sector increased significantly: from 14% of all emission in 1990 to 22% in 2018. As the transport sector—with the exception of intra-European aviation—is not covered by the EU ETS, the European Union and its member states are trying to reduce emissions from the sector in four ways: (i) adopting sectorial renewable energy targets, (ii) introducing CO2 emissions standards for new vehicles, and (iii) increasing the share of zero and low emissions vehicles, and (iv) encouraging a modal shift, which also has an important role to play, particularly from road and air to rail transport.

Sectoral renewable energy targets

The 2009 Renewable Energy Directive 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 impact that the first generation of biofuels may have on emissions from the LULUCF sector in other countries, in 2015 the role of first generation 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).

In 2018, the EU member states were far from achieving this goal, with only 8.1% of energy consumed in the sector coming from renewable sources. This was an increase by only 0.5% in comparison to 2017 (European Environment Agency, 2019b).

The 2018 Renewable Energy Directive (REDII) introduced a new goal of a 14% share of renewables in the transport sector by 2030. This target has been flanked by limiting the share of first-generation biofuels to no higher than 1% above their 2020 share. REDII states that uncertified biofuels that may create the risk of high indirect land-use change emissions cannot be counted toward meeting the 2030 target.

The Directive encourages use of energy from second-generation biofuels and electricity. Energy from second-generation biofuels can be counted at twice their energy content and should amount to at least 1% in 2025 and 3.5% in 2030. This obligation can also be fulfilled by using electricity from renewable sources. The contribution of renewable power used in the road transport sector is to be considered at four times its energy content whereas for rail transport it will be multiplied by 1.5. The Commission will also develop a framework ensuring this electricity is additional to the already installed capacity (European Parliament and the Council of the European Union, 2018b).

CO2 emissions standards for vehicles

Emission intensity of land-based passenger transport

After lengthy negotiations, in December 2018, the representatives of the European Parliament and the Council agreed on a regulation with the goal of tightening emissions standards (in gCO2/ kilometre) from new passenger cars by 37.5% in 2030 below 2021 levels. The emissions standards for new vans are to improve by 31%. For both types of vehicles, there should also be an intermediary improvement of 15% by 2025 below 2021 levels. Member states with a low share of electric vehicles will be encouraged to accelerate their uptake by granting such cars a additional multiplier of 0.7 for clean vehicles. This bonus expires when the share of electric vehicles exceeds 5% of a country’s fleet (European Parliament, 2019a).

These emissions reductions cannot be directly compared to the former 95 gCO2/km limit for passenger cars for 2021 and 147 gCO2/km limit for vans in 2020: due to numerous exceptions and different methodology, the real average emissions of new vehicles will very likely be higher. Recently, it has become clear that the increasing stringency of the emissions standards was accompanied by an increasing gap between test results and real-world performance: according to some estimates this gap reached 42% or 31 gCO2/km per vehicle in 2015 (Transport&Environment, 2018). To limit and possibly remove this gap, the law replaces the current testing regime with the Worldwide Harmonised Light Vehicles Test procedure (WLTP) and empowers the Commission to take the steps necessary to implement this procedure (European Commission, 2017b).

In 2019, the EU was far from reaching its emissions standards for passenger vehicles. On average, new cars registered in the EU27+UK emitted 123 gCO2/km. The most polluting car fleets are in Bulgaria (138 gCO2/km), Luxembourg, Slovakia (133 gCO2/km each) Poland, Hungary, Lithuania (132 gCO2/km each), Lithuania (132 gCO2/km), and Germany (131 gCO2/km). The cleanest car fleets, that are still above the benchmark, are in Portugal (109 gCO2/km), France, and Ireland (114 gCO2/km). Only in the Netherlands is the emissions-intensity from new cars slightly below 100 gCO2/km (ACEA, 2020a).

