COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS An EU-wide assessment of National Energy and Climate Plans Driving forward the green transition and promoting economic recovery through integrated energy and climate planning
Date: 2020-09-17
Institutions: Directorate-General for Energy, European Commission
Subjects: EU environmental policy, adaptation to climate change, competitiveness, energy cooperation, energy policy, environmental cooperation, greenhouse gas, innovation, reduction of gas emissions, renewable energy

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 17.9.2020  COM(2020) 564 final  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS An EU-wide assessment of National Energy and Climate Plans        Driving forward the green transition and promoting economic recovery through integrated energy and climate planning                            
 
 
1.  THE  ROLE  OF  INTEGRATED  NATIONAL  ENERGY  AND  CLIMATE  PLANS  IN 
DELIVERING  THE  2030  TARGETS  AND  CONTRIBUTING  TO  RECOVERY  AND 
RESILIENCE  

This Communication presents the EU-wide assessment of the 27 National Energy and Climate 
Plans  (from  here  onwards  NECPs  or  the  plans)  submitted  by  Member  States  in  accordance 
with the EU’s Governance regulation1, across all the dimensions of the Energy Union and in 
the light of the European Green Deal2 and post-COVID 19 recovery context. 

This assessment comes at the end of an extensive process of preparation and coordination at 
national  level  and  constant  dialogue  between  the  Member  States,  the  Commission  and  the 
other EU institutions. Member States have engaged since 2018 to prepare their NECPs, to be 
submitted  by  31  December  2019.  In  June  2019,  the  Commission  examined  the  draft  plans3 
and provided individual feedback to the Member States4, which took into account most of the 
recommendations.  All  Member  States  have  now  presented  their  final  plans5  containing  an 
integrated vision of the energy and climate transition for the next ten years. This has been an 
unprecedented  process,  as  the  plans  have  been  subject  to  extensive  consultation  with 
stakeholders,  civil  society  and  citizens  to  ensure  ownership  and  wide  public  support6.  The 
Council also discussed the preparation of the plans in various occasions. 

The 27 plans give an overview of how Member States are approaching the first phase of their 
transition  towards  climate  neutrality  and  where  they  want  to  go  in  the  period  2021–2030 
across five areas: decarbonisation, energy efficiency, energy security, internal energy market, 
research  and  innovation  and  competitiveness.  Member  States’  long  term  decarbonisation 
strategies will complement the plans7.  

The  assessment  shows  how  the  full  implementation  of  the  plans  would  lead  Europe  to 
overachieve  the  current  2030  greenhouse  gas  emissions  reduction  target,  establishing  a 
springboard  for  the  greater  ambition  proposed  by  the  Commission  in  the  Communication 
“Stepping  up  Europe’s  2030  climate  ambition:  Investing  in  a  climate-neutral  future  for  the 
benefit  of  our  people”  it  is  adopting  in  parallel,  on  the  basis  of  an  accompanying  impact 
assessment. 

As the impact assessment shows, the plans also provide a solid base to aim in a realistic and 
responsible way to a higher greenhouse gas emissions reduction target for 2030 if additional 
action is taken at all levels to provide further momentum and to fill outstanding gaps and if 
the opportunities for a green recovery are fully taken up.  

1 Regulation (EU) 2018/1999 on the Governance of the Energy Union and Climate Action 
2 COM(2019) 640 final. 
3 COM(2019) 285 final. 
4 Commission Recommendations of 18 June 2019 on the draft integrated National Energy and Climate Plan of each Member 
State covering the period 2021-2030, C/2019/4401 to C/2019/4428 
5 Ireland has asked to consider its intention to update its plan and the level of ambition in the near future.  
6 Several Member States organised local, regional, sectoral workshops to discuss the content of their final NECP with 
stakeholders (social partners, civil society, educational institutions, local institutions and environmental NGOs). 
7 Article 15 of the Governance Regulation: to be submitted by Member States by 1 January 2020. 

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The  assessment  takes  into  account  the  context  of  the  post-COVID-19  recovery.  NECPs  are 
both  a  policy  tool  and  an  investment  agenda  that  provide  business  and  investors  a  forward-
looking  framework.  They  constitute  a  strong  basis  for  Member  States  to  design  their  green 
recovery  and  resilience  strategies  and  deliver  on  broader  European  Green  Deal  objectives 
from  a  clean  and  circular  economy  to  a  zero  pollution  ambition.  This  Communication 
highlights  how  funding  under  the  EU’s  Recovery  and  Resilience  Package  can  be  used  to 
support  the  investments  and  reforms  identified  in  the  national  plans8,  in  particular  by 
investing 
in  energy  efficiency,  renovating  buildings,  deploying  renewable  energies, 
sustainable  mobility,  modernising  electricity  grids  and  boosting  innovation  in  crucial 
technology areas such as renewable hydrogen and batteries. 

This  Communication  is  a  first  step  in  a  process  that  will  involve  other  stages.  The 
Commission  will  publish  an  in-depth  assessment  of  each  individual  NECP  in  October 
together  with  the  State  of  the  Energy  Union  report,  including  country-specific  guidance  on 
how Member States can make further progress in implementing the plans. This will provide 
valuable  input  for  Member  States  to  draw  on  in  preparing  their  national  recovery  and 
resilience  plans  and  drive  the  investment  agenda  for  green  deal  related  projects  that  deliver 
jobs at the same time as a positive climate and environmental impact. It will also inform the 
Commission’s assessment of the recovery and resilience plans. Lastly, Member States need to 
ensure their Just Transition Plans (to be submitted in the context of the Just Transition Fund) 
are consistent with the NECPs.  

Throughout this process, the Commission will continue its dialogue with Member States with 
a  view  to  supporting  the  full  implementation  of  the  plans,  prepare  their  update  due  in  2023 
and  ensure  they  remain  the  compass  to  guide  the  national  progress  towards  reaching 
ambitious energy and climate targets in 2030 and beyond. Coordination with Member States 
will  also  include  the  external  aspects  of  the  NECP’s  and  their  implementation  will  be 
supported by energy and climate diplomacy. 

2.  ASSESSMENT  OF  THE  FINAL  NECPS:  WHAT  HAVE  THEY  DELIVERED  AND 
HOW CAN THEY SUPPORT RECOVERY AND RESILIENCE?  

2.1.  Assessment  of  the  renewable  energy,  energy  efficiency  and  greenhouse  gas 

reduction parts of the NECPs  

2.1.1. EU renewable energy 

The  assessment  of  NECPs  shows  that  the  share  of  renewable  energy  could  reach,  under 
existing and planned measures, a range of 33.1 to 33.7% in 2030 at Union level surpassing 
the  target  of  at  least  32%  in  2030  and  putting  renewables  at  the  forefront  to  achieve  the 
objectives set out in the Communication on stepping up Europe’s 2030 climate ambition. 

8 According to the IEA, a sustainable recovery plan could add 1.1 percentage points to global economic growth each year. 
The effect on employment would be significant, saving or creating roughly 9 million jobs a year over the next three years 
(IEA’s World Energy Outlook Special Report on Sustainable Recovery) 

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This would build on the back of continued relatively positive developments. The analysis of 
Eurostat  figures  for  2018  and  projections  at  Member  State  level  of  the  expected  2020 
renewable energy share in final energy consumption show9 that the EU is projected to reach a 
renewables share of between 22.5% and 22.7% and that the vast majority of Member States 
are  projected  to  meet  their  national  binding  targets.  Early  estimates  suggest  that  renewable 
power generation capacity continued to grow by 6.2% in 2019, with a market growth of 33% 
compared  to  2018.  Furthermore,  several  analysts  suggest  that  while  negatively  impacted  by 
the  COVID-19  crisis,  the  renewables  industry  and  the  associated  investments  are  showing 
relatively strong resilience. The EU thus appears well on track to achieve the European target 
of 20% renewables share in final energy consumption by 2020. Nonetheless, several Member 
States, notably those which are projected to lag behind at this stage should consider additional 
measures, including in the form of cooperation mechanisms, to ensure that they achieve their 
2020 national binding targets. 

The  EU’s  newly  established  renewable  energy  financing  mechanism10  could  in  particular 
rapidly  benefit  larger  scale  offshore  and  innovative  technologies.  The  flexible  nature  of  the 
mechanism  allows  Member  States  to  tap  into  the  best  potential  for  renewable  energy 
generation across Europe and reduce the cost of support, helping Member States to achieve or 
even exceed their national target for 2020 and the EU’s 2030 target. The mechanism can also 
be  combined  with  other  EU  instruments  such  as  CEF  or  InvestEU  to  further  streamline 
funding for new renewable energy projects. 

Nearly  all  final  NECPs  have  confirmed  or  in  some  cases  increased  their  renewable  energy 
ambition  compared  to  the  draft  plans.  However,  the  aggregate  figures  mask  differences 
between Member State contributions. Several plans fail to include sectoral trajectories that are 
in  line  with  the  Renewable  Directive  requirements,  remaining  below  cost-efficient  national 
potentials.  By  contrast,  a  few  Member  States  have  set  very  ambitious  sectoral  targets  for 
renewables.  Austria  and  Sweden  with  the  objective  of  100%  renewable  electricity  by  2030 
and 2040, respectively. 

The analysis for the Communication on stepping up Europe’s 2030 climate ambition shows 
that higher shares of renewables are fundamental to achieve higher greenhouse gas emissions 
reduction targets. As set out in the impact assessment, reducing greenhouse gas emissions by 
at least 55% would require a share of renewable energy in the EU of 38-40% by 2030. 

NECPs provide a vast number of matured projects of renewables that can also contribute 
to the economic recovery. Examples include the creation of 100.000 rooftops solar panel and 
small-scale  storage  programme  in  Austria;  financial  support  to  prosumers  for  installation  of 
small-scale  power  plants  in  Lithuania,  with  an  expected  outcome  of  696  MW  of  installed 
capacity as from 2024; investments to achieve 4 GW of offshore wind capacity in Denmark 
and  3.8  GW  in  Poland; the  launch  of  six  offshore  wind  tenders  by  2023  aiming  at  3.7  GW 

9 Uncertainty remains on 2020 energy demand impact by the pandemic and corresponding impacts on the society and the 
economy. Therefore, two distinct demand trends (low and high) are shown that appear likely as lower and upper boundaries. 
10 Renewable Energy Financing Mechanism C(2020)6123, operational as of January 2021 

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capacity  in  France;  and  building  solar  farms  and  hydrogen  infrastructure  on  former  lignite 
mining sites in Greece and Portugal.  

