EU

In October 2023, the EU submitted a revised NDC to the UNFCCC (Spain and the European Commission, 2023). Its target of reducing emissions by at least 55% below 1990 levels by 2030 (incl. LULUCF and international aviation) is the same as the previous NDC from December 2020. However, the EU has increased its land sector target by 85 MtCO₂e which is what enables the EU to assert that it will overachieve its 55% target. The CAT rates this updated target as ‘did not increase ambition’ because it does not lead to a lower emissions limit (excl. LULUCF and international avaiation) compared to the previous NDC.

Compared to the previous NDC update in 2020, this NDC update clarifies that only CO₂ emissions from flights within the European Economic Area, departing flights to Switzerland and departing flights to the United Kingdom are included in the goal.

The EU’s 2030 NDC is not close to the 1.5°C limit when compared to modelled domestic pathways. It remains far behind on its fair share contribution to the 1.5°C limit and needs to substantially increase its support for emissions reductions abroad and climate finance.

New, 2040 target proposed in February 2024

On February 6 2024, the European Commission proposed a 2040 target of a 90% net GHG emissions reduction below 1990 levels. The CAT quantifies the 2040 target to be 777 MtCO₂e (excl. LULUCF) or an 83.9% reduction from 1990. For the EU, the process of defining an emissions reduction target for 2040 is supposed to ensure it is on track to achieve its climate neutrality target. However, the proposed 2040 target is at the least ambitious end of the 90–95% range recommended by the ESABCC, does not include phase-out dates for fossil fuels, and lacks transparency around carbon removals (European Scientific Advisory Board on Climate Change (ESABCC), 2023). The EU pushed for a global transition away from fossil fuels as part of the Global Stocktake and the outcomes of COP28, and should lead the way by transparently showing how it will phase out of fossil fuels as part of its 2040 target.

The CAT finds the proposed 2040 target falls short of what would at least be needed domestically to be aligned with 1.5°C (compared to modelled domestic pathways), although more clarity around bunkers and the land sector is needed. However, seeing as the EU is failing to contribute its fair share to global climate action, the CAT believes it should adopt at least a 95% reduction below 1990 levels (incl. LULUCF) by 2040. The EU should also support significantly more emissions reductions and increase its climate finance pledge accordingly.

The target of reducing emissions by at least 55% below 1990 levels by 2030 (incl. LULUCF and international aviation) remains the same in the EU’s updated NDC submitted in October 2023 (Spain and the European Commission, 2023). The updated NDC has increased the EU’s target for LULUCF removals to 310 MtCO₂e up from 225 MtCO₂e. The increase in the LULUCF sink is what enables the EU to assert that it will overachieve its 55% target (European Parliament, 2022). However, if the EU were to use the additional 85 MtCO₂e towards achieving its 2030 target – rather than the 225 MtCO₂e referenced in the European Climate Law – then this would decrease the emissions reductions needed in other sectors. The CAT does not view this submission as representing an increase in ambition.

Other than the increase in the LULUCF sink, the new EU NDC update includes a summary of regulatory developments and the main domestic policies adopted in view of the new climate target agreed to in December 2020. It also clarifies that only CO₂ emissions from flights within the European Economic Area, departing flights to Switzerland and departing flights to the United Kingdom are included in the target. Based on this clarification, the CAT considers international aviation to be included in the EU’s NDC, but not international maritime emissions. Please see the Assumptions tab for more details on the quantification of the EU’s 2030 NDC.

The EU had previously submitted an update to its NDC in December 2020 (Germany & European Commission, 2020). The 2020 update provided a strengthened 2030 emissions reduction target of “at least 55%” compared to the first NDC’s target of “at least 40%” (Latvia and the European Commission, 2015). The inclusion of the land sector slightly weakens this target compared to its 2016 NDC, however the inclusion of aviation strengthens it.

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 aviation¹ (European Commission, 2021c). As of the end of 2023, the EU has all the “Fit for 55” legislative framework in place to meet its “at least 55%” target. These policies still fall short of the domestic reductions needed to be consistent with limiting warming to 1.5°C. Domestic emission reductions of at least 62% (excl. LULUCF and international aviation) from 1990 are needed to make the EU’s effort compatible with 1.5˚C, while currently the EU’s target results in a 52% (excl. LULUCF and international aviation) reduction from 1990.

