EU sets new climate goal for 2040 — high ambition, yet gaps persist

EU sets new climate goal for 2040 — high ambition, yet gaps persist

Subject: Environment

Section: Climate change

Context:

• The European Union, through the European Commission, announced a new proposed climate goal, targeting a 90% reduction in net emissions by 2040 compared to 1990 levels.

Details:

• This follows the EU’s previous commitment in September 2020 to cut greenhouse gas emissions by 55% below 1990 levels by 2030, an increase from an earlier target of 40%.
• The 2030 target was formalized as the EU’s second Nationally Determined Contribution to the UNFCCC in December 2020 and was enshrined in the EU Climate Law in 2021, which also commits the EU to achieving carbon neutrality by 2050.
• To support the 2030 target, the Commission released the “Fit for 55” package in 2021, offering proposals to meet the emissions reduction goal.
• The 2024 proposal for a 2040 target is part of an interim step mandated by the EU Climate Law, following the first Global Stocktake at the 28th Conference of Parties to the UNFCCC in Dubai in December 2023, which requires the development of a 2040 target within six months of the GST conclusion.

Fossil fuel phaseout sees a timeline for coal but with caveats:

• The Global Stocktake (GST) emphasized the need to transition away from fossil fuels, aligning with the EU’s 2040 target to significantly reduce the use of coal, rapidly decrease natural gas usage, and phase out oil last.
• Despite the transition, a minimal amount of fossil fuels will still be used, primarily for non-energy purposes and long-distance transport. The shift in the energy mix will decrease fossil fuel imports but may increase imports of raw materials and critical minerals for renewable energy deployment.
• The EU’s energy crisis prompted diversification of energy suppliers and an increase in liquefied natural gas (LNG) imports, making the EU a key LNG importer.
• Record increases in renewable energy adoption in the EU saw wind and solar surpass fossil gas in electricity generation in 2022.
• The EU imports LNG from the United States, the Middle East, and Africa, with recent gas deals signed with Qatar and potential agreements with Nigeria and Mozambique, indicating continued gas imports beyond 2050.
• These gas import deals pose a risk of carbon lock-in and stranded assets, particularly for African countries expanding export capacities, especially if the EU’s new climate target leads to reduced fossil fuel imports.

Missing reflection of the EU’s historical emissions burden

• The EU’s 2030 goal aims for a 55% reduction in emissions, resulting in 2.16 gigatonnes of CO2 equivalent based on 1990 levels, while the 2040 target of a 90% reduction would lead to 0.48 gigatonnes of CO2 equivalent.
• The European Union Scientific Advisory Board for Climate Change recommended a reduction range of 90-95%, but the final 2040 proposal adheres to the lower end of this spectrum.

Heavy faith in carbon capture & CO2 removal:

• The EU’s 2040 climate proposal relies heavily on carbon capture, expecting carbon removals to reach 400 tonnes of CO2 by 2040, up from 310 tonnes of CO2 by 2030.
• Without carbon capture and removal technologies, actual emissions reduction would be around 84% by 2040, per Climate Action Tracker.
• The proposal envisions decarbonizing the energy sector shortly after 2040, utilizing renewables, nuclear, hydrogen, and carbon capture and removal technologies, with significant reliance on unproven carbon capture methods.
• About 40% of the carbon capture target is expected from direct air capture, which is costly.
• The 2040 proposal accompanies other climate policies like the Carbon Border Adjustment Mechanism (CBAM) and the Green Deal Industrial Plan, aiming to support domestic green technology manufacturing.
• The Net Zero Industry Act (NZIA) promotes the domestic production of green technologies and may include provisions for nuclear power.

Key initiatives in news:

1. Fit for 55:
   • Under this, the European Commission has asked all of its 27 member countries to cut emissions by 55 per cent below 1990 levels by 2030.
2. Global Stocktake: 
   • It refers to a proposed five-year review of the impact of countries’ climate change actions.
   • Under the Paris Agreement, every country must present a climate action plan in five-year cycles.
   • The first global stocktake was scheduled for 2023 under the Paris Agreement.
   • It will assess whether the net result of the climate actions being taken was consistent to keep the increase in global average temperature from pre-industrial times to within 2 degrees Celsius.
   • It also recognises that money needs to be made available for Loss and Damage and energy transition in developing countries.
3. Climate Action Tracker:
   • An independent scientific analysis that tracks government climate action and measures it against the globally agreed Paris Agreement aim of “holding warming well below 2°C, and pursuing efforts to limit warming to 1.5°C.” A collaboration of two organizations, Climate Analytics and New Climate Institute, the CAT has been providing this independent analysis to policymakers since 2009.
4. Net Zero Industry Act (NZIA): The European Commission proposed the NZIA on 16 March 2023.
   • NZIA will help strengthen the European manufacturing capacity of net-zero technologies and overcome barriers to scaling up the manufacturing capacity in
   • The measures in the Regulation will increase the competitiveness of the net-zero technology industrial base and improve the EU’s energy resilience.
   • This proposal shows Europe’s commitment to playing a leading role in the net-zero technology transition and helping to deliver on the Fit-for-55 and REPowerEU
5. Carbon Border Adjustment Mechanism (CBAM):
   • CBAM is part of the “Fit for 55 in 2030 package”, which is the EU’s plan to reduce greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels in line with the European Climate Law.
   • The CBAM is a policy tool aimed at reducing Carbon Emissions by ensuring that imported goods are subject to the same carbon costs as products produced within the EU.
   • Implementation:
     • The CBAM will be implemented by requiring importers to declare the quantity of goods imported into the EU and their embedded Greenhouse Gas (GHG) emissions on an annual basis.
   • To offset these emissions, importers will need to surrender a corresponding number of CBAM certificates, the price of which will be based on the weekly average auction price of EU Emission Trading System (ETS) allowances in €/tonne of CO2 emitted.
   • Objectives:
     • CBAM will ensure its climate objectives are not undermined by carbon-intensive imports and spur cleaner production in the rest of the world.

Source: DTE