REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Two years after Paris – Progress towards meeting the EU's climate commitments (required under Article 21 of Regulation (EU) No 525/2013 of the European Parliament and of the Council of 21 May 2013 on a mechanism for monitoring and reporting greenhouse gas emissions and for reporting other information at national and Union level relevant to climate change and repealing Decision No 280/2004/EC)
Date: 2017-11-07
Institutions: Directorate-General for Climate Action, European Commission
Subjects: Kyoto Protocol, adaptation to climate change, climate change, environmental cooperation, environmental monitoring, greenhouse gas, international agreement, pollution control measures, reduction of gas emissions

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 7.11.2017  COM(2017) 646 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL Two years after Paris – Progress towards meeting the EU's climate commitments  (required under Article 21 of Regulation (EU) No 525/2013 of the European Parliament and of the Council of 21 May 2013 on a mechanism for monitoring and reporting greenhouse gas emissions and for reporting other information at national and Union level relevant to climate change and repealing Decision No 280/2004/EC) {SWD(2017) 357 final}  
 
 
Contents 

1. 

2. 

3. 

4. 

5. 

General overview ......................................................................................................... 4 

Climate finance .......................................................................................................... 10 

Mitigating EU emissions ............................................................................................ 14 

Adapting to climate change ........................................................................................ 18 

Participating in international climate policy .............................................................. 19 

2 

 
 
 
 
 
Index of figures 

Figure 1: Progress towards meeting Europe 2020 and 2030 targets (total EU GHG emissions)
 .................................................................................................................................................... 4 

Figure 2: Change in real GDP, GHG emissions and GHG emission intensity in the EU, 1990-
2016 ............................................................................................................................................ 5 

Figure 3: Development of per capita emissions of the largest economies, 1990-2012 .............. 5 

Figure  4:  Accounted  emissions  and  removals  from  the  LULUCF  sector  per  activity,  2013-
2015 ............................................................................................................................................ 6 

Figure 5: Relative gap between projected 2020 emissions outside ETS and 2020 targets (in % 
of 2005 emissions). .................................................................................................................... 8 

Figure  6:  Provisional  accounted  cumulative  LULUCF  net  emissions  and  removals  per 
Member State (2013-2015) ........................................................................................................ 9 

Figure 7: Cumulative surplus of AEA as percentage of 2005 emissions, 2013-2015 ............. 10 

Figure 8: Change in the use of ETS revenues, 2013-2016 (in million €) ................................ 11 

Figure 9: Domestic use of auction revenues, 2013-2016 (in billion €) .................................... 11 

Figure 10: The three proposed legal bases for the EU’s 2030 climate policy framework ....... 15 

3 

 
 
 
 
 
 
1. 

GENERAL OVERVIEW 

1.1. 

Progress towards the 2030 target of at least a 40 % cut in emissions  

The EU and its Member States remain fully committed to the Paris Agreement and to climate action, 
both as a scientifically proven necessity and as an economic opportunity. The EU and its 28 Member 
States have deposited their instruments of ratification and will meet their commitment to reduce their 
domestic emissions by at least 40 % between 1990 and 2030. 

In  2016,  the  EU  greenhouse  gas  emissions  were  already  23 %  below  the  1990  level  based  on 
preliminary  2016  data,  excluding  land  use,  land  use  change  and  forestry  (LULUCF)  and  including 
international aviation (see Figure 1). 

According to most recent Member States’ projections based on existing measures, the 20 % target for 
2020  will  be  met.  In  2030,  emissions  are  expected  to  be  30 %  lower  than  in  1990  if  no  additional 
policies  are  implemented.  The  EU  is  therefore  currently  negotiating  new  legislation  to  ensure  that  it 
will meet its objective of reducing emissions by at least 40 % between 1990 and 2030 (see section 3). 

Figure 1: Progress towards meeting Europe 2020 and 2030 targets (total EU GHG emissions) 

6.000

5.500

5.000

4.500

4.000

3.500

3.000

t
n
e
l
a
v
i
u
q
e

2

O
C

t

M

-20% compared to 1990 

-20% compared to 

1990 

-23%   
in 2016 

-40%compared to 1990 

1990

1995

2000

2005

2010

2015

2020

2025

2030

Historic emissions

Projections with existing measures -WEM- (based on MS submissions)

Proposed greenhouse gas emissions trajectory

The  EU  continues  to  successfully  decouple  its  economic  growth  from  its  emissions  (see  Figure  2). 
From  1990  to  2016,  the  EU’s  GDP  grew  by  53 %,  while  total  emissions  fell  by  23 %.  The  EU 
economy’s greenhouse gas emission intensity, defined as the ratio between emissions and GDP, halved 
in that period. 

-40% 

1990 

compared to 

4 

 
 
 
 
 
Figure 2: Change in real GDP, GHG emissions and GHG emission intensity in the EU, 1990-2016 

0
0
1
=
0
9
9
1
x
e
d
n
I

160

140

120

100

80

60

40

GDP

GHG emissions

GHG intensity

Ex post  evaluation  of  climate  policies  shows  that  lower  emission  intensity  of  the  economy  is  mainly 
driven by innovation.  Innovation  includes  not  only  using low-carbon technologies such  as  renewable 
energy  but  also  raising  productivity,  for  instance  through  more  efficient  power  plants  and  cars.  The 
relative shift between economic sectors, e.g. from industry to services, has had a marginal effect across 
the EU. 

Figure 3: Development of per capita emissions of the largest economies, 1990-2012 

30

25

20

15

10

5

0

USA

EU28

China

5 

 
 
 
 
 
 
 
It  is  estimated  that  the  EU’s  share  of  global  greenhouse  gas  emissions  fell  from  17.3 %  in  1990  to 
9.9 %  in  2012.  Its  share  of  CO2  emissions  alone  fell  from  19.7 %  in  1990  to  9.6 %  in  2015.  A 
comparison of per capita emissions of the three major greenhouse gases (CO2, CH4 and N2O) for the 
three largest economies shows that the EU and China had significantly lower per capita emissions than 
the US (see Figure 3). 