NECPs  and  renewables:  challenges  and  opportunities  for  the  recovery  and  the 

European Green Deal  

NECPs provide a clear signal from Member States that they back the rapid and cost-effective 
transition  to  a  resilient  carbon  neutral  economy,  strongly  based  on  renewables,  which  will 
help  the  private  sector  invest  confidently.  For  example,  at  least  10  Member  States  have 
indicated their intention to phase out coal production of electricity in the coming years and the 
replacement  of  the  decommissioned  capacity  mainly  by  renewable  technologies.  Clean 
mobility  is  also  an  example  where  a  high  number  of  Member  States  have  set  ambitious 
targets,  in  particular  for  electro  mobility11  and  advanced  biofuels12.  However,  NECPs  fall 
short  of  identifying  the  potential  of  offshore  renewables  that  is  available  to  them,  and  the 
related  challenges.  The  Commission  will  help  address  this  in  a  strategic  manner  in  its 
upcoming Strategy for Offshore Renewable Energy by identifying key actions in the area of 
maritime planning, upscaling technologies, and a new approach to infrastructure planning. 

Frontloading investments in these solutions respecting the “do no harm” principle would align 
government spending and the financial stimulus for recovery and resilience with the increased 
ambition  to  reduce  emissions  by  at  least  55%  by  2030  the  EU’s  ambition  to  transition  to 
climate neutrality by 2050. Additional investments in renewables can also have a quick and 
positive impact on the recovery of the economy (as well as reduce energy bills and improve 
air quality in the case of non-combustible renewable). Each €1 million shifted from brown to 
green energy would create a net increase of five jobs13. 

Frontloading  investments  would  also  accelerate  demand  and  competition,  making  Europe’s 
manufacturing  base  stronger  along  its  value  chain  while  showing  worldwide  industrial 
leadership and deliver better jobs.  

Investments in renewables create jobs. In the EU almost 1.5 million people were employed 
in  the  renewables  sector  in  2018,  including  the  indirect  jobs  in  the  value  chain.  The  solar 
photovoltaic  sector  is  the  most  intensive  job  creator  with  12  jobs  for  each  million  euro  of 
investment. In contrast, the wind industry creates 3 jobs for each million euro of investment, 
but  because  of  the  expected  growth  over  the  period  from  2020  to  2030  it  will  become  the 
largest job creator in the renewables sector in the EU. At the EU level, IRENA estimated 2.7 
million jobs  in  renewables by 2050, 1.7 in  energy  efficiency  and 0.8 in  system flexibility14. 

11  In  its  NECP,  Germany  has  set  a  target  of  7-10  million  electric  vehicles  by  2030  and  up  to  1  million  public  accessible 
recharging points by 2030. Greece includes a target of 30 % of electric passenger cars by 2030 and Italy of 6 million electric 
vehicle by 2030. 
12 Estonia estimates a ten-fold increase of biomethane by 2030; Finland of advanced biofuels to 30% by 2030. 
13 Modelling estimates suggest that while €1 million spending in fossil fuels would create 2.7 full-time equivalent jobs, that 
same spending would create 7.5 FTE jobs in renewable energy or 7.7 FTE jobs in energy efficiency; Garrett-Peltier (2017), 
https://www.sciencedirect.com/science/article/pii/S026499931630709X?via%3Dihub 
14 IRENA (International Renewable Energy Agency) Global Renewables Outlook: Energy transformation 2050.  

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Similarly,  IEA estimates that solar photovoltaic together with energy efficiency in buildings 
and industry create the most jobs per million euro of investment15. 

The  European  renewables  industry  is  well  positioned  for  global  leadership.  Its  gross  value 
added  amounted  to  €80  billion  in  2018  (growing  at  6-8%  annually).  The  EU  is  strong  in 
developing the technologies necessary for renewables (e.g. offshore renewables), including a 
rich ecosystem of SMEs. Renewables may also provide replacement employment in eligible 
Just Transition regions and generally in a decentralised manner also opportunities for remote 
areas and islands. Thanks to huge cost reductions, the cost-competitiveness gap of renewables 
is closing rapidly in the EU and mature renewables are now cost competitive and bring down 
energy prices for European consumers16. 

Member States are invited to fast track and make better use of the following measures, which 
are generally not included or sufficiently detailed in their NECPs17. Explore and maximise the 
use  of  waste  heat/cold,  ensure  that  citizens  are  entitled  to  become  a  renewable  self-
consumer (including in combination with storage systems), and be part of renewable energy 
communities,  while  promoting  electrification  based  on  renewables  in  transport  that 
facilitate  variable  renewable  energy  generation  projects.  Furthermore,  predictability  on 
planned  tenders  including  volumes  and  breakdown  of  new  and  repowered  capacity  for 
renewables,  streamlining  permitting  (e.g.  single  contact  point),  swift  procedures  for 
repowering  and  power  purchase  agreements  have  a  positive  impact  on  stimulating  both 
large-scale and small-scale investments.  

Further grid rules and infrastructure adaptation will be necessary to cater for both increasing 
decentralised  generation,  large  offshore  renewable  production  and  integration  of  hybrid 
projects combining renewables with storage, in particular renewable hydrogen. The potential 
for cross-border regional initiatives18 remains to be further tapped through better cooperation 
between Member States and use of EU funds, including funds under the temporary recovery 
instrument  ‘Next  Generation  EU’,  and  building  on  regulatory  advances19.  This  will  further 
boost competitiveness  and decarbonise demand  side sectors such as buildings, industry, and 
transport, which traditionally relied on fossil fuels.  

The  impact  assessment  accompanying  the  Communication  on  stepping  up  Europe’s  2030 
climate ambition20 also shows that investments at local and national level are needed to create 
more  physical  links  between  energy  carriers  in  an  integrated  energy  system.  For  example, 
investments in modern, low-temperature district heating systems should be promoted (as they 

15 IEA (International Energy Agency), World Energy Outlook, Special Report Sustainable Recovery, June 2020; on average 
the three above mentioned measures create between 10-15 jobs for every million euros. 
16 The upcoming annual Prices and Cost report will provide further details 
17 The actions proposed in the Energy System Integration Strategy COM (2020) 299 final are complementary to the 
renewable energy regulatory framework 
18 Grouping of a number of Member States like south east Europe, Baltic, central Europe etc. 
19 Good examples of the regional cooperation are the North Seas Initiative and Baltic Sea Region that could be replicated to 
other regions across Europe. 
20 Communication on Stepping Europe’s 2030 Climate Ambition COM(2020) 562 

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can  connect  local  demand  with  renewable  and  waste  energy  sources),  as  well  as  the  wider 
electric and gas grid in order to optimise supply and demand across energy carriers. 

2.1.2. Energy efficiency  

The  assessment  of  the  final  plans  shows  that  the  energy  efficiency  aggregated  ambition 
would amount to a reduction of 29.7% for primary energy consumption and 29.4% for final 
energy consumption21, reaching 1176 Mtoe  and 885 Mtoe respectively in  2030. This  means 
that  the  collective  ambition  for  2030  has  been  increased  compared  to  the  conservative 
scenario  from  the  draft  plans22,  thanks  to  several  Member  States  increasing  their  planned 
efforts and clarifying points. However, there remains a gap compared to the Union’s 2030 
target of at least 32.5%, which still stands at 2.8 percentage points for primary energy 
consumption and at 3.1 percentage points for final energy consumption. 

The  COVID-19  crisis  currently  impacts  on  energy  consumption,  which  might  unexpectedly 
bring the EU very close to reaching the 2020 energy efficiency targets. However, this is not 
the  result  of  structural  changes  nor  adaptations  and  will  not  be  long-lasting.  Recovery  from 
the  COVID-19  crisis  will  lead  to  a  rebound  in  energy  consumption,  which  means  that 
additional  energy  efficiency  efforts  and  investments  are  needed  to  make  energy  efficiency 
gains structural23. 

The  Energy  Union  has  recognised  a  prominent  role  of  energy  efficiency  and  enshrined  the 
guiding  “Energy  Efficiency  First”  principle  into  legislation24.  Still,  most  final  NECPs  only 
set  out  limited  details  on  the  application  of  this  principle  despite  the  fact  that  energy 
efficiency  plays  a  key  role  for  the  achievement  of  all  targets,  and  notably  the  reduction  of 
greenhouse gas emissions. Final plans include more details on electrification which is in line 
with the energy efficiency first principle. Co-benefits and possible trade-offs between energy 
efficiency  measures  and  climate  adaptation  remain  unrecognised  and  untapped.25  Member 
States  need  to  consider  cost-effective,  technically,  economically  and  environmentally  sound 
energy efficiency measures as part of and as alternatives in planning, policy and investment 
decisions, and prior to making any future investment decisions on energy infrastructure.  

The  Commission  is  preparing  a  dedicated  guidance  for  the  implementation  of  the  Energy 
Efficiency First Principle for energy related policy planning and investment decisions across 
the economy. The Commission is already working towards implementing this principle in all 
its relevant energy policy  proposals, such as the EU Strategy for Energy System Integration 
and the upcoming TEN-E revision. 

21 Compared to the projections of the 2007 Reference Scenario for 2007 
22 The draft plans’ aggregated ambition ranged from 26.3%-30.2% for primary energy consumption and 26.5%-30.7 % for 
final energy consumption. 
23 Recent data BNEF shows that power consumption levels in several Member States is already back to normal. 
24 Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the Governance of the 
Energy Union and Climate Action 
25  Co-benefits  include  better  insulation  protecting  against  heatwaves  (if  coupled  with  adequate  ventilation,  while  poorly 
executed  energy  efficiency  measures  that do  not  take  into  account  vulnerability  to  climate  hazards  (such  as  flooding,  hail, 
strong winds) are at risk of being damaged or destroyed. 

