REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS - Kick-starting the journey towards a climate-neutral Europe by 2050 EU Climate Action Progress Report 2020
Date: 2020-11-30
Institutions: Directorate-General for Climate Action, European Commission
Subjects: EU Emissions Trading Scheme, EU Member State, EU environmental policy, adaptation to climate change, climate change, environmental cooperation, greenhouse gas, pollution control measures, reduction of gas emissions, tradeable emission permit

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 30.11.2020  COM(2020) 777 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS - Kick-starting the journey towards a climate-neutral Europe by 2050           EU Climate Action Progress Report 2020 {SWD(2020) 298 final}  
 
 
“We can be confident in our progress, but this is no time to rest on our laurels. We 

need to step up our efforts across all sectors of the economy. The European Green 

Deal’s policies will drive our green transition and allow us to cut greenhouse gas 

emissions  faster,  with  a  goal  of  reaching  55%  below  1990  levels  by  2030.  The 

transition is feasible if we stick to our commitment and seize the opportunities of 

the recovery to reboot our economy in a greener, more resilient way and create a 

healthy, sustainable future for all.” 

Frans Timmermans, Executive Vice-President for the European Green Deal 

1.  MEETING THE EU’S INTERNATIONAL COMMITMENTS 

In  2019,  greenhouse  gas  (GHG)  emissions  decreased  by  3.7%  while  the  EU  economy 
continued to grow 
In  2019,  EU-27i  greenhouse  gas  emissions  (including  international  aviation)  were  down  by 
24% from 1990 levels, according to the approximated GHG inventoryii. Including emissions 
and  removals  from  land  use,  land  use  change  and  forestry  this  results  in  a  net  emission 
reduction  of  25%iii.The  EU  thus  remains  well  on  track  to  achieve  its  target  under  the  UN 
Framework Convention on Climate Change of reducing GHG emissions by 20% by 2020iv. 
Emissions  in  2019  fell  by  3.7%  compared  to  2018.  EU  GHG  emissions  therefore  reached 
their  lowest  level  since  1990.  Between  1990  and  2019,  the  EU’s  combined  GDP  grew  by 
about  60%.  The  GHG  emission  intensity  of  the  economy,  defined  as  the  ratio  between 
emissions and GDPv fell to 282 g CO2eq/€2015, which is less than half of the 1990 level. 

1 

 
 
 
 
 
 
 
Figure 1: Total EU 27 
GHG emissions 
(including international 
aviation) and removals 
1990-2019, current 2030 
Target and proposed 
step-up, projected 
emissions 2020 – 2050 
with existing (‘baseline’) 
and with additional 
measures necessary to 
achieve climate 
neutrality (‘net zero’) by 
2050vi 

6000

5000

4000

3000

2000

1000

0

[CATEGORY 
NAME] 
emissions: 
-24% vs. 1990 

[CATEGORY 
NAME] target:  
 -20% emissions 
vs. 1990 

[CATEGORY 
NAME] target: at 
least  
-40% emissions 
vs. 1990 

[CATEGORY 
NAME] step-up 
proposal: at least 
-55% net 
emissions vs. 
1990 

-1000

1990

2000

2040

2050

2010

2030

2020
Total GHG (excl. LULUCF)
Total GHG (incl. LULUCF)
Projected GHG, baseline (excl. LULUCF)
Projected GHG, baseline (incl. LULUCF)
Projected GHG, net zero by 2050 (excl. LULUCF)
Projected GHG, net zero by 2050 (incl. LULUCF)
Removals (LULUCF)
Projected removals (LULUCF), baseline
Projected removals (LULUCF), net zero by 2050
Current targets

The COVID-19 crisis is expected to lead to an unprecedented fall in emissions in 2020. The 
IEAvii estimates a drop of 8% in 2020 for global CO2 emissions. The carbon monitor, run by 
an international research consortium, estimates that EU-27 emissions in  the first half of the 
year  2020  have  dropped  by  11%  compared  to  the  same  period  of  the  previous  yearviii. 
However,  as  experienced  in  the  past,  a  swift  economic  recovery  may  lead  to  a  strong  and 
rapid  rebound  in  emissions,  unless  policy  gears  stimulus  measures  toward  the  green 
transition. First reliable data on the impacts of COVID-19 on EU emissions will be available 
in next year’s report. 

Even before the pandemic, emissions from stationary installations in all countries covered by 
the  EU  emissions  trading  system  (EU  ETS),  fell  strongly  by  9.1  %  from  2018  to  2019. 
Emissions  not  covered  by  the  ETS  (such  as  emissions  from  non-ETS  industry,  transport, 
buildings,  agriculture  and  waste)  remained  unchanged  from  2018  to  2019.  The  year  before 
these  had  seen  a  slight  drop,  however,  overall,  emissions  from  this  aggregate  of  economic 
sectors  have  been  stable  for  several  years.  According  to  preliminary  accounting  under  the 
Kyoto  Protocol,  decreasing  net  credits  from  land  use,  land  use  change  and  forestry 
(LULUCF) between 2013 and 2017 stabilized in 2018. 

CO2  emissions  from  international  aviation  continued  to  increase  in  2019,  rising  by  3% 
compared  to  the  previous  year,  continuing  the  increasing  trend.  Aviation  emissions  are 

2 

 
 
 
 
 
 
 
 
 
 
 
 
 
covered by the ETS, but for the moment only for flights within the European Economic Area 
(EEA). Regarding emissions from extra-EEA international aviation, i.e. both from incoming 
flights from and outbound to non-EEA countries, are currently not priced under the EU ETS, 
in  accordance  with  the  ‘stop  the  clock’  provision  in  the  Directive.  This  was  intended  to 
provide  momentum  for  a  global  market-based  mechanism,  the  Carbon  Offsetting  and 
Reduction  Scheme  for  international  aviation  (CORSIA).  Aviation's  overall  impact  on  the 
global climate, including through non-CO2 emissions or effects, is considerably higher than 
the  CO2  component  alone.  It  has  been  estimated  that  the  non-CO2  radiative  forcing  effects 
were 2-4 times those of CO2, which gives a range of 136-272 million tonnes CO2-equivalent 
for  aviation’s  total  impacts  from  intra-EEA  activitiesix.  This  range  results  from  the  varying 
degrees  of  uncertainty  that  still  prevail  as  to  the  exact  magnitude  of  the  various  non-CO2 
effects and trade-offs between them.  

European climate action to  be stepped up towards  net  zero emissions in 2050 despite the 
COVID-19 pandemic 

The  year  2019  was  a  significant  milestone  for  European  climate  action.  The  European 
Council  agreed  in  December  on  the  EU  becoming  climate-neutral  by  2050  in  line  with  the 
Paris  Agreement.  The  European  Parliament  had  already  endorsed  the  objective  in  its 
resolution  on  climate  change  of  March.  To  ensure  climate  neutrality  by  2050,  the 
Commission presented the European Green Deal as a comprehensive multi-sectoral roadmap 
toward  a  green  and  just  transition.  In  principle,  all  EU  actions  and  policies  should  pull 
together to help the EU achieve a successful and just transition towards a sustainable future. 

A new proposal for a European Climate Law was subsequently adopted by the Commission 
in March 2020, in order to make the climate neutrality target legally binding in the EU. The 
proposal  was  amended  in  September  to  include  a  new  target  for  2030  and  support  the 
increasing  of  the  EU’s  nationally  determined  contribution  under  the  Paris  Agreement  from 
the  previous  at  least  40%  reduction  target  to  at  least  55%  compared  to  1990.  Figure  1 
illustrates  where  EU  emissions  are  projected  to  land  with  currently  existing  and  planned 
policies and measures (‘baseline’) on the one hand, and with a plausible path towards climate 
neutrality with additional measures to achieve  -55% net emissions as set out in the Climate 
Target Plan (‘net zero’), on the other. 

Following the outbreak of the COVID-19 pandemic in spring 2020, a recovery package and 
the 2021-2027 budget have been designed with the purpose of helping the EU to rebuild after 
the  pandemic  and  supporting  investment  in  the  twin  green  and  digital  transitions.  The 
European  Council  agreed  in  July  2020  that  30%  of  the  funds  amounting  to  €  1.8  trillionx 
should  be  targeted  at  advancing  the  climate  transition  helping  EU  Member  States  address 
their  sustainability  challenges  and  boosting  green  jobs  and  competitiveness.  The  biggest 
potential  to  create  a  quick  economic  stimulus  in  the  area  of  climate  and  energy  policy  has 
been  identified  in  the  areas  of  building  renovation,  renewable  energy,  renewable  hydrogen, 
and  infrastructure,  as  well  as  clean  mobility  such  as  electric  vehicles  and  charging  points, 
smart grids and energy sector integration. 

To  ensure  consistency,  the  proposed  Recovery  and  Resilience  Facility  (RRF)  Regulation 
fixes  criteria  with  which  national  Recovery  and  Resilience  Plans  for  2021-2023  should 
complyxi. The plans need to be consistent with country-specific recommendations identified 
in the 2019 and 2020 European Semester cycles, the integrated National Energy and Climate 
Plans (NECPs), including on just transition. The plans need to include both investments and 
reforms that contribute to the green transition, corresponding to the climate objective for the 
RRF of 37% of the allocated spending. The RRF links policies with financing, complemented 
by  the  key  financial  resources  delivering  the  European  Green  Deal,  namely  InvestEU, 

3 

 
 
cohesion  funds,  the  Just  Transition  Fund,  Innovation  Fund,  and  Modernisation  Fund.  The 
Digital Europe Programme will support the twin green and digital transitions. 