[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 2.256 MtCO₂e is translated to AR4 resulting in 2.244 MtCO₂e.

* Before September 2021, all CAT ratings were based exclusively on fair share and only assessed a country’s target.

** While the LULUCF Regulation, passed in April 2023, adopts a EU-wide LULUCF sink of 310 MtCO2e, the EU has made clear that this additional sink capacity will help it exceed its 55% target and not contribute to it (European Parliament, 2022; European Parliament & Council of the European Union, 2023e). As such, we do not exclude this additional LULUCF capacity from our quantification of the target. Please see Assumptions for more details.”

Analysis of earlier NDC developments:

• 18.12.2020: EU Member states submitted to the UNFCCC a stronger 2030 domestic emissions target
• 11.12.2020: EU Member states agreed on a stronger 2030 domestic emissions target

The CAT rates NDC targets against what a country should be doing within its own borders as well as what a fair contribution to achieving the Paris Agreement’s long-term temperature goal would be. For assessing targets against fair share, we consider both a country’s domestic emission reductions and any emissions it supports abroad through the use of market mechanisms or other ways of support, as relevant.

The EU does not intend to use market mechanisms and will achieve its NDC target through to domestic action alone. We rate its NDC target against both domestic and fairness metrics.

The CAT rates the EU’s 2030 NDC target as “Almost sufficient” when compared to modelled domestic pathways and “Insufficient” when compared to its fair share emissions allocation.

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 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 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).

The CAT’s assessment of the EU’s total fair share contribution takes into account its emissions reduction target and its climate finance.

When measured against a fair share emissions allocation, we rate the EU’s 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 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 higher than those of most other governments, but we still rate it “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 2022, the EU and its member states provided EUR 28.5bn to developing countries, but contributions still fall short of its fair share contribution (Council of the European Union, 2023c). 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.

Investing in fossil fuel projects overseas is still allowed under the EU’s current investing rules

In February 2022, European Commission published a complementary climate-delegated act to its Taxonomy Regulation (Council of the European Union, 2022a), which states that energy generation from fossil gas and nuclear should be classified as transition activities: activities that cannot yet be replaced by low carbon alternatives but that do contribute to emissions reduction.

To be eligible for the new classification, electricity generation from these sources need to fulfil several criteria:

• For fossil gas power plants, the life-cycle emissions should be below 100gCO₂e/kWh.
• Fossil gas power plants permitted before 2030 can emit up to 270gCO₂e/kWh but only if renewables are not available at sufficient scale.
• Fossil gas power plants that emit less than 550 kgCO₂e per kilowatt of installed capacity classify as transition activity, but only if they replace a facility using solid or liquid fuel, and switch fully to renewable or low carbon gases by 2035.

Despite the criteria, allowing any investments in fossil gas infrastructure to be described as compatible with the EU’s climate ambition is surprising, especially at a time when the negative consequences of EU’s dependency on fossil fuel imports, not only for the climate but also for its economy and security, are becoming so obvious.

In 2019, the European Investment Bank adopted its climate strategy to phase out fossil finance by 2021 (EIB, 2019). EU foreign ministers also called for the ending of export guarantees for fossil fuel projects overseas to promote a global fossil fuel phase-out (Simon & Taylor, 2021). Yet some member states still support fossil fuel investments internationally, especially in natural gas extraction and transportation (Atkins, 2023). 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 fossil gas from offshore Israel to Cyprus, Greece (Council of the European Union, 2021).

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

In April 2021, the European Union adopted its Climate Law, which sets into law the objective of collectively achieving “climate neutrality by 2050.” The objective of achieving climate neutrality by 2050, as agreed in the European Council’s conclusions from December 2019, has been included in the EU’s LTS.

The EU’s climate neutrality – or, essentially, net zero – 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. There is room for improvement in the target’s scope, as the Climate Law currently does not clearly state that international aviation and maritime transport emissions are included, and an explanation of why net zero by 2050 constitutes a fair contribution is lacking.

The full analysis is available here.