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Considering  that  additional  action  is  in  particular  necessary  in  the  built  environment,  it  is 
welcome that NECPs  include various energy efficiency measures in the building sector. 
In  general,  there  is  broad  coverage  in  all  NECPs  (and  in  the  national  long  term  renovation 
strategies submitted so  far) of supportive measures to  building renovation. Some interesting 
approaches  increase  the  level  of  stringency  of  ‘prescriptive’  measures,  such  as  binding 
building renovation targets (e.g. dwellings rented out having to meet a minimum performance 
class, tightening public procurement rules for buildings and legal limits on fossil fuel use for 
heating  purposes,  including  bans).  Several  Member  States  have  good  examples  to  follow, 
including:  Bulgaria  has  set  an  ambitious  target  to  renovate  over  5%  of  public  buildings  per 
year; Latvia intends to renovate 2 000 multi-apartment and 3 000 single family buildings by 
2030;  Romania  has  put  in  place  specific  financing  schemes  with  an  energy  efficiency 
investment  fund  financed  by  private,  national  and  EU  funds;  Cyprus  has  also  co-financed 
programmes  until  2020  to  finance  the  renovation  of  2  100  residential  buildings  and  164 
SMEs.  

As the objectives, targets and contributions of the plans appear insufficient for the collective 
achievement of the EU’s energy efficiency objective for 2030, in line with Article 31 of the 
Governance  Regulation  the  Commission  shall  propose  measures  and  exercise  its  powers  at 
Union level to ensure the achievement of the Union’s energy efficiency targets26. To that end, 
the Commission plans to review and possibly revise the Energy Efficiency Directive27 and 
if  needed  specific  targeted  provisions  of  the  Energy  Performance  of  Buildings  Directive.  It 
will  also  promote  relevant  Green  Deal  initiatives,  notably  the  Renovation  Wave  and  the 
Strategy for Energy Sector Integration, which will be key to promote further energy efficiency 
to  bridge  the  gap.  These  would  complement  other  actions  targeting  public  procurement, 
energy audits, heating and cooling and recovery of waste heat (including from industrial sites 
and  data  centres28)  energy  services,  administrative  capacities,  and  skills.  The  integration  of 
circular economy (i.e. materials efficiency) would bring additional benefits to achieve climate 
and environmental objectives. 

Furthermore, the Commission is also preparing its Ecodesign and Energy Labelling Working 
Plan to identify priorities for the years ahead in terms of possible new or revised Ecodesign 
and Energy Labelling regulations whilst continuing to work with Member States to facilitate 
full and effective implementation and compliance.  

It is important to emphasise that the impact assessment accompanying the Communication on 
stepping up Europe’s 2030 climate ambition shows that the increased ambition for greenhouse 
gas  emissions  reductions  by  2030  would  also  require  higher  energy  efficiency  ambition 
regardless  of  the  scenario  chosen.  Final  and  primary  energy  consumption  would  have  to 
decrease to around 39-41% and 36-37%, respectively, to achieve at least 55%greenhouse gas 

26 Article 31(3) of Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the 
Governance of the Energy Union and Climate Action 
27 https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12552-Review-of-Directive-2012-27-EU-on-
energy-efficiency 
28 The importance of the Primary Energy Factor in the facilitation of energy efficient decision between different energy 
carriers should be fully recognised. 

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emissions  reductions.  Thus,  the  challenge  to  increase  energy  efficiency  efforts  goes  beyond 
the  ambition  gap  of  the  final  NECPs  and  additional  measures  need  to  match  the  ambition 
required by the Communication on stepping up Europe’s 2030 climate ambition. 

NECPs  and  energy  efficiency:  challenges  and  opportunities  for  recovery  and 

European Green Deal objectives 

Energy efficiency and, in particular, building renovation and affordable housing are priorities 
for action and for investments to support the recovery through local jobs.  

Member  States  should  explore  the  potential  of  speeding  up  building  renovation  in 
providing  recovery  stimulus  where  it  is  most  needed:  the  local  economies  and  SMEs 
(who account  for 90% of the construction sector).  Lowering energy bills,  alleviating energy 
poverty,  and,  in  the  long-run,  improving  public  health  and  comfortable  living,  can  make 
society  more  resilient  to  potential  future  crisis.  Worldwide,  jobs  in  the  energy  efficiency 
sector  are  expected  to  total  around  21  million  by  205029.  In  particular,  investment  in  social 
and  affordable  housing  is  a  beneficial  countercyclical  economic  measure  that  generates 
economic return in terms of employment during low economic conjuncture. 

Member States need to draw up and submit national long-term renovation strategies, broken 
down to action at regional and local levels30. As of end-August 2020, only 12 Member States31 
had submitted their long-term strategies32. The Commission calls on all Member States who 
have not yet submitted their strategy to do so as a matter of urgency. 

The elements in the NECPs and in the limited number of these strategies submitted so far are 
an  important  building  block  for  the  policy  vision  to  be  set  out  in  the  Renovation  Wave 
Initiative  which  will  provide  a  political  impetus  to  address  cross-cutting  challenges  in  the 
building  sector.  The  initiative  will  build  on  three  fundamental  blocks:  a  solid  regulatory 
framework,  adequate  financing  and  a  strong  governance  framework  based  on  long-term 
planning and stakeholder engagement. It will propose forward legislative and non-legislative 
instruments and enabling tools, including an important financing element, to ensure action at 
EU, national and local or regional levels. 

2.1.3. Greenhouse gas emissions 

The  NECPs  provide  key  information  on  how  Member  States  aim  to  achieve  their  national 
emissions  reduction  targets  set  in  the  Effort  Sharing  Regulation  (ESR)33.  Currently,  these 
targets  range  from  0  to  -40%  in  2030  compared  to  2005  to  achieve  EU-wide  minimum 
reductions  in  sectors  not  covered  by  the  EU  Emission  Trading  System  (ETS)34  of  30% 

29 Global Renewables Outlook: Energy transformation 2050 
30 Art. 11 of Governance Regulation on multilevel dialogue that aims to improve realism & buy-in by the levels of 
government implementing the strategies and plans. 
31 (NL, DK, FI, SE, AT, CY, FR, ES, CZ, LU, DE, EE). In Belgium, the regions of Brussels and Flanders 
32 The Energy Performance of Buildings Directive (EPBD) requires Member States to notify national long-term renovation 
strategies (LTRS) to the Commission by 10 March 2020. 
33 Regulation (EU) 2018/842 
34 The non-ETS sectors include effort sharing sectors such as, land transport, heating of buildings, agriculture, waste and 
small industrial installations, and the Land Use Land Use Change and Forestry sector. 

8 

 
 
                                                           
compared to 200535. Compared to their current ESR targets, Luxembourg, Slovakia, Slovenia 
and  Sweden  have  set  more  ambitious  national  targets  in  the  sectors  not  covered  by  the  EU 
ETS.  Also  many  other  Member  States  project  that  the  implementation  of  their  policies  and 
measures planned in the NECPs reduces emissions beyond their ESR binding targets36.  

An aggregation of the projected emission impacts of the national measures currently planned 
in  the  NECPs  shows  that  by  2030  the  EU  would  reduce  emissions  by  32%  in  sectors  not 
covered by the ETS (excluding the land use, land use change and forestry (LULUCF) sector). 
This represents a progress of around 4 percentage points compared to the draft NECPs and is 
already  a  welcome  first  step  towards  achieving  the  increased  ambition  levels  of  the  2030 
Communication on stepping up Europe’s 2030 climate ambition37. 

The  assessment  of  the  NECPs  shows  that  for  the  economy-wide  greenhouse  gas  emissions 
reductions,  including  those  covered  by  the  EU  ETS,  emissions  reduce  under  existing  and 
planned measures by 41% below 1990 levels, surpassing the EU 40% reduction target38. This 
is an improvement of about 1.5 percentage points compared to the draft EU NECPs.  

To achieve these emissions reductions, the NECPs lay out a mix of sectoral and cross-sectoral 
measures.  Several  Member  States  intend  to  make  increased  use  of  carbon  pricing.  For 
example,  Germany  has  adopted  a  national  emissions  trading  law  which  is  gradually 
introduced.  It  covers  fossil  fuel  CO2  emissions  so  far  not  included  in  the  EU  ETS,  notably 
those  of  the  transport  and  building  sectors.  Luxembourg  plans  to  bring  in  a  gradually 
increasing  minimum  carbon  tax  for  all  fossil  fuels,  which  will  be  constantly  adapted  to  the 
objectives  of  the  Paris  Agreement.  Ireland  envisages  a  strong  carbon  tax  trajectory  and 
increased  its  carbon  tax  by  30%  in  2020,  with  all  revenues  ring-fenced  to  support  climate 
action  and  protect  the  most  vulnerable  people  in  the  country.  Other  Member  States  such  as 
Belgium study the design of a carbon pricing mechanism for buildings and transport.  

In addition, all Member States can use credits from the LULUCF sector to help achieve their 
ESR  targets.  LULUCF  is  the  only  sector  which  is  a  net  carbon  sink,  that  is,  which  can 
sequester  carbon  from  the  atmosphere  and  store  it  in  soils,  biomass  and  harvested  wood 
products.  Member  States  can  generate  LULUCF  credits  if  they  report  a  larger  carbon  sink 
than the one which would have occurred if past  management practices continued.  If, on the 
contrary,  the  carbon  sink  is  smaller  than  the  business-as-usual  counterfactual,  then  the 
corresponding  emissions  are  considered  debits  and  this  sector  creates  net  emissions;  these 
would  need  to  be  compensated  by  using  allocations  from  the  effort  sharing  sectors39.  Most 
Member States plan to ensure that their carbon sink will be large enough to avoid generating 

35 There is significant flexibility on how to achieve the national ESR targets, e.g. transfers between Member States, limited 
use of EU ETS allowances for some Member States, or using a certain amount of additional emission removals in the land 
use and forestry sector. 
36 Croatia, Estonia, France, Greece, Hungary, Italy, Latvia, Lithuania, Portugal and Spain. In addition, while not providing 
emission projections reflecting their plans, Denmark and the Netherlands set national total greenhouse gas reduction targets 
in law which imply the need to meet if not surpass their non-ETS targets domestically. 
37 COM(2020) 562 
38 This is under the current 2030 target scope, including international aviation and excluding international navigation and the 
LULUCF sink.   
39 Regulation (EU) 2018/841 

9 

 
 
                                                           
any debits, but  very  few of them give any indication in their NECPs of the extent to  which 
they plan to generate and use LULUCF credits for ESR compliance. Several Member States 
indicate  that  their  carbon  sinks  are  decreasing  due  to  ageing  of  forests,  harvesting  and 
increasing  natural  disturbances.  Aggregating  the  projection  information  included  in  the 
NECPs  reveals  that  around  a  third  of  the  2005  EU  carbon  sink  could  be  lost  by  2030.  The 
LULUCF sector may even become a net emitter after 2030. 