In  2015,  the  LULUCF  sector  in  the  EU  provided  a  reported  carbon  sink  absorbing  305  Mt  CO2  eq 
(including  cropland  and  grassland).  The  accounted  credit,  representing  the  difference  between  the 
reported value and a reference baseline, increased from 115 to 122 Mt CO2 eq. between 2013 and 2015. 
Forest management accounts for most of this credit (see Figure 4). The EU therefore remains on track 
to have no debit from the LULUCF sector and is very likely meeting its commitment under the Kyoto 
Protocol.  

Figure 4: Accounted emissions and removals from the LULUCF sector per activity, 2013-2015  

.

q
e
2
O
C
T
M

100

50

-50

-100

-150

-200

-250

2013

2014

2015

net emissions (positive value) 

net removals (negative value) 

Afforestation
Reforestation
Forest
Management

Cropland
Management
Grazing land
Management

Deforestation

Revegetalisation

1.2. 

Progress towards the 2020 targets 

According to Member States’ latest projections based on existing measures, emissions are expected to 
be 26 % lower in 2020 than in 1990. The EU therefore remains on track to meet its domestic emissions 
reduction target of 20 % by 2020 and consequently its obligations under the second commitment period 
of the Kyoto Protocol. 

Between 2005 and 2016, stationary emissions, e.g. from power plants or refineries, covered by the EU 
emissions trading system (ETS) fell by 26 %. This is markedly more than the 23 % reduction set as the 
2020 target. Such emissions accounted for around 40 % of total EU greenhouse gas emissions in 2016. 
Total EU emissions fell by 0.7 % from 2015 to 2016, while overall GDP rose by 1.9 %, confirming that 
emissions and GDP are being decoupled. 

Greenhouse gas emissions from fixed installations covered by the EU ETS fell by 2.9 % compared to 
2015, according to preliminary data. This marks a decreasing trend in emissions since the start of Phase 
3  of  the  EU  ETS.  Moreover,  the  surplus  of  emission  allowances  that  had  built  up  since  2009  fell 
significantly, to around 1.69 billion allowances, as fewer allowances were auctioned. The surplus is at 
its lowest level since 2013. 

6 

 
 
 
 
 
Emissions  not  covered  by  the  EU  ETS  were  11 %  lower  in  2016  than  in  2005,  exceeding  the  2020 
target of a 10 % reduction. However, in 2016 they increased for the second year in a row, by 0.9 %. 
This  is  at  least  partly  explained  by  the  lower  oil  prices  and  higher  demand  for  heating  because  of 
weather conditions in both 2015 and 2016. Under the Effort Sharing Decision (ESD), Member States 
must meet binding annual greenhouse gas emission targets for 2013-2020 in sectors not covered by the 
ETS, including buildings, transport, waste and agriculture. Malta has failed to meet its ESD target for 
each  of  the  three  years  2013-2015  and  has  used  the  flexibility  mechanism  to  comply  with  its  legal 
obligations. Preliminary estimates for 2016 show that Malta, Belgium, Finland and Ireland will likely 
fail to meet their non-ETS targets. 

According  to  national  projections  based  on  policies  already  implemented,  most  Member  States  are 
expected to reach their 2020 targets (see Figure 5). Only a few will need to take additional measures or 
make use of flexibilities such as buying allocations from other Member States that have overcomplied 
or use own surpluses from the first years of the period. 

Some Member States are in a special situation with regard to 2020. 

 

In  Ireland,  emissions  are  expected to  increase  by  6 percentage  points  between  2015 and  2020 
and to remain above the annual ESD allocations, with transport emissions expected to increase 
by  12 %.  In  June  2017,  as  part  of  the  EU’s  annual  cycle  of  economic  coordination  (the 
European  Semester),  it  was  recommended  that  Ireland  further  increases  investment  in  public 
transport. 

  Malta’s  emissions  are  expected  to  remain  above  the  annual  ESD  allocations.  Emissions  from 

hydrofluorocarbons and in the transport sector rose. 

7 

 
Figure 5: Relative gap between projected 2020 emissions outside ETS and 2020 targets (in % of 2005 emissions). 

shortfall 

Hungary
Slovakia
Croatia
Bulgaria
Greece
Portugal
Romania
Sweden
Slovenia
Lithuania
Netherlands
United Kingdom
Spain
Cyprus
Latvia
Czech Republic
Italy
Poland
France
Denmark
Estonia
Finland
Austria
Luxembourg
Germany
Belgium
Malta
Ireland

achievement 

-30%

-20%

-10%

0%

10%

20%

  Belgium  is  expected  to  miss  its  2020  target  by  3.5 percentage  points.  As  indicated  in  the 
European  Semester,  the  composition  of  public  spending  must  be  improved  in  order  to  create 
room for infrastructure investment, including transport infrastructure. Continuing favourable tax 
treatment of company cars contributes to pollution, congestion and greenhouse gas emissions. 

  According  to  the  most  recent  national  projections,  Germany  is  expected  to  miss  its  target  by 
3.3 percentage  points  by  2020.  Based  on  preliminary  data,  in  2016,  Germany’s  non-ETS 
emissions reductions were only slightly below the target. 

  Austria  and  Luxembourg  are  expected  to  miss  their  2020  targets  by  a  margin  of  less  than  3 

percentage points. 

  According to its own projection, Finland could miss its 2020 emissions target, by a margin of 
less than 1 percentage point. However, for 2016, preliminary data indicate that Finland’s non-
ETS emissions were already 3 percentage points higher than the allocation for that year. 

As regards LULUCF, under the Kyoto Protocol most Member States have a cumulative accounted net 
removal from 2013 to 2015. Only Latvia, Bulgaria, Finland and the Netherlands have a provisional net 
emission. It should be noted that LULUCF accounts will be cumulated over the period 2013 to 2020, 
and  therefore  full  accounting  results  cannot  yet  be  determined  and  are  therefore  provisional. 
Nevertheless, as mentioned above, as yet there is no significant compliance risk at EU level.  

