Explanatory Memorandum to COM(2020)80 - Framework for achieving climate neutrality and amending Regulation (EU) 2018/1999 (European Climate Law) - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2020)80 - Framework for achieving climate neutrality and amending Regulation (EU) 2018/1999 (European Climate Law). |
|---|---|
| source | COM(2020)80  |
| date | 04-03-2020 |
1. CONTEXT OF THE PROPOSAL
• Reasons for and objectives of the proposal
The European Green Deal Communication 1 launched a new growth strategy for the EU that aims to transform the EU into a fair and prosperous society, improving the quality of life of current and future generations, with a modern, resource-efficient and competitive economy where there are no net emissions of greenhouse gases in 2050 and where economic growth is decoupled from resource use. The European Green Deal reaffirms the Commission’s ambition to make Europe the first climate-neutral continent by 2050.
Tackling climate change is an urgent challenge. The atmosphere is warming and this is affecting citizens already now. European citizens see climate change as a serious problem and want to see increased action. 2 Climate Change is having an increasingly severe impact on our planet’s eco-systems and biodiversity, in addition to our health and food systems. The Intergovernmental Panel on Climate Change (IPCC) Special Report on the impacts of global warming of 1.5 °C above pre-industrial levels and related global greenhouse gas emission pathways confirms that the impacts of climate change increase rapidly with increasing global mean temperature, and indicates that already at 2 °C the world would see dramatic impacts due to climate change. It estimates that in order to be on a pathway to limit temperature increase to 1.5 °C, net-zero CO2 emissions at global level needs to be achieved around 2050 and neutrality for all other greenhouse gases somewhat later in the century. This urgent challenge calls for the EU to step up its action to show global leadership by becoming climate-neutral by 2050, covering all sectors of the economy and compensating, by 2050, not only any remaining CO2 but also any other remaining greenhouse gas emissions, as set out in the Communication ‘A Clean Planet for all- A European strategic long-term vision for a prosperous, modern, competitive and climate-neutral economy’ 3 and as confirmed by the ‘European Green Deal’ Communication.
Both the European Parliament and the European Council have endorsed the long-term EU climate-neutrality objective.
The European Parliament has endorsed the EU objective of achieving net-zero greenhouse gas emissions by 2050 in its resolution of 14 March 2019 on climate change 4 . In resolutions of 28 November 2019, it stressed that the Union, as a global leader and together with other major global economies, needs to strive towards reaching net-zero greenhouse gas emissions as early as possible and by 2050 at the latest 5 , and declared a climate and environment emergency. 6 The European Parliament also urged the Commission to fully assess the climate and environment impact of all relevant legislative and budgetary proposals, and ensure full alignment with the objective of limiting global warming to under 1.5 °C and that they are not contributing to biodiversity loss, and that there be far-reaching reform of agricultural, trade, transport, energy and infrastructure investment policies. In its resolution of 15 January 2020 on the European Green Deal, the European Parliament called for the necessary transition to a climate-neutral society by 2050 at the latest and for this to be made into a European success story. 7
The European Council has set building a climate-neutral, green, fair and social Europe as one of the main four priorities in its Strategic Agenda for 2019-2024 8 . In its conclusions of 12 December 2019, the European Council, in the light of the latest available science and of the need to step up global climate action, endorsed the objective of achieving a climate-neutral EU by 2050, in line with the objectives of the Paris Agreement 9 . The European Council recognised the need to put in place an enabling framework and that the transition will require significant public and private investments. The European Council also concluded that all relevant EU legislation and policies need to be consistent with, and contribute to, the fulfilment of the climate-neutrality objective while respecting a level playing field, and invited the Commission to examine whether this requires an adjustment of existing rules.
The EU has put in place a comprehensive framework of policies to reduce greenhouse gas emissions. It has already started to modernise and transform the economy with the aim of climate neutrality. Between 1990 and 2018, it reduced greenhouse gas emissions by 23% 10 , while the economy grew by 61%. Additional action needs to be taken and every sector will have to contribute as current policies are expected to only reduce greenhouse gas emissions by 60% by 2050, and thus much more remains to be done to reach climate neutrality.
