COMMISSION STAFF WORKING DOCUMENT First Biennial Transparency Report from the European Union Accompanying the document Report from the Commission First Biennial Transparency Report from the European Union to the United Nations Framework Convention on Climate Change (required under the Enhanced Transparency Framework)
Date: 2024-11-21
Institutions: Directorate-General for Climate Action, European Commission
Subjects: EU environmental policy, EU strategy, Paris Agreement on Climate Change, adaptation to climate change, carbon neutrality, climate change, emission trading, greenhouse gas, pollution control measures, sustainable development

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 21.11.2024  SWD(2024) 273 final  COMMISSION STAFF WORKING DOCUMENT First Biennial Transparency Report from the European Union Accompanying the document Report from the Commission First Biennial Transparency Report from the European Union to the United Nations Framework Convention on Climate Change (required under the Enhanced Transparency Framework) {COM(2024) 552 final}  
 
 
1 

1.1 

1.2 

2 

2.1 

2.2 

2.3 

2.4 

2.5 

2.6 

3 

3.1 

3.2 

3.3 

3.4 

3.5 

3.6 

3.7 

3.8 

3.9 

National inventory report 

Introduction and key developments 

Summary of GHG emission trends 

Information necessary to track progress 

National circumstances and institutional arrangements 

Description of the nationally determined contribution 

Indicator, definitions, methodologies and progress 

Mitigation policies and measures 

Summary of greenhouse gas emissions and removals 

Projections of greenhouse gas emissions and removals 

Climate change impacts and adaptation 

Introduction 

National circumstances, institutional arrangements and legal frameworks 

Impacts, risks and vulnerabilities 

Adaptation priorities and barriers 

Adaptation strategies and policies 

Progress on implementation of adaptation 

Monitoring and evaluation 

Averting, minimising and addressing loss and damage 

Cooperation and good practices 

3.10 

Any other information 

4 

4.1 

4.2 

4.3 

4.4 

4.5 

4.6 

5 

5.1 

5.2 

5.3 

5.4 

5.5 

Support provided and mobilised 

Introduction 

National circumstances and institutional arrangements 

Assumptions, definitions and methodologies 

Providing and mobilising financial support 

Support for technology development and transfer 

Capacity-building support 

Making finance flows consistent with a pathway towards low GHG 
emissions and climate-resilient development 

Budgeting and spending programmes 

Tools and standards 

Disclosures 

International Platform on Sustainable Finance 

Activities of the European Investment Bank 

1 

3 

3 

3 

6 

7 

28 

32 

34 

85 

85 

99 

99 

100 

102 

107 

111 

114 

120 

122 

126 

129 

130 

130 

130 

134 

141 

149 

154 

163 

164 

164 

165 

165 

165 

 
 
6 

7 

8 

8.1 

Improvements in reporting 

List of abbreviations 

Annex to the Biennial Transparency Report 

167 

168 

174 

Annex: Methodology used to identify GHG emissions from international aviation and navigation in 
174 
the scope of the EU’s NDC 

2 

 
 
 
1  NATIONAL INVENTORY REPORT 

1.1  Introduction and key developments 
This chapter provides key information about the EU’s greenhouse gas (GHG) inventory. 

The EU, as a party to the United Nations Framework Convention on Climate Change (UNFCCC) and 
to the Paris Agreement, reports annually on GHG inventories for the years from 1990 to the current 
calendar year (t) minus two (t-2), for emissions and removals within the territory of its Member States. 
The  GHG  inventory  data  presented  in  this  chapter  of  the  Biennial  Transparency  Report  (BTR)  is 
consistent with the GHG inventory of the EU submitted in its 2024 National Inventory Report. 

Further details are given in the National Inventory Document, which is submitted as a stand-alone 
document. 

The key recent developments in GHG emissions in the EU can be summarised as follows: 

•  Total net greenhouse gas emissions in the 27 Member States of the EU (EU-27) (including 
land use, land-use change and forestry (LULUCF), without international bunkers) were 3 133 
million  tonnes  of  carbon  dioxide  equivalents  (CO2eq)  in  2022.  Total  net  GHG  emissions 
decreased by 32.6 % from 1990 to 2022. In absolute terms, the biggest reductions in emissions 
were achieved in public electricity and heat production (down by 495 million tonnes of CO2 
equivalent) between 1990 and 2022. 
In 2022, total net GHG emissions in the EU-27 (including LULUCF, without international 
bunkers) fell by 83 million tonnes, or 2.6 %, compared to 2021. 

• 

1.2  Summary of GHG emission trends  
This section provides a brief description of the trends in GHG emissions. 

1.2.1  Trends in total GHG emissions 

In  2022,  total  net  GHG  emissions  in  the  EU-27,  including  LULUCF  and  indirect  carbon  dioxide 
(CO2) emissions, were 32.6 % (a drop of 1 516 million tonnes CO2 equivalents) below 1990 levels. 
Emissions decreased by 2.6% (83 million tonnes CO2 equivalents) between 2021 and 2022. Emissions 
from  international  aviation  and  navigation  are  excluded  from  national  totals  reported  in  the  GHG 
inventory.  The  trends  at  sector  level  and  in  each  sector’s  share  of  total  EU-27  GHG  emissions  is 
shown in Figure 1. 

3 

 
Figure 1: GHG emissions/removals per sector, 1990 to 2022 

Note: All GHG inventory information presented in this report is based on the September 2024 version of the 
UNFCCC Common Reporting Table (CRT) tool. Further updates and corrections in the CRT tool may result 
in changes to the final GHG inventory data. 

Source: Annual European Union GHG inventory 1990-2022 

4 

- 500 0 5001 0001 5002 0002 5003 0003 5004 0004 5005 0005 500199019911992199319941995199619971998199920002001200220032004200520062007200820092010201120122013201420152016201720182019202020212022GHG emissions/removals (Mt CO2eq)EnergyIPPUAgricultureLULUCFWasteInternational bunkersNet total without bunkers 
 
 
 
1.2.2  GHG emissions without LULUCF per sector and by gas in 2022 

The  share  of  each  main  sector  and  of  each  gas  of  the  total  EU-27  GHG  emissions  (excluding 
LULUCF) in 2022 is shown in Figure 2. 

Figure 2: Share of total GHG emissions (excluding LULUCF and international bunkers) per 

sector and by gas in 2022 

Note:  Indirect  CO2  emissions  are  excluded.  IPPU  =  Industrial  processes  and  product  use.  F-gases  = 
Fluorinated gases 

Source: Annual European Union GHG inventory 1990-2022 

5 

Energy77%IPPU9%Agriculture11%Waste3%3 366 Mt CO2eq.Sectoral sharesCarbon dioxide81%Methane12%Nitrous oxide5%F-gases2%3 366 Mt CO2eq.Gas shares 
 
 
 
2  INFORMATION NECESSARY TO TRACK PROGRESS 

Key developments in progress towards the nationally determined contribution (NDC) target: 

• 

In 2022, the net GHG emissions of the EU in the scope of its NDC were 31.8 % below 
the 1990 level. Ambitious efforts are still needed to reach the -55 % NDC target by 2030. 

•  This is the first BTR submitted based on the updated NDC scope of 17 October 2023.  

• 

In 2023, the EU increased its ambition: 

o  The revised EU ETS Directive increases the level of ambition in the existing system 

from 43% to 62% emissions reductions by 2030, compared to 2005;  

o  The amended Effort Sharing Regulation (ESR) increased, for the sectors that it covers, 
the EU-level GHG emission reduction target from 29% to 40% by 2030, compared 
to 2005; 

o  The new LULUCF Regulation sets a target to increase land-based net removals in the 
EU by an additional -42 million tonnes of CO₂ equivalent (MtCO₂-eq) by 2030. 
This will result in total net removal at the EU level of -310 MtCO₂-eq1. 

•  The most recent  projections available at  EU level  show a continuing  decrease in  GHG 
emissions  up  to  2030  and  beyond.  In  2024  projections  are  updated  voluntarily  by 
Member States, therefore the current projections do not yet fully take account of the effects 
of the recently adopted mitigation policies in all Member States. Only 11 Member States 
have updated their projections. Projected emissions in 2030 are still above the NDC 
target.  

• 

In 2022, the share of renewable energy sources in gross electricity production amounted 
to 38%. The second biggest electricity source – nuclear – amounted to 22%. This despite 
the exceptionally hot and dry summer in many EU countries, which affected nuclear power 
generation. Electricity production in 2022 from all renewable energy sources combined 
exceeded electricity production from natural gas and coal combined. 

•  Although  the  consumption  of  fossil  fuels  has  decreased  in  recent  years  due  to  higher 
energy efficiency and renewable energy generation, the EU is still dependent on imports 
of fossil fuels, in particular oil and natural gas. The share of fossil fuels in the EU energy 
mix declined from 83% in 1990 to 71% in 2022. 