Member  States  were  required  to  list  climate  adaptation  goals  in  their  NECPs,  where 
available  and  as  applicable  to  achieve  the  Energy  Union  objectives.  Although  national 
adaptation  strategies  are  available  in  all  Member  States  and  the  changes  in  climate  are 
affecting  the  entire  EU,  around  a  quarter  of  Member  States  have  not  listed  such  goals,  and 
some  limit  themselves  to  describing  the  framework  for  adaptation  policy  making,  without 
quoting the goals themselves40.  

NECPs  and greenhouse  gas emissions reductions: challenges and opportunities 

for recovery and European Green Deal objectives 

The planned sectoral national policies are often strongly focused on a broad set of measures 
addressing  transport.  In emission terms,  this is  the largest  non-ETS  sector. As it  is  also  an 
economically important sector, planned measures are relevant for reducing emissions and for 
the recovery and should mutually support each other. Measures planned in the NECPs help, 
for example, to boost demand for clean zero and low emission vehicles that reduce CO2 and 
pollutant emissions in line with ambitious EU standards and ensure a clear pathway towards 
zero-emission  mobility,  in  line  with  the  priorities  for  fleet  renewal  as  part  of  the  overall 
economic recovery and resilience planning. This will be supported by an increased roll-out of 
recharging  and  refuelling  infrastructure  for  zero  and  low  emission  vehicles  and  investments 
for green transition in the transport industry value chain (e.g. batteries, hydrogen fuel cells). 
20 NECPs included detailed measures to increasing the use of bicycles. Also the investment 
in public transport and promoting its use, as often planned, will help recovery. The upcoming 
strategy  for  sustainable  and  smart  mobility  will  outline  a  comprehensive  set  of  measures 
towards the decarbonisation of the transport sector.  

A lot of the measures to reduce agricultural emissions or increase the LULUCF sink enable 
synergies and significant opportunities for recovery and resilience. The main focus of NECP 
measures  is  on  reducing  emissions  by  optimising  fertiliser  use  (through  support  to  organic 
farming and precision farming)  and addressing emissions from  the livestock sector  (grazing 
management,  animal  breeding/feeding  and  management).  Anaerobic  digestion  measures 
reduce emissions, recover nutrients and diversify farm income with the production of energy. 
Nature-based solutions and the protection of natural areas are also mentioned. Some Member 
States  plan  measures  to  increase  the  LULUCF  sink,  for  instance  by  providing  subsidies  for 
converting  organic  soils  from  arable  land  to  protected  natural  areas,  or  for  afforestation  in 

40 Good examples for integrating climate change adaptation aspects coherently into different NECP dimensions and/or 
providing some detail on adaptation measures are Croatia, Ireland, Italy, Slovenia and Spain. 

10 

 
 
                                                           
agricultural  land41.  Member  States  refer  to  the  Common  Agricultural  Policy  (CAP)  and  its 
rural  development  programmes  as  the  main  tool  for  supporting  measures  to  reduce 
agricultural  emissions  and  enhance  sustainable  forest  management,  as  well  as  afforestation 
and forest resilience. The NECPs will be an important starting point in the preparation of the 
national strategic plans, especially for describing how to achieve the climate objectives of the 
CAP. The actions described in the NECPs are also relevant in the context of the Biodiversity 
Strategy, ‘farm to fork strategy and the forthcoming forestry strategy.  

Another  sector  with  significant  opportunities  for  recovery  and  resilience  is  industry.  The 
regulatory and policy frameworks at EU level (e.g. EU ETS, Innovation Fund, new industrial 
policy and the circular economy action plan) and at national level can help to accelerate and 
support modernisation and deep transformation of the energy-intensive industry ecosystem to 
climate-neutrality, including through the use of hydrogen and carbon capture utilisation and 
storage.  Other  important  areas  of  work  are  to  create  lead  markets  for  climate-neutral  and 
circular  products  and  to  develop  climate-neutral  solutions  and  finance  their  uptake.  In  this 
context,  it  will  be  important  to  ensure  that  (national)  subsidies  do  not  unduly  distort 
competition and trade among Member States. 

Measures promoting the circular economy with its potential for growth and jobs creation will 
also  help  further  reduce  waste  emissions.  The  upcoming  EU  methane  strategy  will  also 
support this.  

EU funding instruments available  
for renewable energy, energy efficiency and greenhouse gas reductions 

The  costs  for  most  renewables  and  the  clean  technologies  needed  to  decarbonise  energy-
intensive industries are highly dependent on the cost of capital. The EU can play an important 
role in  catalysing the development  of private financing mechanisms that  both  attract capital 
and can be an effective means of reducing the cost of projects. Such mechanisms should also 
cater  for  small  scale  and  technology  specific  needs  so  as  to  increase  local  participation  and 
acceptance of the energy transition. This will be crucial for the deployment of renewables in 
the  next  decade  at  all  levels.  In  this  respect,  early  involvement  of  local  authorities  for 
continued  public  consultation  and  transparent  planning  is  of  utmost  importance.  Similarly 
boosting the Renovation Wave will require a huge amount of private capital. 

There  is  an  array  of  instruments  to  help  realise  renewable,  energy  efficiency  and  other 
emissions  reduction  projects,  which  can,  in  certain  instances,  be  complemented  by  private 
financing  mechanisms.  EU 
the  Connecting  Europe 
Facility, Cohesion  policy  funds  (including  additional  funding  via  REACT-EU),  Just 
Transition  Mechanism, InvestEU,  Recovery  and  Resilience  Facility,  Innovation  Fund, 
Modernisation Fund, Rural Development Fund, Horizon Europe, ELENA, Technical Support 
Instrument (TSI), and capacity building and market uptake measures under LIFE, Renewable 
energy EU Financing Mechanism, and the European Investment Bank.   

instruments  available 

include 

41 Belgium is considering shifting food production to the sea 

11 

 
 
                                                           
2.2. Promote investments and a just transition  

2.2.1. Investments 

In  their  NECPs,  Member  States  presented  an  improved  general  overview  of  the  expected 
investments  needed  to  achieve  the  various  objectives,  targets  and  contributions.  However, 
some  of  the  plans  lack  details  and  do  not  allow  to  compare  or  add  up  the  total  investment 
needs for energy and climate objectives. 

Based  on  Commission  calculations,  to  achieve  the  current  EU  2030  climate  and  energy 
targets, annual investments related to energy production and use will need to increase in 2021-
2030 by just over 1 percentage points of GDP on average, compared to the previous decade, 
that is, an increase of around €260 billion per year. For an increased greenhouse gas emissions 
reduction target of 55% this figure would increase to around €350 billion.  

Most Member States reported energy-related investment needs in the building, industrial, and 
transport sectors. Few reported expected investment needs in the agricultural sector, the third 
largest  source  of  emissions  in  non-ETS  sectors.  While  for  some  Member  States,  EU  funds 
will  make  up  significant  portions  of  planned  investments,  the  achievement  of  targets 
contained in the plans cannot be conditional on obtaining additional allocations from the EU 
budget. 

12 

 
 
 
Full implementation of the NECPs over the coming years will require to mobilise important 
amounts  of  new  public  and  private  investments.  The  response  to  COVID-19  provides  the 
opportunity  to  spearhead  some  of  the  needed  green  investments  and  reforms  through  the 
national and EU recovery and resilience strategies, especially as these offer major job creation 
potential in areas such as energy and resource efficiency and renewable energies. Following 
the  unprecedented  drops  during  the  COVID-19  crisis42,  rising  uncertainty  about  future  oil 
demand due to changes in patterns of work, production and consumption highlights the risks 
of  investments  in  stranded  assets.  In  this  regard,  sustainable  finance  tools,  such  as  the  EU 
taxonomy  will  help  to  identify  sustainable  economic  activities  and  guide  capital  flows  to 
green investments43 44. 

In the field of energy and climate, the priority areas for reforms and investments include:  

the renovation of the building stock and access to affordable housing;  

- 
-  decarbonisation of industry and renewable energy;  
- 
- 

sustainable mobility;  
energy system integration including infrastructure, batteries and renewable hydrogen.  

A  wide  variety  of  forms  of  support  in  the  form  of  grants  and  financial  instruments  (loans, 
guarantees,  equity)  are  available  under  the  Multi-annual  Financial  Framework  (MFF),  the 
recovery  and  resilience  package,  including  the  Recovery  and  Resilience  Facility,  and  from 
funds  under  specific  legislative  instruments  such  as  the  EU  Emissions  Trading  System  for 
prioritising these areas critical to the clean energy transition.  

The  priority  given  to  energy  and  climate  investments  is  reflected  in  the  Commission’s 
proposal  for  the  2021-2027  EU  long-term  budget.  It  sets  a  share  of  the  Cohesion  Fund  and 
European Regional and Development Fund to be obligatorily earmarked on investments for a 
greener  and  low-carbon  Europe.  The  final  NECPs  mark  a  milestone  towards  fulfilling  the 
enabling  conditions,  i.e.  the  conditions  that  have  to  be  met  by  Member  States  in  order  to 
receive this funding.  

The NECPs put forward reforms  and investment  needs in  these priority  areas.  Based on the 
plans, it is estimated that for building renovations alone, Member States identified the need 
to collectively invest around €130 billion per year. In social housing, it is estimated that €57 
billion per year is needed45. 

42 Q1/2020 also saw a drop in coal and gas power generation (38 TWh and 3 TWh), the highest ever renewables share in the 
power mix in the EU (40% having risen by 38TWh), and reduced natural gas imports of €10 billion 
43 The development of the EU taxonomy for environmentally sustainable economic activities is one of the key actions of 
2018 Action Plan for Financing Sustainable Growth. The sustainable finance toolbox will be further expanded through the 
upcoming Renewed Sustainable Finance Strategy to move the behaviour of financial actors, companies, and policy-makers 
further towards environmentally sustainable economic activities. This should prevent further investments into potentially 
expensive stranded assets that could block technology leaps and the needed innovation for reaching climate neutrality 
44 World Energy Investments 2020 – Analysis IEA https://www.iea.org/reports/world-energy-investment-2020 
45 Report of the high-level task force on investing in social infrastructure in Europe 2018 
https://ec.europa.eu/info/sites/info/files/economy-finance/dp074_en.pdf 

13 

 
 
                                                           
In  view  of  the  2030  objectives  and  the  envisaged  energy  system  integration,  the  energy 
infrastructure  (transmission  and  distribution  networks,  heating  and  cooling,  transport,  and 
energy storage) investment needs are estimated at the level of €59 billion per year46. 

