The Commission’s 2030 Climate Target Plan sets out required actions for a number of sectors.
By Paul A. Davies and Michael D. Green
On 17 September 2020, the European Commission (Commission) presented its 2030 Climate Target Plan, which calls for a greenhouse gas (GHG) emissions reduction target of at least 55%, compared to 1990 levels; sets out required actions for a number of sectors; and identifies key changes to be made to existing legislation.
To announce the 2030 Climate Target Plan, the Commission released a Communication, a synopsis report that analyses responses to previous consultations, and an impact plan.
In December 2019, the Commission announced the European Green Deal, a comprehensive environmental plan that included a 2050 zero-carbon target. In March 2020, the Commission adopted an Inception Impact Assessment on the 2030 Climate Target Plan. More recently, Commission President Ursula von der Leyen announced a more ambitious GHG target of at least 55%, which is now confirmed in the Communication.
According to the Communication, the following sectors will need to take certain actions in order to meet the 55% target by 2030:
Buildings and power generation: The building sector will be required to make GHG emissions reductions of at least 60%, compared to 2015 baseline values. Power generation will become greener primarily through an uptake in renewables and application of the “energy efficiency first” principle. More generally, the Communication calls for avoiding unsustainable intensification of forest harvesting for bioenergy purposes.
Transport sector: Renewable energy must form 24% of the market by 2030. The target can be achieved through further development and deployment of electric vehicles, advanced biofuels, and other renewable fuels. Access to batteries (for electric vehicles) and clean hydrogen is also considered crucial.
Non-CO2 emissions: The climate target requires a 35% reduction in methane, nitrous oxide, and fluorinated gases by 2030, compared to 2015 values. Turning waste from the agricultural sector into an energy resource is considered essential in reducing such emissions.
Land use: Restoring and growing the land carbon sink, namely, the ability of the natural environment to absorb CO2 is vital. This can be achieved through improved and enforced forest protection and more sustainable forest management.
The Commission has proposed the following legislative changes in order to achieve the 55% goal:
Trading emissions scheme
The Commission recommends expanding the EU Emissions Trading System (EU ETS) to cover all emissions resulting from fossil fuel combustion and from road transport and building. For sea, intra-EU maritime transport should be included in the EU ETS, and for aviation, the number of freely allocated allowances should be reduced.
The EU will need to strengthen the cap of the EU ETS in order to create a long-term carbon price signal and drive further decarbonisation. This will require revisiting the linear reduction factor beyond its current level of 2.2%. The Commission will assess these areas as part of the 2021 review of the Market Stability Reserve.
Renewable energy policies
Renewables will need to be deployed at a larger scale. The Commission notes that the transition to climate neutrality requires a competitive, secure, and sustainable energy system, as well as a robust internal market framework. The Commission will look into capacity-building schemes to implement citizen-driven renewable energy communities. To further support the 55% target, legislation will be supported by the forthcoming Commission initiatives: Renovation Wave, Offshore Energy Strategy, and Sustainable and Smart Mobility Strategy.
Energy efficiency policies
In relation to buildings, the forthcoming Renovation Wave will propose a series of actions to increase the depth and rate of renovations. The Commission will take action to better enforce the Energy Performance of Buildings Directive; it will also present dedicated guidelines in the first quarter of 2021.
Road transport CO2
In the coming months, the Commission will assess what is required for this sector to achieve climate neutrality by 2050. Ambitious CO2 emissions standards for cars and vans and a revision of the Energy Taxation Directive will likely form part of the proposed measures. For transport, the Impact Assessment preceding the Communication highlights the role for electrification as a key avenue for decarbonisation.
The Commission expects to make detailed legislative proposals by June 2021. Latham & Watkins will continue to monitor developments in this area.
This post was written with the assistance of Sabina Aionesei in the London office of Latham & Watkins.
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