This  report  provides  illustrative  examples  on  how  EU  funds  contribute  to  climate  friendly 
innovation. 

Member States identify additional policies and measures to reach 2030 objectives 

In  2019,  all  Member  States  prepared  their  final  integrated  National  Energy  and  Climate 
Plans. These show that while Member States have made significant progress in defining their 
respective paths  to  reaching the current  2030 climate and  energy targets,  further efforts  are 
still needed.  

With  existing  national  policies  and  measures  implemented,  EU-27  total  emissions  are 
projected to be reduced by 30% in 2030 according to aggregated national GHG projections. 
With the implementation of the planned measures or stated ambitions in the final NECPs, the 
overall GHG reduction of the EU is estimated at 41%, thus reaching the current at least 40% 
reduction target.  

Cooperation with Norway and Iceland to reach the 2030 target  

Norway and Iceland have agreed to cooperate with the EU in order to reach their 2030 targets 
of reducing GHG emissions by at least 40% compared to 1990 levels.  In the context of the 
EEA  Agreement,  Norway  and  Iceland  will  as  of  2021  implement  the  Effort  Sharing 
Regulation (ESR) and the LULUCF Regulation. Norway and Iceland have already taken part 
in the EU ETS since 2008. 

2.  EMISSIONS IN THE EU EMISSIONS TRADING SYSTEM (ETS) 

The  Emissions  Trading  System  (ETS)  covers  emissions  from  approximately  11,000  power 
stations  and  manufacturing  plants,  as  well  as  aviation  within  and  between  the  participating 
countries.  

In 2019, emissions from installations in all countries participating in the ETS are estimated to 
have  decreased  by  9.1%  compared  to  2018.  This  decrease  was  mainly  driven  by  changes 
within  the  electricity  and  heat  production  sectors,  where  emissions  fell  by  about  15% 
compared  to  2018.  The  trend  of  strongly  decreasing  emissions  over  the  past  years  thus 
continues. The decrease was mainly driven by the the power sector, where emissions fell by 
close to 15% as a result of coal being replaced by electricity from renewables and gas-fired 
power production. Emissions from industry decreased by close to 2%. 

Verified aviation emissions grew modestly in 2019, by 1% compared to 2018. 

Figure  2  shows  the  historical  and  projected  development  with  existing  measures  of  ETS 
emissions, together with the cap and the accumulated surplus of ETS allowances.  

4 

 
 
 
.

q
e
-
2

O
C
t

M

Phase 1 

Phase 2 

Phase 3 

Phase 4 

2 500

2 000

1 500

1 000

 500

 0

- 500

Aviation (verified emissions)

Other industrial installations (sum of Member States' projections)

Combustion (sum of Member States' projections)

Other industrial installations (verified emissions)

Combustion* (verified emissions)

Cap phase 3

Surplus of allowances

Cap phase 2

Cap phase 4

*Combustion refers to activity 20 "combustion of fuels" in the EU Transaction Log.   

Figure 2: Verified ETS emissions 2005-2019, Member States projections with existing measures 2020-2030, 
ETS cap phases 2, 3 and 4, and accumulated surplus of ETS allowances 2008-2019, (Mt CO2eq)xii 

As of end June 2020, the total number of international credits used or exchanged amounts to 
around 1.54 billion, accounting for over 96% of the estimate for the allowed maximum of 1.6 
billion.  In  phase  3  alone  (2013-2020),  480.94  million  international  credits  have  been 
exchanged up to the end of June 2020. For the Market Stability Reserve (MSR), operational 
since 2019, the Commission publishes annually the surplus for the preceding year. In 2019, 
the  surplus  was  1.39  billion  allowancesxiii.  On  the  basis  of  the  revised  ETS  legislation  for 
phase 4 (2021-2030), the auction volumes for 2020 were reduced by nearly 40%, or close to 
375 million allowances. Auction volumes in 2021 will see a similar reduction.  In 2021, the 
Commission will review the MSR in the context of the planned ETS revision. 
The  agreement  on  linking  the  EU  ETS  with  Switzerland’s  ETSxiv  entered  into  force  on  1 
January 2020 and is currently being operationalised.  

After more than doubling in the previous year, revenues from the auctioning of allowances on 
the  European  carbon  market  grew  slightly  in  2019xv.  The  total  revenues  generated  by 
Member States, the UK and EEA countries from the auctions between 2012 and 30 June 2020 
exceeded € 57 billion, with more than half of this amount generated in 2018 and 2019. In the 
year 2019, total revenues exceeded € 14.1 billion and around 77% of the revenues were used, 
or  are  planned  to  be  used,  for  climate  and  energy  purposes,  thereby  supporting  the  green 
transition. 

5 

 
 
 
 
 
Example 1. Improved technology enhances energy performance of intermittent kilns in Italy 

The  LIFE  ECONOMICK  project  in  Italy  demonstrated  the  technical  and  economic  viability  of 
applying a new technology to intermittent (or shuttle) kiln for the ceramic sanitary ware industry. Its 
solutions,  which  reduce  heat  losses  and  optimise  combustion  conditions,  can  greatly  improve  the 
energy performance of a shuttle kiln and its lifecycle impacts, while maintaining competitiveness on 
the market and improving working conditions. 

©SE.TE.C.SRL 

*The project is an example of how EU funds contribute to climate-friendly innovation in sectors covered by the ETS. It was 

funded by LIFE in 2016-2019.  

3.  EFFORT SHARING EMISSIONS 

Emissions from sectors not included in the ETS, except for emissions and/or removals from 
LULUCF, such  as  transport, buildings,  agriculture and  waste, are  covered by the EU effort 
sharing  legislation.  The  Effort  Sharing  Decision  (ESD)  sets  national  emissions  targets  for 
2020,  expressed  as  percentage  changes  from  2005  levels.  On  this  basis,  Member  Statesxvi 

6 

 
 
 
 
 
 
 
must respect annual emissions limits. Similarily, the Effort Sharing Regulationxvii (ESR) sets 
national  emissions  targets  for  2030.  The  Commission  is  currently  determining  the  annual 
emissions  allocations  (AEAs)  for  each  country  for  the  years  2021  -  2030  under  the  current 
ESR, based on a comprehensive review of GHG inventories. 

Progress towards the effort sharing targets 

Member  States  are  planning,  adopting  and  implementing  policies  and  measures  to  achieve 
their  current  2030  effort  sharing  targets.  If  currently  implemented  national  policies  are 
aggregated, the EU-27 would reduce effort sharing emissions by 19% by 2030 compared to 
2005. This is well below the 30% overall emissions reduction target under the ESR by 2030 
compared to 2005. However, with the implementation of additional policies Member States 
have  outlined  in  the  final  NECPs  how  a  reduction  of  32%  can  be  achieved.  This  is  clear 
progress  in  comparison  to  currently  implemented  national  policies.  Figure  3  shows  the 
distance  between  Member  States’  existing  2030 targets  under  the  ESR  and  their  own  ‘with 
existing measures’ projections and with planned measuresxviii.  

However, to achieve the current EU-level emissions reduction target of 30%, Member States 
will need to fully implement the planned measures, all the more so as it is currently proposed 
to increase the EU’s 2030 climate ambition to 55 % greenhouse gas emissions reductions on 
the way to climate neutrality by 2050xix.  

7 

 
 
EU-27

Portugal

Greece

Croatia

Latvia

Hungary

Slovakia

Sweden

Czechia

Slovenia

Netherlands

Spain

Italy

Estonia

Bulgaria

Lithuania

Romania

Germany

France

Finland

Denmark

Cyprus

Poland

Austria

Belgium

Ireland

Luxembourg

Malta

-60% 

-66% 

-10% 

3% 

30% 

23% 

18% 

9% 

12% 

6% 
7% 

1% 

16% 

8% 

1% 

0% 
0% 
0% 

0% 

11% 

13% 

2% 

7% 

15% 

0% 

4% 

0% 

0% 

13% 

0% 
-2% 

-5% 

-5% 
-5% 

-6% 

-7% 

-14% 

-8% 

-11% 

-12% 

-3% 

-2% 

-3% 

-14% 

-14% 

-15% 

-16% 

-17% 

-18% 

-9% 

-1% 

-1% 

-20% 

-21% 

-24% 

-24% 

-80%

-60%

-40%

-20%

0%

20%

40%

2030

2030

Figure  3:  Gaps  between  2030  ESR  targets  and  projected  emissionsxx  with  existing  measures,  and  with 
measures  planned  in  the  NECPs  in  percentage  of  2005  base  year  emissions.  Positive  values  indicate 
overachievement of targets; negative values indicate targets are projected not to be met.  

As shown in Figure 4 below, since the effort sharing system was launched in 2013, EU-wide 
emissions have been below the overall limit each year. EU-27 emissions covered by the ESD 
were 10% lower in 2019 in comparison to 2005. The 2020 target of a 10% reduction will thus 
most likely be over-achieved, even without considering the impacts of the COVID-19 crisis. 