• 

In 2022, electric cars made up approximately 22% of new car registrations. At the 
end of 2022, more than 5 million battery and plug-in hybrid electric cars were on European 
roads. 

1 The average yearly net removals for the years 2016, 2017 and 2018, as reported in the 2020 greenhouse gas inventory 
submission, plus the additional -42 MtCO2-eq net removals result in total net removals of -310 MtCO₂-eq at the EU level. 
Any methodological adjustments in the inventory data reporting will be taken into account in the compliance check against 
the 2030 target. 

6 

 
 
 
In the updated NDC of the EU, which was communicated in October 2023, the EU and its Member 
States commit to reduce net greenhouse gas emissions by at least 55% by 2030 compared to 1990.2 
This chapter provides detailed information on the EU’s progress towards this NDC target. It includes: 

•  national circumstances and institutional arrangements (Section 2.1); 

•  description of the NDC (Section 2.2); 

• 

information on the indicators, definitions, methodologies and the status of progress (Section 
2.3); 

•  mitigation policies and measures (Section 2.4); 

•  a summary of GHG emissions and removals (Section 2.5); and 

•  projections for GHG emissions and removals (Section 2.6). 

2.1  National circumstances and institutional arrangements 
2.1.1  National circumstances 

The NDC of the EU is implemented taking into account the specific circumstances of the EU and 
each Member State, such as population, economic development and climate. This section provides 
an overview of the national circumstances relevant to progress in implementing and achieving the EU 
NDC. 

As the EU NDC contains an absolute GHG emissions reduction target, developments in the GHG-
intensive sectors of the economy are particularly important. The decarbonisation of the energy sector, 
as  described  in  Section  2.1.1.6  below,  plays  a  key  role  in  reducing  GHG  emissions  and  in 
implementing and achieving the EU’s NDC. 

2.1.1.1  Government structures 
The EU comprises 27 Member States3. Every action taken by the EU is founded on treaties that have 
been approved by all Member States. Under these treaties, EU institutions adopt legislation in their 
areas  of  competence,  which  the  Member  States  implement4.  The  main  legislative  and  executive 
institutions of the EU include the European Parliament, the Council of the European Union, and the 
European Commission5, as shown in Figure 3. Topics related to energy and the environment are a 
shared competence between the European institutions and the 27 Member States. 

2   Update  of 

the  nationally  determined  contribution  of 

the  European  Union  and 

its  Member  States, 

https://unfccc.int/sites/default/files/NDC/2023-10/ES-2023-10-17%20EU%20submission%20NDC%20update.pdf. 

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

4   Founding agreements, https://european-union.europa.eu/principles-countries-history/principles-and-values/founding-

agreements_en. 

5   Types  of 

institutions  and  bodies,  https://european-union.europa.eu/institutions-law-budget/institutions-and-

bodies/types-institutions-and-bodies_en. 

7 

 
 
Figure 3: Institutions of the European Union 

Source: Based on European Commission, Directorate-General for Communication6 

The  European  Parliament  represents  the  citizens  of  EU  countries,  who  elect  the  members  of  the 
European Parliament every 5 years. It takes decisions on European laws jointly with the Council of 
the European Union. It also approves the EU budget. 

The  European  Council  is  the  meeting  of  the  heads  of  state  or  government  elected  by  the  citizens 
through national elections. They decide on the general political direction and priorities of the EU. A 
separate body, the Council of the European Union, is the meeting of the ministers of Member States, 
which adopts legislation and coordinates policies. In the area of climate legislation, this usually takes 
place through meetings of the Member States’ environment and climate ministers7. The Council of 
the European Union takes decisions on European laws jointly with the European Parliament. 

The European Commission is the EU’s main executive body. It makes proposals for new laws, which 
are scrutinised and approved by the European Parliament and the Council of the European Union. 
Proposals for new laws are supplemented by public consultations8, as well as impact assessments, 
which set out the advantages and disadvantages of policy options. These impact assessments include 
input from non-governmental organisations, national authorities and expert groups that give advice 
on  technical  issues9.  The  European  Commission  manages  EU  policies  and  the  EU’s  budget  and 
ensures that Member States apply EU law correctly. 

The work of these main EU institutions, which covers the legislative and executive tasks of the EU, 
is complemented by the work of the Court of Justice of the European Union, the European Central 
Bank and the European Court of Auditors. These three institutions are responsible for managing the 
judicial, financial and external audit aspects of the European Union. 

6   Ibid. 

7   Environment Council configuration, https://www.consilium.europa.eu/en/council-eu/configurations/env/#gsc-main-

content. 

8   Have your say - Public Consultations and Feedback, https://ec.europa.eu/info/law/better-regulation/have-your-

say_en. 

9   How EU policy is decided, https://european-union.europa.eu/institutions-law-budget/decision-making-

process/legislation_en. 

8 

European ParliamentEuropean CouncilCouncil of the European UnionEuropean CommissionProposes legislationEuropean Court of JusticeEuropean Court of AuditorsDefines prioritiesJointly adopt legislationEuropean Central BankSupervises the EU budgetInterprets EU lawConducts monetary policy 
 
 
2.1.1.2  Population profile 

The 27 Member States of the European Union (EU-27) had a population of 447 million inhabitants 
in 2022. Their population has increased by 6.9 % since 1990. Figure 4 shows the population trend of 
the EU from 1990 to 2022, together with GHG emissions per capita, which showed a marked decrease 
over this period and reached 7.0 tonnes of CO2 equivalents in 2020, approximately 37 % below the 
1990 level. 

Figure 4: Population of the EU-27 and GHG emissions per capita 

Source: Own illustration based on data from Eurostat (Statistical Office of the European Union)10 and the 
annual  European  Union  GHG  inventory  1990-2022.  GHG  emissions  are  in  the  scope  of  the  EU  GHG 
inventory, including LULUCF, excluding international bunkers. 

The EU’s population is distributed across its Member States and its outermost regions. The five most 
populous Member States (Germany, France, Italy, Spain and Poland) make up  approximately two 
thirds of the EU’s population. The average population density in the EU is 109 inhabitants per square 
kilometre (km2)11. 

2.1.1.3  Geographical profile 

The  27  Member  States  are  situated  in  the  western  part  of  the  European  continent.  Furthermore, 
various overseas territories of France, Spain and Portugal, known as the ’outermost regions’, form 
part of the European Union. These include several islands in the Atlantic and Pacific Oceans, and 
French Guiana on the Atlantic coast of South America12. Some overseas countries and territories have 
a  special  relationship  with  an  EU  Member  State  but  do  not  form  part  of  the  EU.  These  include 
Greenland, which is linked to Denmark, and several territories linked to France or the Netherlands. 
The European Union covers an area13 of approximately 4.1 million km². 

10   Population change, https://ec.europa.eu/eurostat/databrowser/product/view/demo_gind?lang=en. 

11   Demography of Europe, 2023 edition, https://ec.europa.eu/eurostat/web/interactive-publications/demography-2023. 

12   The EU and its outermost regions, https://ec.europa.eu/regional_policy/policy/themes/outermost-regions_en. 

13   Land cover overview by NUTS 2 regions, https://doi.org/10.2908/LAN_LCV_OVW. 

9 

01234567891011121314150501001502002503003504004505001990199520002005201020152020GHG emissions per capita (t CO2eq) Population (million inhabitants)PopulationGHG emissionsper capita 
 
 
Figure 5 provides an overview of land use types in the EU Member States. Agriculture is the most 
common land use category in most EU Member States and accounts for around 39% of all land use 
in the EU, followed by forestry with 36%. In some southern European Member States (such as Spain 
or Italy) and some northern European Member States (such as Sweden or Finland), considerable areas 
are not used because they are not suitable for agriculture or forestry. Areas that are not used have 
a significant biological function for biodiversity. 

Figure 5: Land use types in the EU Member States 

Source: Own illustration based on Eurostat14 data of 2018 

2.1.1.4  Economic profile 

GHG  emissions  in  the  EU  have  decreased  since  1990  despite  a  growing  economy.  Economic 
indicators are key to understanding the trends in GHG emissions and the effects of climate change 
mitigation policies. 

Figure 6 shows the developments in the EU’s gross domestic product (GDP). While the overall GDP 
of the EU-27 has grown in most years since 1995, there were decreases in GDP of more than 4% in 
2009 and 2020 due to the global economic crisis and the COVID-19 pandemic, respectively. 