8 

 
 
 
Figure 6: Provisional accounted cumulative LULUCF net emissions and removals per Member State (2013-2015)  

Latvia
Bulgaria
Finland
Netherlands
Cyprus
Malta
Slovenia
Belgium
Luxemburg
Estonia
Greece
Sweden
Romania
Croatia
Czech Republic
Lithuania
Hungary
Slovakia
United Kingdom
Denmark
Austria
Ireland
France
Portugal
Spain
Poland
Italy
Germany

net removals 
(negative values) 

13,2 

3,3 

2,1 

2,1 

0 

0 

net  
emissions  
(positive  
value) 

-0,3 

-0,9 
-0,9 
-1,2 

-1,5 
-2,7 
-3 

-3,9 
-4,8 

-5,4 
-9 
-9 
-10,2 

-11,7 

-12,6 

-13,2 

-17,7 

-23,7 

-114,9 

-42 

-43,8 

-45,6 

-120

-100

-80

-60

-40

-20

0

20

1.3.  Member States’ compliance with the Effort Sharing Decision 

All  28  Member  States  complied  with  their  ESD  obligations  for  the  years  2013-2015.  Malta  emitted 
more  than  its  annual  emission  allocations  (AEA),  but  covered  its  surplus  emissions  by  purchases  of 
units from Bulgaria. Sweden emitted less than its allocation and cancelled its spare units to enhance the 
environmental  integrity  of  the  system.  As  yet,  no  international  credits  from  the  clean  development 
mechanism (CDM) or joint implementation (JI) have been used to comply with ESD obligations. The 
expected cumulative surplus of annual emission allocations per Member State for the three years 2013-
2015 is shown in Figure 7. 

9 

 
 
Figure 7: Cumulative surplus of AEA as percentage of 2005 emissions, 2013-2015 

EU-28
Malta
Finland
Lithuania
Luxembourg
Germany
Latvia
Czech Republic
Austria
Romania
Poland
Belgium
United Kingdom
Estonia
Ireland
Denmark
France
Italy
Spain
Slovenia
Netherlands
Sweden
Bulgaria
Slovakia
Portugal
Greece
Hungary
Croatia
Cyprus

-50%

0%

50%

100%

150%

2. 

CLIMATE FINANCE 

2.1. 

Revenue from auctioning EU ETS allowances 

Member  States  earned  nearly  EUR 15.8  billion  from  the  auctioning  of  EU  ETS  allowances  over  the 
period 2013-2016. Approximately 80 % has been used or is planned to be used for climate and energy 
purposes. Member States stated that most of these revenues would be used domestically (see Figure 8). 

10 

 
 
Figure 8: Change in the use of ETS revenues, 2013-2016 (in million €) 

5.000

4.000

3.000

2.000

1.000

0

2013

2014

2015

2016

Not used for climate
and energy purposes

Use not reported

Total used for
international climate
and energy purposes
Total used for domestic
and EU climate and
energy purposes

Figure  9  breaks  down  domestic  use  of  revenues  for  energy  and  climate  purposes  by  category.  The 
largest category is renewable energy, followed by energy efficiency and sustainable transport. 

Figure 9: Domestic use of auction revenues, 2013-2016 (in billion €) 

0,47 

1,16 

1,02 

4,16 

3,11 

Renewable energy

Energy efficiency

Sustainable transport

R&D: emission reduction
and adaptation

Other domestic use

For  instance,  in  Greece,  Malta,  Portugal  and  Spain  the  largest  share  of  these  revenues  is  invested  in 
renewable energy. In the Czech Republic, France, Hungary and Slovakia, by contrast, the largest share 
of  auctioning  revenues  is  invested  in  energy  efficiency,  e.g.  in  renovating  apartment  buildings.  In 
Cyprus, 30 % of auctioning revenues is spent on forest management, while 33 % of revenues in Italy go 
towards adapting to climate change. 

NER 300  

NER  300  is  one  of  the  world’s  largest  funding  programmes  for  innovative  low-carbon  energy 
demonstration projects. Thirty-nine innovative demonstration projects in renewable energy and carbon 
capture and storage covering 20 EU Member States were awarded EUR 2.1 billion in funding from the 
auction of 300 million ETS allowances. Four of the projects are now operational and 16 have reached 
their final investment decision. 

Approximately EUR 2.2 billion in additional private investment has been attracted. Thus, in total, about 
EUR 4.3  billion  has  been  raised,  paving  the  way  for  further  market  replication  and  falling 
costs. However,  these  first-of-a-kind  projects  are  risky  and,  so  far,  four  project  proponents  have  not 
been  able  to  raise  sufficient  funding;  the  projects  have  had  to  be  cancelled.  In  early  2017,  Member 
States  decided  to  re-invest  these  unspent  funds,  totalling  at  least  EUR 436  million,  in  relevant  low-
carbon projects through two existing financial instruments managed by the European Investment Bank, 
namely the InnovFin Energy Demo Projects and the Connecting Europe Facility. 

11 

 
 
 
The  Swedish  Windpark  Blaiken  project  is 
one  of  four  already  operational  NER  300 
projects. It developed a 225 MW wind farm 
in an arctic climate with turbines equipped 
with  innovative  anti-icing  systems.  The 
NER  300  programme  only  finances  the 
additional costs incurred by this innovative 
system. 

2.2.  Mainstreaming climate policies into the EU budget 

Between 2014 and 2020 at least 20 % of the EU budget is expected to be allocated to climate-relevant 
expenditure, amounting to approximately EUR 200 billion. The state of implementation is as follows. 

