COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Stepping up Europe’s 2030 climate ambition Investing in a climate-neutral future for the benefit of our people
Date: 2020-09-17
Institutions: Directorate-General for Climate Action, European Commission
Subjects: EU Emissions Trading Scheme, EU energy policy, EU environmental policy, climate change, energy efficiency, environmental cooperation, green economy, greenhouse gas, reduction of gas emissions, renewable energy

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  EN 

   EUROPEAN COMMISSION  Brussels, 17.9.2020  COM(2020) 562 final  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Stepping up Europe’s 2030 climate ambition      Investing in a climate-neutral future for the benefit of our people                 {SEC(2020) 301 final} - {SWD(2020) 176 final} - {SWD(2020) 177 final} - {SWD(2020) 178 final}  
 
 
The 2030 Climate target plan 

 1.

ADDRESSING THE CLIMATE CRISIS WITH INCREASED RESOLVE 

The climate crisis remains the defining challenge of our time. The past five  years were 
the  warmest  on  record.  Global  average  temperature  increased  by  1.1°C  above  pre-
industrial  levels  by  2019.  The  impacts  of  global  warming  are  beyond  dispute,  with 
droughts,  storms,  and  other  weather  extremes  on  the  rise.  We  must  take  urgent  and 
sustained  action  to  preserve  the  health,  prosperity,  and  well-being  of  people  in  Europe 
and  all  over  the  world.  The  recent  reports  of  the  IPCC  on  climate  change  and  1.5C 
global  warming,  land,  ocean  and  cryosphere  underlined  the  dire  impacts  if  climate 
change would not be halted. EU citizens are increasingly, and rightly, worried. Nine out 
of  ten  see  climate  change  as  a  serious  concern.  The  EU  leads  the  global  fight  against 
climate change and the Commission is determined that the EU takes further action now.  

The President of the Commission has made the  European Green  Deal1 the top political 
priority,  with the  aim of transforming the EU into a  fair  and prosperous  society  with  a 
modern, resource-efficient and competitive economy. We need to protect, conserve and 
enhance the EU's natural capital, and protect the health and well-being of citizens from 
climate-  and  environment-related  risks  and 
inclusive 
transformation  based  on  a  just  transition  so  as  to  leave  no  one  behind.  Today,  the 
Commission sets our continent on a sustainable path to make this a reality and achieve 
climate neutrality by 2050. 

impacts  and  ensure  an 

The  world  is  currently  experiencing  a  health  crisis  with  an  unprecedented  socio-
economic impact. This requires urgent attention, but our efforts to tackle one crisis must 
not hasten or worsen another. Postponing climate action or rolling back measures is not 
an  option  for  the  European  Union.  If  left  unchecked,  the  unfolding  climate  crisis  will 
have  existential  consequences  for  our  natural  environment,  our  health,  and  our 
livelihoods  way  beyond  the  scale  of  the  current  health  crisis.  The  long-term  economic 
disruptions and adverse social consequences resulting from inaction would far outweigh 
the costs of investing in ambitious climate action today.  

The  unprecedented  European  economic  response  to  COVID-19  offers  a  unique 
opportunity  to  accelerate  the  transition  to  a  climate-neutral  economy  investing  in  the 
necessary transformation and ensure it takes place in a just and socially fair manner. Next 
Generation  EU  and  the  Multiannual  Financial  Framework  for  2021-2027,  with  their 
combined weight of over 1.8 trillion euros, provide significant firepower to help deliver 
the  twin  green  and  digital  transitions  that  Europe  aspires  to.  Effectively  addressing  the 
economic  crisis  while  reaping  the  gains  from  accelerating  the  shift  to  a  clean  and 
sustainable economy requires that these ambitions are also fully transcribed in Member 
States’ Recovery and Resilience Plans. 

In the coming decade, the EU will continue building on a strong track record of climate 
action and parallel economic growth.  In 2019, EU emissions, including removals, were 
down by an estimated 25% compared to 1990, while over the same period the economy 
has grown by 62%. This proves that we can tackle climate change and ensure sustained 
economic  growth  and  job  creation  at  the  same  time.  The  Impact  Assessment 
accompanying this Communication demonstrates that an emissions reduction of 55% by 

1 COM(2019) 640 final 

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2030, compared to 1990 levels, is both economically feasible and beneficial for Europe, 
with proper policies in place.  

The  EU’s  current  policy  framework  alone  would  not  allow  us  to  reach  our  2050  goals 
and  meet  our  commitments  under  the  Paris  Agreement.  Projections  show  that  simply 
continuing to implement the legislation currently in force would see the EU achieving a 
60% reduction of greenhouse gas emissions by 2050. The EU needs to raise its ambitions 
for this decade now and avoid leaving a heavier workload for future generations. The less 
action the EU takes in the next ten years, the steeper and more challenging the reduction 
path after 2030.  

The Commission therefore proposes to change the current emissions reduction pathway 
to  reach  climate  neutrality  by  2050  and  reflect  this  in  the  proposal  for  the  European 
Climate Law. 

In the Impact Assessment and a broad consultation process conducted over the past year, 
the  Commission  has  thoroughly  examined  the  effects  on  our  economy,  society  and 
environment of  reducing  emissions by  50% to 55%  by 2030,  compared to 1990  levels. 
The Impact Assessment has carefully considered the mix of policy instruments available 
and how each sector of the economy can contribute to these targets. A balanced, realistic, 
and prudent pathway to climate neutrality by 2050 requires an emissions reduction target 
of 55% by 2030.  

The present Communication therefore: 

1.  Presents  an  EU-wide,  economy-wide  greenhouse  gas  emissions  reduction  target 
by 2030 compared to 1990 of at least 55% including emissions and removals.  

2.  Previews  a  set  of  actions  required  across  all  sectors  of  the  economy  and  the 
launch  of  revisions  of  the  key  legislative  instruments  to  achieve  this  increased 
ambition. 

3.  Prepares  the  ground  for  a  public  debate  in  autumn  2020  to  increase  the  EU’s 
contribution to the Paris Agreement before the end of the year and set the stage 
for the Commission to make detailed legislative proposals by June 2021. 

The  EU  can  and  should  set  itself  a  55%  target  based  on  the  following  three  key 
considerations. 

First,  large  emissions  reductions  have  come  from  closing  coal  power  stations  and 
cleaning up of energy-intensive industry, while it proved harder to reduce emissions from 
transport  and  agriculture  and  in  buildings,  where  particular  challenges  exist.  Yet, 
reaching climate neutrality requires to significantly step up EU action in all sectors. Long 
lead-times in crucial sectors such as land use and transport require action to be stepped 
up  already  over  the  coming  decade,  otherwise  the  changes  required  after  2030  would 
have to happen unrealistically fast.  

Secondly, risks of carbon lock-in in the coming decade are too high.  This is due to the 
current legislative set-up as well as a natural short-termism in economic decisions in the 
midst  of  the  COVID-19  crisis.  Clearer  and  stronger  investment  signals  are  urgently 
needed for today’s investment planning and decisions to be coherent with the transition 
to climate neutrality.  

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Finally,  science  indicates  that  climate  risks  are  firmly  on  the  downside.  Recent  IPCC 
special reports found greater risks  at lower temperatures of Earth system tipping points 
than in its 5th assessment report, such as a slowdown of the Gulf Stream or instability of 
the Greenland and West Antarctic ice sheets. The climate crisis is also intrinsically linked 
with  the  global  loss  of  biodiversity  and  solutions  must  address  consistently  both 
challenges. The only responsible course of action is therefore to move now when we still 
have the freedom to choose how, instead of inching forward until it may be too late.  

We have a responsibility to act decisively in the interest of future generations. If the EU 
shows that it can be done, many governments and citizens around the world will see that 
growing prosperity can be combined with a pathway that limits global climate change to 
well below 2 °C and pursues efforts to limit it to 1.5 °C, safeguarding the future of our 
planet. Yet, even with global action, some of the adverse effects of climate change will 
continue. That is why the EU is also pursuing its efforts on climate change adaptation, in 
Europe and globally. Finally, achieving climate neutrality in Europe requires investing in 
technologies,  business  models,  skills,  infrastructures  and  changes  in  behaviour.  The 
green  transition  will  modernise  our  economy,  make  it  more  innovative,  circular  and 
resilient and sustain its global competitiveness and prosperity in the years to come. 

 2.

THE ECONOMIC AND SOCIAL BENEFITS OF INCREASED CLIMATE AMBITION  

On  the  basis  of  the  analysis  carried  out  in  its  Impact  assessment,  the  Commission 
concludes that  achieving  55%  greenhouse  gas emissions reductions by  2030 would not 
only put the EU firmly on track to achieve climate neutrality, but would also make EU 
business and industry global trailblazers. The analysis also confirms that this increase of 
greenhouse gas emissions reductions target is possible in a responsible and socially fair 
manner.  It  can  spur  sustainable  economic  growth  and  accelerate  the  clean  energy 
transition, while adverse social consequences need to be addressed and adequate policies 
be  deployed  both  at  EU  and  Member  State  level.  Achieving  55%  greenhouse  gas 
emissions  reductions  by  2030  would  also  improve  the  wellbeing  of  EU  citizens  by 
delivering  significant  co-benefits  in  terms  of  health,  improved  air  quality  and  reduced 
environmental  degradation,  and  it  would  strongly  support  the  COVID-19  recovery  and 
the longer-term competitiveness and resilience of the European economy. 