14   Ibid. 

10 

0100200300400500600IrelandCzechiaAustriaPortugalHungaryBulgariaGreeceRomaniaItalyPolandFinlandGermanySwedenSpainFranceLand use (1000 km2)020406080100MaltaLuxembourgCyprusSloveniaBelgiumNetherlandsDenmarkEstoniaSlovakiaCroatiaLatviaLithuaniaLand use (1000 km2). Note: different scaleForestryAgricultureFishing and aquacultureLand use with heavy environmental impactServices and residential areaNo land use 
 
Figure 6: Trend in gross domestic product and GHG emissions of the EU-27 

Total 

GHG 

Note: 
comparison. 
the 
Source: Own illustration based on Eurostat15 and the annual European Union GHG inventory 1990-2022. 
GHG  emissions  are  in  the  scope  of  the  EU  GHG  inventory,  including  LULUCF,  excluding  international 
bunkers. 

emissions 

shown 

are 

EU 

for 

of 

GDP per capita is distributed unevenly between Member States, as depicted in Figure 7. Luxembourg 
and Ireland are the Member States with the highest GDP per capita. 

Figure 7: GDP per capita in EU Member States, 2023 

Source: Own illustration based on Eurostat16 

15   GDP and main components, https://doi.org/10.2908/NAMA_10_GDP. 

16   Real GDP per capita, https://doi.org/10.2908/SDG_08_10. 

11 

020406080100EU-27LuxembourgIrelandDenmarkSwedenNetherlandsAustriaFinlandBelgiumGermanyFranceItalyCyprusSpainReal GDP per capita (1 000 EUR)020406080100MaltaSloveniaPortugalGreeceCzechiaSlovakiaEstoniaLithuaniaCroatiaPolandHungaryLatviaRomaniaBulgariaReal GDP per capita (1 000 EUR) 
 
 
 
2.1.1.5  Climate profile 

The Member States of the EU cover a wide range of climatic zones. Low temperatures in winter are 
particularly relevant for greenhouse gas emissions as they mean that heating is necessary, which in 
many  cases  depends  on  fossil  fuels.  High  temperatures  in  summer  require  air  conditioning  and 
cooling, which is energy-intensive and may contribute to the emission of fluorinated gases. 

Heating degree days and cooling degree days are commonly used to measure the energy requirements 
of buildings. The number of heating degree days is determined from the number of days with average 
daily temperatures below 15 °C and the temperature difference to a base temperature of 18 °C. The 
higher the number of such days in a year and the higher the temperature differences, the higher the 
resulting number of heating degree days. Likewise, the number of cooling degree days is determined 
from the number of days with average daily temperatures above 24 °C and the temperature difference 
to a base temperature of 21 °C17. 

Figure 8 shows that a there is a high number of heating degree days in northern Europe, but also in 
mountainous areas in central Europe and in the eastern parts of the EU, which are characterised by 
a continental climate with low temperatures in winter. 

17   Heating and cooling degree days – statistics, https://ec.europa.eu/eurostat/statistics-
explained/index.php?title=Archive:Heating_and_cooling_degree_days_-_statistics. 

12 

 
 
Figure 8: Heating degree days in regions of the EU (average for 2013-2022) 

Source: Own illustration based on Eurostat18 

Like heating degree days, cooling degree days show distinct differences between the northern and 
southern regions of the EU (Figure 9). 

18   Cooling and heating degree days by NUTS 3 regions – annual data, https://doi.org/10.2908/NRG_CHDDR2_A. 

13 

 
 
 
Figure 9: Cooling degree days in regions of the EU (average for 2013-2022) 

Source: Own illustration based on Eurostat19 

When  looking  at  the  annual  averages  of  heating  and  cooling  degree  days  across  Member  States 
between  1990  and  2020  (Figure  10),  the  effects  of  a  warming  climate  can  be  observed,  with 
decreasing demand for heating in winter and growing demand for cooling in summer. 

Heating and cooling degree days show significant variations from year to year. This variability is 
particularly  important  because  it  affects  energy  consumption.  Energy  systems  have  to  deal  with 
higher energy demand due to hot or cold weather, and when it is cold the share of fossil fuels used 
for heating may increase. While most of the EU is in the temperate climate zone, extreme weather 
events such as heatwaves are expected to become more frequent in the future20. 

19   Cooling and heating degree days by NUTS 3 regions – annual data, https://doi.org/10.2908/NRG_CHDDR2_A. 

20   IPCC 

AR6 

WGI 

2021 

Regional 

Fact 

Sheet 

for 

Europe, 

https://www.ipcc.ch/report/ar6/wg1/downloads/factsheets/IPCC_AR6_WGI_Regional_Fact_Sheet_Europe.pdf. 

14 

 
  
 
Figure 10: Time series of heating and cooling degree days 

Note: Annual values were determined by averaging the values of each Nomenclature of Territorial Units for 
Statistics (NUTS) 3 region. 

Source: Own illustration based on Eurostat21 

2.1.1.6  Energy 

The  energy  sector  is  the  biggest  source  of  GHG  emissions  in  the  EU,  however  it  is  currently 
undergoing major transformations. Besides an accelerating shift towards renewable energy sources, 
the EU and its Member States are working on reducing their dependence on fuel imports. 

As can be seen in Figure 11, gross inland energy consumption in the EU peaked in 2006 and has 
continued to fall since then. Notable decreases occurred in 2009 in the wake of the global financial 
crisis,  in  2020  due  to  the  COVID-19  pandemic,  and  in  2022  due  to  the  energy  crisis  that  was 
exacerbated by Russia’s war of aggression against Ukraine. The overall decreasing trend over the 
past 15 years – despite a growing economy – can be attributed to a series of EU-wide policies and 
measures, including in the area of energy efficiency (see Section 2.4.3.1). 

Over the whole period of time shown, the share of fossil fuels in the EU energy mix fell from 83% in 
1990 to 71% in 2022, while the share of energy from renewable sources increased from 5% to 18%. 
However, the share of natural gas also increased between 1990 and 2022, from 17% to 21%. 

21   Cooling and heating degree days by NUTS 3 regions – annual data, https://doi.org/10.2908/NRG_CHDDR2_A. 

15 

304050607080901001101201301401990199520002005201020152020Cooling degree days2 4002 5002 6002 7002 8002 9003 0003 1003 2003 3003 4001990199520002005201020152020Heating degree days 
 
 
Figure 11: Gross inland energy consumption of the EU-27 by fuel 

Source: Own illustration based on Eurostat22 

The share of fossil fuels in the EU energy mix decreased from 83% in 1990 to 71% in 2022. Nuclear 
energy  accounted  for  11%  and  renewables  for  18%  of  gross  inland  energy  consumption  in  2022. 
Energy  consumption  from  renewable  sources  has  increased  significantly  since  2005,  as  shown  in 
Figure 12. Biomass constitutes the main renewable energy source, followed by wind and hydropower. 

Figure 12: Energy consumption from renewable energy sources in the EU-27 

Source: Own illustration based on Eurostat23  

Looking specifically at the production of electricity, there has been a significant increase in gross 
electricity production from renewable energy sources in recent years (Figure 13), rising to 38% in 
2022.  The  second  biggest  electricity  source  –  nuclear  –  amounted  to  22%.  In  2022,  electricity 

22   Simplified energy balances, https://doi.org/10.2908/NRG_BAL_S. 

23   Supply, transformation and consumption of renewables and wastes, 

https://ec.europa.eu/eurostat/databrowser/product/page/NRG_CB_RW; Use of renewables for electricity – details, 
https://ec.europa.eu/eurostat/databrowser/product/page/NRG_IND_URED.  

16 

 0 200 400 600 8001 0001 2001 4001 6001 8001990199520002005201020152020Gross energy consumption(Mt oil equivalents)RenewablesNatural gasOilSolid fossil fuelsNuclearOther fuels 0 50 100 150 200 2502005201020152020Energy consumption (Mt oil equivalents)WindSolar photovoltaicSolar thermalBiomass and renewable wastesGeothermalHydropower 
  
 
 
production from all renewable energy sources combined exceeded electricity production from natural 
gas and coal combined. Renewables have been the biggest energy source in electricity production in 
every year since 2013. In 2022, gross electricity production from renewable energy sources exceeded 
the second biggest electricity source – nuclear – by 77%, and it also exceeded electricity production 
from natural gas and coal combined in that year. 

Electricity production from renewable energy sources has more than doubled in the last 15 years, 
while  electricity  production  from  solid  fossil  fuels,  oil  and  nuclear  energy  decreased  in  the  same 
period. Natural gas continues to be a significant fuel for electricity generation. 

Figure 13: Gross electricity production by fuel in the EU-27 

Source: Own illustration based on Eurostat24 

While the use of renewable energy sources has exceeded other sources in electricity production, fossil 
fuels are still widely in use in the transport, buildings, industry and other sectors. Figure 14 shows the 
supply of fossil fuels from 1990 to 2022. The overall supply of fossil fuels fell over this period, but 
this decrease is mostly due to a decline in primary production within the EU (shown in dark colours), 
while net imports (shown in light colours) continue to play an important role. Net imports of natural 
gas more than doubled between 1990 and 2022.  