-  Five  European  structural  and  investments  funds  (ESIFs),  namely  the  European  regional 
development fund, the cohesion fund, the european social fund, the European agricultural fund 
for  rural  development  and  the  European  maritime  and  fisheries  fund.  They  account  for  more 
than  43 %  of  the  EU  budget.  Twenty-eight  partnership  agreements  and  more  than  530  fund-
specific programmes contribute to financing climate policies. A common methodology has been 
set  up  to  determine  the  level  of  support  for  climate  change  objectives.  More  than  EUR 115 
billion will support climate action objectives, corresponding to about 25 % of the total funds. 

regional  development 

The  MYRTE  and  PAGLIA  ORBA  platforms  in 
Corsica,  France  have  been  co-financed  by  the 
European 
fund.  These 
platforms  produce  and  store  energy  through  a 
hydrogen  chain.  This  consists  of  an  electrolysis 
apparatus which, during hours of low consumption, 
from  water 
produces  hydrogen  and  oxygen 
molecules. This energy is then distributed via a fuel 
cell  producing  electricity  during  hours  of  high 
consumption,  for  example  in  the  evening,  while  the 
photovoltaic panels are inactive. 

-  The  common  agricultural  policy  (CAP)  covers  the  European  agricultural  guarantee  fund 
(EAGF)  and  the  European  agricultural  fund  for  rural  development  (EAFRD),  which  together 
account  for  39 %  of  the  EU  budget.  Since  1990,  agriculture-related  non-CO2  emissions  have 
fallen by 24 % in the EU. CAP support for climate-friendly agriculture has contributed to this 

12 

 
 
 
decoupling. Environmental legislation such as the nitrate directive also contributed to reducing 
emissions. 

The CAP requires farmers receiving direct payments to respect certain farming practices which 
are beneficial for the climate and the environment. Farmers also have to comply with a number 
of statutory requirement relating to climate change and the environment. In addition, the CAP 
rural  development  policy,  for  instance,  seeks  to  reduce  emissions  by  supporting  farm 
modernisation  in  order  to  cut  energy  consumption,  produce  renewable  energy,  improve 
livestock and land management and improve input efficiency. Support for afforestation, forest 
protection  and  sustainable  forest  management  also  contribute  to  reducing  emissions.  In  2016, 
EUR 18.7 billion of the CAP’s budget was estimated to be climate-related. Moreover, the use of 
innovation  strategies  are  stimulated  by  the  Rural  Development  Programmes,  which  help  to 
decrease  emissions  and  to  increase  the  capacity  to  sequester  carbon  and  organic  matter  in 
agricultural soils. 

-  Horizon  2020,  the  main  EU  funding  programme  for  research  and  innovation  (R&I),  has  a 
budget  of  EUR 79  billion  for  2014-2020.  Of  this,  35 %  is  expected  to  support climate-related 
R&I.  This  support  includes  targeted,  societal  challenge-driven  R&I  actions  and  bottom-up, 
demand-driven funding. 

In  the  first  three  years  of  Horizon  2020,  approximately  EUR 4  billion  has  been  committed  to 
societal  challenges  such  as  climate  change,  low-carbon  energy  and  industrial  processes,  clean 
transport  and  a  sustainable  bio-economy.  On  the  top  of  this,  around  EUR 2  billion  has  been 
provided to support bottom-up scientific initiatives and innovative ideas through the ‘excellent 
science’ and ‘industrial leadership’ pillars of the programme. 

Following the adoption of the Paris Agreement at COP21, efforts and resources will be further 
concentrated on fighting climate change and decarbonising the economy. A new EU focus area, 
‘Building a low-carbon, climate-resilient future’, will specifically support the implementation of 
the  Paris  Agreement  with  a  budget  of  about  EUR 3  billion  for  2018-2020.  Actions  will 
accelerate clean energy and transport innovation, support the design of cost-effective mitigation 
pathways  and  adaptation  planning,  and  produce  new  scientific  knowledge  for  national  mid-
century  strategies,  the  IPCC’s  sixth  assessment  cycle  and  the  UNFCCC  global  stocktake  in 
2023. 

Horizon  2020  is  open  to  the  world,  and  many  of  these  projects  and  activities  will  be  realised 
through international cooperation advancing the global effort to meet the climate challenge.  

-  The European fund for strategic investments (EFSI) is an initiative backed by a EUR 16 billion 
guarantee from the EU budget, complemented by a EUR 5 billion allocation from the European 
Investment Bank’s  (EIB)  own resources.  This fund supports  strategic investment in  key areas 
such  as  infrastructure,  education,  research,  environment  and  resource  efficiency,  as  well  as 
innovation and risk finance for small businesses. Based on the total guarantee of € 21 billion, 
the  EFSI  is  expected  to  mobilse  EUR 315 billion  of  investment  by  mid-2018.  The  EFSI  has 
already  financed  several  renewable  energy  investments,  including  transport,  industry  and 
energy  storage  projects.  For  2018-2020,  an  extension  of  the  fund,  EFSI  2.0,  is  under 
preparation.  It  will  have  a  particular  focus  on  innovative,  low-carbon  projects  that  will 

13 

 
contribute  to  achieving  the  Union's  climate  targets.  Under  EFSI  2.0  the  EU  guarantee  shall 
increase  to  EUR 26  billion,  complemented  by  a  EUR 7.5  billion  EIB  allocation.  In  the  new 
configuration,  EFSI  2.0  is  expected  to  mobilise  a  total  of  at  least  half  a  trillion  euro  of 
investment by the end of 2020. 