Reaching  a  55%  emissions  reductions  target  will  be  a  significant  investment  challenge 
for  EU  industry,  services,  transport,  and  energy  sectors.  However,  the  return  on 
investment from meeting this challenge is nothing less than the ability for EU businesses 
to  compete  and  our  citizens  to  prosper.  The  COVID-19  crisis  has  severely  hit  the  EU 
economy.  It  has  not  significantly  altered  the  investments  needed  to  reach  an  increased 
2030 greenhouse gas emissions reduction target, but, likely, worsened the conditions for 
such investments to take place, which has to be countered by strong policy initiatives on 
EU and national level. The EU recovery plan, with its recovery and resilience facility, is 
critical  for  these  investments  underpinning  the  green  transition  to  happen.  Despite  net 
greenhouse  gas  emissions  in  2020  being  estimated  to  drop  to  30  to  35%  below  1990 
levels,  the  economic  rebound  from  the  COVID-19  crisis  is  also  estimated  to  bring 
emissions back to previous levels, unless additional action is taken. The dial has not been 
reset on global warming. To achieve climate neutrality by 2050, over the coming decade 
we  will  still  need  to  construct  new  wind  turbines,  clean  our  industries  and  renovate 
buildings to make them energy- and resource-efficient. For this purpose, we will need to 
enable  EU  companies  to  get  into  the  pole  position  developing,  deploying  and 
commercialising low-carbon solutions. Mobility  will still have to be made substantially 
cleaner,  with  zero  emissions  vehicles  well  on  their  way  to  replace  conventional  ones, 
strong  development  of  public  transport  and  greater  use  of  sustainable  transport  modes 

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and  multi-modal  solutions  through  a  large  and  well-integrated  range  of  clean  mobility 
options.  Digital  technologies  will  be  key  part  of  making  sure  the  EU  reaches  climate 
neutrality and strengthens its competitiveness globally. The digital and green transitions 
must be made mutually reinforcing.  

The  EU  multiannual  budget,  together  with  the  Next  Generation  –  EU,  will  dedicate  at 
least  30%  of  its  firepower  to  climate-relevant  spending,  and  all  expenses  will  be 
consistent  with  the  Paris  Agreement  and  respect  the  “do  no  harm"  principle.  National 
recovery and resilience plans and related spending will have to effectively contribute to 
the green and the digital transitions or to addressing the challenges resulting from them. 
Targeted use of these funds can trigger significant private sector investments. We must 
combine  recovery  spending  with  ambitious  climate  action  to  avoid  wasted  money  and 
stranded  assets,  leading  to  additional  resource  needs  later  on.  In  short,  in  times  of 
increasingly scarce liquidity, we should not invest in the old carbon-fuelled economy by 
reflex,  but  encourage  investment  in  innovative  and  low-carbon  technologies,  making 
Europe a modern and  green economy. We must  save  and create new jobs  and incomes 
not only for months or years but for decades. 

The  recovery  as  well  as  the  greening  of  our  economy  can  also  benefit  from  structural 
policies and policy reforms that incentivise competition in product markets, address the 
matching of skills and deliver the necessary education and training.  

A key feature of the green transition is upgrading the EU’s capital stock, requiring higher 
upfront investments, with associated fuel savings that over time will pay back the initial 
investments. Energy-related investments need to increase. Annually in the period 2021-
2030 the EU will need to invest € 350 billion more than it did in the period 2011-2020, 
an  increase  of  around  €  90  billion  per  annum  compared  to  the  investments  needed  to 
achieve  current  2030  climate  and  energy  targets.  In  addition  to  public  support,  the 
sustainable finance initiative will guide private investments towards green recovery. The 
EU  taxonomy  the  EU  Green  Bond  Standard  and  climate  benchmarks  will  be  essential 
tools to bring finance closer to the needs of the real economy. 

Considering  our  large  domestic  market,  accelerating  the  transition  will  help  modernise 
the  whole  EU  economy,  increasing  the  opportunities  for  our  clean  technologies 
leadership and for gaining competitive advantage on the world markets. Developing new 
value  chains  and  expanding  others  will  also  improve  the  open  strategic  autonomy  of 
Europe’s  industrial  ecosystems.  This  will  contribute  to  moving  to  a  truly  circular 
economy,  which  together  with  digitalisation,  will  be  at  the  heart  of  the  modernisation 
required to improve the overall efficiency and resilience of the European economy. 

Our  citizens  want  to  live  in  a  modern,  sustainable,  fair  and  resilient  Europe.  They  are 
crucial partners in the fight against climate change, and can support it through political 
mobilisation  and  consumer  choices.  They  can  greatly  contribute  to  decarbonisation  by 
making more sustainable purchase decisions and lifestyle choices, but need to be assisted 
by actionable and reliable information.  

Buildings  and  transport  are,  alongside  industry,  the  main  energy  users  and  source  of 
emissions.  Decarbonising  both  energy  supply  and  demand  is  key  to  becoming  climate-
neutral  and  can  actually  be  achieved  while  enhancing  the  well-being  of  our  citizens 
drawn from transport and housing  

Increasing our 2030 climate ambition in the buildings sector can and should be socially 
just  and  fair.  For  example,  low-income  households  bear  a  higher  burden  of  heating 

4 

 
expenses compared to wealthier households. The use of highly polluting fuels like coal is 
also  more  common  among  lower  income  households  and  particularly  high  in  specific 
regions  in  Europe.  They  may  thus  be  more  negatively  impacted  by  the  transition,  in 
particular  if  emitting  carbon  becomes  more  costly  and  low-carbon  solutions  are  not 
available to them. In order to avoid negative impacts on vulnerable consumers, social and 
energy efficiency policies are important to target the renovation of their houses and keep 
the impact on their heating and electricity bills in check. 

Renovating  Europe’s  buildings  not  only  lowers  energy  bills  and  greenhouse  gas 
emissions, but it also improves living conditions and creates local jobs. The forthcoming 
Renovation Wave will address the twin challenge of energy efficiency and affordability 
in  the  building  sector.  It  will  focus  on  the  worst  performing  buildings  and  tackle  the 
energy  poverty  as  well  as  on  public  buildings,  notably  schools,  hospitals  and  care 
facilities. When renovating, particular attention will be required as regards financing the 
up-front  investments  and  the  capacity  of  households  to  manage  them.  In  particular, 
targeted support for energy  efficiency investments of lower-income households and for 
social housing will be needed. We must therefore devise policies, earmark budgets, and 
propose different and innovative ways to organise the greening of houses and mobility, 
whilst  helping  vulnerable  social  groups.  The  Commission’s  Impact  Assessment  shows 
that  a  55%  cut  in  emissions  achieved  through  increased  use  of  carbon  pricing,  while 
recycling  revenues  to  low  income  households  can  address  income  impacts  for  these 
households  and  at  the  same  time  still  stimulate  a  switch  to  low-carbon  technologies. 
Clean  and  efficient  private  and  public  transport  will  bring  major  benefits  to  individual 
citizens  and  communities.  Increasing  the  modal  shares  of  public  transport  and  active 
mobility, namely walking and cycling, as well as automated, connected and multimodal 
mobility,  combined  with  more  stringent  air  pollutant  and  CO2  emissions  standards  for 
vehicles, will drastically lower pollution from transport, especially in cities.  

Our citizens have a lot to gain through ambitious and decisive climate action. Reducing 
greenhouse gas emissions improves living conditions and health, can create employment, 
and lowers energy bills. 

Climate change and energy policies supports clean air policy in improving the health of 
EU  citizens.  This  matters  particularly  in  a  number  of  Central  and  Eastern  European 
Member  States  suffering  from  relatively  high  pollution  levels.  Achieving  55% 
greenhouse  gas  emissions  reductions  could  contribute  to  further  decrease  air  pollution, 
reaching a total reduction of 60% by 2030 compared to 2015. This would reduce health 
damages  compared  to  2015  levels  by  at  least  €  110  billion.  Increased  climate  action 
would additionally reduce air pollution control costs by at least € 5 billion in 2030 and 
contribute to mitigating other environmental concerns like acidification. 

In relation to food and agriculture, the Impact Assessment shows that by 2030 emissions 
reductions stemming from changing consumer choices towards healthy diets could be of 
the  same  order  of  magnitude  as  technical  options  available  to  reduce  emissions  in  the 
sector 2.  In  line  with  the  Farm  to  Fork  Strategy3,  consumers  should  be  facilitated  to 
choose sustainable and healthy food and diets. This would not only help the agricultural 
and  food  sector  to  reduce  emissions,  but  also  improve  consumers’  health  and  reduce 
health-related costs for society and food waste. 

2 A strong decrease of consumption of animal products for nutrition could potentially reduce emissions by 
more than 30 million tonnes by 2030. 
3 COM(2020) 381 final 

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The increased climate ambition in the above areas can have positive impacts on GDP and 
total  employment  in  the  EU.  The  Impact  Assessment  indicates  that  in  particular  in 
situations where the economy is performing below capacity, GDP will increase due to the 
investment  stemming  from  increased  climate  ambition.  Similarly,  the  use  of  carbon 
revenues in general could lead to a reduction of labour taxation with positive effects on 
employment. Investing in a modern, circular economy will help provide durable and new 
green jobs in a climate constrained world.  

Not  all  Member  States,  sectors  and  households  start  the  transition  towards  climate-
neutrality from the same point or have the same capacity to respond to the challenges of 
the  transition.  A  more  ambitious  climate  target  is  likely  to  be  more  challenging  in 
Member States and regions with a higher share of fossil fuels in the energy mix, higher 
greenhouse  gas  emissions,  energy  intensity  and  lower  GDP  per  capita.  Certain  carbon-
intensive  sectors  and  regions  with  a  significant  share  of  their  economies  depending  on 
these  will  see  substantial  transformations.  Distributional  aspects  will  need  to  be 
addressed in order to ensure that nobody is left behind. New and upgraded skills will be 
needed  underlining  the  need  to  keep  investing  in  lifelong  learning  using  all  possible 
instruments  and  ensuring  a  diverse  and  inclusive  workforce.  In  regions  where  carbon-
intensive industries are currently of greater importance, focused policies and investments 
are needed, supported by the Just Transition Mechanism.  

As a result  of  these transitions,  the  EU’s energy system will  be much more secure  and 
resilient.  Fossil  fuels,  while  so  engrained  in  our  way  of  life  for  over  150  years,  are 
exposed to volatile fuel prices and supply disruption. More than half of EU energy needs 
are  covered  by  imports.  Renewable  energy  generated  in  the  EU  reduces  this  exposure, 
thereby  increasing  security  of  supply.  Net  energy  imports  are  projected  to  decrease  by 
more  than  a  quarter  in  the  period  2015-2030.  Increasing  the  climate  ambition  from  the 
current 2030 target to 55% and achieving climate neutrality by 2050 would save on the 
EU’s import bill EUR 100 billion over the period 2021-2030 and up to 3 trillion by 2050.   