8 

 
 
 
 
 
3.000

2.500

2.000

.

q
e
-
2
O
C
t

M

1.500

1.000

500

0

5
0
0
2

6
0
0
2

7
0
0
2

8
0
0
2

9
0
1
0
1
1
0
0
0
2
2
2
Emissions

2
1
0
2

3
1
0
2

4
1
0
2

5
1
0
2

6
1
0
2

7
1
0
2

8
1
0
2

9
1
0
2

0
2
0
2

1
2
0
2

2
2
0
2

3
2
0
2

4
2
0
2

5
2
0
2

6
2
0
2

7
2
0
2

8
2
0
2

9
2
0
2

0
3
0
2

Projections with existing measures

With planned measures

Emissions limits ESD

Cumulative surplus of AEAs, w/o cancellations

Emission limits ESR (preliminary)

Figure 4: Emissions in sectors covered by effort sharing legislation 2005-2030 and Annual Emission 
Allocations (AEAs), EU-27 (Mt CO2eq) 

Member States compliance with the Effort-Sharing Decision (ESD) 

All  Member  States  complied  with  their  ESD  obligations  in  2013-2017.  Malta  exceeded  its 
annual  emissions  allocations  (AEAs)  in  each  of  these  years,  but  covered  the  deficit  by 
purchasing  AEAs  from  Bulgaria.  In  2017,  Austria,  Bulgaria,  Cyprus,  Estonia,  Germany. 
Ireland, Lithuania, Luxembourg, and Poland exceeded their AEAs. France, Sweden and the 
UK cancelled surplus AEAs from 2013 to 2017 to enhance the environmental integrity of the 
system. As for previous years, Sweden deleted  its surplus AEAs for that year (5.3 Mt). For 
2017,  it  was  joined  by  France  and  the  UK,  which,  for  the  first  time,  deleted  surplus  AEAs 
accumulated  over  previous  years.  France  deleted  100  Mt  –  most,  but  not  all  -  of  its 
accumulated  surplus,  while  the  UK  deleted  all  its  accumulated  surplus  amounting  to  112.4 
Mt. This means a total of 244 Mt surplus AEAs – corresponding to one fifth of the theoretical 
total  -  will  have  been  deleted  for  the  period  until  2017  by  these  three  countries.  All  other 
Member States (except Malta) banked surplus allocations for possible use in later years. No 
international credits from the clean development mechanism (CDM) or joint implementation 
were used to comply with ESD obligations. 

The compliance cycle for 2018 is ongoing. In 2018, Malta’s emissions exceeded its AEA by 
18%  and  it  will  therefore  again  need  to  purchase  AEAs.  Emissions  in  ten  further  Member 
Statesxxi exceeded the AEAs of 2018 by up to 14%. These Member States have a surplus of 
AEAs  banked  from  previous  years  that  can  be  used  to  ensure  compliance.  The  cumulative 
surplus of AEAs per Member State for 2013-2018 is shown in Figure 5.  

9 

 
 
 
 
 
EU-27

40% 

-87% 

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

EU-28

United Kingdom

25% 

2% 
3% 
3% 
3% 
10% 
10% 
10% 
12% 
13% 
13% 
15% 
31% 
32% 
33% 
50% 
52% 
55% 
57% 
73% 
73% 
112% 
113% 
130% 
132% 
140% 
180% 

39% 

7% 

27% 

73% 

4% 

-50%

0%

50%

100%

150%

200%

Cumulative surplus of AEAs
FR, SE,UK: cumulative surplus of AEAs, deleted
Bulgaria, Malta: traded AEAs

Figure  5:  Cumulative  surplus  of  Annual  Emission  Allocations  (AEAs)  as  percentage  of  2005  base  year 
emissions, 2013-2018 

Preliminary  data  for  2019  show  a  similar  picture  as  for  2018.  Malta  exceeded  its  AEA  by 
18%,  Ireland  15%  and  Luxembourg  by  11%  followed  by  Estonia  with  9%.  Czechia  is 
expected  to  join  the  group  of  Member  States  that  already  had  higher  emissions  than  their 
AEA in 2018. In case of a net deficit, Member States use the flexibility mechanisms in the 
Effort Sharing Decision (beyond banking and borrowing AEAs). 

More  than  one  third  of  effort  sharing  emissions  come  from  transport.  After  a  decrease  in 
emissions  between  2007  and  2013,  emissions  from  transport  have  increased  in  each  of  the 
years  since  then,  and  are  now  only  marginally  lower  (-2%)  than  in  2005.  Towards  2030, 
Member States project, with existing measures, only a slight further reduction (-5% in 2030 
compared  to  2005).  However,  with  implementation  of  planned  policies  and  measures, 
transport emissions are projected to  be reduced  by 20% by 2030, compared to  2005. These 

10 

 
 
 
trends  underpin  the  strong  need  to  focus  recovery  measures  on  this  particular  sector  in  the 
short  run  and  underline  the  importance  of  reinforced  policy  instruments  reducing  transport 
emissions within a more ambitious 2030 target in the medium term. 

The  CO2  emissions  standards  for  new  cars  and  vans  and  heavy  duty  vehicles  are  key 
drivers  for  road  transport  emissions  reduction.  By  2025  and  2030,  respectively,  average 
emissions  from  new  cars  will  have  to  be  15%  and  37.5%  lower  than  in  2021,  and  average 
emissions from vans will have to be 15% and 31% lower than in 2021. Emissions from new 
lorries will have to be 15% and 30% lower than in 2019. The standards include a mechanism 
to incentivise the uptake of zero and low-emission vehicles based on benchmarks values from 
2025  onwards.  They  also 
real-world 
introduce  new  provisions 
representativeness  of  the  monitored  emissions.  Figure  6  shows  that,  while  average  CO2 
emissions  per  kilometre  of  new  cars  and  vans  remained  below  the  targets  set  for  2019, 
provisional data for 2019 indicate an increase in emissions as compared to 2018. According 
to  provisional  data,  in  2019  average  emissions  were  122.4  g  CO2/km  for  cars  (1.6g  above 
2018)  and  158.4  g  CO2/km  for  vans  (0.5g  above  2018).  This  confirms  the  trend  seen  in 
previous years. Therefore, vehicle manufacturers will have to significantly reduce emissions 
of their fleet to meet the stricter targets applying from 2020 onwards.  

to  ensure 

the 

CO2 emissions and EU fleet-wide targets (cars) 

172 g CO2/km (NEDC) 

130 g CO2/km (NEDC) 

95 g CO2/km (NEDC)* 

15% reduction vs 2021 target 
(WLTP) 

37,5% reduction vs 2021 target 
(WLTP) 

200

180

160

140

120

100

80

60

40

20

m
k
/
2
O
C
g

0
2000

2005

2010

2015

2020

2025

2030

2035

2040

CO2 emissions

target 2020 - 2024

target 2015-2019

target 2025-2029 (to be converted into WLTP)

target 2030 onwards (to be converted into WLTP)

11 

 
 
 
 
 
 
CO2 emissions and EU fleet-wide targets (vans) 

180 g CO2/km 
(NEDC) 

175 g CO2/km 
(NEDC) 

147 g CO2/km 
(NEDC)* 

15% reduction vs 2021 target 
(WLTP) 

31% reduction vs 2021 target 
(WLTP) 

200

180

160

140

120

100

80

60

40

20

m
k
/
2
O
C
g

0
2010

2015

2020

2025

2030

2035

2040

CO2 emissions

target 2020 - 2024

target 2015-2019

target 2025-2029 (to be converted into WLTP)

target 2030 onwards (to be converted into WLTP)

Figure 6: Average CO2 emissions (g/km) for newly sold cars and vans compared to current fleet-wide targets 
until 2040xxii 

The  Fuel  Quality  Directive  contributes  to  decreasing  GHG  emissions  from  transport.  It 
mandates to reduce life-cycle GHG emissions intensity of fuels by 6% by 2020, compared to 
2010. The average GHG intensity of the fuels  supplied in  2018 was 3.7% lower than 2010 
based on data from the 28 reporting Member States (Figure 7). The progress achieved varies 
greatly across Member States, but almost all need to swiftly take further action to ensure that 
the 2020 target will be met.  

12 

 
 
 
 
 
20%

18%

16%

14%

12%

10%

8%

6%

4%

2%

0%

T
A

E
B

G
B

R
H

Y
C

Z
C

K
D

I

E F
E

R
F

E
D

L
E

U I
E
H

T
I

V
L

T
L

U
L

T
M

L
N

L
P

T
P

O
R

I

K S
S

S
E

E
S

K
U

8
2
U
E

7
2
U
E

2010-2018 GHG intensity reduction (excl. ILUC)

2020 target

Indicative 2017 intermediate target

Figure 7: Reductions in GHG intensity of fuels achieved by EU fuel suppliers in the 27 reporting Member 
States and UK, 2010-2018 

Emissions  from  energy  use  in  buildings  show  some  year-to-year  variation  due  to 
weather-related fluctuations in heating demand. Over the longer term, emissions have shown 
a  downward  trend  since  2005,  which  is  projected  to  continue  towards  2030.  The  projected 
emissions decrease reflects the availability of economically attractive technologies reducing 
energy  demand  and  integrating  renewables.  In  order  to  achieve  climate  neutrality  by  2050 
and the 2030 milestone along the way – as well as for a swift economic recovery towards a 
green transition - this sector is key, as outlined in ‘A Renovation Wave for Europe’xxiii. More 
measures and funds will be needed to accelerate deep renovations including in upskilling and 
reskilling of the workforcexxiv. 

Non-CO2  emissions  from  agriculture  were  at  a  similar  level  in  2019  as  in  2005  and  with 
existing policies are projected to decline only slightly.  

Emissions  from  waste  management  decreased  by  12%  between  2005  and  2019,  and  this 
downward trend is projected to continue. 

13 

 
 
 
Example 2. New technique reduces costs of biological oxidation of methane from landfills 

The LIFE RE MIDA project tested - for the first time in a Mediterranean climate- an innovative 
technique to reduce methane emissions using microbial oxidation. The project developed full scale 
biofilter and biowindows in two pilot landfill sites in Italy. Key achievements include: 

Reduction  of  more  than  2,700  t  CO2eq  of  emissions  through  the  biological  oxidation  of  about 
150,000 Nm3 of CH4, corresponding to -37% of the current yearly GHGs emitted by the two pilot 
landfill sites. 

