This article was originally published in Energy Spectrum Issue 687 on 21 October 2019. For recent news and analysis on the energy market, find out more about our weekly publication, Energy Spectrum, here.
The European Commission (EC) presented the European Green Deal on 11 December, which sets out how to make Europe the first climate-neutral continent by 2050.
The EC said the deal, shown in Figure 1, provides a roadmap to move to a clean, circular economy and stop climate change, revert biodiversity loss and cut pollution.
The EC will present the first ‘European Climate Law' by March 2020. It will also present the Biodiversity Strategy for 2030, the new Industrial Strategy and Circular Economy Action Plan, the Farm to Fork Strategy for sustainable food and proposals for pollution-free Europe. Work will begin immediately for increasing the ambition on Europe's 2030 emissions targets, setting a realistic path to the 2050 goal. By summer 2020, there will be a comprehensive plan to increase the EU 2030 climate target to at least 50% and towards 55% of emissions compared with 1990 levels “in a responsible way”.
To achieve these additional emissions reductions, the EC will, by June 2021, review and propose to revise where necessary, all relevant climate-related policy instruments. This will contain the Emissions Trading System, including a possible extension of European emissions trading to new sectors of the economy. It will also include Member State targets to reduce emissions in sectors outside the Emissions Trading System, and the regulation on land use, land use change and forestry. The EC will propose to amend the Climate Law to update it accordingly.
Meeting the objectives of the European Green Deal will require significant investment, the EC said. Achieving the current 2030 climate and energy targets is estimated to require €260bn (£219bn) of additional annual investment, representing about 1.5% of 2018 GDP.
The EC will present in early 2020 a Sustainable Europe Investment Plan to help meet investment needs. At least 25% of the EU's long-term budget should be dedicated to climate action and the European Investment Bank will provide further support. For the private sector to contribute to financing the green transition, the EC will present a Green Financing Strategy in 2020. In March 2020, the Commission will launch a ‘Climate Pact' to give citizens a voice and role in designing new actions, sharing information, launching grassroots activities and showcasing solutions that others can follow.
A Just Transition Mechanism will support regions that rely heavily on carbon intensive activities. It will support the citizens most vulnerable to the transition, providing access to reskilling programmes and employment opportunities in new economic sectors.
For the deal to progress, the European Parliament and Council will both need to endorse it.
This deal, which has received praise, could see the EU become the first major economic area to become net zero, perhaps setting an example for other major global players.
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