The EU’s 2030 Climate Plan

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On September 17, the Commission has presented its 2030 Climate Target Plan, consisting of: a Communication on Stepping up Europe's 2030 Climate Ambition; an accompanying Impact Assessment; an EU-wide Assessment of National Energy and Climate Plans; and an amended proposal on the draft European Climate Law to incorporate the new 2030 emissions reduction target. The Communication proposes an EU-wide net greenhouse gas (GHG) emissions reduction target of at least 55 percent by 2030, compared to 1990 levels, instead of the previously agreed 40 percent.

The Commission emphasized that current policies would not lead to a balanced pathway to climate neutrality by 2050 and would result in the need to accelerate annual reductions after 2030. Such a rapid transition could prove unrealistic for some sectors, and particularly for industries with long lead-times. The current targets would only result in a 60 percent reduction by 2050. Existing policies also do not deliver the required predictability for investors about the mediumand long-term goals, and create a risk of stranded assets and unnecessary carbon lock-in.


Achieving this increased climate ambition will require an investment boost. Therefore, the Commission wants to use the current COVID19 crisis as a catalyst for the transition to a climate-neutral economy by ensuring a green recovery from the current COVID-19 crisis.


In order to achieve the more ambitious targets and decarbonization pathway, the Commission is planning to review various pieces of legislation, including for example the EU Emissions Trading System, the Effort Sharing Regulation, the Energy Efficiency Directive or the Renewable Energy Directive. Most importantly for the transport sector and automotive industry, the Commission also wants to review the CO2 Emissions Performance Standards for Cars and Vans Regulation, legislation supporting the roll out of the necessary infrastructure such as TENE and TEN-T and the Alternative Fuels Infrastructure Directive. The European Commission already indicated more ambitious CO2 reduction targets of -50 percent for new cars as well as a phase-out of engine cars sometime between 2035 and 2040.


Following broad public consultation and thorough impact assessments, the Commission will come forward with the corresponding legislative proposals by June 2021. The Commission has also tabled a revised legislative proposal to include this 2030 target in the European Climate Law, which aims to set the long-term direction of travel for all EU climate policies by fixing a legal obligation for the EU to be climate-neutral by 2050.


The Communication and the proposal to raise the 2030 target to at least 55 percent prepares the ground for a public debate in autumn 2020 on increasing the EU's Nationally Determined Contribution (NDC) under the Paris Agreement by the end of 2020. Adopting the new target in time would allow the EU to communicate its higher ambition to international partners well ahead of the 2021 UN Climate Conference (COP26) in Glasgow and set the bar for others to follow.


Road transport under the EU ETS


EU climate policy emissions are generally regulated by the EU Emissions Trading System (EU ETS), which is a European cap-and-trade mechanism for the power and industry sectors covering 40 percent of emissions. All other emissions are the sole responsibility of EU Member States. In accordance with the effort sharing law, Member States have to meet national targets for transport, buildings and agriculture.


The EU ETS has proven to be an effective tool in reducing GHG emissions. It is clear that when the carbon price is sufficiently robust, it becomes a strong driver for immediate change, and a clear signal for low carbon investments. It thus contributes decisively to the deployment of renewable energy and energy efficiency technologies. Therefore, the Commission is thinking about the development of an expanded EU ETS that would also include road transport. The Commission argues that in road transport, emissions trading has the advantage of capturing fleet emissions under the cap and simultaneously incentivizing behavioral change with lasting effects on mobility solutions through the price signal.