Demonstration  that  costs  of  treating  residual  biogas  with  low  methane  concentration  can  be 
significantly reduced. This is particularly important for closed landfills for which waste management 
companies  have  not  allocated  sufficient  financial  resources  to  take  care  of  continuing  methane 
emissions. 

©Isabella Pecorini 

*The project is an example of how EU funds contribute to climate-friendly innovation covered by the effort sharing legislation 

As  part  of  ESD  emissions  from  industry  and  other  sectors,  many  ozone-depleting 
substances  (ODS)  are  potent  greenhouse  gases.  With  the  exception  of  2012,  EU  ODS 
consumption as counted under the Montreal Protocol  has been negative since 2010. Thus, the 
EU will meet  its  obligations to  phase out  ODS consumption by 2020 as  required under the 
Protocol. The Commission ozone team was presented the global Montreal Protocol award for 
customs  and  enforcement  officers  recognising  their  crucial  role  in  implementing  trade 
restrictions and bans for ODS. 

The  Commission  evaluated  the  Regulation  on  substances  that  deplete  the  ozone  layerxxv  in 
2019.  The  evaluation  shows  that  while  the  Regulation  is  very  effective  in  reaching  its 
objectives,  it  may  be  possible  to  achieve  these  results  in  a  more  efficient  manner.  A  new 
proposal to improve the Regulation taking into account these findings is planned in 2021xxvi.  

Fluorinated  gases  (F-gases)  are  a  group  of  gases  often  used  as  substitutes  for  ozone-
depleting  substances.  However,  many  F-gases  are  very  powerful  greenhouse  gases.  The 
Regulation  on  F-gasesxxvii  provides  for  an  EU-wide  phase-down  of  hydrofluorocarbons 
(HFC)  from  2015  and  other  measures  targeting  emissions  from  F-gases,  with  the  aim  of 

14 

 
 
 
 
cutting  emissions  by  two  thirds  by  2030  compared  to  2014.  HFCs  are  also  covered  by  the 
Kigali Amendment to the Montreal Protocol, which entered into force on 1 January 2019.  

Example 3. Industry expertise brought together around resources on alternative refrigerants 

The  European  F-Gases  Regulation  encourages  the  adoption  of  alternatives  to  HFC  refrigerants  with  a 
high global warming potential. Industry groups are joining hands providing information on the safe use of 
alternatives such as ammonia, hydrocarbon, carbon dioxide and other low GWP refrigerants through the 
“Refrigerants,  Emissons  And  Leakage”  (REAL)  Alternatives  4  LIFE  learning  programme.  Resources 
developed  as  part  of  the  project  offer  an  innovative  mix  of  e-learning,  face-to-face  training  materials, 
practical exercises, assessments and an e-library of learning resources.  

REAL Alternatives 4 LIFE has built on the successful REAL Skills Europe & REAL Zero containment 
approaches.  It  was  prepared  by  a  consortium  of  Partners  from  across  Europe,  co-funded  by  the  EU, 
included training and professional institutes as well as employer representative bodies. 

The emissions of F-gases almost doubled from 1990 to 2014 in contrast to emissions of all 
other  greenhouse  gases,  which  were  reduced.  However,  thanks  to  the  EU  F-gas  legislation 
emissions have been falling since 2015, mainly  due to  a reduction of HFC emissions. Data 
for 2019 show that the supply of F-gases decreased by 20% in terms of climate impact, and 
by 17% in terms of volume compared to 2018. In 2019, the total placing on the market under 
the EU quota system was 2% below the maximum quantity allowedxxviii. This reflects a shift 
towards  gases  with  lower  global  warming  potential  and  indicates  that  the  Regulation 
effectively reduces F-gases emissions. 

The  Commission  is  planning  a  review  of  the  F-gases  Regulation  in  2021  to  improve  EU 
rulesxxix  taking  into  account  the  findings  of  three  Commission  reports  adopted  in  2020  on 
alternatives to fluorinated gases in specific equipmentxxx and the availability of HFCs on the 
EU  market.  Moreover,  throughout  2020  the  Commission  has  continued  its  focus  on 
preventing illegal imports of hydrofluorocarbons that are not covered by the quota system. 

4.  LAND USE, LAND USE CHANGE AND FORESTRY 

LULUCF can generate both emissions and removals of CO2 from the atmosphere. From 2013 
to  2020,  EU  Member  States  are  committed  to  ensuring  that  greenhouse  gas  emissions  and 
removals  from  additional  action  in  this  sector  are  accounted  towards  their  reduction  target 
under  the  Kyoto  Protocol.  Additional  action  is  determined  through  the  application  of 
accounting  rules  on  gross  emissions  and  removals  data,  associated  with  an  activity  such  as 
afforestation, reported annually in a specific inventory by each Member State. 

Figure 8 shows that the EU’s ‘reported’ emissions and removals per activity for 2013-2018 
produced an  average sink of  -396 Mt CO2eq, i.e. a net  removal. The reported net  removals 
decrease from -440 Mt CO2eq. to -319 Mt CO2eq from 2013 to 2018. Applying the specific 
accounting  rules  for  the  Kyoto  Protocol,  the  EU’s  ‘accounted’  balance  for  2013-2018 
produced an average annual sink (or credit) of  -114.1 Mt CO2eq. The accounted net credits 
decreased from -150.3 to -79.3 Mt CO2eq from 2013 to 2017 and slightly recovered to -94.6 
in  2018xxxi.  These  quantities 
i.e. 

include  both 

‘mandatory’, 

the  EU 

for 

15 

 
 
afforestation/reforestation,  deforestation  and  forest  management,  and  ‘elected’  activities 
under the Kyoto Protocolxxxii. 

.

q
e
-
2
O
C
t

M

200

0

-200

-400

-600

R A

R A

R A

R A

R A

R A

2013

2014

2015

2016

2017

2018

Afforestation /
Reforestation
Deforestation

Forest Management

Cropland Management

Grazing Land
Management
Revegetation

Total (reported)

Total (accounted)

Figure  8:  Reported  (R)  and  preliminary  accounted  (A)  emissions  and  removals  under  the  Kyoto  Protocol, 
second commitment period, EU-27xxxiii. 

The decrease in net credits described above mainly resulted from decreasing credits or credits 
turning  into  debits  for  forest  management  as  for  example  in  Croatia,  Czechia,  Denmark, 
France, Lithuania, Luxembourg and Slovenia. The main reason is the increase in harvesting 
rates. 

The  LIFE  Peat  Restore  project  aims  to  rewet  degraded  peatlands  in  Poland,  Germany, 
Estonia, Latvia and Lithuania covering an area of 5,300 hectares to restore the natural function 
as carbon sinks. In the project, the emissions and storage of greenhouse gases, the water level as 
well  as  the  wildlife  (flora  and  fauna)  will  be  documented,  analysed  and  compared.  In  addition, 
the  potential  climate  effects  of  the  rewetting  in  terms  of  estimated  avoided  emissions  will  be 
calculated.  

Total budget: € 6 million, EU-contribution 60%. 
16 

©Agnese Priede 

 
 
  
 
 
 
 
 
Example 4. Rewetting of degraded peatlands reduces emissions 

Natural  disturbances  also  contributed  to  increased  emissions.  Bark  beetle  significantly 
attacked  forests  in  Czechia  causing  a  dramatic  increase  in  salvage  logging.  Singular 
disturbances such as wildfires, that affected forests in Cyprus in 2016, and Italy and Portugal 
in 2017, resulting in debits for that year, returned to ‘normal conditions’ in 2018. 

Yet,  in  the  context  of  climate  change,  natural  disturbance  events  are  expected  to  become 
more  frequent.  Market  behaviour  will  mainly  depend  on  the  economic  context.  Material 
substitution  and  wood  for  energy  initiatives  along  with  afforestation  and  reforestation 
programmes are expected to increase as they are driven by policies that will enter into force 
in  2021.  Care  must  be  taken  to  ensure  that  these  are  carried  out  in  accordance  with 
appropriate ecological management principles that increase the future resilience of forests to 
fires,  droughts  and  other  climate-related  disturbances,  as  well  as  help  reversing  declining 
biodiversity trends. 

According  to  preliminary  estimates  using  accounting  rules  for  the  Kyoto  Protocol  second 
commitment period Cyprus, Finland, Lithuania and the Netherlands have net LULUCF debits 
smaller than 1Mt CO2eq per year. Higher levels of debits are forecast for Czechia, Latvia and 
Slovenia (1.5, 2.4 and 3.2 Mt CO2eq per year, respectively). 

The EU’s 2030 Climate and Energy Framework integrates emissions and removals from the 
land sector from 2021 using a set of accounting rules adapted from the Kyoto Protocol. The 
LULUCF  Regulationxxxiv  requires  each  Member  State  to  ensure  that  accounted  emissions 
from  land  use  are  entirely  compensated  by  an  equivalent  removal  of  CO2  from  the 
atmosphere  through  action  in  the  sector.  For  making  this  regulation  operational,  Member 
States have submitted revised National Forestry Accounting Plans, including proposed Forest 
Reference  Levels.  The  Commission  analysed  revised  proposals,  consulted  the  LULUCF 
Expert  Group  and  the  general  public,  and  addressed  issues  through  corrections  by  Member 
States or recalculations by the Commission. The Delegated Regulation setting out the Forest 
Reference  Levels  of  the  Member  States  for  the  period  2021-2025  was  adopted  by  the 
Commission on 28 October 2020. 

