EU

NDC description

In December 2020, the EU submitted an updated version of its NDC to the UNFCCC (Germany and the European Commission 2020b). The updated NDC provides a strengthened 2030 emissions reduction target of “at least 55%” compared to the previous NDC’s target of “at least 40%”. However, the new target includes emissions from the LULUCF sector, which was not the case for the previous NDC, making it more difficult to directly compare them. Due to the United Kingdom having left the EU on 31 January 2020, the updated NDC applies only to the current 27 member states. The NDC clarifies that emissions from outgoing flights that start in the EU are included in the goal, however this information “is subject to revision in light of the enhanced target”.

The European Climate Law adopted in June 2021 clarified some aspects around the new NDC target (European Parliament and the Council of the European Union 2021). The law provides an upper limit of 225 MtCO₂e for the LULUCF emissions sink that can be used to meet the NDC.

The “Fit for 55” package presented by the Commission in July 2021 provides more detail concerning measures for international aviation and maritime: intra-EU aviation will continue to be included in the EU Emissions Trading Scheme (EU ETS), but will be deprived of free emissions allowances. Extra-EU aviation will be covered by ​the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), although this scheme has serious failings. All emissions from intra-EU maritime transport and half of the emissions from extra-EU maritime transport will be included in the EU ETS (European Commission 2021h).

According to the Commission’s modelling reflecting the “Fit for 55” package, the EU’s emissions would amount to 2.2 GtCO₂e in 2030, excluding LULUCF and international aviation and maritime transport¹ (European Commission 2021f). This is almost 54% below emissions in 1990. In addition, the Commission’s proposal for accounting emissions from LULUCF obliges member states to increase the emissions sink to a least 310 MtCO₂e—even though only 225 MtCO₂e can be accounted towards this goal (European Commission 2021l). If adopted, this would create an additional sink of 85 MtCO₂e, which is not considered in this assessment.

The CAT rates EU’s NDC target (“domestic target”) as “Almost sufficient” when compared to modelled domestic pathways and “Insufficient” when compared to its fair share emissions allocation (“fair share target”).

1 | The numbers provided in the scenario use Global Warming Potential from IPCC AR5. For the sake of comparability with other countries assessed by the Climate Action Tracker the number 2.262 MtCO₂e is translated to AR4 resulting in 2.246 MtCO₂e.

The EU’s new domestic target of reducing emissions by “at least 55%” (including LULUCF) is a step in the right direction, especially as the EU has also proposed measures to achieve this goal. Due to the limit on the amount of emissions in the LULUCF sector that can be accounted for in the target, it translates to emissions reduction by “at least 52.9%” (excluding LULUCF).

The target also explicitly includes international aviation. Excluding it for the sake of comparability with other countries assessed by the Climate Action Tracker increases the target to 53.9%. In addition, while the NDC only mentioned domestic navigation, the recent proposal of the European Commission would also cover emissions from intra-EU maritime transports and half of the extra-EU maritime transport in the new Emissions Trading Scheme.

The new target is rated as “Almost sufficient”. The “Almost sufficient” rating indicates that the EU target in 2030 is not yet consistent with the Paris Agreement’s 1.5°C temperature limit but could be, with moderate improvements. If all countries were to follow the EU’s approach, warming could be held below—but not well below—2°C.

We rate the EU’s 2030 domestic emissions reduction target of reducing emissions by at least 55% below 1990 levels (including LULUCF) as “Insufficient” when compared to its fair-share emissions allocation. The “Insufficient” rating indicates that the EU’s fair-share target in 2030 needs substantial improvement to be consistent with the Paris Agreement’s 1.5°C temperature limit. Some of these improvements should be made to the domestic emissions target itself, others could come in the form of additional support for emissions reductions achieved in developing countries in the form of finance. If all countries followed the EU’s approach, warming would reach up to 3°C.

The EU’s international climate finance is rated “Insufficient” (see below) and is not enough to improve the EU’s fair share rating.

The EU’s international public climate finance contributions are rated “Insufficient.” The EU has committed to increasing 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 international climate finance contributions post-2020 and accelerate the phase-out of fossil fuel finance abroad.

In 2019, the EU and its member states provided EUR 23.2bn to developing countries (Germany and the European Commission 2020a). Even though the overall level of climate finance reported by the EU is higher than most countries, contributions fall short of its fair share contribution to the USD 100bn goal. This is partially due to the EU’s strict fair share requirements. Also, the CAT does not consider all country-reported contributions as climate finance. We provide a range for each country that covers different interpretations of climate finance to account for concessionality and finance instrument type, for example (see methods). The amount the CAT compares to the USD 100bn benchmark is often lower than the one reported by countries.