In  short,  increasing  the  EU’s  climate  ambition  for  2030  generates  both  economic 
opportunity and a cleaner and healthier environment for our citizens as we steadily move 
towards  climate  neutrality  by  2050.  It  matches  desires  of  citizens  and  stakeholders, 
according to the replies to the public consultation process organised by the Commission 
for this initiative and empowers regional and local authorities to participate and benefit 
from  the  green  transition.  It  ensures  durable  jobs,  improves  the  EUs  energy  security, 
resilience  and  independence,  stimulates  innovation  and  lays  a  solid  foundation  for 
economic prosperity. 

Figure  1:  The  EU’s  pathway  to  sustained  economic  prosperity  and  climate  neutrality, 
1990-2050 

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While  any  structural  changes  will  pose  challenges,  the  analysis  shows  that  overall  the 
economy and citizens will benefit from these investments, especially considering the dire 
consequences of non-action. For instance, for those lower income households and fossil 
fuel  dependent  and  energy-intensive  sectors,  which  will  be  particularly  challenged, 
targeted policies will need to promote just transition head on. In this way, Europe will set 
a  practical  example  for  all  other  regions  around  the  world  on  how  accomplishing  the 
Paris  Agreement  objectives  will  lead  to  a  more  prosperous,  fair,  resilient  and  healthy 
world.  In  this  respect,  economic  impacts  will  be  more  positive  if  the  regulatory  tools 
allow  for  appropriate  price  signals  and  a  tax  shift,  with  carbon  pricing  revenues  being 
used  to  reduce  distorting  taxes  or  to  invest  in  innovation  and  modernisation  towards  a 
green economy.  

 3.

AMBITIOUS ACTION IN ALL SECTORS OF THE EU ECONOMY 

Achieving 55% greenhouse gas emissions reductions will require actions in all sectors as 
illustrated in the graph above. A climate-neutral transition can only be accomplished with 
contributions from everyone.  

CO2 emissions from the burning of fossil fuels are the largest source of greenhouse gas 
emissions  in  the  EU.  Together  with  fugitive  non-CO2  emissions  in  the  energy  system, 
they are responsible for just over 75% of EU greenhouse gas emissions. This underlines 
the  energy  system’s  central  role  in  the  transition  to  a  climate  neutral  economy.  It  will 
need to be fully decarbonised, while respecting technological neutrality. 

Most other emissions are process CO2 emissions from industry and non-CO2 emissions 
from agriculture and waste. Reducing all emissions as much as possible will be crucial to 
limit  the  need  to  balance  any  remaining  emissions  to  become  climate  neutral.  In  this 
context,  the  EU  land  use  sector  is  of  particular  importance,  given  that  it  presently 

7 

-200204060801001201401601802002202401990199520002005201020152020202520302035204020452050GDP and Net Emissions (1990=100)Non-CO2 otherNon-CO2 AgricultureResidentialTertiaryTransportIndustryPowerCarbon Removal TechnologiesLand use and forestsNet emissionsGDPGDPGreenhouse GasEmissionsandRemovals-55% 
 
 
provides for the largest source of net removals of CO2 from the atmosphere that humans 
can impact. Much more is now also possible with widespread use of digital technologies, 
which could help reduce overall emissions considerably.4 

Based on the analysis in the Impact Assessment, the Commission has reached the view 
that  the  following  contributions  by  different  sectors  would  enable  us  to  reach  a  55% 
emissions reduction by 2030 in a responsible way.  

Energy system transformation including buildings, transport and industry 

In  order  to  reach  the  55%  greenhouse  gas  emissions  reduction  target,  buildings  and 
power  generation  can  make  the  largest  and  most  cost-efficient  emissions  reductions,  in 
the  order  of  60%  and  more  compared  to  2015.  Rapid  penetration  of  renewable  energy, 
which is becoming the  most cost-effective electric power source, the application of the 
energy efficiency first principle, electrification and energy system integration will drive 
the change in both sectors.  

By 2030, the share of EU renewable electricity production is set to at least double from 
today’s levels of 32% of renewable electricity to around 65% or more. The expansion in 
renewable  electricity  production  will  provide  many  opportunities  for  European 
renewable  energy  sources  to  be  fully  harnessed,  for  instance  offshore  wind  energy. 
Renewables  will  lead  to  a  high  degree  of  decentralisation  providing  opportunities  for 
consumers to get engaged, for prosumers to generate, use and share energy themselves, 
and  for  local  and  notably  rural  communities  to  encourage  local  investments  in 
renewables. It will also trigger new employment locally.  

The  deployment  of  renewable  electricity  provides  a  major  opportunity  for  the 
decarbonisation  of  other  sectors  such  as  heating  and  cooling  in  buildings  and  industry. 
The impact assessment highlights that renewables in heating and cooling would achieve 
around  40%  penetration  in  2030.  Beyond  the  direct  use  of  renewable  energy  and 
electrification, renewable hydrogen will also be required to replace fossil fuels in some 
carbon-intensive  industrial  processes,  for  example  as  a  feedstock  for  certain  chemical 
processes, and to deliver high-temperature heat. 

The  building  sector,  currently  responsible  for  40%  of  final  energy  and  36%  of 
greenhouse  gas  emissions  in  the  EU,  has  a  large  cost-effective  potential  to  reduce 
emissions. Today, 75% of the EU’s building stock is energy inefficient5. Many homes are 
still heated with outdated systems that use polluting fossil fuels such as coal and oil. To 
fully tap into this potential for improvement would require the renovation rate, which is 
around  1%  today,  to  double  and  more  in  the  period  up  to  2030.  In  particular,  deep 
renovations  addressing  building  shells,  smart  digitalisation  and  the  integration  of 
renewable energy together need to increase strongly. 

The transport sector had  the lowest share of renewable energy in 2015, with only 6%6. 
By  2030,  this  has  to  increase  to  around  24%  through  further  development  and 
deployment of electric vehicles, advanced biofuels and other renewable and low carbon 
fuels  as  part  of  a  holistic  and  integrated  approach.  Secure  access  to  batteries  will  be 
critical  to  rolling  out  electric  vehicles,  while  clean  hydrogen  will  be  crucial  for 

4 https://www.weforum.org/agenda/2019/01/why-digitalization-is-the-key-to-exponential-climate-action/ 
5 New buildings today consume only half as much as typical buildings from the 1980s. About 35% of the 
EU's buildings are over 50 years old.  
6 Calculated according to the methodology as set out in Directive 2018/2001/EC. 

8 

 
                                                 
decarbonising  heavy-duty  transport  and,  through  its  derivatives,  in  the  aviation  and 
maritime  sector.  The  decarbonisation  of  the  transport  fuel  mix  by  2050  will  also  be 
supported  by  greater  use  of  rail  and  other  sustainable  transport  modes  such  as  inland 
waterways and short sea shipping, in particular for freight transport. 

Projected increases in bioenergy use by 2030 are limited compared to today. To ensure 
the land use sink can continue to strengthen and improve, biomass for energy use in the 
EU should be produced sustainably, and environmental impacts should be minimised. To 
limit impact on biodiversity, the use of whole trees and food and feed crops for energy 
production – produced in the EU or imported – should be minimised. Any unsustainable 
intensification  of  forest  harvesting  for  bioenergy  purposes  should  be  avoided.  Instead, 
bioenergy production should come from better use of biomass wastes and residues and a 
sustainable cultivation of energy crops, rather replacing the production of first generation 
food-crop-based biofuels and be in line with the sustainability criteria of the Renewable 
Energy  Directive.  The  promotion  of  sustainable  forest  management,  a  strong 
enforcement of the existing legislation and a quicker implementation of the sustainability 
criteria in the Renewable Energy  Directive  can play a key  role in this regard alongside 
the foreseen review and potential revision of the latter Directive.  

The  Commission’s  Impact  Assessment  indicates  that  final  and  primary  energy 
consumption would further reduce in 2030, achieving savings of 36-37% for final energy 
consumption  (total  energy  consumed  by  end  users)  and  39-41%  for  primary  energy 
consumption  (total  energy  used  to  meet  final  energy  needs,  e.g.  gas  used  to  produce 
electricity).  This  reduction  will  require  policies  that  address  non-economic  and  local 
barriers.  For  instance,  EU  product  efficiency  standards  have  already  reduced  energy 
needs  for  the  products  in  question  by  about  15%  and  cut  total  EU  greenhouse  gas 
emissions by 7% while creating hundreds of thousands additional jobs7. Actions of this 
kind will need to be intensified. 

Achieving 55% greenhouse gas emissions reductions would result in a new and greener 
energy mix. By 2030, coal consumption would be reduced by more than 70% compared 
to  2015,  and  oil  and  gas  by  more  than  30%  and  25%,  respectively.  Renewable  energy 
instead would see its share increase. By 2030, it would reach 38% to 40% of gross final 
consumption.  Overall, this would  lead to a balanced  path towards climate neutrality by 
2050.  

Some  sectors  have  a  smaller,  yet  still  significant,  cost-effective  emissions  reduction 
potential by 2030. Today, road transport accounts for a fifth of the EU’s greenhouse gas 
emissions and increased its emissions by over a quarter since 1990. It may see a decrease 
in  emissions  of  only  around  20%  between  2015  and  2030,  underlining  the  increased 
focus the sector will require to achieve increased decarbonisation.  

All  transport  sectors  -  road,  rail,  aviation  and  waterborne  transport  -  will  have  to 
contribute  to  the  55%  reduction  effort.  A  smart  combination  of  vehicle/vessels/aircraft 
efficiency  improvements,  fuel  mix  changes,  greater  use  of  sustainable  transport  modes 
and multi-modal solutions, digitalisation for smart traffic and mobility management, road 
pricing and other incentives can reduce greenhouse gas emissions and at the same time 
significantly address noise pollution and improve air quality. In addition, new sustainable 
mobility services and increased use of the existing urban bus and rail services can reduce 
emissions,  congestion  and  pollution  while  improving  road  safety,  especially  in  urban 

7 Report on Ecodesign Impact Accounting, forthcoming 

9 

 
                                                 
areas.  The  upcoming  Strategy  for  a  Sustainable  and  Smart  Mobility  will  set  a  pathway 
for  the  sector  to  master  the  twin  green  and  digital  transitions  building  a  resilient  and 
sustainable transport system for generations to come. 