5.  FINANCING CLIMATE ACTION 

Mainstreaming climate policies into the EU budget  

Meeting  the  objectives  of  the  European  Green  Deal  will  require  a  significant  increase  in 
investments  and  will  inevitably  rely  on  private  sector  engagement,  shifting  large-scale 
investment  to  climate  mitigation  and  climate  adaptation.  New  policy  instruments  and 
financial mechanisms, disruptive business models and services, and societal innovation will 
all be required to provide correct investment signals and predictability for investors, to turn 
research into investable opportunities and innovative businesses, and bring necessary climate 
action solutions to market. 

Achieving the current EU 2030 climate and energy targets is estimated to require increases of 
annual  investments  related  to  energy  production  and  use  in  2021-2030  by  just  over  1 
percentage points of GDP on average compared to the previous decade, namely an increase 
of around € 260 billion per year. For an increased greenhouse gas emissions reduction target 
of at least 55% this figure would increase to around € 350 billion per year. Around one third 
of these additional investments is needed in the transport and residential sectors. Public and 

17 

 
 
 
private sectors will need to mobilise this additional investment. As part of the Green Deal, the 
Commission  has  proposed  the  European  Green  Deal  Investment  Plan  to  support  Member 
States. The agreement reached in the July European Council foresees that at least 30% of the 
next EU's long-term budget (MFF and Next Generation EU) should be dedicated to climate 
action  to  increase  the  current  level  of  20%  set  for  2014-2020.  The  latest  available  data  in 
Figure 9 show that such expenditure accounted for 21% of the budget in 2020, and in total 
around € 210 billion over the whole period.  

The Plan also helps mobilise private investments through targeted financial instruments such 
as  EU  guarantees  and  equity  finance  to  the  European  Investment  Bank.  Moreover,  a  Just 
Transition Fund will be set up to support those regions that rely heavily on carbon intensive 
activities by providing access to reskilling programmes and employment opportunities in new 
economic sectors for example. 

n
o

i
l
l
i

m
R
U
E

40 000

35 000

30 000

25 000

13,7 % 

17,9 % 

20 000

15 000

10 000

5 000

 0

21,8 % 

20,4 % 

20,7 % 

20,9 % 

21,0 % 

25 %

20 %

15 %

10 %

5 %

0 %

2014

2015

2016

2017

2018

2019

2020

Horizon 2020

Connecting Europe Facility

European Regional Development Fund

Cohesion Fund

European Agricultural Guarantee Fund

European Agricultural Fund for Rural Development

Others

Share of climate relevant spending in EU budget

Figure 9: Climate-relevant spending in the EU budget, 2014-2020 (€ million and percentage of the EU 
budget) 

Sustainable finance 

A fundamental shift in investment patterns in the medium to long-term will be essential for 
achieving a climate-neutral EU. As part of the legislative environment, the EU is aligning its 
financial and capital markets framework to climate challenges.  

The EU has continued to implement the 2018 action plan to integrate sustainability in capital 
markets:  

-  The amended Benchmark Regulation introduces a new category, so-called EU climate 
benchmarks,  i.e.  the  EU  Climate  Transition  Benchmark  and  EU  Paris-aligned 
Benchmark, and sustainability-related disclosures for all benchmarks;  
the  Taxonomy  Regulation  establishes  a  framework 
investment;  

to  facilitate  sustainable 

- 

18 

 
 
 
 
 
-  The  Disclosure  regulation  on  sustainability‐ related  disclosures  in  the  financial 

services sector; 

-  Changes  to  the  existing  delegated  acts  under  AIFMDxxxv,  UCITSxxxvi,  Solvency  II, 
MiFIDxxxvii II and IDDxxxviii to integrate sustainability factors, sustainability risks and 
sustainability preferences into the organisation requirements and operating conditions 
for  the  relevant  financial  sector  entities  as  well  as  the  product  oversight  and 
governance processes. 

As  part  of  the  European  Green  Deal,  the  Commission  has  launched  and  accelerated  the 
preparatory processes for a renewed Sustainable  Finance Strategy seeking to  strengthen the 
foundations  for  sustainable  investment,  increase  green  investment  opportunities,  and  fully 
manage climate and environmental risks.  

Research and Innovation (Horizon Europe) 

Research and innovation (R&I) are crucial for climate action. Hence, it is important to ensure 
adequate finance and trigger the required investment for R&I that support the breakthrough 
technologies,  market  uptake  and  large-scale  deployment  of  transformational  solutions, 
needed to achieve the EU’s climate goals. 

Under the Horizon 2020 R&I programme, the European Green Deal call with a budget of € 1 
billion  aims  to  kick-start  urgent  climate  action  in  support  of  the  Green  Deal  objectives.  In 
addition, the European Innovation Councilxxxix has awarded over € 307 million to 64 game-
changing  start-ups  and  SMEs  contributing  to  the  objectives  of  the  European  Green  Deal 
Strategy and the Recovery Plan for Europe. 

From  2021,  the  Horizon  Europe  R&I  programme  will  contribute  to  inclusive  recovery  and 
develop  solutions  for  climate  action.  At  least  35%  of  its  budget  will  be  devoted  to  climate 
action.  

Member States’ use of revenues from the auctioning of EU ETS allowances 

In 2019, the EU-28 Member States earned € 14.1 billion from auctioning revenues. Steadily 
increasing  carbon  prices  have  resulted  in  a  continued  increase  in  revenues  from  the 
auctioning  of  EU  ETS  allowances  in  the  past.  Contrary  to  this,  Figure  10  below  shows  a 
slight decrease in total EU ETS revenues from 2018 to 2019. This decrease results from the 
fact  that  no  auctioning  took  place  in  the  UK  in  2019  due  to  safeguard  measures  following 
Brexit. Auctioning resumed in the UK in 2020. 

In 2019, a total of 77% of the revenues were used, or are planned to be used, for climate and 
energy purposes. This is a significant increase compared to the share of 70% in 2018. 

During the years 2013-2019, almost 78% of revenues went to climate and energy expenditure 
with  a share of 4% of total  revenues  or € 1.9 billion  being directed to  international  climate 
and energy expenditure. 

19 

 
 
n
o

i
l
l
i

b
R
U
E

€16 

€14 

€12 

€10 

€8 

€6 

€4 

€2 

€0 

Used for climate change and
energy purposes (unspecified)

Used for international climate
change and energy purposes

Used for domestic climate
change and energy purposes

Total revenues

2013

2014

2015

2016

2017

2018

2019

Figure 10: Use of revenues from the auctioning of ETS allowances 2013-2019 (€ billion), EU-28 

Over  the  years,  Figure  11  shows  that  most  revenues  from  the  auctioning  of  EU  ETS 
allowances that are used domestically were spent on renewable energy, energy efficiency and 
sustainable  transport.  In  2019  €3.7,  €2.9  and  €0.7  billion  of  domestic  revenues  were 
respectively spent on these purposes. 

Figure 11: Domestic use of 
revenues from auctioning 
of ETS allowances 2013-
2019 (€ billion), EU-28 

Other domestic 
/ EU uses; 3,0 

R&D; 2,1 

Sustainable 
transport; 3,1 

Renewable 
energy; 12,9 

Energy 
efficiency; 11,0 

New Entrants Reserve (NER 300) under the ETS 

The  NER  300  is  a  large-scale  funding  programme  for  innovative  low-carbon  energy 
demonstration  projects.  It  is  aimed  at  demonstrating  innovative  renewable  energy  (RES) 
technologies  and  environmentally  safe  carbon  capture  and  storage  (CCS)  on  a  commercial 
scale  within  the  EU.  The  NER  300  has  been  funded  from  the  monetisation  of  300  million 
emission  allowances  from  the  New  Entrants  Reserve.  The  funds  were  awarded  to  projects 
selected  through  two  rounds  of  calls  for  proposals  in  December  2012  and  July  2014.  As  a 
result, 38 renewable energy projects and one carbon capture and storage project amounting 
to €2.1 billion have been awarded funding in 20 EU Member States. Nine projects are now 

20 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
operational,  and  another  three  projects  from  the  second  call  are  expected  to  become 
operational  by  30  June  2021.  One  project  is  considered  as  completed  and  four  further 
projects are at various stages of development. 

Given  the  challenging  economic  and  policy  context  since  the  NER  300  programme  was 
designed, 22 projects that had been selected for funding found it difficult to raise sufficient 
equity  or  to  attract  additional  financial  support  and  were  withdrawn  by  July  2020.  The 
withdrawals from the two calls for proposals have released a total of almost €1.5 billion. The 
amended  NER  300  Decision  allowed  the  re-investment  of  the  unused  funds  of  €708.7 
million  from  the  cancelled  projects  of  the  first  call  through  existing  financial  instruments. 
Under  the  InnovFin  Energy  Demonstration  Projects  (InnovFin  EDP)  and  the  Connecting 
Europe Facility Debt Instrument (CEF DI), so far, eight projects were allocated almost €201 
million  from  the  available  funding  (see  Example  5).  The  unused  funds  from  the  cancelled 
projects of the second call (presently €746 million) will be added to the resources available 
for the Innovation Fund. 

21 

 
 
Example 5. NER 300 funds re-invested in projects for fuel production from steel-making 
waste gas and electrification of public transport 

The  unused  funds  from  the  first  call  for  proposals  (€709  million)  are  re-invested  in  the  InnovFin 
EDP and the CEF DI, both managed by the European Investment Bank. 