By  2030,  total  investments  needs  in  hydrogen  electrolysers  are  estimated  between  €24-42 
billion plus €220-340 billion to scale up and directly connect 80-120 GW of solar and wind 
energy production capacity. About €65 billion is needed for hydrogen transport, distribution 
and storage47. 

2.2.2. Just transition   

The NECPs also address the social and territorial implications that the clean energy transition 
can have. The transformation of extractive industries (hard coal, lignite, peat or oil shale) and 
carbon-intensive industries (cement, steel, aluminium, fertiliser or paper production) will pose 
a significant challenge to territories that are strongly reliant on such activities and will require 
to  restructure  and/or  diversify  the  economy,  maintain  social  cohesion,  and,  (re)train  the 
affected  workers  and  youth  to  prepare  them  for  future  jobs.  Many  NECPs  include  this 
transition  in  the coal  sector and its social  and economic impacts.  The NECPs show that the 
transition  has  further  accelerated  due  to  global  changes  in  prices  of  fossil  fuels  and  falling 
costs  of  renewable  energies.  Europe  is  phasing  out  coal  sooner  than  initially  expected, 
which helps reduce greenhouse gas emissions and air pollution (the latter often being the main 
driver at local level for such a move, based on health and well-being concerns). This requires 
adequate measures to accompany regions and ensure no one is left behind.  

A total of 21 Member States are either already coal-free (Estonia, Latvia, Lithuania, Belgium, 
Malta, Luxembourg, Cyprus)48, or have committed to phasing-out coal (including lignite and 
peat),  indicating  specific  dates  in  their  NECPs  (see  above  chart).  Two  Member  States 
(Slovenia,  Czechia)  are  still  considering  coal  phase  out  while  four  (Poland,  Romania, 
Bulgaria,  Croatia)  have  not  planned  any  phase  out  yet.  In  this  context,  the  use  of  coal  is 
projected  to  decrease  by  70%  by  2030  compared  to  2015,  and  renewable  electricity  will 
represent 60% of electricity produced in the EU. 

A  large  majority  of  Member  States  still  needs  to  develop  clearer  strategies  and  objectives 
through  a  cross-cutting  approach  to  identify  and  measure  the  social,  employment  and  skills 
consequences  and  other  distributional  impacts  of  the  energy  transition  and  give  proper 
consideration on how to address these challenges. 

The  Just  Transition  Mechanism,  and  the  Just  Transition  Fund  at  its  core,  is  specifically 
designed to address the social and economic impacts of the transition, focusing on the regions, 
industries and workers who will face the greatest challenges. 

46 In-depth analysis in support of the Commission Communication COM(2018) 773 
47 A hydrogen strategy for a climate-neutral Europe COM(2020)301  
48 Starting in 2020, the Coal Regions in Transition Initiative also addresses peat (FI, IE) and oil shale regions (EE). EE is still 
relying on oil shale. 

14 

 
 
                                                           
The EU legislative proposal for the Just  Transition  Fund Regulation,  requires that the plans 
for  just  transition  (Territorial  Just  Transition  Plans)  be  coherent  with  the  objectives  and 
investment needs identified in NECPs. The approval of Territorial Just Transition Plans by the 
Commission will unlock dedicated financing not only from the Just Transition Fund but also 
from  the  dedicated  just  transition  scheme  under  InvestEU  and  the  EIB  public  sector  loan 
facility (the two other pillars of the Just Transition Mechanism). 

Overall,  the  NECPs  did  not  provide  a  clear  prioritisation  of  funding  needs  regarding  just 
transition, nor investment needs for reskilling and upskilling and for support of labour market 
adjustments.  A  description  of  how  the  different  sources  of  funding  will  complement  each 
other are needed to promote a just and fair transition. 

Also  related  to  a  just  transition,  many  NECPs  address  energy  poverty.  This  is  a  major 
challenge,  since  close  to  40  million  Europeans  were  unable  to  afford  keeping  their  home 
adequately warm in 2018.  Most Member States have presented a detailed overview of energy 
poverty.  Many  also  reported  detailed  indicators  to  analyse  its  impact  on  their  territories. 
Several Member States use the primary indicators developed by the European Energy Poverty 
Observatory. NECPs also address affordability often, notably in the context of the energy and 
climate transition. This is the case, for instance, in Austria, Belgium, France, the Netherlands 
or Denmark.  

15 

 
 
 
Based on the information in their NECPs, most Member States are only preparing to take a 
more  systematic  approach  to  address  energy  poverty,  despite  the  clear  focus  set  out  in  the 
Clean Energy Package.  

To help Member States take more determined and targeted action against energy poverty, the 
Commission  will  adopt  guidance  on  the  definition  and  on  indicators  of  energy  poverty  this 
autumn. This will facilitate sharing of good practices and build on the work of the EU Energy 
Poverty Observatory.  

NECPs  and  just/fair  transition:  challenges  and  opportunities  for  recovery  and 
European Green Deal objectives 

Based on the EU wide assessment summarised above, and in the context of the Just Transition 
Mechanism,  it  would  appear  that  Member  States  need  to  work  further  to  develop  specific 
actions for a clean and fair energy transition in the most affected regions, including mobilising 
private  investment,  and  synergies  with  other  funding  sources  and  mechanisms  for  regional 
cooperation.  In  that  respect,  pillar  II  (InvestEU  scheme)  and  pillar  III  (EIB  public  loan 
facility) of the Just Transition Mechanism will offer new ways of financing the transition, in 
particular  by  leveraging  public  and  private  investments.  Member  States  are  encouraged  to 
finalise their Territorial and Just Transition plans so they can become eligible to the different 
pillars of the Just Transition Mechanism. 

Coal regions in transition is an EU initiative to help address challenges and opportunities in 
those  areas49.  The  Commission  supports  regional  and  local  level  involvement  in  ‘just 
transition’  related  initiatives,  which  are  a  driving  force  for  Coal  Regions  in  Transition.  The 
Commission assists regions in building cross-regional consortia, identifying transition-related 
projects  and  matching  projects  with  funding  opportunities,  including  under  EU  funding 
programmes50 51.  

All stakeholders need to continue cooperating and  providing support to regions in a tailored 
manner,  including  through  implementing  the  Just  Transition  Mechanism  and  Fund.  The 
Commission  will  continue  working  with  Member  States  and  affected  territories  to  ensure  a 
just  transition,  leaving  no  affected  region  and  their  people  behind.  The  Just  Transition 
Platform (add reference to the website), launched in June 2020, will support authorities and 
stakeholders working on just transition, by providing tailored technical assistance, not least to 
develop  and  then  implement  the  transition  plans  for  both  coal  regions  and  carbon  intensive 
regions. 

49 All coal, peat and oil shale regions (DE, PL, CZ, BG, RO, ES, EL, IE, HU, SK) are supported via EU funds (Cohesion 
policy, LIFE, H2020). Support also comes in the  form of technical assistance (Structural Reform  Support Programme, the 
EIB-Commission support through Jaspers, ENER’s START programme and contract with the World Bank). 
50  The  Initiative  is  an  open  forum  for  stakeholder  dialogue  with  national,  regional  and  local  authorities,  wider  society, 
industry, trade unions, NGOs, academia, experts in energy transition, and the European Commission. 
51 E.g. joint work by Commission and Polish partners in Poland’s coal country team set up under the initiative led to €100 
million of ERDF and Cohesion Funds being reprogrammed in Silesia to support local ‘just transition’ projects. This 
highlights the need to anticipate consequences of the transition and adapt policies and objectives in a concerted manner. Most 
Member States currently planning the phase out of coal or other solid fossil fuels (peat, oil shale) would benefit from 
providing more specific information on the way to proceed with the transition until 2030 and beyond. 

16 

 
 
                                                           
The  Commission  will  also  continue  promoting  dialogue  and  cooperation  with  and  among 
local authorities through the Covenant of Mayors (already covering 320 million EU citizens 
in over 10 000 municipalities), the Clean Energy for EU Island Initiative (56 islands in 25 
Member States)52, and the establishment of a new Climate Pact. Public-private partnerships53 
for social housing can complement public-sector measures to combat energy poverty at local 
level.  

2.3 Energy security, internal energy market, R&I and competitiveness  

2.3.1. Energy security 

The COVID-19 crisis has shown the importance of a resilient energy system with appropriate 
business  continuity  plans.  It  has  tested  the  resilience  of  critical  energy  infrastructures  and 
highlighted  their  vulnerability  to  shortages  in  the  supply  of  strategic  components  and 
technologies,  as  well  as  the  importance  of  preserving  strategic  supply  chains.  It  has  also 
highlighted  the  interlinkages  between  different  sectors  and  the  need  to  protect  against 
cyberattacks since the energy system is increasingly digitalised and decentralised54. A number 
of  NECPs  also  acknowledge  energy  efficiency  and  domestic  renewables  as  key  factors 
contributing  to  their  energy  security  (Malta,  Luxembourg,  France,  Lithuania  and  Portugal). 
Even though most Member States flag their energy sector as vulnerable to climate change in 
their  national  adaptation  strategy  or  even  in  the  decarbonisation  chapter,  only  five  Member 
States have proposed corresponding measures under the chapter on energy security. 

In  terms  of  external  energy  security,  the  EU  remains  dependent  on  imports  for  half  of  its 
primary  energy  consumption,  but  has  diversified  its  supply  routes,  notably  for  natural  gas. 
Regional  cooperation  is  crucial  in  this  respect.  In  their  NECPs,  seven  Member  States 
(Bulgaria, Italy, Estonia, Germany, Poland, Croatia, and Ireland) are considering or planning 
further LNG capacities to ensure supply security or increase competition on the gas markets. 

