Compiled by Mitchell Beer
The European Union is “well on track” toward its goal of reducing its climate pollution 55% by 2030, and is expected to release a 90% target for 2040 on July 2.
An assessment by the European Commission (EC) shows that governments’ updated climate plans put them on track for a 54% emissions cut this decade. The calculation “relies on countries delivering on fresh promises despite a green backlash and surging focus on defence spending,” Politico reports.
“When we play our cards and instruments in a smart manner, we deliver as a continent,” said EC First Executive Vice President Teresa Ribera, who holds the competition and climate portfolio.
“The cost of inaction is rising,” Ribera told a media briefing last Wednesday. “Every climate disaster we are unprepared for hits harder. It imposes more cost to our economy and it creates more social harm.”
Although the top-line number is encouraging, the Commission said EU countries are failing to address energy poverty, falling short on their energy efficiency targets, and lagging on sustaining healthy forests and lands that will absorb the equivalent of 310 megatonnes of carbon dioxide per year by the end of this decade.
“We’ve come a long way, but we’re not where we need to be,” said EU Energy Commissioner Dan Jørgensen.
One official told the Financial Times the numbers are “surprisingly good, after the EC faced pressure to water down green legislation. In December 2023, Euractiv reported the continent was “significantly off-track” on its 2030 target. Last month, the EU formally adopted a regulation that requires 44 oil and gas companies to collectively inject 50 million tonnes of CO2 per year into geological storage sites by 2030, Open Access Government says.
“This initiative is an essential element of the EU’s climate policy, designed to make heavy industry part of the solution to greenhouse gas emissions,” the website states. “By requiring oil and gas companies to provide CO2 storage infrastructure, the EU is tying climate responsibility to historical fossil fuel production while enabling the growth of a new industrial sector that supports net-zero goals.”
Looking ahead, more than 150 businesses and investors signed a joint letter last week, urging the EU to adopt a minimum 90% emission reduction target by 2040. The letter calls on legislators to integrate the new target “into a comprehensive industrial strategy guided by a ‘competitive sustainability’ approach, allowing the EU to lead the global race of development of sustainable industrial ecosystems and industries,” the University of Cambridge writes.
It asks them to place the target “at the centre of the EU’s overall strategy to enhance energy security by accelerating the clean energy transition and energy efficiency, and phasing out fossil fuels.”
“A 2040 EU emission reduction target of at least 90% provides long-term certainty to investors,” said Günther Thallinger, a member of the Board of Management at financial services multinational Allianz SE. “This clarity enables confident capital allocation. Aligning national policy with climate science will help avert climate impacts. It will also unlock investment in sustainable infrastructure. We encourage policy-makers to deliver the clarity and ambition that investors are ready to support.”
“A strong EU 2040 target of at least 90% greenhouse gas reduction will be instrumental in creating the regulatory certainty and investment signals we need to decarbonize our operations and supply chains at speed and scale,” said Rebecca Marmot, chief sustainability and corporate affairs officer at consumer products giant Unilever. “Prioritizing deep emissions cuts is critical, not just for environmental integrity, but also for driving innovation and resilience in our business and across the European economy. This is about ensuring that climate ambition translates into real transformation, now.”
Politico says the target to be released July 2 will include some reliance on carbon credits, contrary to the message the EU is receiving from some advisors. That flexibility “will let EU countries meet part of the 2040 target by paying for emissions-cutting projects abroad instead of only reducing their own carbon footprint,” Politico writes, citing government representatives in Brussels who’d been briefed by EU Climate Commissioner Wopke Hoekstra.
“Carbon credits are meant to work like this,” Politico explains. “One country—say, an EU member—pays for a project that reduces emissions in another country (usually a poorer nation), for example, a solar farm that replaces polluting coal-fired power. But instead of the country hosting the solar farm counting the reduction toward its own target, the EU country would get the credit.”
In the real world, “such transactions have often failed to produce documented emissions cuts,” the news story adds. But a controversial carbon trading provision adopted at last year’s COP29 climate summit in Azerbaijan “has raised hopes that future credits will be better regulated.”
But the EU’s climate science advisers, the European Scientific Advisory Board on Climate Change (ESABCC), cautioned Monday that carbon trading would draw resources away from investments in “European industries and infrastructure,” Reuters writes.
“Using international carbon credits to meet this target, even partially, could undermine domestic value creation by diverting resources from the necessary transformation of the EU’s economy,” the ESABCC wrote in an analysis of the 2040 target.
Euractiv confirmed last week that Hoekstra will propose a 90% target, adding that Germany is already onboard with the plan.
“To make the target acceptable to EU countries who see the target as overly ambitious or unrealistic, the Commission is considering allowing governments to use carbon capture technologies and carbon credits based on ‘offsets’ outside the EU to help meet it,” Euractiv writes. “These potentially controversial offsets abroad would be capped at ‘a maximum of three percentage points of the 2040 target’ and have to come from ‘highly qualified, certified, and permanent projects’.”
This article first appeared in The Energy Mix, and is republished under a Creative Commons License.
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