Since the last progress report two new projects, Voltalis from France improving the energy efficiency 
and Steelanol on decarbonising the steel sector in Belgium (see below), have been selected to benefit 
from the NER 300 unspent funds of up to €95 million under InnovFin EDP. 

NER  300  support  of  some  €34  million  was  awarded  under  the  CEF  DI  to  three  innovative  clean 
transport projects located in Italy and Germany. 

Three  further  renewable  energy  projects  have  benefitted  from  project  development  assistance  by 
NER  300  unspent  funds.  These  projects  from  Sweden,  Italy  and  the  Netherlands  address  climate 
change by developing innovative, first-of-a-kind demonstration plants. 

InnovFin EDP: Steelanol - fuel production from waste gas from the steel-making 

The Steelanol project, valued at €225 million, received a €75 million loan fully backed by NER 300 
resources.  This  first-of-a-kind  project  aims  to  demonstrate  a  pathway  for  producing  ethanol  from 
waste gas fully integrated into a large-scale steel mill, a major breakthrough toward low-carbon steel-
making. 

©Jeroen Op De Beeck, ArcelorMittal 

22 

 
 
 
 
Example 5. cont.   

CEF DI: Hamburger Hochbahn e-mobility programme 

The  project  by  Hamburger  Hochbahn,  a  public  transport  operator,  aims  to  renew  and  electrify 
Hamburg’s  urban  public  transport  fleet.  It  will  replace  diesel  buses  by  100  e-buses  and  deploy  the 
charging  infrastructure.  The  project  uses  100%  certified  renewable  electricity  for  its  e-buses.  The 
company expects that the charging infrastructure will be modular and scalable, easy to maintain, and 
highly energy- and cost-efficient.  

The project is supported by the CEF DI with NER 300 contribution amounting to €4.7 million. 

Innovation Fund 

The Innovation Fund is a low-carbon fund created by the revised EU ETS Directive for phase 
four. It supports, on a competitive basis, first-time market development and commercial scale 
demonstration of innovative technologies and breakthrough innovation in sectors covered by 
the  EU  ETS.  This  includes  innovative  renewables,  energy-intensive  industries,  carbon 
capture,  utilisation  and  storage,  energy  storage,  as  well  as  substitute  products  and  cross-
sectoral  projects.  It  is  funded  by  the  auctioning  of  450  million  allowances  and  undisbursed 
revenues from the second call of the NER 300 programme. By the end of September 2020, 31 
auctions  were  executed,  providing  more  than  €590  million.  An  additional  €746  million  of 
NER 300 undisbursed revenues will be added in 2020. The fund’s implementing structure has 
been  established  and  the  grants  will  be  managed  by  Innovation  and  Networks  Executive 
Agency (INEA) while the European Investment Bank will provide the Project Development 
Assistance to eligible projects. 

A  first  call  for  proposals,  amounting  to  €1  billion  and  addressing  large-scale  projects  was 
launched in July 2020. This will be followed by regular calls until 2030, helping companies 
to  bring  the  breakthrough  of  clean  technology  solutions  needed  for  achieving  climate 
neutrality by 2050. The call is open for projects in eligible sectors from EU Member States, 
Norway  and  Iceland  while also  enabling  co-financing  from  other public funding initiatives, 

23 

 
 
 
 
 
 
such as State aid or other EU funding programmes. A first call for small-scale projects with 
capital expenditure below €7.5 million is planned towards the end of 2020.  

Modernisation Fund 

The Modernisation Fund will support low-carbon investments in the power sector and wider 
energy  systems  of  ten  Central  and  Eastern  European  Member  States  listed  in  the  ETS 
Directive. Moreover, five eligible Member Statesxl decided to transfer additional allowances 
to the Modernisation Fund. As a result, 643 million allowances will be available from 2021 to 
2030xli.  The  shares  of  eligible  Member  States  resulting  after  these  transfers  are  shown  in 
Figure  12xlii.  The  Modernisation  Fund  will  follow  a  lean  administrative  procedure. 
Beneficiary  Member  States  are  responsible  for  the  selection,  financing  and  reporting  of 
investments,  and  must  comply  with  applicable  State  aid  rules.  The  Commission  will  be 
responsible for the disbursement decisions following a technical and financial assessment of 
the EIB. The fund will be operational as of 2021. 

3% 

8% 

29% 

31% 

19% 

2% 

1% 

1% 

3% 

2% 

Bulgaria

Czechia

Estonia

Croatia

Latvia

Lithuania Hungary

Poland

Romania

Slovakia

Figure 12: Shares of eligible Member States in the Modernisation Fund 

LIFE – Climate Action 

The LIFE programme is the EU’s funding instrument for the environment and climate action, 
co-financing  projects  with  European  added  value.  The  total  budget  for  funding  projects  in 
2014 to 2020 amounts to € 2.5 billion under the sub-programme for environment and € 0.86 
billion  under  the  sub-programme  for  climate  action.  Most  LIFE  Environment  projects  also 
bring climate co-benefits. 

LIFE  Climate  Action  supports  mitigation  and  adaptation  projects,  climate  governance  and 
information. The number of proposals submitted under the 2019 LIFE call were higher than 
in  previous  years.  Under  the  2019  LIFE  call  for  traditional  projects,  proposals  involving 
coordinating  beneficiaries  from  13  Member  States  were  recommended  for  funding,  with 
Spain,  Italy  and  the  Netherlands  attracting  the  most.  In  addition,  LIFE  Integrated  Projects 
implement regional, multi-regional or national environmental and climate plans and strategies 
required by EU environmental or climate legislation, with more funding per proposal than for 
traditional projects. 

24 

 
 
 
 
The multiannual financial framework for 2021-2027 includes an increased budget of € 5.43 
billionxliii  for  the  LIFE  programme  for  Environment  and  Climate  Action  with  the  thematic 
breakdown in the pie chart in Figure 13 below. 

1 

0,95 

Nature and biodiversity

2,15 

Circular economy and quality
of life

Climate change mitigation
and adaptation

1,35 

Clean energy transition

Figure 13: Proposed budget allocation for LIFE 2021-2027 

Structural Reform Support Programme (SRSP) 

Since  2016,  the  Commission  has  provided  Member  States  with  extensive  technical  support 
and  expertise  in  a  large  portfolio  of  projects  related  to  the  green  transition  and  climate 
neutrality. Support to green projects, has expanded significantly during the implementation of 
the SRSP. Under the 2020 SRSP, about one in four projects contributed to the goals of the 
European  Green  Deal,  including  climate  action.  In  2020,  there  was  also  a  special  call 
launched to provide technical assistance to Member States who requested it in preparation for 
the territorial just transition plans, in the context of the Just Transition Mechanism. Overall, 
the  SRSP  2019  and  2020  supported  104  (at  least  partially)  green  projects  in  25  Member 
States. SRSP 2020 is also supporting 18 Member States in the preparation of their respective 
territorial  just  transition  plans.  At  the  same  time,  the  SRSP  2019  continued  to  support  the 
transition away from coal with two projects. Under SRSP 2020, two additional assignments 
were approved, providing expertise to Member States to help  achieve coal phase-out.  From 
2020 onwards, the revamped Technical Support  Instrument (TSI) will also cover aspects of 
the  just  transition.  The  TSI  budget  can  provide  tailored  expertise  to  support  design  and 
implementation  of  climate  policies,  including  relevant  training  aimed  at  building  capacity 
among national and regional authorities. 

6.  ADAPTING TO CLIMATE CHANGE  

The impacts of climate change are increasingly felt across Europe and the wider world. The 
last  five  years  were  the  hottest  on  record,  and  heatwaves,  droughts  and  wildfires  are 
becoming increasingly common across Europe. This highlights the urgent need to adapt to the 
adverse effects of climate change. 

The  European  Green  Deal  sets  out  an  increased  focus  on  adaptation,  building  on  the 
achievements of the current EU Adaptation Strategy, which was adopted in 2013 to prepare 
Member States for current and future climate impacts:  

  All EU Member States now have a national adaptation strategy or plan 

25 

 
 
 
  More than 2,700 cities and towns in Europe have committed through the Covenant 
of  Mayors  initiative  to  enhancing  their  climate  resilience  reflecting  an  increase  of 
some 800 since 2019 

  Several  National  Energy  and  Climate  Plans  contain  adaptation  goals  and  consider 

climate risks to the energy sector  

  A  new  version  of  the  Climate-ADAPT  platform  was  deployed  in  January  2019 

alongside the publication of the Climate-ADAPT Strategy 2019-2021 

  The European Commission has published the fourth edition of its PESETA reportxliv 
on a range of climate impact projections and adaptation in the EU and beyond 

  The LIFE programme continues to fund adaptation projects in crucial areas such as 

agriculture, forestry, water management, buildings or protected areas 

Example 6. Preventing forest fires in Catalonia through sustainable forest management  

Catalonia  began  developing  its  ORGEST  silvicultural  models  in  2004  as  a  means  of  sustainably 
managing  forests  and  protecting  them  from  large  fires,  while  enabling  them  to  continue  to  produce 
wood, cork, pine nuts and other goods. The resulting ORGEST guidelines are a set of benchmarks for 
forest  management,  for  the  various  tree  formations  in  the  region.  Just  under  60%  of  the  forest 
management  plans  approved  in  the  region  between  January  2014  and  June  2017  use  the  ORGEST 
silvicultural models. Over half of those have a combined production-prevention objective. 