In February 2019, the European Parliament and Council agreed on emission standards for heavy duty vehicles. Emissions from new vehicles should decrease by 15% in the period 2025-2029 and by 30% from 2030 onwards, in comparison to emissions of the new vehicles sold between July 1, 2019 and June 30, 2020. The regulation also includes a 2% benchmark for the share of zero and low-emission vehicles (ZLEV). Whereas failing to meet this benchmark does not result in any negative consequences, exceeding it leads to more lenient emissions standards for the remaining vehicles (The ICCT, 2019).

Promoting low-carbon vehicles

Zero emission fuels for domestic transport

One of the options available for car manufacturers to reduce the average emissions of their cars is to increase the availability and sale of zero and low-emissions vehicles. The emission standards regulation also includes a mandatory quota for the share of zero- and low-emission vehicles (ZLEV) defined as emitting less than 50gCO2/km for new passenger cars and light commercial vehicles. According to the regulation, in 2025 at least 15% of passenger cars and light vans must be ZLEV. By 2030 this share should increase to 35% for passenger cars and 30% for light vans (European Parliament, 2019a).

In 2019, the share of new electrically chargeable vehicles in the EU reached 3% - 1% higher than in 2018. However, over 45% of the vehicles where plug-in hybrids that can still largely run on gasoline (ACEA, 2020b). As a result – mainly due to a slowdown in many other countries – the share of electrically-chargeable passenger vehicles in the EU was higher than the global average (2.5%), and the USA (2.0%), but significantly below China (4.6%) (EV-Volumes, 2020). In the first half of 2020, the number of new registered electric vehicles in the EU27 reached almost 300.000, an increase by 87% compared to the same period in 2019. Their share amounted to 7%, half of which are battery-only vehicles (ACEA, 2020c). However, part of this increase resulted from a fall in the sale of combustion vehicles due to the COVID-19 crisis.

The EU is reaping the benefits from electric vehicle exports. In 2018, the EU27+UK trade surplus from exporting electric and hybrid electric cars amounted to €3 billion, mainly from Germany, Sweden and the UK (Eurostat, 2019). In 2019, this surplus decreased to €1.1 billion, but this number does not include the UK, which is responsible for some of the decrease (Eurostat, 2020a).

Some EU member states have already announced plans to ban the sale of combustion cars in the coming decades, e.g. Denmark and the Netherlands by 2030, and France by 2040 (Dutch Government, 2017; electrive, 2019; WEF, 2017).

Underdeveloped charging infrastructure remains a major hindrance to the uptake of electric vehicles. The 2014 Deployment of Alternative Fuels Infrastructure Directive obliged member states to expand publicly-available charging infrastructure by installing at least one charging station for every ten vehicles projected to be on the road by the end of 2020. It also encouraged member states to facilitate installing charging stations for maritime and inland waterways, and at airports, to allow ships and planes to use electricity while stationary instead of running their engines (European Parliament and the Council of the European Union, 2014).

More recently, the 2018 Energy Performance Buildings Directive (EPBD) introduced the requirement that all new residential buildings and those undergoing major renovations, with more than ten parking spaces, must be equipped with adequate pre-cabling or pre-tubing to enable the installation of an electric vehicle recharging point for every parking space (European Parliament and the Council of the European Union, 2018a).

The European legislation, combined with the additional funding from both national and European sources, has led to a significant increase in the number of charging points in the EU27, from 59,200 in 2015 to 194,900 in 2020. After an increase in 2017 and 2018, the number of EVs per charging point remained stable at seven, which meant that the development of infrastructure kept pace with the increasing number of electric vehicles. The number of fast charging stations (>22 kW) per 100 km of motorways increased from 20 to 26. The number of hydrogen charging stations increased as well but remained at a significantly smaller level – from 0.15 to 0.17 hydrogen charging station per 100 km of motorways (European Alternative Fuels Observatory, 2020). This meant that for every hydrogen charging station there were 153 fast charging electric stations.