In this context, this proposal aims to establish the framework for achieving EU climate neutrality. It aims to provide a direction by setting a pathway to climate neutrality, and enhance certainty and confidence on the EU’s commitment for businesses, workers, investors and consumers, as well as transparency and accountability, thus sustaining prosperity and job creation. To this end, it aims to set in legislation the EU’s 2050 climate-neutrality objective, in line with scientific findings reported by the IPCC and the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES), and to contribute to the implementation of the Paris Agreement on climate change, including its long-term goal to keep the global temperature increase to well below 2°C above pre-industrial levels and to pursue efforts to keep it to below 1.5°C. It also aims to contribute to the implementation of the Sustainable Development Goals. The proposal also provides for the conditions to set out a trajectory leading the Union to climate neutrality by 2050, for regular assessment of progress towards climate neutrality and the level of ambition of the trajectory identified, and mechanisms in case of insufficient progress or inconsistencies with the EU 2050 climate-neutrality objective.
In spite of efforts to reduce greenhouse gas emissions, climate change is already having and will continue to have impacts on the EU’s environment, citizens and economy. Continued and more ambitious action on adaptation to climate change, including by strengthening the efforts on climate-proofing, resilience building, prevention and preparedness is essential, as well as on ensuring a just transition.
• Consistency with existing policy provisions in the policy area
The proposal aims to complement the existing policy framework by setting the long-term direction of travel and enshrining the 2050 climate-neutrality objective in EU law, enhancing adaptation efforts, establishing a process to set out and review a trajectory until 2050, regular assessment and a process in case of insufficient progress or inconsistencies. It also tasks the Commission to review existing policies and Union legislation in view of their consistency with the climate-neutrality objective as well as with the trajectory identified. Consistency with Regulation (EU) 2018/1999 on the Governance of the Energy Union and Climate Action has been ensured by including consequential amendments to that Regulation. Several other European Green Deal Initiatives such as the European Green Deal Investment Plan 11 and the proposal for a Regulation establishing the Just Transition Fund 12 have been adopted. Other initiatives are under preparation and will support achieving the objectives of this Regulation. This includes the new, more ambitious EU Strategy for Adaptation to Climate Change, the launch of the European Climate Pact, an EU industrial strategy to address the twin challenge of the green and digital transformation and a new circular economy action plan, and a sustainable finance strategy including to further embed sustainability into the corporate governance framework.
As regards the relation with existing policy instruments with a 2030 perspective, the Commission should assess and make proposals for increasing the Union’s greenhouse gas emission reduction target for 2030 to ensure its consistency with the climate-neutrality objective for 2050. By September 2020, the Commission will present an impact assessed plan to increase the EU’s greenhouse gas emission reduction target for 2030 to at least 50% and towards 55% compared with 1990 levels in a responsible way. The Commission will propose to amend this Regulation accordingly and, by June 2021, review and propose to revise where necessary, all relevant related policy instruments.
For the period 2030 to 2050, the Commission would be empowered to adopt delegated acts to supplement this Regulation by setting out a trajectory at Union level to achieve over time the 2050 objective.
The global challenge of climate change requires global action. While the EU cannot solve climate change without others also acting, being responsible for less than 10% of global greenhouse gas emissions, it is a leader in the global transition towards a net-zero-greenhouse gas emissions economy. Given that worldwide progress towards the objectives of the Paris Agreement is insufficient, EU leadership is needed now more than ever. As the EU sets its own ambitious targets, it will also continue to lead international negotiations to increase the ambition of major emitters ahead of the 2020 United Nations Climate Change Conference in Glasgow. The EU will keep promoting and implementing ambitious climate policy across the world, including in the context of a strong climate diplomacy, and engaging intensely with all partners to increase the collective effort while at the same time ensuring a level playing field.
• Consistency with other Union policies
All EU actions and policies should pull together to help the EU to achieve a successful and just transition towards climate neutrality and a sustainable future, as stated by the Commission in the European Green Deal Communication. As such, this initiative is linked to many other policy areas, including the Union’s external policies. The Commission announced it will improve the way its better regulation guidelines and supporting tools address sustainability and innovation issues, with the objective that all EU initiatives live up to a green oath to ‘do no harm’.
The aspect of Commission recommendations to Member States as set out by the proposed Regulation is complementary to the recommendations issued in the context of the European Semester. While the European Semester focuses on macro-economic and structural reform issues – which also encompasses climate issues-, this initiative addresses specific policy developments inconsistent with the climate-neutrality objective or trajectory towards climate neutrality.
2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
• Legal basis
Articles 191 to 193 of the Treaty on the Functioning of the European Union (TFEU) confirm and specify EU competencies in the area of climate change. The legal basis for this proposal is Article 192(1) TFEU. In accordance with Articles 191 and 192(1) TFEU, the European Union shall contribute to the pursuit, inter alia, of the following objectives: preserving, protecting and improving the quality of the environment, promoting measures at international level to deal with regional or worldwide environmental problems, and in particular combating climate change.