-  The  LIFE  sub-programme  for  climate  action  contributes  to  the  implementation  and 
development of climate policy and legislation through action grants and financial instruments. 
In 2016, EUR 54.5 million has been awarded to twenty nine projects with EU added value for 
mitigation, adaptation, and governance and information. Two LIFE pilot financial instruments 
are also under implementation: the Private Finance for Energy Efficiency (PF4EE), which aims 
to  increase  private  financing  for  investment  in  energy  efficiency-enhancing  projects,  and  the 
Natural  Capital  Financing  Facility  (NCFF),  which  supports  investment  in  natural  capital  that 
helps  to  achieve  biodiversity  and/or  climate  change  adaptation  objectives.  So  far,  six  local 
banks have created innovative lending facilities for energy efficiency investments, particularly 
for  small  and  medium-sized  enterprises  in  the  Czech  Republic,  Spain,  Belgium,  France,  Italy 
and Portugal. For NCFF, one project in Netherlands has been signed. The EUR 6 million NCFF 
loan  to  Rewilding  Europe  Capital  will  be  able  to  support  over  30  conservation  and  rewilding 
businesses  across  Europe,  including  wildlife  tourism  operators,  sustainable  fisheries  and 
producers of natural products such as honey. 

LIFE METHAmorphosis is a Spanish project co-
financed  under  LIFE  2014.  It  aims  to  improve 
waste  management,  reduce  energy  consumption 
and  produce  high-quality  bio-methane  by 
demonstrating, at industrial scale, two innovative 
waste  treatment  systems:  one  for  urban  waste 
plants and the other for agri-industrial and other 
organic waste treatment plants. 

3. 

MITIGATING EU EMISSIONS 

Under the Paris Agreement, the EU and its Member States collectively committed to decreasing their 
emissions by at least 40 % by 2030 from 1990 levels. This commitment is linked to a raft of proposed 
legislation  in  the  area  of  climate  action,  energy  and  transport.  The  proposals  are  currently  being 
negotiated with the European Parliament and the Council. Figure 10 below shows how the three main 
pillars  of  the  EU’s  proposed  2030  climate  policy  framework,  covering  all  greenhouse  gas  emissions, 
are  inter-related.  Implementation  is  proposed  to  be  closely  monitored  through  the  governance  of  the 
EU’s Energy Union. Member States’ public and private stakeholders will also be aided in meeting the 
overarching 2030 greenhouse gas targets by: 

i. 

the provision of climate finance (see previous section) without prejudging financial allocations 
for the climate financing in the next Multiannual Financial Framework, and 

14 

 
 
ii. 

complementary  new  EU-wide  legislation,  especially  on  energy  efficiency,  renewable  energy, 
emissions  standards  for  cars,  vans  and  heavy  duty  vehicles,  carbon  capture  and  storage,  and 
fluorinated gases. 

Figure 10: The three proposed legal bases for the EU’s 2030 climate policy framework 

Emission Trading (ETS) 

Target: -43% by 2030 vs 
2005 

including Power/energy sector, 
Industry, aviation (40% of EU 
emissions) 

Max  100 
Mt  CO2 
eq.  

Effort Sharing 

Target: -30% 
by 2030 vs 
2005 

including households 
transport agriculture 
waste (60% of EU 
emissions) 

full  

flexibility 

Max 
280 
Mt CO2 eq.  

Land Use, 
Land Use 
Change 
and 
Forestry 
(LULUCF) 

No debit 

3.1. 

Revision of the EU ETS — phase 4 (2021-2030) 

The Commission’s legislative proposal of July 2015 on revising the EU ETS for phase 4 aims to reduce 
the emissions from energy production plants and industry by 43 % by 2030 from their 2005 levels. The 
European  Parliament  and  Council  are  currently  involved  in  trilogue  negotiations,  having  adopted 
positions on the revision of the Directive in February 2017. 

The proposal would increase the annual reduction in the number of allowances from the current 1.74 % 
to  2.2 %  in  order  to  provide  the  emissions  reductions  and  thus  deliver  the  underlying  environmental 
objective. In their positions, both Parliament and the Council propose further strengthening the EU ETS 
by temporarily doubling the rate at which allowances are placed in the Market Stability Reserve (MSR) 
from 2019. This change would allow the MSR to reduce the existing market oversupply of allowances 
faster. 

Since  European  leaders  have  agreed  to  continue  free  allocation  after  2021,  the  necessary  changes  to 
update the relevant rules are also proposed. This includes updated benchmarks to reflect technological 
progress where necessary, criteria for the future composition of the carbon leakage list and procedures 
to reflect changes in production. 

Several  low  carbon  funding  mechanisms  are  proposed,  in  particular  an  Innovation  Fund  (to  support 
demonstration of innovative renewable energy and low-carbon innovation in industry, as well as carbon 
capture, use and storage) and a Modernisation Fund (modernising the energy systems of EU Member 
States with lower GDP). 

3.2. 

Proposals for regulations on effort sharing and on land use for 2021-2030 

Two proposals tabled in July 2016 set out how exactly the EU’s Member States should implement their 
commitment  to  reduce  its  non-ETS  emissions  by  30 %  by  2030  compared  to  2005.  The  European 
Parliament and Council are currently involved in trilogue negotiations, having adopted positions on the 
two proposals between June and October 2017. 

15 

 
 
 
 
 
 
 
 
 
 
 
 
 
First,  for  sectors  outside  the  ETS  and  LULUCF  each  Member  State  would  have  binding  annual 
greenhouse gas emission limits for 2021-2030. Member States have agreed to share efforts on the basis 
of  fairness,  solidarity,  cost-effectiveness  and  environmental  integrity.  Thus,  the  proposal  recognises 
Member States’ varying capacity to take action by setting them different 2030 targets, primarily based 
on 2013 GDP per capita. The proposed 2030 targets range from 0 % to 40 % reductions compared to 
2005 levels. Two new limited flexibilitiess are given: allowing eligible Member States to use EU ETS 
allowances, and allowing all Member States to use greater action in land use sectors in order to meet 
part of their binding effort-sharing targets. 