To stimulate the cleaner vehicle market, in February 2019, the EU Parliament and Council agreed on an amendment to the Directive on promoting clean and energy efficient vehicles. The Directive requires public authorities procuring vehicles (e.g. for public transport) to take their CO2 emissions and the emissions of other pollutants into account. It also sets a minimum share of clean heavy-duty vehicles (trucks and buses) in the total number of heavy-duty vehicles contracted by member states. These shares differ depending on the member states and types of vehicles. For example, in the period 2021-2025, between 24% (Romania) and 45% (majority of the EU member states) of buses procured by public communities should be clean or zero emissions. For the period 2026-2030, these shares increase to between 33% and 65% (European Parliament, 2019c).

Modal Shift

The EU aims to strengthen the position of railways in comparison to the other modes of transport, by increasing competition between the operators and investing in rail transport infrastructure, as well as other measures. However, these efforts still did not have an impact on shifting freight transport from road to rail: between 2013 and 2018, the share of freight transported by rail remained constant at 18.7% (Eurostat, 2020b). To improve the situation, the European Commission proposed an amendment of the 1992 European Combined Transport Directive in 2017. However, the negotiations between the Parliament and the Council did not make any progress since the proposal was tabled (European Parliament Think Tank, 2019). A revised proposal of the Directive on Combined Transport will be presented in 2021 as part of the European Green Deal (European Commission, 2019a).

Whereas in passenger transport the number of passenger-kilometres increased slightly over the last decade, this increase was much faster than in the case of rail. This is especially the case in Eastern European countries, where a shift from train to plane could be clearly observed with more passenger-kilometres travelled by plane than by train in most of the countries. Due to the massive investment in new motorways, co-financed to a large degree from European sources, the popularity of passenger cars increased significantly. This has been accompanied by only a modest improvement in railway infrastructure (Climate Analytics et al., 2020).

The increase in the role of aviation has been strongly undermined by the COVID-19 related limits on international travel and it remains to be seen how soon and whether it will fully recover. In the meantime, the funding to be made available on climate action in the framework of the Multiannual Financial Framework and NextGenerationEU Recovery Fund presents the opportunity to replace domestic and, in some cases, intra-EU flights with rapid train connections. So far, however, only a few countries have mentioned improving in railways infrastructure in their National Energy and Climate Plans, e.g.

  • Austria will increase its annual investment in railways modernisation from federal sources from €2 to €2.5 billion (Federal Ministry for Sustainability and Tourism, 2019),
  • Italy plans to improve regional train connections (Ministry of Infrastructure and Development, 2019),
  • Luxembourg will spend €2.2 billion between 2018-2023 on encouraging people to switch from road to rail (Ministère de l’Énergie et de l’Aménagement du territoire, 2019),
  • Romania plans to modernise and electrify four major rail connections (Romanian Ministry of Economy, 2020),
  • Slovakia plans to modernise the main railway tracks constituting part of the Trans-European Transport Network (TEN-T) (Slovak Ministry of Economy, 2019),
  • Slovenia plans more intensive investment in its railway network to facilitate modal shift in passenger and freight transport (Republika Slovenija, 2020),
  • Spain will promote modal shift to rail in the framework of ADIF Master Plan to Combat Climate Change until 2030 (Ministry for Ecological Transition and Demographic Challenge., 2020)
  • Czechia, Estonia, Latvia, Lithuania in addition to some of the countries discussed above, mentioned plans to electrify their existing rail connections,
  • Croatia, Denmark, Finland, Greece, Hungary, Ireland, Malta, Netherlands, Portugal, and Sweden did not mention any plans to invest in rail infrastructure as part of their mitigation efforts.