Member States with nuclear energy as part of their energy mix, presented their nuclear plans 
in their NECPs. The Commission will continue to secure the application of the highest safety 
standards  for  nuclear  technologies,  supporting  the  regulatory  processes  and  cooperation 
between  concerned  Member  States.  Concerned  Member  States  should  maintain  adequate 
capacities in all the parts of the nuclear supply chain and ensure security of fuel supply to lead 
to  safer  facilities  for  people  and  the  environment,  and  focus  on  building  up  skills  and 
industrial strategic capabilities for decommissioning and nuclear waste reprocessing. 

52 26 islands receive support for the development of their Clean Energy Transition Agenda (6 "pilots" and 20 "pioneers"), 13 
more islands have signed the Island pledge in 2019 towards full decarbonisation; 16 additional islands receive support on 
specific technical aspects for projects being prepared. 
53 Such as the Papillon project (city-NGO-industry) in Belgium 
54  The Commission Staff Working Document Energy Security: good practices to address pandemic risks, contains a list of 
risks and challenges in the short-term and long term, as well as a series of 20 good practices to address risks in the energy 
sector 
that  are  associated  with  a  pandemic.  https://ec.europa.eu/energy/topics/energy-security/energy-supply-and-
pandemic_en 

17 

 
 
                                                           
NECPs  and  energy  security:  challenges  and  opportunities  for  recovery  and 

European Green Deal objectives 

On  energy  security,  the  pandemic  highlighted  the  need  to  focus  more  on  the  resilience  of 
clean  technology  supply  chains.  Developing  strategic  supply  chains  of  industrial 
capabilities in clean technologies55 should be a focus of recovery and resilience plans56. 
Member States need to identify policies and measures from NECPs to improve preparedness 
and  enhance  resilience  in  this  respect.  This  also  requires  cross-border  cooperation  and  EU 
action, including beyond EU’s borders supported by an assertive energy diplomacy. 

Member States need to ensure that their energy systems are capable of meeting the challenges 
posed by both extreme events (storms, droughts, floods, heatwaves) and slow-onset pressure 
(e.g.  water  scarcity,  sea-level  rise,  permafrost  thawing),  not  only  within  the  EU,  but  also 
outside its borders in  terms  of energy imports. The EU is  providing funding (Horizon 2020 
call  and  future  Horizon  Europe  funding)  to  reduce  reliance  on  commodity  modules  by 
developing next generation solar photovoltaic manufacturing through innovative technologies 
for modules that bring together the whole value chain. 

As part of the new Security Union Strategy57, which addresses both critical infrastructure and 
cybersecurity, the Commission proposed actions to tackle the specific risks faced by critical 
energy infrastructures in an integrated energy system and infrastructure. A Network Code on 
cybersecurity  in  electricity  will  be  developed  with  sector-specific  rules  to  increase  the 
resilience and  cybersecurity  aspects of  cross-border  electricity  flows. This  includes  rules  on 
common minimum requirements, planning, monitoring, reporting and crisis management. 

2.3.2. Internal Energy Market 

A fully integrated and well-functioning internal energy market provides price signals to guide 
investment  in  green energy and technologies, secures energy supplies and enables the least-
cost path to climate neutrality through smart technologies. The NECPs assessment highlights 
several shortcomings in the energy market (flexibility through smart grids, storage and limited 
demand-side  response).  These  have  a  negative  impact  on  costs  for  consumers  and  industry, 
hamper a successful recovery, and the transition towards climate neutrality. 

In this context, the NECPs are a tool to help ensure that the objectives the electricity and gas 
internal  market  legislation  are  achieved,  and  the  right  policy  and  financial  framework  is  in 
place  to  meet  the  challenge  of  climate  neutrality  at  least  cost  while  safeguarding  energy 
security. The NECPs also provide an opportunity to strengthen the role of consumers as active 
participants and beneficiaries of the green transition.  

Though most Member States recognise the importance of the new electricity market design, 
only some have a holistic approach to necessary changes in forward-looking objectives. In an 

55 Including photovoltaic, batteries, renewable hydrogen, wind and ocean energy, grid and electronic components 
56 Complementing the EU’s Action Plan on Critical Raw Materials, and upcoming European Raw Materials Alliance 
including energy.   
57 EU Security Union Strategy COM(2020)605 final 

18 

 
 
                                                           
integrated  and  cost-reflective  energy  system,  efficient  markets  should  provide  transparent 
price signals for consumers to both contribute to and benefit from the transition. Many plans 
also lack key information on competition and market liquidity. 

A  considerable  number  of  NECPs  refer  to  smart  meter  deployment  with  a  specific  and 
measurable target as enabling consumers to actively participate in the market. However, few 
set specific objectives and clear timelines, making it difficult to monitor progress towards the 
targets. 

Fossil  fuel  subsidies  remain  a  major  impediment  to  a  cost-efficient  energy  and  climate 
transition and to a functioning internal market. The final plans show a slight improvement in 
the  reporting  of  energy  and  fossil  fuel  subsidy  amounts  and  measures  to  phase  them  out. 
Providing the necessary details overall would be important for an assessment of the extent to 
which fossil fuel subsidies in place are hampering climate objectives58. Only three countries 
(Italy,  Denmark,  and  Portugal)  have  performed  a  comprehensive  stocktake  of  fossil  fuel 
subsidies  and  few  Member  States  intend  to  phase  them  out  or  have  formulated  specific 
policies. 

Electricity interconnections together with local grids are a key enabler for decarbonisation, 
market  integration,  security  of  supply  and  competition.  Most  Member  States  have  included 
interconnectivity targets or projections of interconnectivity level by 2030 in their final plans. 
On  electricity,  most  Member  States  have  already  achieved  and  even  far  exceeded  the  EU 
interconnectivity  target  of  15%  as  set  for  2030.  The  role  of  Projects  of  Common  Interest 
(PCIs) in meeting this target is key59. The Commission will continue to assist the remaining 
Member  States  in  increasing  their  interconnection  capacity  and  ensure  that  existing 
interconnection capacity is fully used to maximise the benefits of the internal energy market 
in line with EU law60. 

Member  States  have  indicated  the  investment  needs  relating  to  the  internal  energy 
market in their NECPs. On interconnections, Germany indicated that it needs €55 billion to 
upgrade  its  existing  electricity  transmission  system  and  to  build  new  onshore  transmission 
infrastructure  by  2030.  A  further  €21  billion  is  needed  for  offshore  electricity  transmission 
infrastructure  to  allow  for  the  installation  of  17-20  GW  offshore  wind  by  2030.  Spain  also 
planned  to  strengthen  and  expand  transmission  and  distribution  lines,  including  between 
islands,  and  interconnections  with  neighbouring  countries,  in  particular  France.  On 
investments related to energy system integration and flexibility, Estonia indicated 500MW of 
pumped  hydro  storage  by  2028,  and  Greece  plans  to  implement  ‘smart’  policies  for  islands 

58 Although Member States have addressed the recommendation describe and list energy subsidies in their NECPs, the 
quality of the information ranges from general descriptions to comprehensive and quantified lists of subsidies. 19 Member 
States have included information on fossil fuel subsidies. 12 Member States have indicated (the intention to) work on setting 
plans to phase out fossil fuel subsidies. Only six Member States have included a timeline to phase out some of the existing 
fossil fuel subsidies. 
59 Since the Energy Infrastructure Regulation (TEN-E) came into force in 2013, nearly 40 gas and electricity PCIs have been 
implemented and some further 79 Projects of Common Interest (PCIs) are expected by 2022. To this end, an amount equal to 
EUR 3.8 billion has been invested from the Connecting Europe Facility (CEF). 
60 Article 16.8 of the Regulation (EU) 2019/943 on the Internal Market for Electricity  

19 

 
 
                                                           
that  cannot  be  interconnected  in  a  cost-effective  way,  for  instance  by  setting  up  innovative 
hybrid renewable power generation with storage systems. 

NECPs  and  internal  energy  market:  challenges  and  opportunities  for  recovery 

and European Green Deal objectives  

The focus on ensuring that markets remain liquid and competitive is key to delivering energy 
and climate goals as well as steering recovery investments to avoid distorted market signals. 
A  more  structured  and  coherent  approach  is  needed  to  identify  and  promote  sources  of 
flexibility  and  address  any  barriers  to  market  participation  by  new  players  and  enable  open 
and competitive markets  for the transition.  This should be fully reflected by Member States 
when implementing their NECPs. 

Though Member States follow different paths to sector integration, the recently adopted  EU 
Strategy for Energy System Integration can constitute a reference point for Member States 
on  more  flexible  energy  systems  and  provide  the  next  steps  in  adapting  energy  markets  to 
climate neutrality needs. 

The  Commission  will  also  promote  greater  demand  side  flexibility  through  a  Network 
Code61, revision of the State Aid guidelines, and consumer information. 

Member States need to fulfil their obligation to report on energy subsidies, in particular for 
fossil  fuel  subsidies,  and  measures  to  phase  them  out.  In  view  of  the  international 
commitments to phase out fossil fuel subsidies in the G20 and the UN, as well as EU’s own 
policy  commitments,  the  Commission  will  address  this  matter  in  the  State  of  the  Energy 
Union  report  2020  and  issue  further  guidelines  to  Member  States  to  promote  a  shift  away 
from fossil fuel subsidies. This will help Member States to address  the incoherence between 
2030  objectives  and  green  recovery  and  resilience  on  the  one  hand,  and  the  use  of  scarce 
financial  resources  to  encourage  fossil  fuels  consumption  and  prevent  the  needed 
technological shifts on the other. The Commission will pay particular attention to improving 
reporting on fossil fuel  subsidies and progress  towards phasing them, particularly  as part of 
the integrated national energy and climate progress reports.  In the context of the legislative 
reviews of the Energy Taxation Directive, as well as State Aid Guidelines, the Commission 
will consider the need to take further measures to ensure coherence among EU policies and 
address the EU Green Deal’s ambition to end fossil fuel subsidies. 

Concerning  infrastructure,  most  plans  identified  as  key  actions  the  completion  of  PCI 
projects, strengthening of internal grids and the deployment of innovative technologies such 
as smart grids and new generation electricity grids62, including the revision of network codes 
for  renewable  energies.  European  grids  must  adapt  to  the  changing  energy  system  of  more 
decentralised,  digital  real-time,  and  two  way  energy  across  sectors.  To  this  aim  the 
Commission  will  review  the  TEN-E  and  TEN-T  Regulations  and  the  Alternative  Fuels 

61 To unlock the potential of electric vehicles, heat pumps and other electricity consumption to contribute to the flexibility of 
the energy system (starting end-2021). 
62 New generation electricity grids make efficient use of new communication technology (e.g. digital platforms) to exploit the 
energy infrastructure in an innovative way (e.g. flexible networks), by its users (generators, consumers and prosumers). 

