On 11 December 2019, the European Commission presented the European Green Deal that sets out a detailed vision to make Europe the first climate-neutral continent by 2050, safeguard biodiversity, establish a circular economy and eliminate pollution, while boosting the competitiveness of European industry and ensuring a just transition for the regions and workers affected. The European Green Deal covers all sectors of the economy, notably transport, energy, agriculture, buildings, and industries such as steel, cement, ICT, textiles and chemicals. The figure below illustrates the various elements of the Green Deal.
Figure 1: The key elements of the Green Deal
In December 2020, political leaders from the EU member states endorsed a new target to cut emissions to “at least 55%” below 1990 levels by 2030 and to reach “climate neutrality” (net-zero) by 2050. These targets were made legally binding by the European Climate Law, which was agreed in April 2021 and formally adopted on 28 June 2021. A new European Climate Pact, launched in December 2020, aims to bring together regional and local authorities, civil society, industry and schools to agree on commitments to change behaviour.
In addition, the EC adopted a new EU strategy on Adaptation to Climate Change on 24 February 2021. This new strategy sets out how the EU can adapt to the unavoidable impacts of climate change and become climate resilient by 2050. The Strategy has four principal objectives: to make adaptation smarter, swifter and more systemic, and to step up international action on adaptation to climate change.
Tax policies are to be reformed in line with climate ambitions, which includes work on a carbon border tax and a review of the Energy Taxation Directive. The main objectives of revising the Directive are:
- aligning taxation of energy products and electricity with EU energy and climate policies, to contribute to the EU 2030 energy targets and climate neutrality by 2050;
- preserving the EU single market by updating the scope and the structure of tax rates, and rationalising the use of optional tax exemptions and reductions.
Figure 2: EC’s Statement on their first major climate milestone will be a 55% reduction of emissions by 2030. And by 2050, EC’s aim to make the EU climate neutral.
On 14 July 2021, the EC adopted the Fit for 55 Package of proposals to make the EU’s climate, energy, land use, transport and taxation policies fit for reducing net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels. Achieving these emission reductions in the next decade is crucial to Europe becoming the world’s first climate-neutral continent by 2050 and making the European Green Deal a reality. The EC is presenting the legislative tools to deliver on the targets agreed in the European Climate Law and fundamentally transform the economy and society for a fair, green and prosperous future. The Fit for 55 Package will enable the necessary acceleration of greenhouse gas emission reductions in the next decade as it combines the following:
application of emissions trading to new sectors and a tightening of the existing EU Emissions Trading System;
- increased use of renewable energy;
- greater energy efficiency;
- a faster roll-out of low emission transport modes and the infrastructure and fuels to support them;
- an alignment of taxation policies with the European Green Deal objectives;
- measures to prevent carbon leakage; and
- tools to preserve and grow our natural carbon sinks.
To make the EU a world leader in the circular economy and clean technologies, and to decarbonise energy-intensive industries, a new European Industrial Strategy was adopted in March 2020 aligned with the EU Green Deal and updated in May 2021 to ensure it takes account of the new circumstances following the COVID-19 crisis, while ensuring European industry can lead the way in transitioning to a green, digital and resilient economy.
The EC adopted the new Circular Economy Action Plan (CEAP) in March 2020 and it is one of the main building blocks of the European Green Deal, as Europe’s new agenda for sustainable growth. The EU’s transition to a circular economy will reduce pressure on natural resources and will create sustainable growth and jobs. It is also a prerequisite to achieve the EU’s 2050 climate neutrality target and to halt biodiversity loss. For more information, visit here.
Figure 3: The EU Circular Economy Action Plan (2020)
Another key objective of EU’s Green Deal is mainstreaming biodiversity across all policy areas, with a Biodiversity Strategy for 2030 adopted in May 2020. The biodiversity strategy aims to put Europe’s biodiversity on the path to recovery by 2030 for the benefit of people, climate and the planet. In the post-COVID-19 context, the strategy aims to build our societies’ resilience to future threats such as the impacts of climate change, forest fires, food insecurity, and disease outbreaks – including by protecting wildlife and fighting illegal wildlife trade.
Additional elements of the EU Green Deal include A Renovation Wave for Europe – Greening our buildings, creating jobs, improving lives, a strategy aims to double annual energy renovation rates in the next 10 years for the building sector, and a new Farm to Fork Strategy adopted in May 2020 for a fair, healthy and environmentally-friendly food system. Food systems cannot be resilient to crises such as the COVID-19 pandemic if they are not sustainable.
The EU’s ambitious commitment to become the first climate-neutral continent in the world by 2050 requires substantial investment from both the EU and the national public sector, as well as the private sector. In January 2020, the EC presented a communication on the Sustainable Europe Investment Plan (also known as European Green Deal Investment Plan) that aims to increase funding for the transition by mobilising €1 trillion for sustainable investment over the next decade through the EU budget and associated instruments like InvestEU; create an enabling framework for sustainable investment; and support the identification, structuring and execution of sustainable projects.
At the same time, the EC presented a legislative proposal for a new Just Transition Fund, which was adopted in January 2020 and amended in May 2020, to support the people and regions most affected by the low-carbon transition. The new fund is part of a just transition mechanism that cuts across different funds and financing instruments and should mobilise at least €100 billion in public and private investment.