To  achieve  climate  neutrality  and  ensure  that  sectors  with  emissions  that  are  more 
difficult to abate have access to sufficient quantities of renewable and low carbon fuels, 
conventional  cars  will  need  to  gradually  be  displaced  by  zero  emissions  vehicles  and 
greater  use  should  be  made  of  sustainable  collective  transport  services.  The  Impact 
Assessment projects reduction levels in 2030 corresponding to a decrease of around 50% 
of the CO2 emissions per kilometre for passengers cars, as compared to the 2021 targets. 
The  production  and  sales  of  electric  vehicles  are  already  taking  off,  and  hydrogen 
promises new ways of propulsion, particularly for heavy duty trucks, indicating that this 
is a realistic scenario.  

Both  the  aviation  and  maritime  sectors  will  need  to  scale  up  efforts  to  improve  the 
efficiency  of  aircraft,  ships  and  their  operations  and  to  increase  the  use  of  sustainably 
produced renewable and low-carbon fuels. This  will be assessed in greater detail in the 
context of the ReFuelEU Aviation and FuelEU Maritime initiatives that aim to increase 
the  production  and  the  uptake  of  sustainable  alternative  fuels  for  these  sectors.  The 
necessary  technology  development  and  deployment  has  to  happen  already  by  2030  to 
prepare for much more rapid change thereafter. 

Similarly, industry may see emissions reductions of up to around 25% by 2030 compared 
to  2015.  Best  practices  can  further  reduce  greenhouse  gas  emissions,  thus  improving 
overall  efficiency,  by  using  waste  heat  and  increasing  electrification  through  continued 
incremental improvements.  However,  to allow  industry  to  truly decarbonise after 2030, 
zero  or  very  low  carbon  technologies  and  business  concepts,  including  system 
integration,  access  to  sustainable  resources  and  increased  circularity,  medium  and  high 
heat electrification, hydrogen and carbon capture, utilisation and storage, will need to be 
developed  and  tested  at  scale  in  this  decade.  To  kick-start  this  and  facilitate  the 
development  of  appropriate  supply  and  demand  based  support  for  zero  or  very  low-
carbon  technologies  and  create  markets  for  low-carbon  products,  EU  certification 
systems based on the greenhouse gas performance for low-carbon basic materials and for 
carbon  removals  should  be  developed8.  In  addition,  changes  in  corporate  governance 
rules  and  practices,  including  on  sustainable  finance,  will  make  company  owners  and 
managers prioritise sustainability objectives in their actions and strategies. 

Appropriate infrastructure to maximise the benefits of the clean energy transition and to 
deploy  alternative  emissions-free  fuel  and  feedstock  is  critical  for  both  sectors.  Heat 
networks, hydrogen pipelines, electric recharging and hydrogen refuelling infrastructure 
are all examples of infrastructure that will need to be developed and will require careful 
planning. 

Non-CO2 emissions  

Non-CO2  emissions  of  methane,  nitrous  oxide  and  so-called  F-gases  represent  almost 
20% of the EU’s greenhouse gas emissions. By 2030, these can be reduced effectively by 
up to 35% compared to 2015. 

8 See also the Circular Economy Action Plan (COM (2020) 98 final). 

10 

 
                                                 
The  energy  sector  shows  the  largest  potential  in  low-cost  additional  reductions  beyond 
existing policies, notably by avoiding fugitive methane emissions from oil, gas and coal 
production  and  transport.  These  will  be  addressed  among  others  in  the  upcoming 
Methane Strategy.  

The  waste  sector  is  expected  to  strongly  reduce  its  emissions  already  under  existing 
policies, notably due to the obligation to separately collect bio-waste as of 2024 and ban 
of  bio-waste  landfilling.  Reductions  will  depend  strongly  on  fully  enforcing  existing 
legislation. In addition, there is a further cost-effective reduction potential in wastewater 
treatment, notably through a better management of sewage sludge. Finally turning waste 
into  a  resource  is  an  essential  part  of  closing  the  loop  towards  a  circular  economy, 
reducing emissions across the entire industrial value chain. 

The majority of these emissions comes from the agriculture sector. Over the past years, 
the  decline  of  these  emissions  has  stagnated  and  in  some  cases  emissions  have  even 
increased. In a business as usual situation, they are projected at best to slowly decrease 
by 2030. While these emissions can never be fully eliminated under existing technology 
and management options, they can be significantly reduced while ensuring food security 
is  maintained  in  the  EU.  Efficient  use  of  fertilisers,  adopting  precision  farming,  a 
healthier  herd  and  the  deployment  of  anaerobic  digestion  producing  biogas  and 
valorising  organic  waste  are  examples  of  existing  technologies.  Alternative  options 
accelerating growth of sustainable shellfish and algae production could produce protein 
with  a  low  greenhouse  gas  emissions  footprint.  Furthermore,  by  adapting  its  land  use 
management  and  cultivating  perennials  on  cropland  in  a  sustainable  manner  for  use  of 
the  harvested  biomass  in  buildings,  industry  and  energy,  agriculture  can  greatly 
contribute to decarbonise other sectors.  

The land use sector 

Nature  is  a  vital  ally  in  the  fight  against  climate  change  and  halting  the  loss  of 
biodiversity.  It  regulates  the  climate,  and  nature-based  solutions  will  be  essential  for 
emissions reductions and adaptation to climate change. Restoring and growing our land 
carbon  sink  –  the  ability  to  absorb  CO2  by  our  natural  environment  such  as  trees  -  is 
crucial to our climate goals.  

The EU land use, land use change and forestry (LULUCF) sector both emits greenhouse 
gases and absorbs CO2 in its soil and biomass. In total, it has been a significant net sink 
in  the  past.  However,  over  recent  years  the  EU’s  sink  has  come  under  pressure  from 
increased economic use and the adverse effects of climate change. While it expanded in 
the two decades from 1990 to 2010 from a net sink of around 250 million CO2eq to above 
300 million tons CO2eq, it has seen significant losses over the last five years. This resulted 
in  a  sink  reduced  to  263  million  tons  CO2eq in 2018.  This  underlines  the  risks  for  the 
magnitude of the sink, which is of crucial importance to achieve net zero greenhouse gas 
emissions by 2050. 

Unchanged land use practices and further increases in harvesting, in part driven by age 
class impacts of maturing managed forests, could see the sink potentially further decline 
to  225  million  tons  CO2eq  by  2030.  There  are  significant  risks  for  the  sink  of  rising 
negative impacts from natural hazards such as fires and pests due to a changing climate 
as well as increasing economic demand for forest biomass, which also negatively affect 
biodiversity. 

11 

 
We  need  a  growing  sink  in  order  for  the  EU  to  achieve  climate  neutrality  by  2050. 
Reversing the current trend requires significant short-term action due to long lead times, 
especially  in  forestry.  This  includes  improved  and  enforced  forest  protection  and  more 
sustainable forest management as well as sustainable re- and afforestation and improved 
soil management including through the restoration of wetlands, peatlands and degraded 
land in line with the Biodiversity Strategy9 and contributing to its aims. Furthermore, a 
shift towards growing woody biomass on cropland in a sustainable manner, including as 
a  feedstock  for  advanced  biogas  and  biofuels,  could  alleviate  the  situation.  The  Impact 
Assessment estimates that, if implemented swiftly in the coming years, this could already 
reverse  the  current  trend  of  a  diminishing  EU  land  carbon  sink  by  2030,  increasing  it 
again to levels above 300 million tons CO2eq. 

 4.

UPDATING THE 2030 CLIMATE AND ENERGY POLICY FRAMEWORK 

The analysis in  the  Impact Assessment has looked at the broad changes,  which,  if  any, 
would  be  required  in  the  current  policy  framework  to  trigger  the  sectoral  contributions 
identified  above,  and  that  can  only  be  delivered  through  a  whole  of  government 
approach.  Key  elements  are  summarised  in  the  following  pages.  Specific  impact 
assessments  and  public  consultations  will  be  carried  out  in  the  coming  months  to 
precisely  determine  the  legislative  changes  the  Commission  intends  to  propose  in  June 
2021 to support the enhanced 2030 climate and energy framework and their cumulative 
impacts  on  the  European  economy.  These  will  have  to  further  assess  sector  specific 
distributional and competitiveness impacts by exploring feasible targeted solutions. 

The EU is implementing its current 2030 climate target of at least 40% greenhouse gas 
emissions reductions through three key pieces of climate legislation: 

 

 

 

the Emissions Trading System Directive10, which sets up a cap and trade system 
for  large  industrial  and  power  sector  installations  and  the  aviation  sector  to 
reduce emissions by 43% by 2030 compared to 2005; 

the  Effort  Sharing  Regulation  (ESR)11,  with  binding  greenhouse  gas  emissions 
pathways  at  Member  State  level  for  the  remaining  emissions,  adding  up  to  a 
reduction of 30% by 2030 compared to 2005;  

the  Land  Use,  Land  Use  Change  and  Forestry  (LULUCF)  Regulation 12  that 
obliges Member States to ensure that the net carbon sink from land use does not 
deteriorate compared to how it would have evolved continuing existing land use 
management practices. 

Energy  legislation  and  policies  are  also  essential  instruments  contributing  to  the 
achievement of this target with the 2030 EU binding targets of at least 32% of renewable 
energy  sources  in  the  EU’s  energy  mix  and  at  least  32.5%  energy  efficiency.  The 
Renewable  Energy  Directive  (RED  II)13 and  the  Energy  Efficiency  Directive14 and  the 
Regulation on the  Governance of the Energy Union and Climate Action15 capture these 

9 COM(2020) 380 final 
10 Directive (EU) 2018/410 amending Directive 2003/87/EC 
11 Regulation (EU) 2018/842  
12 Regulation (EU) 2018/841  
13 Directive (EU) 2018/2001 
14 Directive (EU) 2018/844 
15 Regulation (EU) 2018/1999 

12 

 
                                                 
targets  in  legislation,  supported  through  sectoral  legislation  such  as  the  Ecodesign 
directive16 and the Energy Performance of Buildings Directive17. A comprehensive set of 
notably  transport  and  other  sectoral  policies  also  contribute  to  the  achievement  of  the 
target.  

