This article is part of our special report EU transport decarbonisation: What’s the cost?.
The study by Farm Europe aims to contribute to the discussion on the state of the draft NECPs from the perspective of the transport sector.
It examines all the 28 draft NECPs from this point of view, underlining the importance of the need to make vital efforts in this area for Europe to succeed and reach its energy and climate targets. It focuses on the question whether or not the proposed measures, ambitions and tools in these draft Plans are truly able to effectively contribute to the decarbonisation of the European transport sector.
The European Union has both external and internal climate commitments. Externally, the European Union has made a pledge under the Paris Agreement to achieve a certain level of decarbonisation across all the Member States. Internally, the European Union has tried to translate these Paris Agreement obligations into targets for energy decarbonisation (through the Renewable Energy Directive), energy efficiency (through the Energy Efficiency Directive), industrial/power decarbonisation (through the EU ETS system of tradable carbon credits), and “everything else” decarbonisation (through the Effort Sharing Regulation targeting transport, agricultural, waste and other sectors not included in the EU ETS system).
At the heart of this system is the Energy Governance Regulation, which is what is supposed to draw these various policies into an integrated whole to allow them to be quantified, measured, costed and stress tested to ensure that the EU’s amorphic “ambitions” actually add up to not less than the tons of carbon dioxide abatement of its Paris Agreement obligations.
Accordingly, the Energy Governance Regulation compels all Member States to generate integrated National Energy and Climate Plans, laying out what they will do between now and 2030 under the various directives and regulations described above. The Commission is then supposed to crunch the numbers to determine whether these NECPs aggregate to compliance under these directives, regulations and the Paris Agreement. The final NECPs are due to be submitted to the Commission by the end of 2019.
As a result of all this, we know a good amount about where the EU’s GHG emissions are coming from today and where they came from 10 years ago. Therefore, we know that most emissions, not surprisingly, come from three energy sectors roughly equally divided now among power generation (electricity), heating and cooling (mostly for industries) and transport. However, it is a new phenomenon that there is rough parity among these energy sectors. Whereas transport in 1990 accounted for only 15% of total EU GHG emissions, it now accounts for over 25% (Eurostat).
Indeed, the transport sector has become the number one issue of EU decarbonisation policy, as its emissions track record has not improved in the last decade but on the contrary is on the rise. In contrast, there is visible progress outside the European Union, for example in the United States and Brazil. Both countries have shown that transport decarbonisation at scale is not only achievable, but need not be expensive or contentious or even be the result of “climate ambition”.
Progress in GHG reductions in Europe to date is largely due to EU success with relatively painless “low hanging fruit” in the power sector in the past decade, leading to assertions of climate leadership by the Union. However, this achievement has obscured the lack of meaningful decarbonisation in transport. It is probable that large parts of the EU will not meet their 2020 targets. In this eventuality there is a case to be made that meaningful action on transport decarbonisation could have ensured 2020 success.
What is absolutely clear is that for a 2030 success meaningful transport sector decarbonisation is required. In the next decade, if the EU ignores again the transport sector it will be left with no plausible path to comply with its Paris Agreement obligations.
Thus there is a large cloud hanging over the EU’s current climate policy.
Throughout the Member States and Institutions there is a noticeable trend to propose increased targets and ambitions for 2030, 2050 or even for 2100. This is a tendency that can easily escalate into a state of postponing much needed actions into the distant future that distracts the focus from concentrating on what could, should and needs to be achieved for today’s world.
This report aims to highlight this problem more clearly by focusing on transport sector energy. A similar analysis could just as easily apply to every other energy and non-energy sector in the EU, but that would be a far more complicated exercise than just focusing on transport sector energy. It is logical that similar efforts should be made for other sectors. There is a real possibility that the results would be similar, albeit perhaps not as disappointing as for transport sector energy.
