2020 for sure was a disaster year, in which the world has been brought to standstill because of a virus so small, that it cannot be seen – even with a normal microscope. But in the future, this year may well be regarded as a turning point at which the planet has decidedly steered away from disastrous global warming, onto a path of climate neutrality. And it is Europe, one of the (historically) largest polluters of the atmosphere, that is showing the lead. Much depends however if all the promises put on paper to halt climate change, will be fulfilled. An overview of EU climate action in 2020 (and an outlook to 2021) is appropriate.
The right high-level ambitions are all there. Ursula von der Leyen, the new EU Commission president, has made climate her absolute spearhead with the announcement of the European Green Deal in December 2019. It is an ambitious and holistic programme without precedent. In March 2020, the Commission published its proposal for the first European Climate Law, which aims to put into legislation that Europe’s economy and society have to become climate-neutral by 2050. Almost nowhere in the world exist such legally binding and stringent climate laws, except for maybe the UK. The entire European economy must become more sustainable and transform into a circular economy, while almost the entire energy supply will run on wind, solar and hydrogen. Biodiversity in Europe will also be fully restored and agriculture made more sustainable. This action plan will require at least EUR 260 billion per year in additional investment until 2040.
New climate target for 2030
The climate law was just the start of a long string of legislative and non-legislative actions. An obvious and urgent one was to boost the climate ambitions for the next decade, as the world only has a few years left to severely cut emissions or otherwise face a future in which the global temperature goes up with more than two degrees celsius. This is why the Commission proposed to decrease greenhouse gas emissions by at least 55% by 2030 (compared to 1990 levels). The European Parliament had a big internal fight over this goal. More conservative, pro-industry parties found this goal too high and damaging for the European economy, while progressives and greens were pushing for an even higher target of 65% reduction. The same conundrum took place between the EU member states, notably between the western and eastern parts of the EU. Countries like Poland, Hungary and Romania are still heavily reliant on coal and nuclear energy and they oppose a quick energy transition.
In 2019, the actual figure of greenhouse gas reductions in the EU was only 24%, so what was basically on the negotiation table was no less than a complete overhaul of Europe’s economy in a mere whisper of time. To the surprise of many, in December the European Council succeeded to support the original 55% target of the Commission. This clears the way for the three EU institutions to come to a final agreement on the revised 2030 target, probably early 2021.
Two important developments will make the ambitious climate target more feasible. First, the coronacrisis. When covid-19 hit Europe, it was feared that the virus would push climate down on the political agenda and that governments would direct their funds to saving the economy, rather than investing in climate action. But thanks to continued pressure from the Commission and several progressive EU Member States, the opposite has happened. The EU has established a whopping 750 billion euro ‘NextGenerationEU’ recovery fund to overcome the crisis, and up to a third of this fund will be earmarked for climate-friendly investments. Also in the new seven-year budget, funds have been allocated for the transition to a green economy.
Secondly, the EU is reforming its Emissions Trading System (ETS), which is a complicated system to put a price on carbon pollution. The ETS has never been a real success because the price of the certificates to allow industries to emit CO2, simply was too low. Also many parts of the economy do not fall under the ETS, such as transport. But since 2019, the cost of a carbon permit has steadily risen to 30 euros a tonne, which means that a real incentive now emerges for industries to find carbon-free alternatives to their production or operation. In June 2021 the Commission will propose a new reform of the ETS, in which not only the amount of tradeable certificates will be limited but where the system will now also apply to the shipping and aviation sector. According to experts, a carbon price of 50-100 euros a tonne is needed in order to really push Europe’s industry to decarbonise.
Circular economy, second chance
The European Green Deal also sets an ambitious roadmap towards a climate-neutral circular economy, where economic growth is decoupled from resource use. In such a form of the economy, materials can be reused over and over again and products can be easily disassembled to allow repairs and a longer lifespan. This is not a new concept, the Commission has been advocating for the ideal of a circular economy for a decade. But it is hard to get rid of the take-make-waste linear economy model that the world is stuck in. Currently, only 12% of materials and raw materials are recycled in Europe, so the circular economy remains an unattainable dream for the time being.
This is why in March 2020, the Commission came up with a new Circular Economy Action Plan, basically using its powers as broker for the EU single market to intervene and make sustainable products the new golden standard. There are dozens of actions and milestones that the EC will undertake in this field in the next few years, notably to rebuild ‘key product value chains’ such as electronics, packaging, batteries, plastics, fabrics, construction and food. Whereas in the former action plan the measures where ‘regulatory-light’, in the new plan there are a lot of new and revised regulations coming to Europe’s industries. Watch this space as it will attract a lot of policy and advocacy attention in the EU Bubble, from NGOs and research bodies, as well as from trade associations and MEPs.
