European Council endorses 40% GHG cut by 2030; requests ways to cut transport emissions via efficiency, electrification and renewable fuels

24 October 2014

On 23 October, leaders of the European Union agreed on the climate and energy policy framework for the EU for the period from 2020 to 2030. During its meeting, the European Council endorsed 4 targets: a binding EU target of at least 40% less greenhouse gas emissions by 2030, compared to 1990; a binding target of at least 27% of renewable energy used at EU level;
an energy efficiency increase of at least 27%; and the completion of the EU-internal energy market by reaching an electricity interconnection target of 15% between members states and pushing forward important infrastructure projects.

The Council members also requested further examination by the European Commission on instruments and measures for a comprehensive and technology-neutral approach to reduce emissions and increase energy efficiency in transport, for electric transportation and for the use of renewable energy sources in transport after 2020.

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In its January 2014 communication to the Council on the proposed climate and energy policy framework (the basis for the current decision), the European Commission has noted that:

Further reduction of emissions from transport will require a gradual transformation of the entire transport system towards a better integration between modes, greater exploitation of the non-road alternatives, improved management of traffic flows through intelligent transport systems, and extensive innovation in and deployment of new propulsion and navigation technologies and alternative fuels. This will need to be supported by a modern and coherent infrastructure design and smarter pricing of infrastructure usage. Member States should also consider how fuel and vehicle taxation can be used to support greenhouse gas reductions in the transport sector in line with the Commission’s proposal on the taxation of energy products.

Internationally, the EU should participate actively within the International Civil Aviation Organisation with the aim of creating by 2016, a global market-based-mechanism in the aviation sector that will operate from 2020. On maritime emissions, the Commission will implement its strategy to integrate the sector in the EU’s greenhouse gas reduction policies, and work with International Maritime Organisation on a global approach to achieve the necessary emissions reductions through the most appropriate measures.

Commenting on the presentation of the climate and energy package for 2030, Neste Oil, the Finland-based refining and marketing company that is also currently the leading global seller of renewable drop-in diesel (NExBTL), said that the Council’s agreement should open up new opportunities for bioeconomy-related investments that can generate jobs and secure the EU’s energy base.

The European Council has made an important statement highlighting the importance it attaches to promoting the use of renewable fuels after 2020 and the activity by the Finnish government in this area has been very welcome. Around 20% of carbon dioxide emissions in the EU currently come from transport, and this figure is expected to rise in the future. This is why reducing transport-related CO₂ emissions has a central role to play in achieving greenhouse gas emissions targets, as well as those set for increasing renewable energy usage.

The European Council called on all countries to come forward with similar ambitious targets and policies well in advance of the UNFCCC (UN Framework Convention on Climate Change) Conference of the Parties 21 in Paris, to be held 30 Nov — 11 Dec 2015. The EC said it would re-examine this issue after the Paris Conference.

40% target. The 40% target is to be delivered collectively by the EU “in the most cost-effective manner possible”, with the reductions in the ETS (Emissions Trading System ) and non-ETS sectors amounting to 43% and 30% by 2030 compared to 2005, respectively. All Member States are to participate in this effort, “balancing considerations of fairness and solidarity.”

The Council said that a reformed Emissions Trading System (ETS) will be the main European instrument to achieve this target; the annual factor to reduce the cap on the maximum permitted emissions will be changed from 1.74% to 2.2% from 2021 onwards.

Free allocation will not expire; Member States with a GDP per capita below 60% of the EU average may continue to give free allowances to their energy sectors up to 2030. The maximum amount handed out for free after 2020 should be no more than 40% of the allowances allocated. Under the plan, a new reserve of 2% of the EU ETS allowances will be set aside to address particularly high additional investment needs in low income Member States.

The existing methodology to set the national reduction targets for the non-ETS sectors will continue until 2030, with efforts distributed on the basis of relative GDP per capita. All Member States will contribute to the overall EU reduction in 2030 with the targets spanning from 0% to -40% compared to 2005. Targets for the Member States with a GDP per capita above the EU average will be relatively adjusted to reflect cost-effectiveness.

Renewables and efficiency. The Council agreed to a binding target of at least 27% for the share of renewable energy consumed in the EU in 2030. The Council noted that the integration of rising levels of intermittent renewable energy requires a more interconnected internal energy market and appropriate back up, which should be coordinated as necessary at regional level.

The Council also set an indicative target at the EU level of at least 27% for improving energy efficiency in 2030 compared to projections of future energy consumption. This will be reviewed by 2020, having in mind an EU level of 30%.

Resources

• European Commission communication to Council (January 2014): A policy framework for climate and energy in the period from 2020 to 2030