24   Production of electricity and derived heat by type of fuel, https://doi.org/10.2908/NRG_BAL_PEH. 

17 

01020304050607080901001990199520002005201020152020Gross electricity production (Mtoe)RenewablesNatural and derived gasesOilSolid fossil fuelsNuclearOther fuelsElectricity production from renewable energy sources 
 
Figure 14: Supply of fossil fuels in the EU-27  

Source: Own illustration based on Eurostat25 

In  the  same  period,  final  energy  consumption26  remained  at  roughly  the  same  level,  as  shown  in 
Figure 15. Though, compared to the highest final energy consumption value of 41 447 Mtoe back in 
2006, 2022 final energy consumption decreased from its peak level by 8.9%27. While approximately 
1.3 units of fossil fuels were produced or imported in 1990 for each unit of final energy consumed, 
approximately 1.1 units of fossil fuels were required in 2022 for each unit of final energy consumed. 
This  shift  can  be  explained  by  the  increase  in  renewable  sources  in  the  energy  mix  and  by  the 
increased efficiency of the energy system. 

Figure 15: Final energy consumption by sector in the EU-27  

25   Simplified energy balances, https://doi.org/10.2908/NRG_BAL_S. 

26   Final  energy  consumption  is  the  total  energy  consumed  by  end  users;  it  is  smaller  than  gross  inland  energy 

consumption because it does not include transformation and distribution losses. 

27   Energy statistics - an overview - Statistics Explained (europa.eu) 

18 

 0 200 400 600 8001 0001 2001 4001990199520002005201020152020Energy import/production(Mt oil equivalents)Natural gas (net import)Natural gas (primary production)Liquid fuels (net import)Liquid fuels (primary production)Solid fuels (net import)Solid fuels (primary production) 0 100 200 300 400 500 600 700 800 9001 0001990199520002005201020152020Final energy consumption(Mt oil equivalents)OtherHouseholdsCommercial and public servicesTransportIndustry 
  
 
 
Source: Own illustration based on Eurostat28 

The  trends  in  end-user  energy  prices  is  shown  in  Figure  16.  Prices  for  electricity  had  increased 
modestly since 2007, then with a significant increase in 2021. Natural gas prices remained at a level 
similar  to  2007  until  2020.  However,  electricity  and  gas  prices  increased  significantly  in  the  EU 
during 2022. The energy crisis that started in 2021 continued in 2022 – exacerbated by Russia’s war 
of aggression against Ukraine – driving energy prices, particularly for natural gas, to record highs. 
As such, in 2022, the increase in the use of coal and lignite for power generation, above the level 
recorded in 2021, boosted GHG emissions in the energy sector29. However, this increase was more 
than compensated by the reduced demand for both industrial and household energy, as a response to 
the high prices. 

Figure 16: Average end-user energy prices in the EU-27 

Source: Own illustration based on Eurostat.30 Prices are nominal, i.e. not adjusted for inflation.  

2.1.1.7  Transport 

Currently, the transport sector is largely reliant on fossil fuels and constitutes an important source of 
GHG emissions. As can be seen in Figure 17, the volume of freight transport (expressed in tonne-
kilometres – tkm) saw a decrease in 2009 due to the global economic crisis but has increased in most 
years since then. Freight transport within the EU (excluding maritime) is dominated by road transport, 
which accounted for approximately 78% of all inland freight transport tkm in 2022. 

Like freight transport, passenger transport in the EU is dominated by road transport. There were small 
year-to-year increases in total passenger transport until 2019, followed by a pronounced decrease in 

28   Simplified energy balances, https://doi.org/10.2908/NRG_BAL_S. 

29 Together with the decreased level of nuclear and low hydro power production 

30   Energy statistics – prices of natural gas and electricity, 

https://ec.europa.eu/eurostat/databrowser/explore/all/envir?lang=en&subtheme=nrg.nrg_price&display=list&sort=ca
tegory. 

19 

80100120140160180200220240200720092011201320152017201920212023Index (2007 = 100)Electricity - householdsElectricity - industryGas - householdsGas - industry 
 
 
2020 due to the COVID-19 pandemic (Figure 17). In 2021, cars accounted for 78% of all passenger 
transport, expressed in passenger kilometres (pkm). 

Figure 17: Freight and passenger transport volume in the EU-27 

Source: Own illustration based on Eurostat31 and EU Transport in figures32. Air transport in this graph covers 
only domestic and intra-EU transport. Maritime transport is not included. 

While fossil fuels currently dominate road transport, electric vehicles showed a strong increase in 
recent years and were supported by EU and national policies. Electric cars (battery electric and plug-
in hybrid electric) accounted for approximately 21% of all new cars registered in the EU in 2022 
(Figure  18).  In  the  years  ahead,  electric  passenger  cars  will  play  a  key  role  in  mitigating  GHG 
emissions  from  road  transport.  A  typical  battery  electric  vehicle  in  the  EU  offers  a  substantial 
reduction in  GHG emissions across its lifetime, compared with an equivalent internal combustion 
engine vehicle. The extent to which the GHG emissions advantage is realised during the use phase 
depends strongly on the electricity mix33. 

31   Inland freight transport split by mode of transport, https://doi.org/10.2908/TRAN_HV_FRMOD. 

32   EU  Transport  in  figures:  Statistical  pocketbook  2023,  https://transport.ec.europa.eu/facts-funding/studies-data/eu-

transport-figures-statistical-pocketbook/statistical-pocketbook-2023_en. 

33   Electric vehicles from life cycle and circular economy perspectives, https://www.eea.europa.eu/publications/electric-

vehicles-from-life-cycle. 

20 

 01 0002 0003 0004 0005 0006 0002008201020122014201620182020Passenger transport volume (bn pkm)Passenger carsPowered 2-wheelersBuses & coachesRailwaysTram & metroAir 0 5001 0001 5002 0002 50020082010201220142016201820202022Freight transport volume (bn tkm)RoadRailInland waterwaysAir freight transport amountsto less than 0.1% of freight transport volume in all years. 
 
  
 
Figure 18: New registrations of electric vehicles in the EU 

Note: Total of the 27 EU Member States. Source: Own illustration based on European Environment Agency 
data 34  

2.1.1.8  Industry 

The industrial sector accounted for approximately 21% of total gross value added (GVA) in the EU 
in 202035. Production values of total manufacturing increased over the past decade, but production 
values of energy-intensive sub-sectors decreased over that time period. (Figure 19). Large decreases 
in production in many sectors were observed in 2009 in the wake of the global economic crisis, in 
2020  due  to  the  COVID-19  pandemic  and  in  2022-2023  because  of  high  energy  prices.  These 
decreases were most pronounced in the iron and steel sector. 

Figure 19: Trends in production values of different industry subsectors in the EU-27 

34   New registrations of electric vehicles in the EU, https://www.eea.europa.eu/en/analysis/indicators/new-registrations-

of-electric-vehicles. 

35   National accounts aggregated by industry, https://doi.org/10.2908/NAMA_10_A64.  

21 

0%2%4%6%8%10%12%14%16%18%20%22%0.00.20.40.60.81.01.21.41.61.82.02.22010201120122013201420152016201720182019202020212022Share of electric cars in new registrationsNew registrations (million)Plug-in hybrid electric carsBattery electric carsShare of electric cars innew registrations 
 
 
 
Note: For cement, lime and plaster, data are available from 2010 onwards. Hence, the production index for 
this subsector is 100 for 2010. Source: Own illustration based on Eurostat36 

2.1.1.9  Agriculture 

The proportion of agricultural land in the total land area varies widely between Member States (Figure 
20). Ireland has the highest share of agricultural area, which is predominantly grassland. Finland and 
Sweden  have  the  smallest  shares  of  agricultural  areas,  and  these  are  mostly  arable  land.  Overall, 
approximately 39% of the EU’s surface area is used for agriculture. Of this area, 61% is arable land, 
32% is permanent grasslands and 8% is permanent crops. 

Figure 20: Share of agricultural land in total land area in the EU and its Member States 

Source: Own illustration based on Eurostat37, data for 2022 

The  main  sources  of  GHG  emissions  from  agriculture  include  methane  emissions  from  enteric 
fermentation and manure management, plus some nitrous oxide emissions from manure management, 
which all depend, among other things, on livestock size. Livestock populations in the EU showed 
varying  trends  over  the  past  three  decades  (Figure  21).  The  swine,  cattle  and  sheep  populations 
decreased  between  1990  and  2022  by  18%,  31%  and  37%  respectively,  while  the  population  of 
poultry was roughly the same in 2022 as in 1990. 

The application of fertilisers is another important source of greenhouse gases. These include nitrous 
oxides from nitrogen containing fertilisers and CO2 from the application of limestone, dolomite and 
urea-based fertilisers. As can be seen in Figure 21, liming and the application of inorganic fertiliser 

36   Ibid. 

37   Utilised agricultural area by categories, https://doi.org/10.2908/TAG00025. 

22 

0%10%20%30%40%50%60%70%ItalyPortugalBelgiumLithuaniaCzechiaBulgariaPolandGermanyNetherlandsSpainLuxembourgFranceRomaniaHungaryDenmarkIrelandShare in total land area0%10%20%30%40%50%60%70%SwedenFinlandCyprusEstoniaSloveniaCroatiaLatviaAustriaMaltaSlovakiaEU-27GreeceShare in total land areaArable landPermanent grasslandPermanent cropsOther agricultural area 
 
 
decreased  considerably  between  1990  and  2022  (by  39%  and  33%  respectively),  while  urea 
application decreased by 15% and nitrogen from organic fertiliser by 14%. 