In 2018, direct emissions from the residential building sector decreased by 2.4%, at a rate slightly higher than the overall reduction of emissions and constituted 9.2% of all of the EU27+UK’s emissions (excl. LULUCF). In comparison to 1990, emissions from the sector decreased by almost 25.2% - around the same level as the EU27+UK’s overall emissions (European Environment Agency, 2020b).The worrying trend is an increase in final energy consumption in buildings – by 8.3% between 2014 and 2017. This indicates that energy savings measures have been more than counterbalanced by occupied space and energy consumption. On a positive note, an increasing share of this direct energy was coming from renewables – 20.3% in 2018 (European Environment Agency, 2019b).

The Energy Performance Buildings Directive (EPBD Directive), first adopted in 2010, regulates emissions from the buildings sector and 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 an NZEB as a building with a very high energy performance, whose energy needs are covered largely from renewable sources of energy, the EU left the definition of the exact energy consumption level of such buildings to its member states (European Parliament and the Council of the European Union, 2010b).

The Commission’s estimates show the EPBD Directive has already contributed to an additional emission reduction of 63 MtCO2 in 2013 (European Commission, 2016b). To strengthen climate action in this sector the EU amended the EPBD Directive in 2018. It included obliging each member state to submit a long-term renovation strategy leading to fully decarbonising its building stock by 2050, with specific milestones for 2030, targeting especially the worst-performing building stock (European Parliament and the Council of the European Union, 2018a). To increase the renovation rate, the Commission is planning to launch its ‘Renovation Wave’ initiative in September 2020.

It remains to be seen whether this will help address the issue of the low rate of major renovation of the existing building stock which currently amounts to between 1–2% of the total stock. Major renovation in this case is defined as renovation which affects at least 25% of the building’s envelope or its costs exceeds 25% of the value of the building. With 2% in France, 1.5% in Germany, to 0.12% in Poland and 0.08% in Spain, there is much variety among the EU member states in terms of the major renovation rate of residential buildings (ZEBRA2020, 2017). An increase of the renovation rate to 3.5% would be necessary to make emissions from the building sector compatible with the 1.5°C temperature increase limit (Climate Action Tracker, 2020b).

Since 35% of the EU’s building stock is over 50 years old and much of the overall lifetime reaches beyond 100 years, increasing the renovation rate could significantly reduce energy consumption and emissions (European Parliament, 2016). 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.

Buildings emissions intensity (per floor area, residential)

Much more effective has been European legislation dealing with the energy efficiency of household appliances. The 2009 Eco-design and the 2010 Energy Labelling directives are set to reduce emissions by 315 MtCO2eq in 2020 and 515 MtCO2eq in 2030 (European Commission, 2017a; European Parliament and the Council of the European Union, 2009a, 2010a). 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, 2016a).

An important part of decarbonising the EU building stock is the phase-out of fossil fuels in heating. Some countries have already introduced such a ban (e.g. Denmark) or are planning to do so (e.g. the Netherlands and the UK) (Cambridge Econometrics, 2019; Energy Saving Trust, 2019; IEA, 2017). The higher cost of the alternatives to natural gas, such as heat pumps or district heating, does require public support, especially in the case of replacing already existing heating installations.


The EU Regulation for the Land Use, Land Use Change and Forestry incudes the GHGs emissions and removals from forestry in EU’s 2030 climate and energy framework. It allows the use of net removals from this sector to comply with the targets in the non-EU ETS sectors by up to 280 MtCO2 from 2021–2030 (European Commission, 2016c). The Regulation includes a no-debit rule meaning that emissions from deforestation could be offset by either afforestation or improved management of existing forests (European Commission, 2016c). However, this target is weakened by the possibility of using 2021-2025 LULUCF emissions reductions to offset emissions in the second half of the decade.

The regulation also introduces flexibility on the accounting of emission reductions from managed forests, amounting to up to 360 MtCO2 in the period 2021-2030. Finland will be granted additional compensation of 10 MtCO₂ for the 2021–2030 period “in view of the special circumstances of its forestry sector”. However, EU member states can only be activate this ‘managed forest land’ flexibility mechanism, if the EU collectively meets the ‘no-debit’ rule (European Parliament, 2018b).

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