Current  projections  indicate  that,  if  current  policies  are  fully  implemented,  greenhouse 
gas emissions reductions18 by 2030 would be around 45% compared to 1990 levels when 
excluding land use emissions and absorptions, and around 47% when including land use. 
However,  it  is  clear  that,  while  current  energy  targets  should  allow  us  to  surpass  our 
current greenhouse gas emissions reduction target, this would not be sufficient to achieve 
a  55%  greenhouse  gas  emissions  reduction  target.  To  achieve  this,  both  the  climate 
legislation  as  well  as  the  energy  policies  need  to  be  reviewed  to  deliver  this  ambition 
increase. 

This is also confirmed  by  the assessment of Member States’ final National Energy  and 
Climate  Plans  (NECPs)  under  the  Governance  Regulation 19.  The  Governance  of  the 
Energy Union and Climate Action establishes an iterative process for close cooperation 
between the Union and Member States, relying on draft and final NECPs. As set out in 
the Communication on an EU-wide assessment of National Energy and Climate Plans20, 
Member  States  have  been  ambitious  when  developing  their  national  plans  for  the  first 
time.  The  Commission’s  analysis  indicates  that  aggregated  final  national  plans  would 
surpass  the  renewable  energy  target  at  EU  level  by  1.7  percentage  points  while 
underachieving on the energy efficiency target by around 3 percentage points. Combined, 
this would result in around 41% greenhouse gas emissions reductions (excluding land use 
emissions and absorptions) by 2030 for the EU21.  

Higher  ambition,  therefore,  requires  adjustments  to  the  current  policy  framework,  and 
this  in  turn  would  offer  a  more  balanced  pathway  towards  climate-neutrality  over  the 
next 30 years, avoiding the need for sharp reductions after 2030 and reaping earlier the 
opportunities for sustainable growth and investment.   

An increasing role for emissions trading and energy taxation 

The EU Emissions Trading System (ETS) has proven to be an effective tool in reducing 
greenhouse gas emissions. Emissions from stationary sources declined by 33% between 
2005 and 2018. With carbon prices increasing, following the introduction of the Market 
Stability  Reserve  and  the  market  anticipating  the  impact  of  the  reinforcement  of  the 
system, these emissions saw a further drop by almost 9% year on year in 2019. 

Other  policies,  most  notably  renewable  energy  and  energy  efficiency  policies,  have 
contributed to the reductions  in  power sector  emissions. However,  it is clear that when 
the carbon price is sufficiently robust, it becomes a strong driver for immediate change 
(e.g. change of  fuel  used for electricity  generation), and a  strong signal  for low  carbon 
investments, and thus contributes decisively to the deployment of renewable energy and 
energy efficiency technologies.  

16 Directive (2009/125/EC) 
17 Directive 2010/31/EU and amendement 2018/844/EU 
18 Including intra EU aviation and navigation 
19 Regulation (EU) 2018/1999 
20 [add reference] 
21 Including intra EU and extra EU aviation, not including maritime navigation 

13 

 
                                                 
The  Commission  has  assessed  carefully  the  possibility  of  reinforcing  and  expanding 
emissions  trading  as  a  tool  to  achieve  greenhouse  gas  emissions  reductions  at  the  EU 
level. 

The Commission sees important benefits in expanding the use of emissions trading in the 
EU, to deliver in an economically efficient manner an increased climate ambition of 55% 
greenhouse  gas  emissions  reductions.  Emissions  trading  can  achieve  greenhouse  gas 
emissions  reductions  cost-effectively.  Its  resulting  carbon  price  internalises  the  climate 
externalities  and  gives  consumers  incentives  to  reduce  greenhouse  gas  emissions.  It 
guarantees environmental integrity in the form of the emissions cap and provides a strong 
price  signal  that  influences  daily  operational  and  strategic  investment  decisions.  At  the 
same  time,  emissions  trading  raises  revenues  that  can  be  re-invested  in  the  economy 
leading to better overall economic outcomes.  

As  already  announced  in  the  European  Green  Deal,  a  further  expansion  of  the  system 
could  include  emissions  from  road  transport  and  buildings.  Already  now,  the  EU  ETS 
directly or indirectly covers around 30% of buildings emissions from heating22. Covering 
all  emissions  of  fossil  fuel  combustion  and  integrating  them  in  the  EU  ETS  would 
present  important  benefits  in  terms  of  effectiveness  and  administrative  feasibility.  The 
Commission therefore intends to pursue such an integrated  approach and will look into 
incorporating it in its legal proposal by next year June. 

Next  to  extending  the  use  of  emissions  trading  also  the  revision  of  Energy  Taxation 
Directive  could  contribute  to  putting  a  price  on  carbon  and  reducing  emissions.  Well-
designed  tax  reforms  can  promote  economic  growth,  job  creation  and  resilience  and 
foster a just transition. At present, a wide range of sectoral tax exemptions and reductions 
are de facto forms of fossil fuel subsidies, which are not in line with the objectives of the 
European Green Deal. 

The  Commission  is  aware  that  carbon  pricing  does  not  address  all  barriers  to  the 
deployment of low and zero emissions solutions. Other complementary policy actions are 
needed  to  ensure  that  the  incentives  align  and  to  trigger  further  investments  in  clean 
energy  technologies  and  infrastructure  or  to  overcome  financing  difficulties  for  low-
income households.  In road transport, emissions trading has the advantage of capturing 
fleet emissions under the cap and simultaneously incentivising behavioural change with 
lasting effects on mobility solutions through the price signal. At the same time, the CO2 
emissions  performance  standards  for  cars  are  the  main  driver  to  ensure  the  supply  of 
modern and innovative clean vehicles, including electric cars. Ambitious CO2 emissions 
standards  for  cars  and  vans  will  be  needed  to  ensure  a  clear  pathway  towards  zero 
emissions mobility. 

Therefore, the existing regulatory  and enabling framework  will be further  developed in 
parallel.  Renewable  energy,  energy  efficiency  and  transport  policies  and  standards  will 
be revised and, where needed, new policies will be introduced. Sectoral ambitions will be 
set  in  light  of  the  55%  economy  wide  greenhouse  gas  emissions  reduction  target.  The 
Commission  will  underpin  these  ambitions  with  policies  fostering  a  just  transition, 
research  and  development  and  sustainable  finance  and  ensure  an  effective  use  of  the 
Union’s budget and recovery funds to support the transition.  

Next steps on emissions trading 

22 This is related to the system’s coverage of district heating and due to electric heating. 

14 

 
                                                 
An  expanded  emissions  trading  system  could  be  developed  as  an  upstream  trading 
system regulating at the  point of fuel distributors or tax warehouses and would need to 
appropriately  address  any  risk  of  double  counting,  evasion  or  loopholes  in  relation  to 
entities covered by the existing downstream system for the aviation, power and industrial 
sectors.  

As the existing EU ETS has shown, the development of a new market requires setting up 
functioning  monitoring,  reporting  and  verification  and  can  benefit  from  transitional 
arrangements or a pilot period before being gradually integrated into the existing system.  

Low-income households bear a higher burden of heating and fuels expenses compared to 
wealthier households. This underlines that any expansion of emissions trading will need 
to  address  distributional  impacts,  e.g.  by  using  part  of  the  corresponding  auction 
revenues. This will depend on the revenue allocation between the EU and national level 
and on its well-targeted use (e.g. Modernisation Fund and Innovation Fund).23  

Increasing the EU’s 2030 climate ambition will also require a strengthened cap of the EU 
ETS  to  create  the  necessary  long-term  carbon  price  signal  and  drive  further 
decarbonisation.  

This will require revisiting the linear reduction factor that defines the annual reduction of 
the cap beyond its current level of 2.2% to guarantee that the sectors covered by the EU 
ETS  deliver  the  necessary  emissions  reductions.  Considering  that  the  nominal  cap  is 
currently  higher  than  actual  emissions,  a  change  in  the  linear  reduction  factor  could 
potentially be combined with a one-off reduction of the cap that would put it closer to the 
actual emissions level. The Commission will further assess how to strengthen the cap in 
the context of an extension of the system and next year’s review of the functioning of the 
Market  Stability  Reserve.  Similarly,  the  Commission  will  further  assess  the  combined 
impact of an expanded system and a strengthened cap on the free allocation available for 
industry  to  effectively  address  the  risk  of  carbon  leakage.  The  Impact  Assessment 
already estimates that, at first sight, a significant amount of free allocation would still be 
available, even with the necessary strengthening of the cap.  

Furthermore as the EU is increasing its climate ambition, the Commission is working on 
introducing a carbon border adjustment mechanism in certain sectors to address the risk 
of  carbon  leakage.  It  is  considering  several  options  as  an  alternative  to  the  current 
measures  addressing  that  risk  as  part  of  an  on-going  impact  assessment  with  a  view  to 
table a legislative proposal in the first half of 2021. 

Emissions trading: maritime and aviation 

EU international emissions from navigation and aviation have grown by more than 50% 
since 1990. Action in these sectors is urgently needed, including as they recover from the 
current crisis. The EU has a legislative framework in place that covers all greenhouse gas 
emissions except from maritime transport, for which the current regulation focuses solely 
on  monitoring,  reporting  and  verification  of  emissions.  For  aviation,  the  application  of 
the EU ETS is currently suspended in relation to flights to countries outside the European 
Economic Area to allow for the development of corresponding international instruments.  

23 The European Council Conclusions, 17-21 July 2020, recognised the need to work towards reforming the 
own  resources  system  and  introduce  new  own  resources  for  the  Union.  In  this  context,  the  European 
Council invited the Commission to put forward a proposal on a revised emissions trading system, possibly 
extending it to maritime and reducing the allowances allocated for free to airlines. 

15 

 
                                                 
For  both  sectors,  in  accordance  with  its  international  commitment  to  economy-wide 
action under the Paris  Agreement, the EU should continue  to regulate  at least  intra-EU 
aviation emissions in the EU ETS and include at least intra-EU maritime transport in the 
EU  ETS24.  For  aviation,  the  Commission  will  propose  to  reduce  the  free  allocation  of 
allowances,  increasing  the  effectiveness  of  the  carbon  price  signal  in  this  sector,  while 
taking  into  account  other  policy  measures  such  as  energy  taxation  and  the  ReFuelEU 
initiatives.  