20 

 
 
                                                           
Infrastructure  Directive,  the  scope  and  governance  of  the  Ten  Year  Network  Development 
Plans,  and  accelerate  investment  in  smart,  highly-efficient,  renewables-based  electricity, 
district heating and cooling, and in CO2 infrastructure.  

2.3.3. Research, innovation and competitiveness 

There final NECPs fail to pay sufficient attention to R&I needs for delivering on climate 
and energy objectives. There is an overall decrease in national budgets devoted to R&I in 
clean  energy  technologies  and  a  severe  lack  of  national  objectives  and  funding  targets 
that show concrete  and relevant  pathways to  2030 and 2050. Most of the plans also  outline 
only funding of existing non-energy specific programmes that run for fewer than five years. 

The  cooperation  between  the  Member  States  and  the  Commission  through  the  Strategic 
Energy Technology Plan (SET-Plan) received full support in the vast majority of the NECPs 
as  a  basis  for  energy  R&I  planning  and  alignment.  Some  Member  States  specified  areas  of 
particular interest, but most did not specify how national funds and/or activities are allocated 
under the work packages (implementation plans) in which they are involved and how the SET 
Plan and their national energy and climate objectives are linked. 

Batteries  will  play  an  equally  prominent  role  for  the  EU’s  transport  decarbonisation  and 
power sector to keep system costs low (by providing emissions free balancing and flexibility 
and reducing grid expansion needs). Batteries are covered by NECPs in this respect for their 
necessary  roles  in  stationary  and  mobility  applications.  NECPs  cover  partially  the  related 
needs  for  further  R&I  and  the  development  of  industrial  manufacturing  capabilities.  The 
European  Battery  Alliance63,  launched  by  the  Commission  three  years  ago,  has  helped  to 
provide the necessary impetus among industrial stakeholders to invest in battery production in 
the  EU.  Member  States,  industry  and  other  key  stakeholders  have  responded  massively  and 
rapidly, including through  Important  Projects  of  Common European  Interest  (IPCEI).  Over 
500  actors  are  now  part  of  the  alliance    that  has  attracted  €100  billion  of  combined 
investments  announced along the EU value chain.  There are over 20 battery factories under 
development (at  different  maturity  stages)  with  numerous  projects  across  the  whole  value 
chain,  including  extraction  and  refining  raw  materials,  battery  materials,  and  recycling.  The 
first  resulting 11  EU factories that are being built  should start  producing  by 2022-2023 and 
deliver 270GWh batteries per year by 2030. Industry estimates this results in value added of 
€250 billion annually from 2025 onwards, creating 4 to 5 million jobs, whilst overall transport 
electrification including road and rail in the EU could bring additional 600,000 jobs by 2030. 

Before the end of 2020, the Commission will adopt a new fit-for-future regulatory framework 
for batteries, which will aim to ensure that all batteries placed on the EU market (regardless of 
their origin) meet the highest standards regarding performance, durability, safety, responsible 
sourcing of raw materials and minimal  environmental impact, including low carbon footprint 

63 To develop a strong, innovative, sustainable and competitive battery value chain in the EU, supporting transport 
electrification in response to the strong demand for electric vehicles, securing access to batteries strategic raw materials and 
increasing resilience and autonomy, capturing the skills and boosting manufacturing capacities. 

21 

 
 
                                                           
over their life cycle. The new regulation should be complemented by high quality and timely 
standards to be developed by CEN/CENELEC.  

Some Member States give specific attention to long-term technologies such as carbon capture 
and  use  and  storage  (CCUS)  which  could  contribute  to  decarbonise  certain  hard-to-abate 
sectors by 2030 and hydrogen, while incremental innovation in more near-term technologies 
such as energy efficiency, wind and solar receives less attention.  

The  approach  to  competitiveness  varies  between  NECPs.  Some  followed  a  narrow 
definition looking at patents and researchers, or even just at power prices. Other plans cover 
technology deployment aspects and thus take a broader competitiveness approach to national 
suppliers  of  clean  technologies,  including  the  value  chains  to  develop  such  solutions. 
However, most plans lack quantitative indicators and are therefore not measurable.  

NECPs and R&I and competitiveness: challenges and opportunities for recovery 

and European Green Deal objectives 

A new strategic approach to clean energy R&I and competitiveness is needed to rebuild 
the European economy and accelerate the innovation and market uptake of new technologies 
and innovation for climate neutrality. Both EU and national R&I policies as well as funding 
and national industrial strategies need to be better aligned with energy and climate objectives 
and be made operational through NECPs.  

A range of funding instruments are available to help Member States do more in this area, such 
as  Horizon  Europe,  the  Innovation  and  Modernisation  Funds  and  Invest  EU.  In  September 
2020, the Green Deal call will also support economic recovery by providing €1 billion of R&I 
funding  (with  €250-300  million  for  key  energy  priorities).  The  Innovation  Fund  launched  a 
first  call  in  July  2020,  providing  €1  billion  to  large-scale  projects  for  clean  and  innovative 
technologies. A new call dedicated to small-scale projects (with a capital expenditure of less 
than €7.5 million) is being prepared and will be launched by the end of 2020.  

The Commission will revise the SET-Plan in 2021. This will support the EU’s green recovery 
and address the R&I needs of Member States, who also need to develop clear and ambitious 
national objectives and funding targets for R&I. The EU will also work with the private sector 
to increase their level of R&I spending and related deployment in clean energy technologies.  

Hydrogen strategy  

Most NECPs acknowledge64 the role of hydrogen in the energy transition. Half of the plans 
mention  concrete  hydrogen-related  objectives  for  the  domestic  generation  of  renewable  or 
low-carbon hydrogen, for end-use in industry and hard-to-electrify transport sectors (such as 
Luxembourg which aims to make steel more sustainable through renewable hydrogen use).  

64 France, Germany, Austria, The Netherlands for instance have concrete plans in their NECPs, while others such as Portugal 
are developing fast concrete strategies. 

22 

 
 
                                                           
The  Commission,  Member  States  and  industry  will  work  together  in  the  Clean  Hydrogen 
Alliance on implementing the recently published EU Hydrogen Strategy.  

The  goal  is  to  develop  an  investment  agenda  with  a  pipeline  of  viable  projects  and  further 
develop clean hydrogen supply chains and downstream technologies. Energy diplomacy and 
coordinated action beyond EU borders, particularly with the countries in the Neighbourhood, 
will be necessary for the successful implementation of the Hydrogen Strategy. 

Numerous  projects  are  underway.  Denmark  and  Germany  building  at  Bornholm  a  3-5  GW 
offshore wind energy production, including an electrolysis facility to fuel trucks, busses, ships 
and  aircraft.  Spain  is  planning  since  the  submission  of  its  NECPs the  construction  of  a  100 
MW PV plant, 20 MWh ion lithium battery storage system and hydrogen production system 
through electrolysis in Puertollano. 

Together  with  the  State  of  the  Energy  Union  Report,  the  Commission  will  present  the  first 
Competitiveness  Progress  Report  in  autumn  2020.  This  will  analyse  how  competitive  the 
clean  technologies  and  solutions  are  and  propose  a  common  approach  to  assessing 
competitiveness  and  quantifying  efforts.  The  underlying  Clean  Energy  Transition  - 
Technologies and Innovations Report will present a more detailed evidence-based analysis of 
the current and future status of clean technologies and solutions to help create a stronger link 
between R&I activities, clean technologies, and energy and climate objectives (at national and 
EU level). 

2.4. Regional cooperation and environmental aspects in the NECPs  

2.4.1. Increased cooperation between Member States and multi-level dialogue 

The  plans  indicate  that,  though  Member  States  understood  well  and  described  the  need  for 
regional  cooperation,  with  some  making  use  of  existing  regional  fora  in  drawing  up  the 
plans,  the  full  potential  of  regional  cooperation  has  yet  to  be  seized.  Few  Member  States 
describe specific measures to optimise access to and use of regional facilities or how to plan 
better renewable energy deployment and energy efficiency measures in cooperation with other 
Member States.  

Building  on  the  NECPs,  Member  States  should  make  better  practical  use  of  regional 
cooperation.  This  should  include  using  existing  fora  to  address  common  issues  affecting 
energy transition priorities, especially energy efficiency, transport, smart grids and renewables 
(such  as  planning,  skills  shortages  for  renewable  energies,  energy  efficiency  and  buildings) 
thus  enhancing the energy transition  regionally.  Examples of this happening already  are the 
four existing groups: the Pentalateral and CESEC, the Northern Seas initiative, and the Baltic 
countries  (for  example  Estonia  and  Latvia  are  planning  a  joint  auction  for  offshore  wind). 

23 

 
 
Regional planning of auctions, such as for offshore wind, would help build a steady pipeline 
of projects and underscore foresight and recovery contribution of this sector65. 

Member States should accelerate flagship projects with a regional dimension such as offshore 
wind  and  fast  charging  networks  along  TEN-T  corridors.  To  do  this  they  should  use  the 
recovery  funds,  CEF  and  regional  aid  funds,  and  the  EU  renewable  energy  financing 
mechanism, making full use of regional forums. Member states could also collaborate on the 
pilot testing of breakthrough energy efficiency or energy generation technologies, with a view 
to identifying the most efficient and cost-effective technologies and triggering their industrial 
production.  The  pooling  of  architectural  heritage  renovation  projects  could  also  trigger  the 
large  scale  production  of  specific  technologies  such  as  solar  shingles  or  photovoltaic  glass, 
and render those a cost-effective option for the renovation of historic buildings. 

2.4.2. NECPs and environmental policies 

Air  pollution  is  a  risk  factor  for  certain  illnesses,  such  as  respiratory  and  cardiovascular 
diseases66. These are the diseases that put people at a higher risk from COVID-19. 