Second,  Member  States  would  be  required  to  balance  greenhouse  gas  emissions  and  removals  from 
land  use,  land  use  change  and  forestry  under  the  ‘no  debits  rule’.  It  is  proposed  that  greenhouse  gas 
emissions from land use would have to be entirely compensated by equivalent removal of CO₂ from the 
atmosphere  through  action  in  that  sector  or  in  the  effort-sharing  sectors.  For  example,  if  a  Member 
State  cuts  down  forests,  it  must  compensate  for  the  resulting  emissions  by  planting  new  forest,  by 
managing  its  existing  forests,  croplands  and  grasslands  more  sustainably,  or  by  further  reducing 
emissions in its effort-sharing sectors. In addition, Member States would also have the option of trading 
LULUCF  credits.  If  implemented,  this  accounting  system  would  help  Member  States  to  incentivise 
farmers and foresters to move towards climate-smart agriculture and forest management.  

3.3. 

Low emission mobility strategy 

The EU’s mobility sector is a major employer and an indispensable driver of the EU economy’s global 
competitiveness.  A  modern  mobility  system  is  needed  for  the  transition  to  a  low-carbon  economy. 
Measures  include  developing  clean  technologies  through  improved  emissions  standards,  and  making 
use  of  low-carbon  fuels.  In  July  2016  the  Commission  adopted  an  EU  Strategy  for  low  emission 
mobility  which  is  based  on  three  pillars:  higher  efficiency  of  the  transport  system,  low-emission 
alternative energy for transport, and low- and zero emission vehicles. 

The  Commission  is  working  towards  the  deployment  of  cooperative,  connected  and  automated 
vehicles,  which  will  help  reduce  emissions  and  congestion.  Furthermore,  the  Commission  proposes 
adjustments to the regulatory frameworks for road charging, electronic tolling and combined transport. 

As regards clean technologies, EU-wide carbon dioxide emissions standards are driving innovation and 
efficiency. The Commission is proposing new post-2020 standards for cars and vans. It has proposed a 
monitoring  and  reporting  system  for  emissions  from  heavy  duty  vehicles  that  paves  the  way  for 
standards  for  this  type  of  vehicles  in  2018.  The  proposed  review  of  public  procurement  of  clean 
vehicles will consequently help create markets for innovative and low-emission products. 

As regards the use of low-carbon and renewable fuels, in November 2016 the Commission proposed a 
recast of the Renewable Energy Directive with a strong advanced biofuels component, by means of an 
EU-wide  obligation  on  transport  fuel  suppliers. The  proposed  revision  of  the  Energy  Performance  of 
Buildings Directive (see section 3.4) and the electricity market design will contribute to the provision 
of  charging  points  in  buildings  and  an  energy  grid/system  which  is  fit  for  purpose,  and  support  the 
transition  towards  zero-emission  mobility.  The  Alternative  Fuels  Infrastructure  Directive  provides  a 
strong  framework  to  ensure  the  availability  of  infrastructure,  common  standards  and  consumer 
information  for  alternative  energy.  The  Commission  is  issuing  an  Alternative  Fuels  Infrastructure 
Action Plan to address governance, financing and interoperability of infrastructure services. 

16 

 
3.4. 

Energy efficiency 

The  Commission  has  proposed  a  revision  of  the  Energy  Efficiency  Directive  (EED)  with  a  binding 
30 % EU target for 2030. The EED will also extend energy savings requirements to 2030 and simplify 
the rules for calculating such energy savings. 

The review of the European Performance of Buildings Directive promotes the use of smart technology 
in  buildings  and  includes  key  measures  to  further  promote  investment  in  energy  efficiency  and 
renewable energy. 

3.5. 

Renewable energy 

Under the proposed recast of the Renewable Energy Directive, renewable energy sources must account 
for at least 27 % of the EU’s gross final energy consumption by 2030. This binding target is in line with 
European Council conclusions of October 2014. The recast directive also creates an innovation-friendly 
regulatory environment and promotes long-term investment. 

3.6. 

Governance 

The European Commission adopted in November 2016 a regulation proposal for the governance of the 
Energy  Union.  This  would  require  Member  States  to  draft  integrated  national  energy  and  climate 
(NECP)  plans  covering  a  10-year  period,  starting  from  2021  to  2030.  The  plans  will  set  out  their 
national  energy  and  climate  objectives  and  will  represent  their  contribution  to  the  Energy  Union’s 
objectives, including the EU’s joint energy efficiency and renewable energy targets. The plans should 
also be aligned with the long-term low emissions strategies submitted every 10 years with a proposed 
50-year outlook. 

The proposal establishes a calendar for drafting, finalisation and updating the plans closely aligned with 
the 5-year review cycle set out in the Paris Agreement. The plans will inform the EU’s and the Member 
States’ participation in the facilitative dialogue in 2018 and the Global Stocktake in 2023, and every 5 
years thereafter.  

The  proposal  also  lays  down  integrated  monitoring  and  reporting  rules  for  tracking  progress  on 
implementing the plans. It provides for specific mechanisms to cover any gaps in achieving EU targets 
for energy efficiency and renewable energy. It also provides for a transparent, accurate, comprehensive, 
complete and consistent monitoring mechanism for greenhouse gas emissions so that the EU meets its 
reporting obligations under the Paris Agreement. 

Member  States  are  already  drafting  their  national  plans,  with  more  than  two  thirds  having  set  up 
political processes to prepare these. More than half of them engaged in public consultation in relation to 
national  plans.  Approximately  half  of  them  already  have  long-term  strategies  for  climate  with  a 
perspective  until  at  least  2030.  More  than  one  third  of  Member  States  have  indicated  to  the 
Commission  that  they  have  started  work  on  the  analytical  basis  and  on  regional  cooperation  in 
preparation of their NECPs. 

3.7. 

The monitoring, reporting and verification (MRV) system for EU shipping 

The  EU  supports  ongoing  discussions  at  the  International  Maritime  Organisation  (IMO)  to  globally 
reduce emissions from international shipping (see section 5.3). It has already amended its own MRV 
laws on shipping emissions in relation to ports in the European Economic Area. As a result, companies 
operating  ships  over  5 000  gross  tonnes  submitted  plans  detailing  their  monitoring  procedures  in 

17 

 
August  2017.  Monitoring  and  reporting  will  apply  to  shipping  activities  from  1 January 2018.  An 
assessment  of  the  possible  alignment  of  the  EU  MRV  scheme  with  the  IMO  data  collection  system 
concerning fuel consumption from ships is ongoing. Following this assessment, there could be further 
proposals to amend the EU’s MRV legislation in 2018. 