The contribution marks a 6.9% increase compared to 2018 and includes EUR 2.5bn from the EU budget and the European Development Fund as well as EUR 3.18bn from the European Investment Bank. Relative to their gross national income, Luxembourg, Germany and France lead the list of highest shares in contributions (Dejgaard and Appelt 2018). Due to the high fair share requirements, reported contributions fall short of the EU’s fair share contribution to the USD 100bn goal, despite past increases.

To incorporate finance flows into the plans to achieve long-term climate goals, in June 2020 the EU adopted the Taxonomy Regulation establishing framework for sustainable investment (The European Parliament and the Council of the European Union 2020). On the basis of this Taxonomy Regulation, a year later the Commission adopted a Delegated Regulation that listed detailed criteria for assessing a certain activity as either contributing substantially to climate change mitigation, or causing no significant harm to any of the EU’s environmental goals (European Commission 2021a). The Delegated Regulation also defines which activities can be defined as causing significant environmental harm. The EU’s Taxonomy Regulation is mostly designed to determine internal financial flows, but it could also be applied to assessing the sustainability of EU’s investment abroad.

In 2019, the European Investment Bank adopted its climate strategy to phase out fossil finance by 2021 (EIB 2019). Additionally, EU foreign ministers called for an end of export guarantees for fossil fuel projects overseas to promote a global fossil fuel phase-out (Simon and Taylor 2021). Yet some member states still support fossil fuel internationally, such as Germany in providing public guarantees for gas turbines (Euler Hermes Aktiengesellschaft 2020) and the Czech Republic by means of state-own export credit agency EGAP (Norlen 2017). Finally, in July 2021, the European Council agreed that EU public funding will be used for two new pipelines exclusively for the transport of natural gas, including the EastMed pipeline that would transport natural gas from offshore Israel to Cyprus, Greece (Council of the European Union 2021b).

The EU remains committed through 2025 to the USD 100bn collective goal of climate finance for developing countries, but the USD 100bn goal itself is insufficient for the post-2020 period. The European Commission also proposed to increase its total external contributions by 70% to at least EUR 4.2bn per year (2021-2027) (Eckstein et al. 2021). However, this increase alone is insufficient to improve the EU’s CAT finance rating, which requires a halt in fossil fuel finance overseas as well as additional finance mobilisation.

Further information on how the CAT rates countries (against modelled pathways and fair share) can be found here.

Last NDC update

The EU’s updated NDC, submitted on 17 December 2020, increased the emissions reduction goal from “at least 40%” to “at least 55%” by 2030 below 1990 levels. Contrary to its earlier goal, the latest target is defined as a net goal, as it includes emissions sinks both in the base and the target year. The European Climate Law limits the amount of LULUCF emissions that can be accounted towards this target to 225 MtCO₂e, in this way ensuring that the target amounts to at least 52.8% (excl. LULUCF).

The new NDC also covers emissions from “outgoing flights that start in the EU” stating at the same time that “this information is subject to revision in light of the enhanced target”. The European Commission’s earlier modelling of the new target does include intra-EU aviation. Excluding it for the sake of comparability with other countries strengthens the goal to 54% (excl. LULUCF).

In April 2021, the European Union came to an agreement on its Climate Law, which sets a binding objective of collectively achieving climate neutrality by 2050. The objective of achieving climate neutrality by 2050 has also been included in the EU’s Long-Term Strategy (LTS) submitted to the UNFCCC in March 2020.

The EU’s climate neutrality (net zero) goal performs moderately in terms of its architecture, transparency and scope, with a regular review and assessment process, a provision for an intermediate target in 2040 to be set following the Paris Agreement’s Global Stocktake, an exclusion of reductions or removals achieved outside of its territory, and clear analysis underpinning the target. 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. We evaluate the EU’s net zero target as “Acceptable”.

For our full EU net zero analysis click here.

Under the Copenhagen Accord, the EU committed to reducing emissions by 20% below 1990 levels by 2020, unconditionally. 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%.

Since the pledge was submitted, Croatia joined, and the United Kingdom left the EU. When applied to current membership, the unconditional pledge required emissions to fall below 3.9 GtCO₂e (excl. LULUCF). The conditional pledge would lead to emissions falling below 3.4 GtCO₂e. In 2010, when the pledge was made, over two-thirds of the unconditional and almost half of the conditional goal had already been achieved.

The EU had already met its unconditional pledge in 2014. According to our estimates, in 2020 EU’s emissions fell below the level of the conditional pledge. This reduction in emissions before 2020 resulted mostly from policy measures proposed in 2008 in the framework of the Energy and Climate Package. These measures were introduced and strengthened in the subsequent years, resulting in emission reductions of almost 26% in 2019. Exceeding the EU’s conditional target in 2020 was, to some degree, also a result of the COVID-19 pandemic which doubled the reduction in emissions in absolute numbers in comparison to 2019.