The Governance Regulation requires67 Member States to report on the impacts of industrial, 
agricultural,  transport  and  energy  policies  and  measures  on  air  pollution,  linked  to 
environmental  legislation68.  Despite  some  efforts  made,  there  continues  to  be  insufficient 
reporting of the projected impacts of the planned policies and measures on the emissions of 
air  pollutants  by  Member  States  in  their  final  plans.  Only  13  Member  States  provided  a 
sufficient  level  of  detail  and/or  improved  analysis  of  the  air  impacts  compared  to  the  draft 
plans.  The  final  plans  provide  insufficient  analysis  of  potential  trade-offs  between  air  and 
climate/energy objectives (mostly related to increasing amounts of bioenergy). It is welcome, 
though, that some Member States analysed impacts of planned measures on all air pollutants 
regulated  under  the  National  Emissions  Reduction  Commitment  Directive69,  with  even 
sometimes  a  useful  split  by  source  sector,  which  helps  define  mitigating  measures  more 
efficiently. 

The assessment of the potential impacts of expanding bioenergy planned in several plans on 
carbon sinks, biodiversity, water, and air pollution is insufficient. They lack details on how to 
supply  the  required  sustainable  biomass,  by  feedstock  and  origin  and  trajectories  for  forest 
biomass, and how they are aligned with measures to maintain and increase the carbon sink. 

65 Slovenia has promoted regional cooperation in setting up smart grids and introduced innovative technologies in the wider 
region together with Croatia, using the Connecting Europe Facility. 
66 WHO estimates globally annual 7 million premature deaths due to air pollution and over 400,000 premature deaths in the 
EU according to the European Environmental Agency 
67 The Energy Union Governance Regulation stipulates that this obligation applies “where relevant”, which is the case in all 
sectors where air pollutants and GHG emissions originate from the same source (transport, energy, agriculture, industry, 
domestic heating etc.). 
68 NEC Directive (EU) 2016/2284 on the reduction of national emissions of certain atmospheric pollutants. 
69 EU 2016/2284 

24 

 
 
                                                           
NECPs  and  environmental  policies:  challenges  and  opportunities  for  recovery 

and European Green Deal objectives 

All  Member  States  should  strengthen  the  link  between  National  Air  Pollution  Control 
Programmes  (NAPCPs)  and  NECPs,  also  in  terms  of  implementation  at  local  level70.  This 
will improve the process of identifying synergies and avoiding or mitigating trade-offs, while 
promoting  synergetic  measures  (e.g.  clean  transport,  increased  share  of  non-combustible 
renewables).  

In  most  NECPs,  further  work  is  needed  to  integrate  and  quantify  greenhouse  gas  emissions 
reductions associated to circular economy policies, and assess the synergies and trade-offs of 
specific  policies  with  biodiversity  (e.g.  role  of  ecosystem  services  for  mitigation  and 
adaptation, but also risks in terms of biodiversity loss). The analysis of such interactions could 
be  expanded  to  other  environmental  domains,  such  as  water  and  soil  pollution,  resource-
efficiency and the water-energy nexus in line with the “do no harm” principle espoused in the 
European  Green  Deal.  When  assessing  the  potential  to  develop  bioenergy,  Member  States 
should  also  evaluate  the  efficiency  of  bioenergy  compared  to  other  sources  of  renewable 
energy, including in terms of land-use and carbon sinks, air quality and other environmental 
impacts.  As  set  out  in  the  Biodiversity  Strategy,  the  EU  will  prioritise  solutions  such  as 
ocean energy, offshore wind (that supports fish stock regeneration), solar-panel farms that 
provide biodiversity-friendly soil cover, and sustainable bioenergy. 

3.  CONCLUSIONS  

This  assessment  shows  that  the  first  implementation  of  the  new  integrated  planning 
framework set out in the Governance Regulation has been very positive. All Member States 
have  submitted  final  plans  of  good  quality,  albeit  sometimes  with  some  delay.  The  plans 
follow a comparable structure and cover integrated national objectives and policies for all the 
dimensions of the Energy Union. The plans were also the outcome of wide consultation and 
participation  at  national  and  subnational  level,  building  a  strong  sense  of  ownership  of  the 
energy  and  climate  transition  objectives.  This  work  represents  a  major  effort  by  Member 
States and lays the foundation for stepping up the ambition to deliver climate neutrality in line 
with the European Green Deal, the proposed European Climate Law and the Communication 
on stepping up Europe’s 2030 climate ambition. 

The aggregate assessment at EU level has identified the following key takeaways and trends.  
The final plans are substantially more ambitious than the 2018 draft plans, on key dimensions 
such  as  greenhouse  gas  emissions  reduction  or  renewables  targets.  This  is  in  line  with  the 
Commission’s June 2019 recommendations on the draft plans. 

70 At municipality level, air quality drives behaviours towards energy transition and decarbonisation as the benefits are felt 
quickly. EU finances several bottom up initiatives covering circular economy and air pollution. 

25 

 
 
 
                                                           
First,  the  assessment  shows  that  Member  States  are  accelerating  their  energy  and  climate 
transition  driven  by  the  EU  wide  objective  of  climate  neutrality.  Greenhouse  gas  emissions 
reductions  surpass  the  current  EU  target  of  -40%  by  2030  compared  to  1990  levels.  Under 
existing and planned measures they would decrease by 41% in  the current  EU target  scope, 
excluding the LULUCF sink. The energy mix is projected to change even faster than expected 
by many only recently. The plans indicate that almost all Member States are phasing out from 
coal or have set a phase-out date. The use of coal is projected to decrease by 70% compared to 
2015, with renewable electricity set to reach 60% of electricity produced by 2030.  

Second, the assessment shows that the share of renewable energy could reach under existing 
and planned measures a range of 33.1-33.7% by 2030 at Union level, going well beyond the 
current 2030 target of at least 32% share of renewable energy. Further investment and reforms 
in renewable energies identified in NECPs, have the potential to push this share further up.  

Third,  with  regard  to  energy  efficiency,  an  ambition  gap  for  2030  remains.  Albeit  reduced 
compared to  that of the draft plans, the gap still stands at  2.8 percentage  points for primary 
energy consumption and 3.1 percentage points for final energy consumption, compared to the 
target  to  increase  energy  efficiency  by  at  least  32.5%  by  2030.  While  there  is  a  growing 
attention  to  the  issue,  as  shown  by  the  final  plans,  and  measures  already  planned  at  the 
European level, there are still significant efforts to be made to close the gap. In this context, 
the Commission will take action, in particular through the Renovation Wave initiative and the 
review and possible revision of the Energy Efficiency Directive, and guidance for the Energy 
Efficiency First Principle.  

Furthermore,  plans  dot  not  always  detail  with  sufficient  precision  actions  and  measures  in 
important dimensions such as identifying investment needs, mobilising funding, research and 
innovation and competitiveness, regional cooperation, land use land use change and forestry, 
just transition and energy poverty. Lastly, Member States need to step up efforts to phase out 
fossil  fuel  subsidies.  Recommendations  from  the  Commission  in  these  respects  where  not 
fully taken into account. 

The shortcomings and remaining gaps emerging from this EU wide assessment will have to 
be  addressed  through  a  collective  effort  both  by  Member  States  and  at  EU-level.  Member 
States  will  have  to  implement  their  NECPs,  taking  into  account  the  new  financing 
opportunities  under  the  MFF  and  the  Recovery  and  Resilience  Facility.  Investments  should 
primarily be centred on renovating buildings, sustainable mobility, decarbonising industry and 
agriculture,  renewable  energies,  including  renewable  hydrogen,  and  associated  technologies 
and  solutions  for  energy  system  integration.  Enhanced  attention  should  also  go  to  climate 
adaptation and carbon sinks. Mature projects should be frontloaded as much as possible. The 
Recovery  and  Resilience  Facility  should  be  used  in  conjunction  with  other  existing  funds, 
notably InvestEU to crowd in private financing and scale up public financing.  

In the context of the fifth report of the State of the Energy Union to be adopted in October, the 
Commission  will  publish  staff  working  documents  for  each  Member  State  containing 
individual assessments of each final NECP and of the way these addressed the related 2019 
Commission recommendations. They will also provide some guidance for the implementation 

26 

 
 
of the plans, and on actions that will help exploit the full potential of the plans in the context 
of a green recovery. 

The Commission  will assist  Member States in  implementing the plans through bilateral  and 
regional engagement, the exchange of best practices, as well as through the different tools at 
its disposal, such as the Structural Reform Support Programme and its proposed successor the 
Technical Support Instrument, which offer tailor-made technical support to Member States to 
improve  the  capacity  to  design,  develop  and  implement  reforms,  the  InvestEU  and  the 
instruments proposed under Next Generation EU. Furthermore, the Commission will promote 
technical  exchanges  with  Member  States  on  the  implementation  of  the  NECPs,  making  the 
link with national recovery and resilience plans. 

Action at  national  level  will be reinforced and complemented by further  policy measures at 
EU level, to close the remaining gap and increase the ambition level, as set out in the parallel 
Communication on stepping up Europe’s 2030 climate ambition. The full implementation of 
the Clean Energy Package, including a rapid adoption of any outstanding measures, provides 
a solid foundation for this work. 

Finally,  this  first  exercise  shows  that  a  well-designed  governance  framework  matters  for 
delivering  a  common  effort  at  European  level.  Building  on  the  existing  framework  centred 
around  the  NECPs,  this  will  nonetheless  require  adaptations  to  evolving  needs  and  policy 
priorities under the Green Deal and the recovery and resilience plans. In its review by mid-
2021 of the energy and climate legislation to reflect the increased greenhouse gas emissions 
reduction ambition for 2030, the Commission will also review the Governance Regulation and 
ensure that it remains fit for purpose.  

The  NECPs  are  not  a  one  off  exercise,  but  an  iterative  process.  The  annual  reporting  of 
greenhouse  gas  emissions  inventories  and  projections,  as  well  as  the  national  bi-annual 
implementation  reports,  will  be  important  tools  for  monitoring  progress.  Based  on  these 
elements  Member  States  will  update  and  revise  their  NECPs  in  2023  (drafts)  and  2024 
(final)71. This will provide the opportunity to build on lessons learned from the first years of 
implementation  and  adapt  plans  to  the  changed  climate  and  energy  targets  and  economic 
circumstances, reflecting the agenda for  green investment  developed at  national  level  in  the 
context of the Recovery and Resilience Plans. 

71 For these updates, Member States should use, whenever available and as soon as they become available, European 
statistics  

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