Erick Burgueño Salas
Research expert covering climate change and the water industry
The European Union has introduced a set of initiatives to combat climate change by reducing greenhouse gas emissions on the continent. The most encompassing is the European Green Deal, which was introduced in late 2019 and approved the following year. This deal spells out the EU’s goal of achieving carbon neutrality by 2050. A follow-up package named Fit for 55 was announced in the summer of 2021 and specifically addresses the targets to be achieved by 2030. A third important addition is the the RePowerEU plan, which was proposed in May 2022 in response to the Russia-Ukraine war and the high energy import dependency in Europe.
The European Green Deal further aims at ensuring that economic and environmental progress would not harm society’s poorest, with carbon tariffs included for member states with less available resources. A Farm-to-Fork strategy and other policies ensuring the implementation of a circular economy, as well as afforestation are also addressed.
In the short- to mid-term around one trillion euros are expected to be raised through various budget means, including the post-pandemic Recovery Plan and green bonds. In 2022, the value of green bonds issued in Europe stood at 229 billion U.S. dollars, the highest in the world.
European Green Deal: overall targets and financing
In line with the Paris Agreement, the overarching objective of the European Green Deal is for the EU to achieve net zero emissions of greenhouse gases by 2050. Greenhouse gas emissions in the EU had already declined by around a third in 2021, compared to 1990 levels (a year often used as a baseline to compare progress to). The energy sector remains the single greatest contributor to GHG emissions in the EU, despite also noting the most prominent fall in overall emission volumes.The European Green Deal further aims at ensuring that economic and environmental progress would not harm society’s poorest, with carbon tariffs included for member states with less available resources. A Farm-to-Fork strategy and other policies ensuring the implementation of a circular economy, as well as afforestation are also addressed.
In the short- to mid-term around one trillion euros are expected to be raised through various budget means, including the post-pandemic Recovery Plan and green bonds. In 2022, the value of green bonds issued in Europe stood at 229 billion U.S. dollars, the highest in the world.
Fit For 55: mid-term targets and ETS extension
The EU’s Fit for 55 package expands on the European Green Deal and addresses mid-term targets. The main goal is to achieve GHG emissions reductions of 55 percent (compared to 1990 levels) by 2030. The measures underlying this goal include increased efficiency for final energy consumption, no new internal combustion engine cars sold after 2035, greater investments in alternative fuels in the maritime and aviation industry, renewable energy sources making up 40 percent of the total energy mix, and carbon dioxide removal by strengthening natural carbon sinks. The package also banks on revisions of the energy taxation system and EU Emissions Trading System, the first major carbon market launched in the world.RePowerEU: reducing reliance on Russian fossil fuels
When Russia invaded Ukraine in late February 2022, it made the EU reevaluate its reliance on trading with Russia, particular for energy sources. Within this context, the RePowerEU plan intends to make the bloc independent of Russian imports before 2030, a goal meant to be partially achieved by tightening the targets set under the Fit for 55 scheme. For example, renewable energy sources are to be deployed at a faster pace to make up 45 percent of total energy consumption by 2030. Energy saving incentives to reduce oil and gas demand in the short-term have also been put forward. Meanwhile, the EU’s objective of constructing more LNG terminals in order to diversify its gas supply chain has been among the more controversial targets included.