3.8. 

Space strategy 

Services provided by Copernicus, the world’s largest single earth observation programme, can already 
be  used  to  track  land  cover  and  land  use  change,  and  could  be  used  in  the  future  to  achieve  the 
objectives of the LULUCF proposal (see section 3.2) and monitor deforestation and all forms of land 
use change on a global scale. 

Furthermore,  in  line  with  its  space  strategy,  the  Commission  is  testing  the  feasibility  of  global  CO2 
anthropogenic emission monitoring and verification support capacity using a collection of independent, 
observation-based atmospheric data which could in future complement national inventory systems and 
help increase their reliability and accuracy. 

3.9. 

Carbon capture and storage 

The European Union is stepping up its research efforts into carbon capture and storage (CCS) and into 
the  commercial  viability  of  carbon  capture  and  use  (CCU).  A  number  of  countries  such  as  The 
Netherlands, the UK and France are exploring options for developing clusters of energy- and carbon-
intensive industries where CO2 could be captured for subsequent safe geological storage or use. Four 
proposals  for  cross-border  CO2  transport  infrastructure  were  submitted  for  inclusion  in  the  list  of 
projects of common interest and are eligible for financial support. 

3.10. 

F-gases 

The  new  European  Regulation  to  control  emissions  from  fluorinated  greenhouse  gases  (F-gases)  has 
been  in  effect  since  1 January 2015.  It  is  aimed  at  cutting  total  EU  emissions  from  F-gases  by  two 
thirds  by  2030  compared  to  2014  levels.  It  prohibits  the  placing  of  F-gases  on  the  market  in  certain 
circumstances  where  alternatives  are  available.  In  2018,  quotas  for  legally  placing  HFCs  on  the  EU 
market were reduced to 63 % of 2015 levels. 

4. 

ADAPTING TO CLIMATE CHANGE 

The 2013 strategy for adapting to climate change aims to prepare EU Member States for current and 
future impacts. In particular, it ensures that adaptation is mainstreamed across all relevant EU policies, 
to  secure  greater  coordination,  coherence  and  information  sharing  across  Member  States.  The 
Commission is evaluating the strategy to mid-2018 and is considering revising it, partly in view of the 
Paris Agreement.  

18 

 
focusing  on 

LIFE  FRANCA  is  an  Italian  project  co-financed 
under  LIFE  2015, 
flood  risk 
anticipation  and  communication  in  the  Alps.     
The  project  aims  to  prepare  the  population  for 
flood  events  through  a  participatory  process 
involving  citizens,  authorities  and  experts.    The 
results of this pilot project will be transferable to 
other regions, as well as to other natural hazards 
connected with climate change. 

The general trends include the following: 

  Twenty five Member States have adopted national adaptation strategies and the rest are being 
drafted. However, less than half of Member States have yet produced or started to implement 
action plans. 

  The  sectors  most  commonly  identified  as  needing  to  adapt  to  the  adverse  effects  of  climate 
change  are  water  management  and  water  resources,  coastal  areas,  forests  and  forestry, 
agriculture, biodiversity and ecosystems, human health, and tourism and recreation. 

  Most Member States are just starting to monitor and evaluate the effectiveness and efficiency of 

adaptation actions. 

  Cities  have  stepped  up  efforts  to  identify  climate  change  adaptation  needs  and  update  their 
urban  policies  (see  section  5.1),  including  implementing  green  infrastructure  and  ecosystem-
based approaches to adaptation.   

5. 

PARTICIPATING IN INTERNATIONAL CLIMATE POLICY 

5.1. 

Global climate action agenda 

In response to the Paris Agreement’s call to mobilise non-state actors including business, cities, citizens 
and  international  civil  society, the EU  is  supporting  a  number  of  flagship  initiatives  such  as  Mission 
Innovation, the Covenant of Mayors, the NDC Partnership, Renewable Energy for Africa, 4/1000 for 
Climate Smart Agriculture and InsuResilience. All of these initiatives are meeting the specific targets 
they  have  set  themselves.  Systematic  tracking  tools  to  measure  their  impact  on  emissions  reductions 
and resilience are currently being devised. 

By way of example, the Global Covenant of Mayors for Climate & Energy brings together more than 
7 300 cities and towns in more than 56 countries. It informs, mobilises and supports cities taking action 
on  mitigation  and  adaptation to  climate  change,  and  on  access  to  clean  and  affordable  energy.  Cities 
voluntarily  draft  local  strategies  and  plans  for  mitigation  and  adaptation.  The  Covenant  makes  their 
commitments and actions visible, assists with exchanges of experience and provides technical support. 
It has a strong, bottom-up approach based on three points: 

i. 

a  new  target  of  at  least  a  40 %  reduction  in  CO2  emissions  (and  possibly  other  greenhouse 
gases) by 2030; 

19 

 
ii. 

iii. 

both mitigation and adaptation through the Mayors Adapt initiative; 

global scope, opening up participation to local authorities worldwide. 

5.2. 

Aviation 

The  EU  has  supported  the  development  of  a  global  measure  to  address  CO2  emissions  from 
international  aviation.  A  Resolution  on  a  Carbon  Offsetting  and  Reduction  Scheme  for  International 
Aviation  (CORSIA)  was  adopted  at  the  39th  ICAO  Assembly  in  early  October  2016.  CORSIA  is 
conceived  as  a  carbon  offsetting  scheme  with  the  objective  of  stabilising  international  aviation 
emissions at 2020 levels. It will be introduced from 2021. 