International  cooperation  on    maritime  transport  and  aviation  is  desirable.  International 
instruments  negotiated  or  under  negotiation  in  the  International  Maritime  Organization 
(IMO)  and  the  International  Civil  Aviation  Organization  (ICAO),  such  as  the  Carbon 
Offsetting and Reduction Scheme for  International Aviation (CORSIA),should promote 
effective action in this context. In the light of progress at global level, the Commission 
will give fresh political consideration to the international aspects of the EU ETS, taxation 
and fuel policies  for aviation  and maritime to ensure  the  gradual  decarbonisation of all 
fuel  use  from  transport  relating  to  the  EU  with  the  ambition  to  include  international 
emissions from aviation and navigation into the EU ETS.  

Agriculture, Land Use, Land Use Change and Forestry sector 

The Land Use, Land Use Change and Forestry sector’s emissions and removals will be 
fully integrated into the proposed 2030 EU greenhouse gas target as reported under the 
UNFCCC inventory.  

This  will  be  the  starting  point  of  the  pathway  between  2030  and  2050  for  achieving 
climate  neutrality  and  allow  monitoring  progress  towards  net  zero  greenhouse  gas 
emissions by 2050 in a fully coherent manner. Corresponding targets need to be set in the 
Effort  Sharing  Regulation  and  under  the  EU  ETS,  to  ensure  that  in  total,  at  least  the 
economy wide 2030 greenhouse gas emissions reduction target of 55% will be met. 

The Land Use, Land Use Change and Forestry Regulation currently requires EU Member 
States  to  maintain  their  natural  carbon  sink  according  to  existing  land  use  practices.  It 
covers the activities of both the forestry and agriculture sectors.  

Over time, the sector should do more. The current trend of a decreasing land carbon sink 
needs to be stopped and reversed. The Biodiversity Strategy, the Farm to Fork Strategy, 
the  forthcoming  Forest  Strategy,  EU  Nature  Restoration  Plan  and  the  new  Adaptation 
Strategy will all put strong policies in place to protect and enhance the natural sink and 
resilience of the EU’s  forests to climate change, restore degraded land and ecosystems, 
rewet  wetlands  and  promote  the  bio-economy,  including  the  use  of  durable  harvested 
wood products, in full respect of ecological principles fostering biodiversity.  

The  sector  will  have  to  provide  for  food,  feed  and  materials  for  a  growing  world 
population  in  a  climate-neutral  economy.  Strong  synergies  and  trade-offs  with 
biodiversity  aspects  exist.  The  direction  should  be  to  increase  the  use  of  sustainably 
produced biomass and minimise the use of whole trees and food and feed-based crops to 
produce  energy.  Addressing  this  includes  reviewing  and  revisiting,  as  appropriate  the 

24 On average, including all extra EU navigation and aviation emissions, i.e. the assumed scope as reported 
in  the  greenhouse  gas  inventory  of  the  United  Nations  Framework  Convention  on  Climate  Change  as 
memo item, in the EU greenhouse gas emissions reduction target would require additional reductions of up 
to  3  percentage  points  by  2030  compared  to  1990  in  other  sectors  to  achieve  the  overall  EU  reduction 
target. 

16 

 
                                                 
biomass sustainability criteria in the Renewable Energy Directive, which are also used in 
the  EU  ETS,  following  the  ongoing  Commission’s  assessment  of  the  EU  and  global 
biomass supply and demand and related sustainability.  

Biomass-related  aspects  will  need  to  be  assessed  in  a  coherent  manner  with  other  fuel 
initiatives,  e.g.  the  Renewable  Energy  Directive,  the  Fuel  Quality  Directive  and  the 
upcoming  initiatives  promoting  sustainable  aviation  and  maritime  fuels.  A  fuel  policy 
coherent  with  the  overall  climate  and  energy  policy  will  be  essential  for  those  sectors 
with hard to abate emissions, be it to produce biogas and biofuels or hydrogen or e-fuels. 

Land Use, Land Use Change and Forestry presently removes more CO2 by storing it in 
biomass  or  in  soil  carbon  than  it  releases  to  the  atmosphere.  This  sink  needs  to  be 
maintained and even enhanced to balance any remaining emissions in the economy with 
carbon  dioxide  removals  and  to  achieve  net  zero  GHG  emissions  by  2050.  Increased 
flexibility  between  the  Land  Use,  Land  Use  Change  and  Forestry  Regulation  and  the 
Effort  Sharing  Regulation  could  be  a  way  to  strengthen  incentives  for  removals  in  the 
land  use  sector  itself.  An  ambition  increase  in  the  Land  use,  Land  use  change  and 
Forestry sector beyond the current requirements needs to be assessed carefully given the 
diverse  situation  across  Member  States.  This  would  benefit  from  the  detailed  analysis 
and elaboration of policies implementing the biodiversity  and forestry strategies, which 
in  principle  will  drive  some  of  the  additional  actions  reducing  emissions  in  the  sector. 
The Commission will reflect upon these options when coming forward with a legislative 
proposal  to  update  the  Land  Use,  Land  Use  Change  and  Forestry  Regulation  and  the 
Effort Sharing Regulation next year. 

To make removals happen in practice, individual farmers or forest managers need to be 
directly incentivised to store more carbon on their land and their forests.  Currently  this 
depends strongly on Member States action but carbon farming and certification of carbon 
removals should increasingly be deployed in the run up to 2030.  

A further step to enhance removals could be to integrate agriculture non-CO2 greenhouse 
gas emissions into the land use, land use change and forestry sector and to create a new 
regulated sector covering agriculture, forestry and land use. Such a sector would have the 
potential  to  become  rapidly  climate-neutral  by  around  2035  in  a  cost-effective  manner, 
and  subsequently  generate  more  removals  than  greenhouse  gas  emissions.  This  would 
require  a novel  policy  approach that would  (i) set national  and sub-sectoral targets  and 
benchmarks,  (ii)  create  flexibility  across  the  EU  ensuring  cost-effective  incentives  and 
mobilise  the  necessary  financial  resources,  as  well  as  (iii)  develop  the  certification  of 
carbon  removals.  An  EU  carbon  farming  initiative  under  the  Climate  Pact  will 
demonstrate and promote such new business models. 

Over time, the Commission clearly sees merit in the creation of an Agriculture, Forestry 
and Land Use sector with its own specific policy framework covering all emissions and 
removals of  these sectors and to become the  first sector to  deliver net zero  greenhouse 
gas  emissions.  Subsequently,  this  sector  would  generate  carbon  removals  to  balance 
remaining  emissions  in  other  sectors  induced  by  a  robust  carbon  removal  certification 
system. 

Effort Sharing Regulation 

Introducing  emissions  trading  for  a  significant  share  of  the  existing  Effort  Sharing 
Regulation  sectors  and  eventually  folding  agricultural  non-CO2  emissions  into  the  land 
use  sector  would  have  consequences  for  this  Regulation.  The  Commission  will  give 

17 

 
consideration  to  different  options  in  light  of  an  expansion  of  emissions  trading  to  all 
fossil fuel use.  

If,  on  one  hand,  the  scope  of  the  Regulation  were  to  be  maintained  creating  overlap 
between  the  sectors  covered  by  the  EU  ETS  and  the  Effort  Sharing  Regulation,  this 
would provide an incentive for Member States to take subsidiary action strengthening the 
regulatory  framework  for  sectors  such  as  buildings  and  road  transport.  If,  on  the  other 
hand,  the  scope  were  to  be  reduced,  and  in  case  of  a  full  transition  to  an  EU  ETS 
covering all fossil fuel combustion emissions, the Regulation would predominantly cover 
non-CO2 emissions. Its role and purpose would be further reduced in case of a move of 
agriculture  non-CO2  emissions  towards  an  agriculture  and  land  use  sector.  If  all  other 
objectives  of  the  Regulation  were  sufficiently  targeted  by  other  legislative  instruments, 
the Regulation could even be repealed as a whole in the future. 

Considering the need to maintain strong incentives and accountability for Member States 
to  ensure  action  at  national  level,  the  Commission  will  use  the  upcoming  impact 
assessment for both the review of the Emissions Trading System and the Effort Sharing 
Regulation to further consult the public on the role of the Effort Sharing Regulation and 
the  related  Governance  Regulation.  At  the  same  time,  Member  States  have  different 
capabilities to reduce greenhouse gas emissions. The EU budget together with the Next 
Generation  EU  package  can  be  a  strong  driver  for  transformation  and  leverage 
sustainable private and public investment, if resources are well-deployed. It will remain 
essential to address distributional concerns between Member States in order to ensure a 
fair transition.  

Renewable energy policies 

Renewable energy plays a fundamental role for delivering the European Green Deal and 
for achieving climate neutrality by 2050.  

Based on the assessment carried out, it is clear that the EU needs to transit from today’s 
energy  system  to  an  integrated  energy  system  largely  based  on  renewables  already  by 
2030.  The  greenhouse  gas  emissions  reduction  target  of  55%  achieved  through  the 
combination of intensified policies and the extension of the EU ETS is assessed to reach 
a share of renewables of around 38.5%. 

Renewables will  need  to  be deployed at larger scale  to  contribute to the higher climate 
ambition and to promote the Union’s industrial leadership on renewable technologies. An 
increased  renewables  target  will  provide  the  necessary  predictability  and  investment 
certainty for further renewable energy deployment across all sectors. 

The transition to climate neutrality requires a competitive, secure and sustainable energy 
system and a robust internal market framework. The existing framework and recent EU 
strategies  on  Energy  System  Integration,  on  Hydrogen  and  on  Batteries  set  important 
enabling conditions for the uptake of renewable energy carriers. To go further, relevant 
legislation  will  be  reinforced  and  supported  by  the  forthcoming  Commission  initiatives 
on  a  Renovation  Wave,  an  Offshore  Energy  strategy,  alternative  fuels  for  aviation  and 
maritime as well as a Sustainable and Smart Mobility Strategy.  