Figure 21: Livestock population and fertiliser application in the EU 

Source: Own illustration based on the annual European Union GHG inventory 1990-2022 

2.1.1.10 Forests 

Woodland is the most important land category in the EU, accounting for 41% of all land. The share 
of woodland in individual Member States ranges from 65% in Finland to 4% in Malta, as shown in 
Figure 22. The vast majority of all woodland is used for forestry, i.e. economic activities. Mostly in 
southern  European  Member  States,  larger  shares  of  woodland  are  exploited  economically.  The 
management of the EU’s forests plays a significant role in climate change mitigation because they 
constitute a significant carbon sink and stock. However, this forest sink has been declining in recent 
years, due to a combination of many factors, including increased harvest rates (partly due to natural 
disturbances,  but  mainly  because  increasing  socio-economic  pressures  over  forest  biomass,  for 
instance for energy production), lower growth due to droughts, forest fires and age-related effects.38 

38   Korosuo A., Pilli, R., Abad  Viñas, R., Blujdea, V. N. B., Colditz, R. R., Fiorense, G., Rossi,  S., Vizzarri, M. and 
Grassi,  G.  (2023),  The  role  of  forests  in  the  EU  climate  policy:  are  we  on  the  right  track?  Carbon  Balance  and 
Management, 2023, 18(1), 15, https://cbmjournal.biomedcentral.com/articles/10.1186/s13021-023-00234-0. 

23 

0,00,20,40,60,81,01,21,41,61,80204060801001201401601801990200020102020Poultry population (billion)Swine/cattle/sheep population (million)SwineCattleSheepPoultry024681012141618202202468101214161820221990200020102020Nitrogen input (Mt)Limestone/dolomite/urea application (Mt)Liming (application of limestone and dolomite)Nitrogen from inorganic fertiliserNitrogen from organic fertiliserUrea application 
 
 
 
Figure 22: Share of woodland in total land area in the EU and its Member States  

Source: Own illustration based on Eurostat,39 data of 2018. In this dataset, woodlands are areas covered by 
trees with a canopy of at least 10%. 

In recent decades, the area of forest land increased in the EU, as the afforested area was larger than the 
deforested area in every year (Figure 23). However, the afforested area decreased considerably after 2005, 
and the net increase in forested areas became less pronounced than before. 

Figure 23: Areas of afforestation and deforestation in the EU, 1990-2021 

Source: Own illustration based on changes in areas between the previous and the current inventory year, as 
reported in the 2023 GHG inventory of the EU. 

39   Land cover overview by NUTS 2 regions,  https://doi.org/10.2908/LAN_LCV_OVW. 

24 

0%10%20%30%40%50%60%70%ItalyPolandCzechiaPortugalLithuaniaGreeceEU-27AustriaBulgariaSlovakiaCroatiaLatviaEstoniaSwedenSloveniaFinlandShare in total land area0%10%20%30%40%50%60%70%MaltaIrelandNetherlandsDenmarkCyprusBelgiumHungaryFranceRomaniaGermanyLuxembourgSpainShare in total land areaWoodland used for forestryWoodland not used for forestry- 200- 100 0 100 200 300 400 500 6001990199520002005201020152020Forest land (million hectares)AfforestationDeforestationNet change 
 
 
 
2.1.1.11 Waste 

While there has been little variation in the overall amount of municipal waste generated in the EU 
over  the  past  decades,  there  has  been  a  significant  shift  in  waste  treatment  from  landfilling  to 
incineration with energy recovery, composting/digestion and recycling (Figure 24). This shift is due 
to EU-wide waste management policies and is a significant factor in the mitigation of GHG emissions. 
The  shift  away  from  landfill  is  reducing  methane  emissions.  Waste  incineration  causes  CO2 
emissions,  but  with  energy  recovery  it  can  substitute  the  incineration  of  fossil  fuels  for  heat  or 
electricity generation. 

Figure 24: Treatment of municipal waste in the EU, 1995-2022 

Source: Own illustration based on Eurostat40 

40   Treatment 

by  waste 
of  waste 
https://doi.org/10.2908/ENV_WASTRT. 

category, 

hazardousness 

and  waste  management 

operations, 

25 

0100200300400500600199520002005201020152020Municipal waste generated/treated (kg per capita)RecyclingComposting and digestionIncineration with energy recoveryIncinerationLandfillUntreated 
 
 
 
2.1.2  Institutional arrangements 

2.1.2.1  Institutional arrangements for tracking progress 

The EU and its Member States have specific arrangements in place to track progress in implementing 
and  achieving  the  EU  NDC.  These  arrangements  include  the  tracking  of  GHG  emissions  and 
removals, the reporting of policies and measures, and projections of GHG emissions and removals. 
These processes are specified in the Regulation on the Governance of the Energy Union and Climate 
Action (the Governance Regulation)41 and in the Directive setting up a system for greenhouse gas 
emission allowance trading (the ETS Directive)42. 

Under  the  Governance  Regulation,  the  EU  has  created  an  EU  inventory  system  to  ensure  the 
timeliness, transparency, accuracy, consistency, comparability and completeness of the data reported 
by the EU and its Member States. This inventory system includes a quality assurance and quality 
control  programme,  procedures  for  setting  emission  estimates,  and  comprehensive  reviews  of 
national inventory data. 

Each EU Member State compiles its GHG inventory in accordance with the requirements of the Paris 
Agreement43  and  the  relevant  Intergovernmental  Panel  on  Climate  Change  (IPCC)  guidelines44. 
Inventory data on GHG emissions and removals, including information on methods, are submitted 
electronically using a reporting system managed by the European Environment Agency (EEA). The 
submitted data are subject to quality control procedures and feed into the compilation of the GHG 
inventory of the EU. Net GHG emissions, calculated from emissions and removals reported in the 
GHG inventory of the EU, are the key information used to track progress towards the EU’s NDC 
target to reduce net emissions by 2030 by 55% compared to 1990. 

The 17 October 2023 updated NDC scope is supplemented by additional information to clarify the 
precise  amount of international  aviation  and maritime emissions which are covered under the EU 
NDC. 

These  emissions  are  calculated  based  on  the  Joint  Research  Centre’s  Integrated  Database  of  the 
European  Energy  System  (JRC-IDEES)  45.  Details  of  the  methodology  used  to  identify  GHG 

41   Regulation 

(EU)  2018/1999  on 

the  Governance  of 

the  Energy  Union 

and  Climate  Action, 

http://data.europa.eu/eli/reg/2018/1999/oj. 

42   Directive  2003/87/EC  establishing  a  system  for  greenhouse  gas  emission  allowance  trading  within  the  Union,  as 

amended,  http://data.europa.eu/eli/dir/2003/87/2024-03-01. 

43   Chapter  II  of  the  annex  to  decision  18/CMA.1,  https://unfccc.int/documents/193408;  and  decision  5/CMA.3, 

https://unfccc.int/documents/460951. 

44   2006 IPCC Guidelines for National Greenhouse Gas Inventories,  https://www.ipcc-nggip.iges.or.jp/public/2006gl/; 
and on a voluntary basis: 2019 Refinement to the 2006 IPCC Guidelines for National Greenhouse Gas Inventories, 
https://www.ipcc.ch/report/2019-refinement-to-the-2006-ipcc-guidelines-for-national-greenhouse-gas-inventories/. 

45   European Commission, Joint Research Centre, Rózsai, M., Jaxa-Rozen, M., Salvucci, R., Sikora, P., Tattini, J. and 
Neuwahl, F., JRC-IDEES-2021: the Integrated Database of the European Energy System – Data update and technical 
documentation, 
2024, 
the 
https://publications.jrc.ec.europa.eu/repository/handle/JRC137809. 

Luxembourg, 

Publications 

European 

Union, 

Office 

of 

26 

 
 
emissions from international aviation and navigation in the scope of the EU NDC, which are added 
to the national totals from the EU GHG inventory, are given in the annex of this report. 

Under the Governance Regulation each Member State must report to the Commission biennially on 
the status of implementation of its integrated national energy and climate plans (NECPs). This process 
allows the Commission to ensure that the EU and the Member States remain on track to achieve the 
climate-neutrality objective and progress on adaptation. 

Under the Governance Regulation, Member States operate national systems for policies, measures 
and projections and submit standardised information, which is subject to quality assurance and quality 
control. Based on the data submitted, the EEA compiles projections of GHG emissions and removals 
for the EU. This EU-wide information is summarised annually in the Commission’s Climate Action 
Progress Report46 and in the EEA’s Trends and Projections Report based on approximated inventories 
data of the previous year (n-1). 