The LIFE+ DEMORGEST project (together with a complementary LIFE Nature project called Life+ 
Pinassa) provided an opportunity to apply the ORGEST models at landscape scale in two pilot areas 
with high fire risk, and on another seven demonstration plots where 10 of the ORGEST models were 
tested. The project could show that investments in forest fire prevention methods in accordance with 
the  ORGEST  guidelines  can  generate  2.5  times  the  invested  amount  in  terms  of  returns  from 
ecosystem services. For example, the plots following the advice from the ORGEST models have an 
annual CO₂  absorption rate that is 60% higher than in non-management scenarios, while water use 
efficiency increased by up to 40%. 

As  one  of  the  initiatives  announced  under  the  European  Green  Deal,  the  Commission  is 
currently working on a new, more ambitious EU strategy on adaptation to climate change to 
be adopted in early 2021. An extensive stakeholder consultation was carried out for the new 
strategy  between  May  and  August  2020.  The  new  strategy  will  build  on  the  2013  EU 
Adaptation  Strategy,  which  was  positively  evaluated  in  2018xlv,  including  several  areas  for 
improvement and the need for the EU to: 

  align  its  adaptation  action  with  the  Paris  Agreement,  the  Sendai  Framework  for 

Disaster Risk Reduction and the UN sustainable development goals;  

  support increased citizen climate action through the new European Climate Pact;  
  strengthen infrastructure against extreme weather and climate change impacts;  
  embed  ecosystem-based  approaches  in  the  assessment  and  choice  of  adaptation 

options; 
increase the attention on public health issues in adaptation policy and planning.  

 

Under  Horizon  2020’s  successor  Horizon  Europe,  an  ambitious  Mission  on  Adaptation  to 
climate change including societal transformation will be launched in  2021. Horizon Europe 
missions will focus on research and scale-up innovation in areas of great impact for the EU, 

26 

 
 
 
 
and will engage citizens, industry and public support through coordinated efforts to achieve 
ambitious targets. 

Member States report regularly under the Union Civil Protection Mechanism. Based on these 
reports and additional evidence, the Commission regularly publishes ‘An overview of natural 
and man-made risks the EU may face’xlvi. The report maps, and therefore improves awareness 
of,  and  preparedness  to,  risks  relating  to  forest  fires,  floods,  droughts  and  other  extreme 
weather events. 

7.  INTERNATIONAL CLIMATE COOPERATION 

Aviation 

In October 2019, ICAO’s 40th Assembly reaffirmed its support for the global market-based 
measure Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) and 
decided  to  start  working  on  a  long-term  goal  for  emission  reductions  from  international 
aviation,  in  view  of  its  adoption  at  the  next  Assembly  in  2022.  So  far  88  countries  have 
volunteered  to  join  from  2021,  there  are  uncertainties  related  to  the  final  coverage  and 
robustness of the scheme in light of reservations of countries with important aviation activity. 
In  March  2019,  the  ICAO  Council  approved  the  first  set  of  six  programmes  which  may 
provide units for offsetting of emissions during the CORSIA pilot phase from 2021 to 2023. 
A new application period has been opened in 2020 for a second wave of eligible units which 
are currently being assessed, with an ICAO decision planned by the end of the year. The June 
2020  ICAO  Council  also  agreed  on  the  change  of  baseline  for  CORSIA,  now  being  based 
only on 2019 emissions during the pilot phase.  
The EU Member States notifiedxlvii ICAO of the existing differences between the features of 
the  EU  ETS  for  aviation  and  the  legally-binding  features  of  CORSIA  contained  in  the 
Standards and Recommended Practices (SARPs) to  protect  the EU’s interests.  The EU also 
issued  a  declarationxlviii  at  ICAO’s  40th  Assembly  stating  that,  while  the  EU  strongly 
supported CORSIA and remained fully committed to implement it from the start of the pilot 
phase,  it  maintains  its  right  to  increase  the  climate  ambition  level  in  tackling  aviation 
emissions not discriminating according to the nationality of operators. 

The  EU  already  has  an  integrated  monitoring,  reporting  and  verification  framework  for  the 
EU  ETS  and  CORSIA  in  place.  In  addition,  the  Commission  is  assessing  different  policy 
options for a legislative proposal by June 2021 to implement further aspects of CORSIA in 
the EU, through amending the EU ETS Directive.  

Maritime  

International shipping carries 80% of the world’s trade volume and is responsible for 2-3% of 
all  GHG  emissions.  In  the  future,  these  emissions  are  projected  to  increase  significantly  if 
mitigation measures are not swiftly put in place.  

After  the  adoption  of  the  initial  GHG  emissions  reduction  strategy  by  the  International 
Maritime  Organization  (IMO)  in  2018xlix,  the  European  Commission  has  been  closely 
involved  in  the  ongoing  negotiations  around  its  implementation.  So  far,  discussions  have 
focused  in  particular  on  short-term  measures  that  can  deliver  further  emissions  reductions 
before 2023, also building on existing IMO measuresl, such as the Energy Efficiency Design 
Index and the Ship Energy Efficiency Management Plan.  

In  addition,  in  2019,  the  EU  system  for  the  monitoring,  reporting  and  verification  of  CO2 
emissions  from  maritime  transport  confirmed  the  substantial  impact  of  shipping  with  over 

27 

 
 
138  million  tonnes  of  CO2  released  into  the  atmosphere  in  2018.  It  also  confirmed  the 
significant  carbon  footprint  of  EU’s  external  seaborne  trade,  with  around  two-thirds  of  the 
CO2  emissions  reported  coming  from  voyages  to  or  from  a  port  outside  the  European 
Economic Area. Overall, these CO2 emissions represent around 3.7% of total CO2 emissions 
reportedli by the European Union in 2018lii. The Commission published in May 2020 its first 
annual  report  on  CO2  emissions  from  maritime 
transport.  This  report  enables  a 
comprehensive  and  granular  understanding  of  CO2  emissions  from  ships  calling  at  ports 
inside the European Economic Area. It also provides valuable analysis on the characteristics 
and  energy  efficiency  of  ships,  helping  identify  the  various  factors  influencing  CO2 
emissionsliii. As such, the EU monitoring, reporting and verification (MRV) system provides 
valuable  information  for  policymakers  to  address  GHG  emissions  from  shipping  and  could 
constitute  the  basis  for  any  such  measures  that  will  be  adopted  under  the  European  Green 
Deal.  A  review  is  currently  underway  as  to  whether  the  EU  MRV  system  can  be  aligned, 
where appropriate, to the IMO data collection system.  

In 2019, the European  Green  Deal  announced a basket of measures to  ensure that shipping 
contributes  to  the  EU  climate  effort,  including  a  proposal  to  extend  European  emissions 
trading to the maritime sector to ensure that the price of transport reflects its climate impact 
and a specific initiative to ramp-up the production and deployment of sustainable alternative 
fuels for ships. 

Supporting developing countries  

The EU and its Member States remain the world’s biggest providers of official development 
assistance  to  developing  countries,  delivering  €75.2  billion  in  2019.  The  EU,  its  Member 
States  and  the  European  Investment  Bank  are  also  the  largest  providers  of  public  climate 
finance with a contribution of €23.2 billion in 2019, a 6.9% increase compared to 2018. 

The  Commission  will  provide  at  least  €14  billion  (or  an  average  of  €2  billion  a  year)  to 
support  climate  activities  in  developing  countries  in  2014-2020.  In  addition,  the  European 
Investment  Bank provided  €3  billion  in  climate  finance  to  developing  countries  in  2018.  It 
finances,  for  example, energy efficiency and renewable  energy projects  in Africa and other 
regions. 

The Global Climate Change Alliance Plus (GCCA+) initiative, with a budget of € 750 million 
from 2007-2020, contributes towards the 20 % climate mainstreaming objective for the 2014-
2020 period. The GCCA+ EU flagship initiative helps the world’s most vulnerable countries 
to  address  climate  change.  It  focuses  on  building  climate  resilience  in  Least  Developed 
Countries  (LDCs)  and  Small  Island  Developing  States  (SIDS).  In  2015,  the  GCCA+ 
expanded  to  include  middle-income  countries  in  support  of  the  implementation  of  their 
Nationally  Determined  Contributions  (NDCs)  under  the  Paris  Agreement.  So  far,  it  has 
funded over 80 projects in Africa, Asia, the Caribbean and the Pacific. In addition, in 2018, 
the Commission pledged € 10 million to the UNFCCC’s adaptation fund. 

Furthermore, a technical assistance facility will be set up to provide technical assistance and 
policy  advice  to  support  the  upgrade  and  implementation  of  the  Nationally  Determined 
Contributions under the Paris Agreement climate strategies and action plans. The facility will 
also  support  formulating  and  implementing  National  Adaptation  Plans,  land  policies  and 
practices,  disaster  risk  reduction  strategies  and  low-carbon  or  carbon-neutral  development 
strategies. At the regional level, the EU supports the Africa Adaptation Initiative to promote 
climate change adaptation across the continent.  

The  EU  and  its  Member  States  are  the  world’s  leading  humanitarian  aid  donor,  including 
helping those people that are most vulnerable to the impacts of climate change. Preparedness 

28 

 
 
to  disasters  –  including  to  those  caused  by  climate  change  -  is  increasingly  embedded  in 
humanitarian aid programmes and projects. 