ICAO member countries are free to participate in the first two phases, which run until 2027. Currently, 
according to Member State's statements on their participation in the scheme, emission coverage could 
be around 80 % of what is needed to make aviation carbon-neutral from 2020. To ensure CORSIA’s 
effectiveness and integrity, key elements need to be in place, such as: 

 

rules on monitoring, reporting and verification of emissions (including biofuels); 

  eligibility criteria for emission units; 

  a registry that provides an appropriate level of transparency and accountability. 

Once final agreement on these is reached, ICAO members will have to introduce them in each country. 

At the same time, the EU is addressing aviation emissions through the EU Emissions Trading System. 
After the 2016 ICAO Assembly the Commission approved a legislative proposal to extend the current 
intra-European scope of the EU ETS for aviation (flights between airports in the European Economic 
Area) beyond 2017, and provide for a new review once there is more clarity on CORSIA’s rules and 
implementation by non-EU countries. The proposal on ETS aviation is expected to be adopted by the 
Council and by the European Parliament by the end of 2017.  

Horizon  2020  contributes  to  the  achievement  of  ICAO's  carbon  neutrality  growth  objective  with 
research  and  development  on  aircraft  technologies,  operational  improvements  as  well  as  on  the 
development of alternative fuels.  

5.3.  Maritime policy 

In  October  2016,  the  IMO  agreed  on  a  roadmap  for  drafting  a  comprehensive  IMO  strategy  for 
reducing GHG emissions from ships. Two key meetings on this IMO strategy were held in June and 
July  2017.  At  these  meetings,  a  number  of  non-EU  partners  (e.g.  small  island  developing  states  and 
Canada)  and  the  EU  Member  States  argued  in  favour  of  including  an  adequate  emissions  reduction 
objective in the strategy. 

The  IMO  is  expected  to  adopt  an  initial  strategy  setting  out  the  level  of  ambition  and  suggesting 
measures and timelines in Spring 2018. If that happens, the international shipping sector and the IMO 
would be in a position to provide information on its initial ‘contribution’ to international efforts to cut 
CO2  emissions  for  the  2018  stock-taking  process  (the  ‘facilitative  dialogue’)  under  the  Paris 
Agreement. Adoption of the final IMO strategy, including short-, medium- and long-term measures, is 
expected in Spring 2023. 

20 

 
 
5.4. 

ETS linking with Switzerland  

The emergence of a global carbon market, notably through the linking of emissions trading systems, is 
a  longstanding  goal  of  the  EU.  It  would  offer  opportunities  for  greater  emissions  reductions  while 
cutting  the  cost  of  climate  change  mitigation.  Negotiations  with  Switzerland  on  linking  emissions 
trading systems started in 2010 and were concluded in 2015. The Linking Agreement was initialled in 
January 2016 and proposals for signing and concluding it are now with the Council and Parliament. 

5.5. 

International carbon markets 

Beyond this, and even more so following COP 21 and the entry into force of the Paris Agreement, the 
EU continues to play an active role in supporting the development of carbon pricing and, in particular, 
of emissions trading systems in other parts of the world. It does this both through multilateral initiatives 
such as the Partnership for Market Readiness, run by the World Bank, and involvement in International 
Carbon  Action  Partnership  (ICAP)  activities  and  training.  It  also  conducts  bilateral  activities,  in 
particular by stepping up cooperation with  China,  which is preparing a nationwide system. As in  the 
EU, emissions trading and carbon pricing in general have an important role to play in the rest of the 
world’s transition to a low-carbon, energy-efficient economy. 

5.6. 

Ratification of the Kigali Amendment 

In  July  2017,  the  EU  and  its  Member  States  committed  to  ratifying  the  Kigali  Amendment  to  the 
Montreal Protocol quickly, so that it comes into force on 1 January 2019. This amendment, adopted in 
October 2016, is a significant step forward in implementing the Paris Agreement by limiting the global 
production and use of hydrofluorocarbons (HFCs). Science suggests that an ambitious phase-down of 
HFCs alone could prevent up to 0.5 °C of global warming by the end of the century. 

5.7. 

Supporting developing countries 

The EU and its Member States are the world's biggest providers of official development assistance to 
developing  countries,  delivering  EUR 75.4 billion  in  2016.  In  particular,  the  EU,  EIB  and  Member 
States provided EUR 20.2 billion to help developing countries tackle climate change that year. 

Furthermore, the EU and the African Union intend to put in place an Africa Research and Innovation 
Partnership on Climate Change and Sustainable Energy. This partnership, which needs to be approved 
formally by both sides, will be jointly funded and owned.  

The  EU  also  supports  developing  countries  in  their  efforts  toward  implementing  the  Reducing 
Emissions  from  Deforestation  and  Forest  Degradation  (REDD+)  programme.  Support  is  provided 
through international initiatives such as the REDD+ Partnership, the Forest Carbon Partnership Facility 
(FCPF),  the  EU  REDD  Facility,  and  the  UN-REDD  programme.  In  order  to  support  developing 
countries in limiting and reducing GHG emissions from their shipping sectors, in 2015 the Commission 
signed  a  contract  with  the  International  Maritime  Organization  (IMO)  providing  EUR  10  million  to 
implement  a  four-year  project  entitled  'Capacity  Building  for  Climate  Change  Mitigation  in  the 
Maritime  Shipping  Industry'.  For  this  purpose,  five  Maritime  Technology  Cooperation  Centres 
(MTCC)  are  being  established  in  the  different  eligible  world  regions,  namely  Africa,  Asia,  Small 
Islands  Developing  States  in  the  Pacific,  Caribbean  and  Latin  America.  These  MTCCs  will  act  as 
centers  of  excellence  to  promote  the  uptake  of  low  carbon  technologies  and  operations  in  maritime 
transport. 

21 

 
In the shipping sector, the Commission has signed in 2015 a contract with the International Maritime 
Organization  (IMO)  providing  EUR  10  million  to  implement  a  four-year  project  entitled  "Capacity 
Building for Climate Change Mitigation in the Maritime Shipping Industry" to promote the uptake of 
low carbon technologies and operations in maritime transport. 

22