Today there is no plausible argument that the NECPs as they were published in draft form earlier this year aggregate to any meaningful level of transport decarbonisation by 2030. Based on observing the draft NECPs or the Commission’s public comments attached to them, there is little room to assume that any substantive effort will be undertaken by the Commission to calculate in a systematic way the tons of carbon abated by the EU through 2030 – which is the only metric for compliance with the Paris Agreement – or the costs of such abatement – which is the only way to provide a credible and predictable path for a successful climate policy, which will not be overturned but supported by society as a whole when the challenges and their consequences arise (It is not without a precedent that social unrest and protests have happened before – see France in 2018-2019 – due to policy changes in such climate-related issues as fuel taxes). Openness on cost to citizens, taxpayers and society is important.
Therefore, it is of utmost importance that society has a clear understanding of what to expect for the future and that citizens support chosen policy tools in order to achieve climate targets. Discussions today focus on “ambitions” rather than on good governance. It is hard to argue against ambitious but vague policies targeting 2100. The real work is gaining public support for and implementing policies that will reduce oil consumption next year, albeit at some level of cost. Hence, the current deficiency in cost and implementation details from all the discussions makes it hard to argue that there is truly forward progress.
Regarding the assessment that we undertook, we examined the plans, targets, policy tools and initiatives for the transport sector in each draft NECP. As the chart below shows, we found that only Finland and Italy submitted a draft NECP with a clear and coherent transport plan where all renewable technologies are considered. A handful of countries (CZ, FR, GR, HU, SI) apply a comprehensive approach to renewable energy technologies in transport, furthermore, Spain’s transport decarbonisation pathway could be considered clear.
The cost of transport decarbonisation is key, yet it is only discussed in two NECPs in any meaningful way. The carbon abatement cost of transport decarbonisation is the ultimate metric to gauge if a policy is cost effective or not. No draft NECPs contains a carbon abatement cost calculation or a ranking based on costs of the transport decarbonisation options. It is that an ambitious policy whose cost is unknown (or hidden) will lose public support when the costs become known and real. Furthermore, it is unlikely that citizens of one country will continue to support a set of policy measures costing two or three times as much per ton of carbon abated than in a neighbouring country with more cost-effective policies while achieving the same climate outcomes.
Logic, and history, show that when climate plans are derailed by public protest, the beneficiary is fossil fuel. The most effective way to preserve oil’s status quo is to have climate policies that result in a public backlash. Therefore, only robust, ambitious and cost-effective final NECPs stand a chance to reign in fossil fuel dominance.
Public consultations play a key role in developing well-thought-out plans. Less than half of Member States held a public consultation for the draft NECPs. For the final NECPs EU regulation prescribes that public consultation must be carried out.
Based on the available literature, we calculated a transport sector carbon abatement cost under each NECP. The aim of the estimation was to indicate the rough magnitude of how much it would cost to abate 1 ton of carbon emission from transport. The figures are not intended to be definitive. It is the task of each Member State and the European Commission to come up with more precise calculations.
Our results show a transport carbon abatement cost of more than €500 on average in the EU under the NECPs, and there is a wide variation across countries. Compared to other sectors, transport decarbonisation is nowhere cheap, it is difficult to find technologies that cost less than a hundred Euros a ton, commonplace in other sectors. The chart below shows that in terms of cost of decarbonisation a lot depends on the choice of transport pathways and technologies.2 A given Euro will deliver substantially more carbon reduction in countries with well thought through transport policies.
It is important to note that in its communication3, the European Commission did not raise any significant objections or recommend any structural changes to any NECP as in general its major comment was a call to increase the ambition. This per se leads to the conclusion that the Commission has in fact approved the part regarding the transport policies of the draft NECPs. Our assessment shows that major revisions are needed if the final NECPs are to stand a decent chance of bringing about cost-effective transport decarbonisation before 2030.
In conclusion, most draft NECPs do not present a robust transport decarbonisation pathway between 2020 and 2030. The draft plans appear to be insufficiently clear and coherent to be aggregated at EU level into a meaningful evaluation of whether the EU will meet its Paris Agreement obligations.