• Subsidiarity (for non-exclusive competence)
Climate change is by its very nature a trans-boundary challenge that cannot be solved by national or local action alone. Coordinated EU action can effectively supplement and reinforce national and local action and enhances climate action. Coordination of climate action is necessary at European level and, where possible, at global level, and EU action is justified on grounds of subsidiarity. Since 1992, the EU has worked to develop joint solutions and drive forward global action to tackle climate change. More specifically, action at EU level should aim to provide for cost effective delivery of long-term climate objectives, while ensuring fairness and environmental integrity. The establishment of a robust governance of the EU 2050 climate-neutrality objective will help to ensure that the EU remains on track to achieve the objective. Action on climate change adaptation at EU level enables the integration of adaptation policies and measures in key sectors, governance levels and EU policies.
• Proportionality
The proposal complies with the proportionality principle because it does not go beyond what is necessary in order to set the framework for achieving climate neutrality. The proposal aims to provide a direction by setting the EU on a path to climate neutrality, certainty on the EU’s commitment and for transparency and accountability by setting out a process of assessment and reporting. It requests Member States to take the necessary measures to enable the collective achievement of the climate-neutrality objective but it does not prescribe specific policies or measures, leaving Member States flexibility, taking into account the regulatory framework to achieve 2030 greenhouse gas emission reduction targets. It sets a mechanism for reviewing existing policies and Union legislation or taking additional measures, but does not include the detailed proposals yet. Similarly, the proposal provides for flexibility to ensure that the EU improves its adaptive capacity to the impacts of climate change.
• Choice of the instrument
The objectives of the present proposal can best be pursued through a Regulation. This will ensure direct applicability of the provisions. Requirements are placed on Member States to contribute to achieving the long-term objective. Moreover, many of the provisions are directed to the Commission (assessment, reporting, recommendations, additional measures, review) and also to the European Environment Agency and could therefore not be implemented by national transposition. A legislative rather than a non-legislative approach is needed to anchor the long-term objective into EU law.
3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
• Stakeholder consultations
When preparing the ‘Clean Planet for All’ Communication, the Commission carried out a public consultation from 17 July to 9 October 2018, receiving more than 2800 replies from a wide range of stakeholders. The Commission also organised a stakeholder event on 10-11 July 2018. The public consultation conducted by the Commission in preparation for the ‘Clean Planet for All’ Communication found that there is significant support, both from individuals and from organisations, for the EU to achieve a balance between greenhouse gas emissions and removals by 2050. A synopsis report on the consultation activities undertaken for the ‘Clean Planet for all Communication’ is annexed to the In-depth analysis in support of the Commission Communication COM (2018) 773 13 . The adoption of the ‘Clean Planet for All’ Communication led to a yearlong extensive debate among the Member States, institutions, local and regional authorities, social partners, businesses, industry, stakeholders and the citizens. This broad social engagement allowed the debate to mature and enabled the development of a broad consensus on the EU’s ambition for 2050 14 . In addition, on 28 January 2020, the Commission organised a public event, which brought together a broad range of stakeholders for a discussion on implementing the European Green Deal - the European Climate Law. Panellists shared their views on the content of the Climate Law, addressed social and financial aspects of the European Green Deal and engaged in a session of questions and answers with the public. The Commission also published a roadmap on the initiative that was open for feedback for 4 weeks, from 9 January 2020 to 6 February 2020. Many stakeholders present at the event submitted their feedback. In total, 926 replies were received. Contributors included many European and national associations representing industrial sectors such as the power, automotive and steel sectors, as well as private companies, NGOs and many EU citizens. Public authorities from seven Member States (Denmark, France, Germany, Portugal, Spain, Sweden and The Netherlands) and Norway contributed to the consultation.
• Impact assessment
In support of the ‘Clean Planet for All’ Communication, the Commission services carried out an in-depth analysis 15 . It explores how climate neutrality can be achieved by looking at all the key economic sectors, including energy, transport, industry and agriculture. Current policies will have a continued impact after 2030, with projected emissions reductions of around 60% by 2050. However, this is not sufficient for the EU to contribute to the Paris Agreement’s temperature goals. A portfolio of scenarios was analysed for achieving the transition to net-zero greenhouse gas emissions by 2050, based on existing – though in some cases emerging – technological solutions, empowering citizens and aligning action in key areas such as industrial policy, the circular economy, finance or research and innovation, while ensuring social fairness for a just transition. The assessment builds upon scientific literature and inputs from a wide range of stakeholders as well as integrated modelling allowing to better understand the transformation of and complex interactions between the energy, industry, buildings, transport, agriculture, forestry and waste sectors. Given this recent (November 2018) full analysis on the implications of the 2050 climate-neutrality objective, and evaluation of the EU adaptation strategy, an impact assessment is not required.