2.1.2.2  Institutional arrangements for implementation of the NDC 

The EU and its Member States have set up a comprehensive system for the implementation of the EU 
climate change mitigation targets. The European Climate Law47 sets the goal of climate neutrality by 
2050 and the intermediate target of reducing net greenhouse gas emissions by at least 55% by 2030 
compared to 1990 levels. These targets cover emissions and removals that are regulated in the Union 
law. 

The 2030 climate and energy framework  were put in place to ensure that the EU and its Member 
States achieve their target. The main elements of this framework are: (i) the EU Emissions Trading 
System (EU ETS)48, which caps GHG emissions in energy, industry, aviation and maritime transport; 
(ii) the LULUCF Regulation, which includes national net removal targets for the LULUCF sector; 
and  (iii)  the  Effort-Sharing  Regulation  (ESR)  which  sets  national  reduction  targets  for  GHG 
emissions not covered by the EU ETS or the LULUCF Regulation. The implementation of the ESR 
is supported by additional sectoral policies and measures (details can be found in this report in the 
chapter on mitigation policies and measures). The legislative acts under the 2030 climate and energy 
framework require the European Commission and the EU Member States to set up the institutional 
arrangements for implementing the specific policies and measures under the framework. 

Progress in implementing these policies and measures is monitored under the Governance Regulation. 
Relevant  information,  which  is  reported  regularly  and  archived  by  the  EEA,  includes  GHG 
inventories,  approximated  GHG  inventories  for  the  previous  year,  information  on  policies  and 
measures, projections, and progress in implementing the integrated national energy and climate plans 

46  EU  Climate  Action  Progress  Report  2024,  https://climate.ec.europa.eu/document/download/d0671350-37f2-4bc4-

88e8-
088d0508fb03_en?filename=COM_2024_498_F1_REPORT_FROM_COMMISSION_EN_V4_P1_3729454.PDF 
47   Regulation (EU) 2021/1119 establishing the framework for achieving climate neutrality and amending Regulations 

(EC) No 401/2009 and (EU) 2018/1999 (‘European Climate Law’), http://data.europa.eu/eli/reg/2021/1119/oj. 

48   This refers to ETS1, i.e. the Emission Trading System for stationary sources (Chapter III of the ETS Directive) and 
for aviation and maritime transport (chapter II of the ETS Directive). Note that the ‘Emissions trading system for 
buildings, road transport and additional sectors’ (ETS2), added in 2023 as Chapter IVa of the ETS Directive, forms 
an instrument under the Effort Sharing Regulation (ESR). 

27 

 
 
(NECPs). This information helps the EU and its Member States to correct their course if progress 
towards the targets of the 2030 Climate and Energy Framework is behind schedule. As an example, 
the European Commission assesses the drafts of new or updated NECPs and gives recommendations 
on improving planning and implementation. In addition, the reported information is subject to quality 
checks, and the GHG inventories reported by EU Member States will be subject to comprehensive 
reviews in 2025, 2027 and 203249. 

All EU legislation, including the legislation under the 2030 climate and energy framework, is subject 
to a stakeholder engagement process. ‘Better regulation tools’ ensure that policy is based on evidence 
and  the  best  available  practice50.  During  the  preparation  of  a  legislative  proposal,  the  European 
Commission invites individuals, businesses and stakeholder organisations to provide their views on 
the subject dealt with by the new legislation. These comments are documented in a dedicated portal51, 
and  the  European  Commission  reports  on  how  it  takes  these  comments  into  account  in  the 
development of its legislative proposal. 

2.2  Description of the nationally determined contribution 
Under their updated NDC52 the EU and its Member States, acting jointly, are committed to a legally 
binding target of a domestic reduction of net greenhouse gas emissions by at least 55% compared to 
1990 by 2030. The term ‘domestic’ means without the use of international credits. 

The NDC consists of a single-year target, and the target type is ‘economy-wide absolute emission 
reduction’. The scope of the NDC covers the 27 Member States of the EU. Details of the EU NDC 
can be found in Table 1. 

NDC Scope 

The scope of the EU NDC updated on 17 October 2023 NDC scope includes a specific share of CO2 
emissions from flights subject to effective carbon pricing through the EU ETS and carbon dioxide, 
methane and nitrous oxide emissions for waterborne navigation voyages within the EU. 

This section provides further details on the inclusion of these emissions in the EU’s NDC. 

49   Consolidated text (2023) of Regulation (EU) 2018/1999 on the Governance of the Energy Union and Climate Action, 

https://eur-lex.europa.eu/eli/reg/2018/1999/2023-11-20.  

50   Decision-making process, https://ec.europa.eu/info/strategy/decision-making-process/how-decisions-are-made_en. 

51   Have your say – public consultation and feedback, https://ec.europa.eu/info/law/better-regulation/have-your-say_en. 

52   The  update  of  the  nationally  determined  contribution  of  the  European  Union  and  its  Member  States, 
https://unfccc.int/sites/default/files/NDC/2023-10/ES-2023-10-17%20EU%20submission%20NDC%20update.pdf. 

28 

 
 
 
 
International aviation 

EU NDC scope - International aviation: comprises emissions from civil aviation activities as set out 
for 2030 in Annex I to the EU ETS Directive only in respect of CO2 emissions from flights subject 
to effective carbon pricing through the EU ETS. With respect to the geographical scope of the NDC 
these comprise emissions in 2024-2026 from flights between the EU Member States and departing 
flights to Norway, Iceland, Switzerland and the United Kingdom. International aviation also covers 
CO2 emissions from non-domestic flights between EU Member States and the Outermost Regions 
(OMRs) (*)  

(*) From 1 January 2024, the revised EU ETS also covers non-domestic flights to and from outermost regions 
that were previously exempted. The outermost regions of the EEA Member Countries are: i) France: French 
Guiana, Guadeloupe, Martinique, Mayotte, Reunion, Saint Martin; ii) Spain: Canary Islands; iii) Portugal: 
Azores, Madeira. 

By July 2026, the Commission will make a legislative proposal to revise the EU ETS that will include 
the scope of the EU ETS for aviation. According to the revised EU ETS Directive, from 1 January 
2027, flights involving third countries not applying ICAO’s CORSIA scheme will also be covered by 
the EU ETS, except for flights involving most small island countries and Least Developed Countries. 
Depending on the assessment preparing the legislative proposal, the revised scope may be changed 
so that flights to third countries applying ICAO’s CORSIA scheme will also be covered by the EU 
ETS. Consequently, the target scope will be adjusted accordingly.   

Aviation emissions covered by the EU NDC scope  

Emissions 

Domestic aviation 

Intra-EEA aviation 

Extra-EEA aviation 

Domestic EU 
flights  
(e.g. Palermo 
Milan) 

Domestic 
“non-EU EEA” 
flights (e.g. Oslo 
to Bergen) 

Flights 
between “non-
EU EEA” 
countries 
(from Oslo to 
Reykjavik) 

Flights 
within the 
EEA, 
departing 
from EU 
airports 

Flights  
to/from EU 
airports to 
OMRs 

departing flights 
from EU airports to 
UK and Switzerland 

Current  NDC 
commitment 

Yes 

No 

No 

Yes 

Yes 
From Jan 2024 

Yes 

International maritime 

EU NDC Scope – international maritime for waterborne navigation: the EU NDC only covers CO2, 
methane  and  nitrous  oxide  emissions  from  voyages  within  the  EU  Member  States  for  maritime 
transport activities, so from voyages that depart in one Member State and arrive in a different Member 
State. (**) 

(**) For waterborne maritime 100% of emissions from voyages departing from a port under the jurisdiction of 
an EU Member State and arriving at a port under the jurisdiction of another EU Member State; iv) 100% of 
emissions within a port under the jurisdiction of an EU Member State. No size threshold was specified. 

This is not the EU ETS1 scope. Indeed, the EU ETS is broader as it covers 50% of the emissions from 
voyages starting or ending at EU port, emissions when ships are at berth in EU ports and all emissions 

29 

 
 
 
from voyages within the EU. The EU ETS only covers CO2 emissions in 2024-25 (and CH4 and N2O 
emissions  as  from  2026)  as  well  as  emissions  from  large  ships  (above  5  000  gross  tonnage) 
performing maritime transport activities. 