29 

 
 
  
 
 
Technical notes 

i ‘EU-27’ means the current EU 
ii  EEA  (2020),  Approximated  EU  greenhouse  gas  inventory  -  Proxy  GHG  emission  estimates  for  2019, 
forthcoming 
iii No estimate is made for LULUCF emissions and removals in the approximated EU greenhouse gas inventory 
for 2019. Using 2018 LULUCF data as proxy for 2019, net emission reductions (including LULUCF) compared to 
1990 were 25%. 
iv In addition to the target under the UNFCCC, the EU-27, together with Iceland and the UK, also committed to 
a binding emission reduction for the second commitment period of the Kyoto Protocol (2013-2020). The target 
is  to  reduce  emissions  by  20%.  For  more  detailed  information  see  SWD  [xyz]  which  contains  additional 
information as annex to this document. 
v Ratio given for illustration, statistically imprecise as GDP (national accounting) and emissions (territory) have 
different scopes. 
vi  Due  to  different  scopes  used  in  the  quantification  of  the  scenarios  ‘baseline’  and  ‘net  zero’  (where 
international aviation is not in the scope, SWD(2020) 176) the two time series presented here as ‘baseline’ and 
‘net  zero’  were  calibrated  to  the  EU’s  current  target  scope  using  the  historical  emissions  incl.  international 
aviation  in  2019.  Furthermore,  the  2020  and  2030  reduction  targets  for  the  EU  (expressed  in  percent)  have 
been converted into approximate emission limits for the EU-27. 
vii IEA (2020), Sustainable Recovery, IEA, Paris. https://www.iea.org/reports/sustainable-recovery 
viii Carbon Monitor: Data update 20 August 2020. https://carbonmonitor.org/  
ix Directive 2008/101/EC, recital 19,  https://eur-lex.europa.eu/legal- content/EN/TXT/?uri=celex%3A32008L0101 
x EU Multi-Annual Financing Framework 2021-2027 € 1074.3 billion and Next Generation EU € 750 billion, the 
main instrument for implementing the recovery package 
xi SWD(2020) 205 final 
xii  Due  to  ETS  scope  changes,  time-series  are  not  consistent  before  2013.  The  figure  includes  all  countries 
participating in the EU ETS in the respective years. Cap phase 4 with existing 40% target. Aviation is included in 
the cap for 2012-2019.  
xiii C(2020) 2835 final, https://ec.europa.eu/clima/sites/clima/files/ets/reform/docs/c_2020_2835_en.pdf  
xivAgreement between the European Union and the Swiss Confederation on the linking of their greenhouse gas 
emissions trading systems, OJ L 322, 7.12.2017, p.3. 
xv Auctioning for the UK, suspended temporarily in 2019, resumed in 2020. 
xvi According to the Withdrawal Agreement, the UK continues to apply key ESD provisions. 
xvii Regulation (EU) 2018/842 on binding annual greenhouse gas emission reductions by Member States from 
2021 to 2030 contributing to climate action to meet commitments under the Paris Agreement. 
xviii Due to Brexit, the aggregated targets (AEAs) for the 27 Member States do no longer exactly reach the EU-
level reduction targets expressed in percent as contained in the ESD and ESR. The difference for 2030 is about 
1 percentage point. 
xix Stepping up Europe’s 2030 climate ambition, COM(2020) 562 final. 
xx  In  2019  and  2020,  Member  States  have  submitted  projections  in  the  context  of  the  NECPs  and  of  the 
Monitoring  Mechanism  Regulation  (EU)  No.  525/2013  (MMR)  as  part  of  the  effort  sharing  legislation.  The 
aggregated  “with  existing  measures”  projections  for  effort  sharing  sectors  are  based  on  the  GHG  projection 
submissions under the MMR Monitoring Mechanism Regulation (EU) No. 525/2013 or the NECPs, whichever is 
more recent. 13 Member States reported updated GHG projections in 2020 (AT, BE, CY, DK, EE, EL, HU,  IE, LV, 
LT, LU, PL and SI). The aggregated planned measures are based on the 2030 greenhouse gas projections “with 
additional  measures”  for  effort  sharing  sectors  that  were  included  in  the NECPs.  If  Member  States  provided 
projections in March 2020 under the MMR calibrated to more recent inventory data these were used. For the 
few Member States for which projections of planned measures for effort sharing sectors are not available (DK, 
NL, PT, RO, SE, SK), the following gap-fillers were applied: ESR targets for DK, NL and RO, as the targets set in 
the  NECPs  imply  fulfilling  the  ESR  targets  domestically,  national  domestic  ESR  targets  (SK),  with  additional 
measures  projections  submitted  under  the  MMR  in  2019  (PT).  For  SE  with  existing  measures  projections 
submitted in March 2019 are presented; certain measures have been implemented or planned to achieve the 
domestic target for ESR sectors of at least -50% reductions since then which will only be reflected in updated 
projections  in  March  2021.  For  Bulgaria  it  is  noted  that  the  WEM  projection  has  lower  emissions  than  the 
WAM projection. One reason is that they stem from different modelling exercises, WEM from the 2019 MMR 

30 

 
 
                                                           
 
layer.  The  evaluation: 

https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12479-Review-of-EU-rules-on-

submission  and  WAM  from  the  final  NECP.  The  2005  base  year  values  as  used  under  the  Effort  Sharing 
Decision and published in the accompanying Staff Working Document e.g. in SWD(2018) 453 have been used 
unless Member State updates thereof based on more recent inventories are available from the NECPs. 
xxi Austria, Belgium, Bulgaria, Cyprus, Estonia,Finland,Germany, Ireland, Luxembourg, Poland. 
xxii Targets for 2021-2024 to be calculated in WLTP 
xxiii COM(2020) 662 final 
xxiv Employment and Social Developments in Europe 2019, Chapter 5 
xxv  Regulation  (EC)  No  1005/2009  on  substances  that  deplete  the  ozone 
https://ec.europa.eu/clima/sites/clima/files/ozone/docs/swd_2019_406_en.pdf  
xxvi  https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12310-Ozone-layer-protection-
revision-of-EU-rules  
xxvii Regulation (EU) No 517/2014 on fluorinated greenhouse gases  
xxviii F-Gases report 2020, EEA, forthcoming. 
xxix 
fluorinated-greenhouse-gases  
xxx  https://ec.europa.eu/clima/news/more-climate-friendly-alternatives-harmful-greenhouse-gases-used-air-
conditioning-and_en  
xxxi The trend in reported emissions and removals for the EU differs from accounting due to a marked drop by 
65 Mt CO2-eq of net removals by Forest Management in Romania in 2018. This is noted as an error in the 2020 
EU National Inventory Report (Table 11.6, p 896). In accounting, credits by Forest Management in Romania are 
capped to 3.5% of the emissions in the base year. 
xxxii  Denmark,  Germany,  Ireland,  Italy,  Portugal  and  Spain  elected  to  include  in  their  accounts  Cropland 
Management;  Denmark,  Germany,  Ireland,  Italy  and  Portugal  also  elected  Grazing  Land  Management; 
Romania elected Revegetation. 
xxxiii Reported emissions and removals from LULUCF under the Kyoto Protocol as shown in Figure 8 are based 
on specific activities and are not the same as land-based reported emissions and removals from LULUCF under 
the UNFCCC Convention inventory as included in Figure 1. 
xxxiv Regulation (EU) 2018/841 on the inclusion of greenhouse gas emissions and removals from land use, land 
use change and forestry in the 2030 climate and energy framework. 
xxxv Alternative Investment Fund Manager Directive 2011/61/EU 
xxxvi Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of 
laws,  regulations  and  administrative  provisions  relating  to  undertakings  for  collective  investment  in 
transferable securities (UCITS) 
xxxvii  Directive  2014/65/EU  of  the  European  Parliament  and  of  the  Council  of  15 May  2014  on  markets  in 
financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU 
xxxviiiDirective  (EU)  2016/97  of  the  European  Parliament  and  of  the  Council  of  20  January  2016  on  insurance 
distribution (recast) 
xxxix  The  European  Commission  has  launched  the  European  Innovation  Council  (EIC)  as  a  flagship  initiative 
aimed  at  supporting  European  innovators  in  the  scaling-up  of  breakthrough,  disruptive  innovation.  The 
proposal for Horizon Europe has earmarked € 10 billion for the EIC. 
xl Czechia, Croatia, Lithuania, Romania, Slovakia 
xli https://ec.europa.eu/clima/policies/budget/modernisation-fund_en  
xlii Because of the national transfers, these shares deviate from the ones listed in Annex IIb of the ETS Directive. 
xliii Allocation based on European Council conclusions 
xliv https://ec.europa.eu/jrc/en/peseta-iv 
xlv https://ec.europa.eu/clima/policies/adaptation/what_en 
xlvi  https://ec.europa.eu/echo/sites/echo-site/files/swd_2017_176_overview_of_risks_2.pdf.  Next  report  due 
in November 2020. 
xlvii https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:32018D2027  
xlviii https://www.icao.int/Meetings/a40/Documents/10132_en.pdf (see p. 79) 
xlix  IMO  targets:  reduce  total  annual  GHG  emissions  from  international  shipping  by  at  least  50%  by  2050 
compared to 2008 (to be reviewed in 2023) and full decarbonisation as early as possible before the end of the 
century, and 40 % carbon intensity improvements by 2030. 

31 

 
 
                                                                                                                                                                                     
 
l On air quality, in 2016 the IMO confirmed the entry into force of the stricter 0.5% global sulphur limit (down 
from 3.5%) in marine fuels from 1 January 2020. 
li https://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1598194010804&uri=CELEX:52019PC0038  
lii  2019  Annual  Report 
the  European  Commission  on  CO2  Emissions 
https://ec.europa.eu/clima/sites/clima/files/transport/shipping/docs/swd_2020_82_en.pdf  
liii https://ec.europa.eu/clima/sites/clima/files/transport/shipping/docs/swd_2020_82_en.pdf  

from  Maritime, 

from 

32