Europe’s new climate plan heralds energy ‘transformation’

European Commission Vice President Frans Timmermans (L) and EU Commissioner for Energy Estonia's Kadri Simson (R) give a joint press conference on the Commission's plan to step up the EU's climate ambition for 2030 at the EU headquarters in Brussels, Belgium, 17 September 2020. [EPA-EFE/JOHN THYS]

Meeting the EU’s proposed new climate targets for 2030 will require a “transformation” of the bloc’s energy system, with a renewed focus on renewables and further efforts to cut fossil fuels in buildings, transport and industry, the European Commission has said.

“Climate change is the defining challenge of this century,” said Kadri Simson, the EU’s energy Commissioner. “And to meet this challenge, we need both long-term vision and immediate action,” she said as the EU executive presented its new climate plan for 2030 on Thursday (17 September).

The centrepiece of the Commission’s new climate plan is the objective to reduce greenhouse gas emissions by 55% by 2030 – a move it says will put the EU on track to reach climate neutrality by mid-century, in line with the bloc’s international commitments made under the Paris Agreement.

Achieving the EU’s updated climate target “would result in a new and greener energy mix,” the EU executive says. “By 2030, coal consumption would be reduced by more than 70% compared to 2015, and oil and gas by more than 30% and 25%, respectively,” it said in new policy proposals unveiled on Thursday.

Renewable energy, meanwhile, would see its share soar from 18.9% in 2018 to reach 38-40% of gross final consumption by the end of the decade. In electricity, this would mean “at least” doubling today’s share of renewables from 32% to “around 65% or more,” the Commission points out.

'We can do it!': EU chief announces 55% emissions reduction target for 2030

European Commission President Ursula von der Leyen announced plans on Wednesday (16 September) to target a 55% cut in greenhouse gas emissions by 2030 as part of a broader European Green Deal programme aimed at reaching “climate neutrality” by mid-century.

Focus on buildings and power sector

But those efforts, as impressive as they seem, will not be sufficient to displace fossil fuels altogether. “Our assessment shows that the energy mix in the European Union will still be dominated by fossil fuels, but significantly less than today,” said an EU official who was briefing the press after the presentation of the bloc’s new 2030 targets.

According to the Commission, buildings and power generation can make “the largest and most cost-efficient emissions reductions” to reach the bloc’s new climate goals for 2030, with EU estimates pointing to potential CO2 cuts “in the order of 60% and more compared to 2015”.

Buildings, in particular, will continue relying chiefly on fossil fuels if nothing is done to overturn this by the end of the decade.

“Many homes are still heated with outdated systems that use polluting fossil fuels such as coal and oil,” the Commission points out, reminding that the building sector today is responsible for 40% of the EU’s final energy consumption and a whopping 36% of its total greenhouse gas emissions.

Addressing this would require at least doubling the renovation rate of buildings, which currently remains stuck at around 1% annually. “In particular, deep renovations addressing building shells, smart digitalisation and the integration of renewable energy together need to increase strongly,” the Commission says.

In fact, deeper energy savings need to be applied across all sectors of the economy, the EU executive argues, saying consumers could achieve savings of 36-37% while primary energy consumption could fall by 39-41% with stronger policies in place.

EU building 'renovation wave' set for launch in September

The European Commission’s energy chief, Kadri Simson, has flagged the upcoming building renovation wave, rooftop solar, and offshore wind as key priorities for the energy sector in the recovery phase from the coronavirus crisis.

Carbon pricing

And to achieve deeper emission cuts, Europe’s number one policy tool remains the EU carbon market, the Emissions Trading Scheme (ETS), which forces power plants, factories and airlines running flights within Europe to buy permits to cover their emissions.

“In our transition to climate neutrality, carbon pricing will continue to play a key role,” said Frans Timmermans, the EU’s climate action Commissioner. A revision of the EU’s carbon trading scheme, expected to be tabled by June next year, will “look into expanding the ETS to road transport and buildings” as well as shipping, he confirmed.

A much-awaited revision of the EU’s energy taxation directive is also on the cards by the same date. “At present, a wide range of sectoral tax exemptions and reductions are de facto forms of fossil fuel subsidies, which are not in line with the objectives of the European Green Deal,” the Commission points out.

If those reforms are carried out as planned, carbon costs for businesses could double this decade to reach €59, according to analysis of the Commission’s modelling. This could be prohibitively high for businesses in countries like Poland, which have warned about the social cost of the transition to clean energy.

The Commission acknowledges this, saying carbon pricing policies also carry social risks – and not just in poorer eastern EU countries. In France, the “Yellow Vest” movement of 2018 was sparked by a seemingly benign €0.10 rise in the price of gasoline and diesel, which ended up with violent clashes in the streets of Paris between the police and protestors.

“I never made a secret of my scepticism in terms of bringing road transport under the ETS,” Timmermans said in reference to the potential social consequences of applying higher carbon prices to sectors directly affecting consumers and households.

“But since we’re technology neutral at the Commission, I’m open to be convinced if the study shows it’s an efficient way of doing it,” he added, saying a cost-benefit analysis will be made to evaluate the pros and cons of integrating transport into the EU’s carbon market.

“We need to pay great political attention to those social risks,” Timmermans replied in French to a journalist who asked about the risk of triggering a “Yellow Vest” movement at European level.

Road transport in the EU ETS: A high-risk, low-reward strategy

The Emissions Trading Scheme (ETS) is not a good instrument to cut road transport emissions because it will raise petrol prices and fuel popular discontent, as seen in the past with the ‘Gilets Jaunes’ protests, writes William Todts. Road emissions …

[Edited by Zoran Radosavljevic]

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