Maritime navigation emissions covered by the EU NDC  

Emissions 

Domestic maritime 
navigation 

International maritime navigation 

Within ports 

Voyages 
within a MS 
(e.g. 
Valencia - 
Barcelona) 

Voyages 
within 
NO/IS  
(e.g. Oslo - 
Bergen) 

Voyages 
between 
two EU 
MS 
(e.g. 
Valencia - 
Rotterdam) 

Voyages 
between 
a MS 
and 
NO/IS 
(e.g. 
Rotterdam 
- Oslo) 

Voyages 
between 
an EU 
MS and 
a third 
country 

Voyages 
between 
NO/IS 
and a 
third 
country 
(or IS/NO) 

 emissions 
within a 
port of an 
EU MS 
(reported 
under domestic 
emissions) 

emissions 
within a 
port of 
NO or IS  
(or 
another 
third 
country) 

Yes 

No 

Yes 

No 

No 

No 

Yes 

No 

Current  NDC 
commitment 
(CO2; CH4; N2O) 

30 

 
 
 
 
 
Table 1: Description of the NDC of the EU 

Information 

Description 

Target and 
description 

Economy-wide net domestic reduction of at least 55% in greenhouse gas emissions by 2030 
compared to 1990. The term ‘domestic’ means without the use of international credits. 

Target type 

Economy-wide absolute emission reduction. 

Target year 

2030 (single-year target) 

Base year 

1990 

Base year value  Net greenhouse gas emissions level in 1990: 4 699 405 kt CO2eq. 

Implementation 
period 

2021-2030 

Geographical 
scope 

EU Member States (Belgium, Bulgaria, Czechia, Denmark, Germany, Estonia, Ireland, Greece, 
Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Hungary, Malta, 
Netherlands, Austria, Poland, Portugal, Romania, Slovenia, Slovakia, Finland, Sweden) including 
EU outermost regions (Guadeloupe, French Guiana, Martinique, Mayotte, Reunion, Saint-Martin 
(France), Canary Islands (Spain), Azores and Madeira (Portugal)). 

Sectors as contained in Annex I to decision 5/CMA.3: Energy, Industrial processes and product 
use, Agriculture, Land Use, Land Use Change and Forestry (LULUCF), Waste.  
International Aviation: emissions from civil aviation activities as set out for 2030 in Annex I to 
the EU ETS Directive are included only in respect of CO2 emissions from flights subject to 
effective carbon pricing through the EU ETS. With respect to the geographical scope of the NDC, 
these comprise emissions in 2024-26 from flights between the EU Member States and departing 
flights to Iceland, Norway, Switzerland and the United Kingdom. 
International maritime navigation: waterborne navigation is included in respect of CO2, methane 
(CH4) and nitrous oxide (N2O) emissions from maritime transport journeys between the EU 
Member States. 

Carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), 
perfluorocarbons (PFCs), sulphur hexafluoride (SF6), nitrogen trifluoride (NF3) 

The included LULUCF categories and pools are as defined in decision 5/CMA.3. 

The EU’s net reduction target of at least 55% by 2030 is to be achieved through domestic measures 
only, without contribution from international credits. 
The EU will account for cooperation with other parties in a manner consistent with the guidance 
adopted by CMA1 and any further guidance agreed by the CMA. 

The information on the scope of the NDC contains clarifications/further details compared to the 
information provided in the updated NDC of the EU.   

Sectors 

Gases 

LULUCF 
categories and 
pools 

Intention to use 
cooperative 
approaches 

Any updates or 
clarifications of 
previously 
reported 
information, as 
applicable 

Note: This table is identical to the table ‘Description of a Party’s nationally determined contribution under 
Article 4 of the Paris Agreement, including updates’, which has been submitted electronically together with 
this BTR. 

31 

 
 
Source: Updated NDC of the EU53 

As specified in Table 1, the NDC covers the emissions and removals from all sectors of the EU GHG 
inventory.  In  addition,  CO2  emissions  from  specific  international  flights  (covered  by  the  EU 
Emissions Trading System) and GHG emissions from maritime voyages between EU Member States 
are included in the scope of the NDC.  

2.3  Indicator, definitions, methodologies and progress 
2.3.1  Indicator 

To track progress in implementing and achieving the NDC of the EU, an indicator is used which has 
the same unit and metric as the NDC base year and target values. The chosen indicator is ‘annual total 
net  GHG  emissions  consistent  with  the  scope  of  the  NDC  in  CO2eq’.  Table  2  provides  more 
information on this indicator. 

Table 2: Indicator to track progress 

Information 

Description 

Selected indicator  Annual total net GHG emissions (in CO2eq) consistent with the scope of the NDC. 

Reference level 
and base year 

The reference level is the total net GHG emissions of the EU in the base year (1990). The reference 
level value for the EU is 4 699 405 kt CO2eq. 

Updates 

This is the first time the reference level has been reported, hence there are no updates.  
The value of the reference level may be updated in the future because of methodological 
improvements to the EU GHG inventory and to the determination of international aviation and 
navigation emissions within the scope of the NDC. 

Relation to the 
NDC 

The indicator is defined in the same unit and metric as the target of the NDC. Hence it can be used 
directly to track progress in implementing and achieving the NDC target. 

Definitions 

Definition of the indicator ‘annual total net GHG emissions in CO2eq’: 
total net GHG emissions correspond to the annual total of emissions and removals reported in CO2 
equivalents in the latest GHG inventory of the EU. The totals comprise all sectors and gases listed 
in the table entitled ‘Reporting format for the description of a Party’s nationally determined 
contribution under Article 4 of the Paris Agreement, including updates.’ 

Note: The information in this table is identical to the information in common tabular format (CTF) Tables 1 
(‘Description  of  selected  indicators’)  and  2  (‘Definitions  needed  to  understand  the  NDC’),  which  were 
submitted electronically together with this BTR. 

Source: The reference level is based on the Annual European Union GHG inventory 1990-2022. 

2.3.2  Methodologies and accounting approach 

The EU and its Member States use the following accounting approach for tracking progress towards 
the  EU  NDC:  annual  GHG  data  from  the  national  GHG  inventory  of  the  EU,  complemented  for 
international  aviation  and  navigation  by  estimates  from  the  Joint  Research  Centre’s  Integrated 

53   The  update  of  the  nationally  determined  contribution  of  the  European  Union  and  its  Member  States, 
https://unfccc.int/sites/default/files/NDC/2023-10/ES-2023-10-17%20EU%20submission%20NDC%20update.pdf. 

32 

 
 
Database of the European Energy System54. The total net GHG emissions are provided in the scope 
of the EU NDC and are compared to the economy-wide absolute emission reduction target as defined 
in the NDC. The EU will account for its cooperation with other parties in a manner consistent with 
guidance adopted by the Conference of the Parties serving as the meeting of the Parties to the Paris 
Agreement (CMA). 

For emissions and removals from the LULUCF sector, net emissions are used for tracking progress 
towards the 2030 target of the NDC based on all reported emissions and removals. 

Details on methodologies and accounting approaches consistent with the accounting guidance55 under 
the Paris Agreement can be found in  CTF Table 3 (‘Methodologies and accounting approaches’), 
which was submitted electronically together with this BTR. 

2.3.3  Structured summary – status of progress 

An important purpose of the BTR is to demonstrate where the EU and its Member States stand in 
implementing their NDC, and what progress they have made towards achieving it. The most recent 
data on GHG emissions and removals in the scope of the NDC constitute the key information for 
tracking this progress. Table 3 summarises the current status of progress. 

Table 3: Summary of progress towards implementing and achieving the NDC  

Unit 

Base year 
value 

Values in the implementation 
period 

2021 

2022 

2030 

Indicator: total net 
GHG emissions 
consistent with the 
scope of the EU 
NDC 

kt 
CO2eq 

NA: not applicable. 

4 699 405  3 272 650  3 205 223  NA 

Target level 

Target 
year 

Progress made 
towards the NDC 

At least 55% 
below base 
year level 

2030 

The most recent 
level of the 
indicator is 31.8% 
below the base 
year level. 

Note  that  an  annual  emissions  balance  consistent  with  chapter  III.B  (Application  of  the  corresponding 
adjustment) will be provided in a subsequent BTR after the CMA finalises further relevant guidance, based on 
the annual information reported under Article 6.2. 

More detailed information can be found in CTF Table 4 (‘Structured summary: tracking progress made in 
implementing and achieving the NDC under Article 4 of the Paris Agreement’), which has been submitted 
electronically together with this BTR. 

Source: the indicator values are based on the annual European Union GHG inventory 1990-2022. 

54   European Commission, Joint Research Centre, Rózsai, M., Jaxa-Rozen, M., Salvucci, R., Sikora, P., Tattini, J. and 
Neuwahl, F., JRC-IDEES-2021: the Integrated Database of the European Energy System – Data update and technical 
documentation, 
2024, 
the 
https://publications.jrc.ec.europa.eu/repository/handle/JRC137809. 

Luxembourg, 

Publications 

European 

Union, 

Office 

of 

55   Decision  4/CMA.1,  Further  guidance 
https://unfccc.int/documents/193407. 

in 

relation 

to 

the  mitigation 

section  of  decision  1/CP21, 

33 

 
 
 
Based on the GHG inventory data and data on international aviation and maritime navigation in the scope of 
the NDC for 2022, the EU and its Member States have reduced net GHG emissions by 31.8 % compared to 
1990. This demonstrates that the EU and its Member States have made progress in implementing and achieving 
their NDC. The legal and institutional framework is in place to make further progress in the years ahead and 
to achieve the NDC target by 2030. 