EU  action  will  focus  on  cost-effective  planning  and  development  of  renewable  energy 
technologies, eliminating market barriers and providing sufficient incentives for demand 
for  renewable  energy,  particularly  for  end-use  sectors  such  as  heating  and  cooling  or 
transport either through electrification or via the use of renewable and low-carbon fuels 

18 

 
such  as  advanced  biofuels  or  other  sustainable  alternative  fuels.  The  Commission  will 
look  into  capacity  building  schemes  to  implement  citizen-driven  renewable  energy 
communities financed by the EU and self-consumption models enabling higher consumer 
uptake  and  faster  development  of  decentralised  renewable  energy  technologies. 
Continuous  support  for  corporate  sourcing  of  renewable  energy,  and  establishing 
minimum  mandatory  green  public  procurement  criteria  and  targets  in  relation  to 
renewable energy may also be needed. 

Specifically  in  the  fossil  fuel  dominated  heating  and  cooling  sector,  the  Commission 
intends to assess the nature and the level of the existing, indicative heating and cooling 
target,  including  the  target  for  district  heating  and  cooling,  as  well  as  the  necessary 
measures  and  calculation  framework  to  mainstream  further  renewable  and  low  carbon 
based solutions, including electricity, in buildings and industry.  

For  transport,  the  Impact  Assessment  demonstrates  that  there  is  a  clear  role  for 
electrification  as  a  key  avenue  for  decarbonisation.  However,  some  transport  sectors 
heavily  depend  on  high  energy  density  fuels,  such  as  the  aviation  and  maritime. 
Alongside  the  sustainable  alternative  fuels  initiatives  for  these  sectors,  ReFuelEU 
Aviation and  FuelEU Maritime, the Commission will propose an updated methodology 
to promote, in accordance with their greenhouse gas performance,  the use of renewable 
and low-carbon fuels in the transport sector set out in the Renewable Energy Directive. 

In addition, a comprehensive terminology for all renewable and low-carbon fuels and a 
European  system  of  certification  of  such  fuels,  based  notably  on  full  life  cycle 
greenhouse gas emissions savings and sustainability criteria, and existing provisions for 
instance  in  the  Renewable  Energy  Directive  would  support  the  further  development  of 
renewables.  Large-scale  deployment  of  renewables  also  requires 
the  necessary 
infrastructure.  A  holistic  approach  to  large-scale  and  local  infrastructure  planning, 
protecting and enhancing the resilience of critical infrastructures is needed and will guide 
the forthcoming revisions  of  the  TEN-E and  TEN-T regulations, and  of the  Alternative 
Fuels  Infrastructure  Directive.  Modern  low-temperature  district  heating  systems  should 
be  promoted,  as  they  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.  

Energy Efficiency policies 

The EU has a comprehensive framework for a wide range of energy efficiency measures 
across  different  sectors 25 .  A  rigorous  enforcement  of  existing  legislation  on  energy 
efficiency is necessary but insufficient to reach the increased climate target. The Impact 
Assessment  shows  that  energy  efficiency  improvements  will  need  to  be  significantly 
stepped up to around 36% in terms of final energy consumption26. 

Achievement of a more ambitious energy efficiency target and closure of the collective 
ambition  gap  of  the  national  energy  efficiency  contributions  in  the  NECPs  will  require 
actions  on  a  variety  of  fronts,  largely  through  the  legislative  policy  initiatives  already 

252012  Energy  Efficiency  Directive  together  with  the  Energy  Performance  for  Buildings  Directive,  the 
Ecodesign Directive and the Energy and Tyre Labelling Regulations 
26 The  Impact  Assessment  identifies  a  range  of  35.5  %  -  36.7  depending  on  the  overall  design  of  policy 
measures underpinning the new 2030 target. This would correspond to a range of 39.2%- 40.6% in terms of 
primary energy consumption.  

19 

 
                                                 
announced  by  the  European  Green  Deal  for  June  2021.  Therefore  these  initiatives  will 
identify the precise policy options available as well as the exact level of new targets.  

However,  the  analysis  accompanying  this  Communication  already  indicates  that  most 
savings  would  need  to  come  from  buildings.  The  forthcoming  Renovation  Wave  will 
therefore launch a set of actions to increase the depth and the rate of renovations at single 
building  and  at  district  level,  switch  fuels  towards  renewable  heating  solutions,  diffuse 
the  most  efficient  products  and  appliances,  uptake  smart  systems  and  building-related 
infrastructure for charging e-vehicles, and improve the building envelope (insulation and 
windows).  Action  will  be  taken  not  only  to  better  enforce  the  Energy  Performance  of 
Buildings Directive, but also to identify any need for targeted revisions. The possibility 
of establishing mandatory requirements for the worst performing buildings and gradually 
tightening  the  minimum  energy  performance  requirements  will  also  considered  as  a 
means to ensure a suitable minimum pace for the improvement of the building stock. 

Building  on  the  existing  framework  and  the  long-term  renovation  strategies,  other 
measures  will  be  identified  to  remove  the  main  barriers  to  building  renovation  and 
reinforce  the  pull  factors  for  faster  and  deeper  renovations.  The  Renovation  Wave  will 
address the necessary elements to achieve and sustain higher renovation rates, including 
regulatory  strengthening.  It  will  foresee  adequate  financial  instruments,  for  instance  to 
facilitate  de-risking  and  incentivising  the  measurement  of  actual  energy  savings,  and 
other  facilitating  measures,  such  as  fostering  training  in  the  required  skills.  Indicative 
milestones for 2030, 2040 and 2050 and with measurable progress indicators will be set 
up. 

Over and beyond the contribution from the building sector, other efforts will be needed 
to achieve a more ambitious energy efficiency target. 

The  existing  energy  efficiency  requirements  and  product  standards  will  be  reviewed  in 
the  first  half  of  2021.  In  addition,  the  forthcoming  Sustainable  Product  Legislative 
initiative announced in the Circular Economy Action27 Plan will look into widening the 
Ecodesign approach to other product categories. 

The higher ambition level will also require to better promote energy efficiency wherever 
cost-effective  in  all  areas  of  the  entire  energy  system  as  well  as  in  all  relevant  sectors 
where activity affects demand for energy, such as transport and the agriculture sectors. In 
this  context,  the  Commission  will  present  dedicated  guidelines  in  the  first  quarter  of 
2021.  Considering  that  the  Information  and  Communication  Technologies  (ICT)  sector 
accounts for between 5 and 9% of global electricity consumption and more than 2% of 
global greenhouse gas emissions, the EU Digital Strategy28 announced a commitment to 
make  data  centres  climate-neutral  by  2030,  with  actions  to  be  put  in  place  in  2021  to 
2022. 

Road transport CO2 vehicle standards 

For road transport, CO2 and vehicle standards have proven to be an effective policy tool. 
In parallel to applying emissions trading to road transport at the level of the fuel supplier 
and  road  pricing  in  line  with  the  ongoing  revision  of  the  Eurovignette  Directive  ,  only 
stringent  CO2  emissions  performance  standards  ensure  the  supply  of  modern  and 
innovative  clean  vehicles,  including  vehicles  that  see  strong  reductions  in  fuel 

27 COM (2020) 98 final 
28 COM/2020/67 final 

20 

 
                                                 
consumption and drive trains such as battery or fuel cell electric vehicles with no tank to 
wheel  emissions  at  all.  By  June  2021,  the  Commission  will  therefore  revisit  and 
strengthen the CO2 standards for cars and vans for 2030.  

This work has to look beyond 2030. The Impact Assessment indicates that to reach the 
overall  climate  neutrality  target  in  2050,  nearly  all  cars  on  the  roads  must  be  zero 
emissions by that time. This transition needs to be flanked by the appropriate roll out of 
infrastructure for recharging and refuelling of those vehicles. The upcoming revision of 
the  Alternative  Fuels  Infrastructure  Directive  is  a  key  initiative  in  this  regard.  The 
development and testing of new automotive technologies have long lead times and cars 
are  on  the  roads  between  10  and  15  years.  The  Commission  will  also  assess  in  the 
coming  months  what  would  be  required  in  practice  for  this  sector  to  contribute  to 
achieving  climate  neutrality  by  2050  and  at  what  point  in  time  internal  combustion 
engines in cars should stop coming to the market.  

Mainstreaming of climate action across all policies 

Many other EU policies have been put in place, or are being reoriented to contribute to 
the  ‘do  no  harm’  principle  and  the  transition  to  climate  neutrality.  Mainstreaming  of 
climate  policy  objectives  into  other  EU  policies  is  a  key  enabler  and  will  allow  for  an 
inclusive transformation based on a just transition. 

The  Sustainable  Europe  Investment  Plan  aims  at  boosting  sustainable  investments.  Its 
Just Transition Fund (the first pillar of the Just Transition Mechanism) addresses head on 
the acceleration of the transition in coal, peat, oil shale and carbon-intensive regions. The 
InvestEU programme focuses on attracting private investments, and it has been proposed 
to use at least 30% of its overall financial envelope to contribute directly to achieving the 
climate  objectives.  The  Modernisation  Fund  will  support  the  transition  of  the  energy 
system in lower income Member States. The European Regional Development Fund and 
the  Cohesion  Fund  will  support  complementary  investments  in  energy  efficiency, 
renewables,  innovation  and  research.  The  European  Social  Fund  Plus  will  provide 
comprehensive  support  for  up-  and  re-skilling  of  workers.  Moreover,  the  Commission 
will propose in May 2021 an Action Plan for the implementation of the European Pillar 
of  Social  Rights  promoting  just  transitions,  access  to  training  and  essential  services 
including energy, mobility and housing for all. The Commission’s Long-term Vision on 
rural areas to be launched next year will pay specific attention to promoting sustainability 
for citizens living in remote, rural areas. 

Horizon Europe, the new research and innovation framework programme, with inter alia 
a  dedicated  Climate,  Energy  and  Mobility  cluster,  will  see  at  least  35%  of  its  funds 
supporting the  achievement of the climate  goals. The  Innovation  Fund  will support the 
demonstration  of  breakthrough  technologies  at  commercial  scale  in  the  energy  and 
industry sectors. 

The  Renewed  Sustainable  Finance  Strategy  with  its  envisaged  legislative  and  non-
legislative  initiatives  will  guide  private  investments  more  towards  green  recovery  and 
sustainable  economic  activities.  Among  other  initiatives,  the  EU  sustainable  finance 
taxonomy, the EU Green Bond Standard and climate benchmarks will play a crucial role 
in  fostering  investment  closer  to  the  needs  of  the  real  economy  for  the  benefit  of  the 
planet and society.  