The energy transition
As the bulk of manmade greenhouse gas emissions happen because of the usage of fossil fuels (oil, gas and coal), most focus in the fight against climate change lies on ‘decarbonising’ our economy. In the EU, almost 30% from the emissions come directly from the energy sector and almost a quarter are related to the transport sector (including aviation), whereas most houses and buildings in Europe continue to be heated with gas.
The way out of this system is fairly simple on paper: we have to ‘electrify’ everything and the use cases that can not be electrified, should switch to ‘green hydrogen’. For the first category, this includes electric vehicles, boats, small airplanes and heat pumps, combined with a strategy to increase energy efficiency across the board. As for the really heavy industry and transport, such as steel and aluminium factories, big planes and ships, the switch to hydrogen or synthetic fuels is a must.
Again, here is nothing new as the EU has had targets for the uptake of renewable electricity and for higher energy efficiency standards for a long time, though they were not mandatory for EU Member States. But the ambition has to be scaled up if the energy transition needs to be completed by 2050. Otherwise we will continue to need coal and gas power plants, as well as nuclear, to cover for the increased demand for electricity. This is especially true for the production of green hydrogen as this has to be done with 100% renewable electricity (instead of natural gas).
The good news is that the share of renewables in the EU’s energy mix continues to rise, as prices for solar and wind continue to drop. Many EU Member States have announced large-scale deployment plans of both renewable electricity sources, as they are now competitive to (and in many cases cheaper than) electricity made from the burning of coal and gas. But renewables only make 15% of the EU’s energy mix (2018 figures) so the way to a fully decarbonised energy system is still very long.
Note June 2021 in your calendar as in that month, the Commisison will propose new legislative proposals in this field, including a revision of the Renewable Energy Directive as well as the Efficiency Energy Directive. Advocacy behind and in front of the scenes has already started, for instance in the public consultations that the Commission has launched on both directives (deadline 9 February 2021).
Farm to Fork
Saving the climate entails more than just getting rid of fossil fuels and decrease the world’s hunger for resources. It is also about making our food system more sustainable. Globally, agriculture is responsible for a quarter of the extra greenhouse gas emissions, for a large part because of livestock breeding. It is also connected to severe degradation of our biodiversity and the environment, as well as air pollution.
The Commission has therefore launched another set of action plans in May 2020: the ‘Farm to Fork Strategy’ and the revised Biodiversity Strategy. They are in the very heart of the European Green Deal, according to the Commission. The focus on ‘Farm to Fork’ means that farmers in the EU need to halve their use of pesticides, as well as slashing their usage of fertilisers and antibiotics. Also, 25% of Europe’s agricultural land should be dedicated to organic farming by 2030. The Biodiversity Strategy has quite a few shared goals with the farming strategy, restoring degraded ecosystems across the EU and better preserving nature areas. Until now, the EU has missed all its current targets for protecting biodiversity, so this part of the European Green Deal needs to be followed critically.
Green Dealing in 2021: legislative train at full speed
As in any cycle of the 5-year tenure of the European Commission, the opening year of sweeping statements and bold promises of von der Leyen’s team has come to an end. The next phase of her presidency of the Commission is all about translating the policy goals into technical regulatory language. In 2021 we will see a lot of these efforts being played out, with a string of public consultations, impact assessments, delegated and implementing acts and reviewed directives on the agenda. In EU speak: the legislative train is driving at full speed.
There are also non-legislative initiatives that should be taken into consideration by stakeholders in the Brussels Bubble. The Commission will start organising more events under the umbrella of the European Climate Pact, an attempt to bring together thousands of different organisations, companies and individuals to turn the fight against climate change in Europe into a societal movement.
In March 2021, the Commission will announce the Green Digital Alliance. The EC is bringing together major leaders of the ICT industry and have them commit to carbon neutrality by 2030, two decades ahead of the headline goal for the economy at large. The companies will also commit to developing a calculator for the enablement effect of digital solutions: IT as an enabler to reduce greenhouse gas emissions and accelerate the energy transition. The Commission regards the green and digital revolution as a twin revolution in which one cannot do without the other, and wants companies to take the lead.
Finally, the UN will host another climate summit, COP26 in the jargon, November 2021 in Glasgow. COP26 was scheduled for 2020 but it was delayed due to the coronacrisis. On the agenda are, amongst other hot topics, increased ambition targets of countries around the world, as the promises they made after the 2015 Paris Climate Agreement, are by far not sufficient to limit global warming to two degrees celsius. With a new pro-climate action American President in the White House, COP26 will play a very important role to get the entire world to commit to carbon neutrality by 2050.