• Fundamental rights
The proposal respects the fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union. In particular, it contributes to the objective of a high level of environmental protection in accordance with the principle of sustainable development as laid down in Article 37 of the Charter of Fundamental Rights of the European Union. 16
4. BUDGETARY IMPLICATIONS
The indirect impacts on Member States’ budgets will depend on their choice of national policies and measures for greenhouse gas emission reductions and other mitigation or adaptation action, and will follow mostly from the possible complementary proposals to revise related instruments or propose new ones to deliver the additional greenhouse gas emission reductions necessary as will be presented in the impact assessed plan to increase the EU’s greenhouse gas emission reductions target for 2030.
The implementation of this proposal will require the redeployment of human resources within the Commission, as well as a small reinforcement of the staff of the European Environment Agency (EEA), which are presented in the attached legislative financial statement.
5. OTHER ELEMENTS
• Implementation plans and monitoring, evaluation and reporting arrangements
Transparent and regular reporting by Member States coupled with robust assessments by the Commission and mechanisms to ensure that progress is assessed are essential to ensure that the EU remains on track towards achieving the EU 2050 climate-neutrality objective. The initiative builds on the process based on integrated national energy and climate plans and the robust transparency framework for greenhouse gas emissions and other climate information that is contained in Regulation (EU) 2018/1999 on the Governance of the Energy Union and Climate Action. The Commission will use inter alia the information submitted and reported by Member States under the Governance Regulation as a basis for its regular assessment of progress. This includes information on greenhouse gas emissions, policies and measures, projections and adaptation. The Commission will also make use of this information for the Environmental Implementation Reviews and the monitoring of the Environment Action Programmes. Information obtained from Member States may be complemented by systematic atmospheric observations through in situ as well as remote sensing observations, such as those provided by Copernicus. The Commission will also regularly assess whether the trajectory requires updating and review policies and legislation and take action in case of insufficient progress.
• Detailed explanation of the specific provisions of the proposal
Article 2 sets the EU 2050 climate-neutrality objective, covering all sectors and all greenhouse gases - not only CO2-, and to be achieved domestically within the Union. It reflects that in line with Article 4 i of the Paris Agreement, developed country Parties should continue taking the lead by undertaking economy-wide absolute emission reduction targets. It recognises that while greenhouse gas emissions should be avoided at source as a priority, removals of greenhouse gases will be needed to compensate for remaining greenhouse gas from sectors where decarbonisation is the most challenging. The natural sink of forests, soils, agricultural lands and wetlands should be maintained and further increased and carbon removal technologies, such as carbon capture and storage and carbon capture and utilisation, should be made cost-effective and deployed. The Article also requires the European Parliament, the Council and the Commission and the Member States to take the necessary measures both at Union and national level to enable the collective achievement of this objective. Measures at Union level will constitute an important part of the measures needed to achieve the objective.
Identifying a trajectory for greenhouse gas emission reductions at Union level will help to ensure that the EU 2050 climate-neutrality objective is achieved (Article 3). Every five years, aligned with the Paris Agreement timelines, the Commission will review the EU trajectory. Under the Paris Agreement, Parties periodically take stock of the implementation of the Paris Agreement and assess collective progress towards achieving its purpose and long-term goals, in the ‘global stocktake’. At the latest within six months of each global stocktake, the Commission will review the trajectory.
Article 4 concerns adaptation to climate change. In spite of mitigation efforts, climate change is already creating and will continue to create significant stress in Europe and strengthening the efforts to enhance adaptive capacity, strengthen resilience and reduce vulnerability is crucial, building on Union legislation which already addresses specific climate adaptation objectives. The development and implementation of adaptation strategies and plans is essential in this regard. The new EU Adaptation Strategy will aim directly at helping achieve this goal.
The Commission will assess progress every five years, aligned with the Paris Agreement timelines (Articles 5 to 7). Before each global stocktake, the Commission will assess and report on the collective progress made by the Member States towards the achievement of the climate-neutrality objective or on adaptation, and on the consistency of Union measures with the climate-neutrality objective or adequacy to enhance adaptive capacity, strengthen resilience or reduce vulnerability. The Commission will take the necessary measures where the assessment suggests that Union measures are inconsistent or inadequate or progress is insufficient. The Commission will also regularly assess relevant national measures and issue recommendations where it finds inconsistencies or that measures are inadequate.