21 

 
To  achieve  climate  neutrality,  a  90%  reduction  in  overall  transport  emissions  by  2050 
compared to 1990 levels will be one main objective of the forthcoming Sustainable and 
Smart Mobility Strategy while addressing recovery of the sector. 

Industry must lead change as Europe embarks on its transition towards climate neutrality 
and  digital  leadership,  while  leveraging  the  impact  of  its  single  market  to  set  global 
standards. Both the European Industrial Strategy29 and the EU Circular Economy Action 
Plan  point  towards  increased  resource  efficiency  and  the  circular  economy  as 
indispensable  pathways  for  a  modernisation  of  EU  industry  contributing  to  greenhouse 
gas emissions reductions. 

Secure  supply  of  batteries  in  line  with  the  strategic  action  plan  for  batteries  under  the 
European  Battery  Alliance  will  be  indispensable  for  decarbonising  the  EU’s  energy 
system  by  enabling  integration  of  increasing  amounts  of  renewable  energy,  and  our 
transport sector by catalysing the shift to electric vehciles. 

The forthcoming  Zero Pollution  Action Plan for air, water  and  soil will look at how to 
further address pollution from large industrial installations fully consistent with climate, 
energy, as well as circular economy policies. The EU’s Digital Strategy supports digital 
technologies  that  can  help  achieve  climate-neutrality  across  all  sectors  of  the  EU 
economy, and aims at greening the ICT sector itself.  

The  CAP  strategic  plans  to  be  developed  by  Member  States  are  a  key  opportunity  to 
direct more resources to reduce emissions in the agriculture sector in a durable manner, 
while  enhancing  the  economic  and  environmental  sustainability  and  resilience  of  the 
sector. 

Preparing a more ambitious EU strategy on adaptation to climate change will be essential 
for all sectors, as climate change will continue to create increasing stress on the Europe 
economic and social fabric, in spite of the mitigation efforts. 

Both mitigation and adaptation will in turn benefit from the EU Space programmes such 
as Copernicus with ever improving monitoring capabilities.  

Overall,  higher  ambition  by  2030  and  the  transition  to  climate  neutrality  and  recovery 
from the COVID-19 crisis will be both a challenging task and an opportunity to build a 
better future for all. A Technical Support Instrument ensures that the Member States can 
benefit  from  tailor-made  expertise  for  developing  sustainable  and  growth  enhancing 
reforms. 

Alongside  government  policies  and  regulation,  citizens,  communities  and  organisations 
have their part to play. Regions, cities and towns are key centres of transformative and 
sustainable solutions that lead the way forward through movements such as the Covenant 
of Mayors. To this end, the Commission will launch the European Climate Pact to give 
everyone a voice and space to design climate action, share information, launch grassroots 
activities and showcase solutions that others can follow.   

International dimension 

As  an  advanced  economy,  with  a  proven  track  record  in  successful  implementation  of 
ambitious climate policy, the EU has the possibility – as well as the moral obligation – to 

29 COM(2020) 102 final 

22 

 
                                                 
influence  global  greenhouse  gas  emissions  trends  and  increase  resource  efficiency, 
within and beyond the international climate negotiations. Raising the EU ambition from 
the current level to 55% within the next ten years will double the ambition of the EU’s 
nationally determined contribution and set the stage for the upcoming UN climate change 
negotiations in 2021, thereby reinforcing the EU’s global leadership position.  

The Commission invites the European Parliament and the Council to consider this as the 
EU‘s  new  contribution  to  the  Paris  Agreement.  This  should  be  submitted  to  the 
UNFCCCC  as  the  updated EU’s Nationally Determined  Contribution before the  end of 
the year. This would give an early boost to the UN’s preparations of the next meeting of 
the Parties of the Paris Agreement in late 2021, as well as the UN’s Decade for Action 
(2030 Agenda).  

By setting a higher target for 2030, and thereby increasing its ambition under the Paris 
Agreement, the EU would set a positive example for the rest of the world of how climate 
change  can  be  effectively  tackled,  while  pursuing  a  modern  and  competitive  economy 
and  a  prosperous,  inclusive  and  resilient  society.  It  would  also  provide  momentum  for 
next year’s multilateral discussions in the context of the G7 and the G20, which will be 
presided by the UK and Italy, respectively. Through its external assistance the EU will be 
able to support third countries in their effort to raise their climate ambitions. 

The EU should continue leading by example, but it must also use its leverage to promote 
a  global  change  in  economic  incentives  in  support  of  the  low-carbon  transition  taking 
into  account  changing  geopolitical  and  geoeconomic  realities.  The  EU  will  continue  to 
foster multilateral rule-based cooperation, using its green, climate and energy diplomacy 
– and the full spectrum of its external policy instruments to enhance the ambition level of 
its partners, and in particular the largest and upcoming emitters, and accelerate the global 
transition to climate neutrality. This means using the EU’s strategic partnerships, external 
financing,  trade  and  other  cooperation  platforms  including  through  the  deployment  of 
international environmental standards and promotion of clean technologies through trade. 
The  private  sector  should  play  an  important  role  and  EU  leadership  on  sustainable 
finance,  in  particular  through  the  EU  taxonomy  as  a  tool  to  help  investors  in  the 
transition  to  a  low-carbon,  resilient  and  resource-efficient  economy  as  well  as  through 
the International Platform on Sustainable Finance with our international partners will be 
instrumental. The EU will seek mutually beneficial alliances and ensure an international 
level  playing  field  around  new  sustainable  technologies,  such  as  renewable  hydrogen, 
advanced  solar  and  wind,  batteries,  and  carbon  capture,  as  well  as  around  critical  raw 
materials  for  these  technologies,  such  as  rare  earths.  The  EU’s  position  as  the  world’s 
largest trading block provides significant opportunities in this respect.  

At  the  same  time,  to  effectively  contain  global  climate  change  and  achieve  the  UN 
Sustainable  Development  Goals,  all  countries  and  notably  G20  members  will  need  to 
come forward with much more ambitious actions to prevent catastrophic consequences.  

In the absence of comparable increases in ambition by our partners, as the EU increases 
its  climate  ambition,  the  Commission  will  propose  a  carbon  border  adjustment 
mechanism , for selected sectors, to reduce the risk of carbon leakage as a an alternative 
to  measures  currently  in  place  to  address  that  same  risk  ..  Hence,  the  Commission  is 
looking into the options for setting up an effective carbon border adjustment mechanism, 
compliant with World Trade Organization rules.  

23 

 
 5.

CONCLUSIONS AND NEXT STEPS 

Raising  the  EU’s  ambition  of  greenhouse  gas  emissions  reductions  to  55%  by  2030  is 
feasible and beneficial for the health, prosperity, and wellbeing of our citizens. Without 
underestimating  the  challenge  of  mobilising  significant  additional  investments  in  the 
coming decade  and  promoting a  just  transition, it offers  the  opportunity  for sustainable 
growth,  and,  in  the  context  of  the  COVID-19  recovery,  an  opportunity  for  durable 
investments that can kick-start the EU economy.  

Higher ambition for 2030 will contribute to a more gradual emissions reduction path and 
a more balanced economic and social transition towards climate neutrality in the next 30 
years. Therefore, it will be more credible, more prudent and fairer with respect to future 
generations.  

Pressure on  natural resources,  general uncertainty  around  global developments, and the 
growing  climate  concerns  of  the  global  population  will  increase  pressure  on  all 
governments  to  act  swiftly.  Acting  ambitiously  will  provide  the  EU  and  its  businesses 
and industries a first-mover advantage in the international economic arena, increasing its 
competitiveness in the growing global markets for sustainable and green technologies.  

Equally important, enhancing ambition will deliver very important benefits alongside the 
fight against climate change, like a reduced fossil fuel import bill, higher energy security, 
reduced  air  pollution,  better  health,  improved  biodiversity,  lower  dependence  on 
imported raw materials, and less hazards from waste. Paired with intensified renewables 
and  energy  efficiency  policies,  it  will  cut  energy  costs  for  households  and  companies, 
and  provided  that  social  impacts  are  addressed  help  alleviate  energy  poverty  and 
contribute to growth and jobs. 

EU citizens, businesses and social partners require increased certainty and predictability 
on  the  pathway  towards  climate  neutrality.  Therefore,  the  Commission  is  amending  its 
proposal for the first European Climate Law30 today, adding a 2030 target of at least 55% 
net  greenhouse  gas  emissions  reductions  compared  to  1990.  This  will  be  the  starting 
point  for  a  smooth  pathway  for  the  EU  to  become  climate-neutral  by  2050.  The 
Commission invites the European Parliament and the Council to swiftly reach agreement 
on and adopt the European Climate Law Regulation. 

Over the course of the coming nine months, the Commission will review its key climate 
and energy legislation. This Communication already identifies key options to amend it. 
The Commission is convinced that all policy instruments relevant for the decarbonisation 
of our economy must work in coherence in order to achieve our objectives. A reinforced 
and  expanded  use  of  emissions  trading  at  EU  level,  energy  efficiency  and  renewable 
energy  policies,  instruments  supporting  sustainable  mobility  and  transport,  circular 
economy,  environmental,  agricultural,  financial,  research  and innovation, and industrial 
policies will all have important roles in achieving the objectives of the European Green 
Deal in general and an increased climate target for 2030 and climate neutrality by 2050 
in particular. 

Drawing  on  a  broad  public  debate  and  a  process  of  consultation  with  the  European 
Parliament, the Council, the Economic and Social Committee and the Committee of the 
Regions,  as  well  as  national  Parliaments,  and  all  citizens  and  stakeholders  -  namely 
through the European Climate Pact, but also the upcoming Conference on the Future of 

30 COM(2020) 80 final 

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Europe  -  the  Commission  will  prepare  the  key  necessary  legislative  proposals  by  June 
2021. This process  should pave the way  for  their subsequent rapid adoption, and leave 
sufficient  lead-time  for  all  actors  to  achieve  the  increased  2030  climate  and  energy 
ambition. 

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