2.4  Mitigation policies and measures 
2.4.1  Introduction 

In  order  to  mitigate  global  climate  change,  there  is  an  urgent  need  to  reduce  the  emissions  of 
greenhouse  gases  and  to  remove  more  greenhouse  gases  by  sinks.  The  European  Union  and  its 
Member  States  have  implemented  mitigation  policies  and  measures  for  many  years,  which  have 
successfully contributed to the reduction of greenhouse gas emissions in recent years. These include 
the EU Emissions Trading System (EU ETS) and a wide range of policies and measures addressing 
all sectors of the economy. 

To ensure that the EU and its Member States will achieve their updated NDC target of an economy-
wide  net  domestic  emission  reduction  of  at  least  55%  by  2030  compared  to  1990,  the  EU  has 
strengthened and expanded its climate change policies and measures. 

The  European  Green  Deal,  a  comprehensive  and  holistic  plan  to  become  the  first  climate  neutral 
continent by 2050, was adopted in 2020. It acts as a catalyst for more ambitious targets and policies 
and measures. 

2.4.1.1  The 2030 climate and energy framework 

The EU’s 2030 climate and energy framework were created to ensure that the EU and its Member 
States  achieve  their  climate  change  mitigation  commitments  under  the  Paris  Agreement,  as 
communicated in the EU’s NDC. The main elements of this framework are the EU ETS, the ESR and 
the LULUCF Regulation. Details on this legislation can be found in sections 2.4.2 and 2.4.7.1. 

The  2030  framework  was  first  established  in  line  with  the  EU’s  original  NDC  of  2015,  which 
stipulated a 40% reduction in GHG emissions by 2030 compared to 199056. In 2020, the EU and its 
Member  States  updated  their  NDC  and  committed  to  a  net  reduction  of  at  least  55%  by  2030 
compared to 199057. To meet this more ambitious target, a comprehensive package of legislation (the 
‘Fit for 55 package’) was adopted in 2023 and 2024. Only the adoption of the energy taxation directive 
is still pending. The key items in this legislative package are: 

•  more rapid emission reductions under the EU ETS up to 2030 and an extension of the ETS to 

maritime transport emissions; 

•  a more ambitious emissions reductions to be achieved by EU Member States by 2030 under 

the ESR; 

56 Intended nationally determined contribution of the EU and its Member States, https://unfccc.int/sites/default/files/LV-
03-06-EU%20INDC.pdf. 
57 The update of the nationally determined contribution of the European Union and its Member States, 
https://unfccc.int/sites/default/files/NDC/2022-06/EU_NDC_Submission_December%202020.pdf. 

34 

 
 
•  a more ambitious renewable energy and energy efficiency targets; 

•  various updates to existing legislation, such as stricter CO2 emission standards for cars; and 

•  new measures, including a carbon border adjustment mechanism, a new and separate ETS for 
road transport, buildings and small industry not covered by the existing ETS together with a 
social climate fund, a methane regulation and updated EU rules to decarbonise gas markets 
and promote hydrogen. 

More information on these initiatives can be found in the following sections. 

The  Regulation  on  the  Governance  of  the  Energy  Union  and  Climate  Action  (‘the  Governance 
Regulation’)58, is a critical piece of legislation that sets common rules for the planning, reporting and 
monitoring of progress towards its 2030 climate and energy targets and its international commitments 
under  the  Paris  Agreement.  The  Governance  Regulation  requires  EU  Member  States  to  draft, 
communicate  and  implement  integrated  NECPs  and  to  regularly  report  on  their  progress  in 
implementing them. The Governance Regulation also sets out the detailed reporting obligations on 
GHG emissions, policies and measures, projections, adaptation and support provided to developing 
countries. 

2.4.1.2  The EU’s long-term strategy and the Climate Law 

In addition to the 2030 target, the EU and its Member States committed to the objective of a climate-
neutral  EU  by  2050.  This  objective  was  agreed  by  the  European  Council  in  December  2019  and 
communicated in March 2020 as the EU’s long-term low GHG emissions development strategy under 
the Paris Agreement59. With the submission of its long-term strategy, the EU became the first large 
economy  that  committed  to  economy-wide  climate  neutrality.  In  addition  to  the  EU  as  a  whole, 
several Member States communicated their own long-term strategies under the Paris Agreement60. 

The EU long-term strategy (“Clean Planet for All”, Nov 2018) for the reduction of greenhouse gas 
emissions, as requested by the European Council in March 2018, confirms the EU’s lead in global 
climate action. The strategy presents a vision to achieve climate neutrality by 2050, through a fair 
transition encompassing all sectors of the economy. It mentions seven strategic priorities, including 
reaping the full benefits of bioeconomy and creating essential carbon sinks. 

The  binding  objective  of  climate  neutrality  by  2050  is  enshrined  in  the  European  Climate  Law61, 
which entered into force in July 2021. The European Climate Law also contains the 2030 climate 
target of reducing domestic emissions by at least 55% compared to 1990. It constitutes a net target, 

58 Regulation (EU) 2018/1999 on the Governance of the Energy Union and Climate Action, 
http://data.europa.eu/eli/reg/2018/1999/oj. 

59 Long-term low greenhouse gas emission development strategy of the European Union and its Member States, 
https://unfccc.int/sites/default/files/resource/HR-03-06-
2020%20EU%20Submission%20on%20Long%20term%20strategy.pdf. 

60 Communication of long-term strategies, https://unfccc.int/process/the-paris-agreement/long-term-strategies. 

61 Regulation (EU) 2021/1119 establishing the framework for achieving climate neutrality and amending Regulations 
(EC) No 401/2009 and (EU) 2018/1999 (‘European Climate Law’), http://data.europa.eu/eli/reg/2021/1119/oj. 

35 

 
 
i.e.  removals  of  CO2  from  the  atmosphere  are  taken  into  account.  However,  the  total  amount  of 
removals which can be counted towards the achievement of the target is limited to a maximum of 
225 megaton (Mt) CO2eq. 

The European Climate Law also sets out the process for developing the 2040 climate target, which 
will take into account  an indicative greenhouse gas budget  for 2030 to  2050. Based on a detailed 
impact assessment62 and the advice of the European Scientific Advisory Board on Climate Change 
set up by the Climate Law, on 6 February 2024 the European Commission presented its 2040 climate 
target  communication and recommended  reducing  the EU’s net  GHG emissions  by 90% by 2040 
relative to 199063. Based on the scenarios presented in the impact assessment, this requires a further 
deployment of carbon capture, substantial reductions of GHG emissions in the land sector and a fully 
developed carbon management industry by 2040. Carbon capture will need to cover all emissions 
from industrial processes emissions and deliver sizeable carbon removals. In addition, high levels of 
production and consumption of e-fuels will be necessary to further decarbonise the energy mix.  

Finally, the European Climate Law requires the EU and Member States to adopt adaptation strategies 
and sets out the rules for assessing progress towards the climate targets. 

2.4.1.3  The environment action programmes 

The overall environment policy of the European Union is guided by environment action programmes. 

The eighth environment action programme, which entered into force in May 2022, constitutes the 
EU’s  legally  agreed  common  agenda  for  environment  policy  up  to  2030.  It  contains  six  priority 
objectives, several of which are directly related to climate action: 

•  achieving the 2030 GHG emission reduction target and climate neutrality by 2050; 

•  enhancing  adaptive  capacity,  strengthening  resilience  and  reducing  vulnerability  to  climate 

change; 

•  advancing towards a regenerative growth model, decoupling economic growth from resource 
use and environmental degradation, and accelerating the transition to a circular economy; 

•  pursuing a zero-pollution ambition, including for air, water and soil, and protecting people’s 

health and well-being; 

•  protecting, preserving and restoring biodiversity, and enhancing natural capital; and 

• 

reducing environmental and climate pressures relating to production and consumption. 

The  Commission,  assisted  by  the  European  Environment  Agency  and  the  European  Chemicals 
Agency,  monitors,  assesses  and  reports  annually  on  progress  towards  these  priority  objectives.  In 

62 Communication from the Commission: Securing our future – Europe’s 2040 climate target and path to climate 

neutrality by 2050, https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52024SC0063. 

63 Communication from the Commission: Securing our future – Europe’s 2040 climate target and path to climate 
neutrality by 2050, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A2024%3A63%3AFIN. 

36 

 
 
March  2024,  a  mid-term  evaluation64  of  the  environment  action  programme  was  completed.  The 
review noted that good progress had been made towards the target of reducing net GHG emissions 
but called for greater ambition if the EU is to achieve almost three times the average annual reduction 
rate of the last decade, especially in the buildings and transport sectors. It also emphasised the need 
for a significant increase in carbon removals. A full evaluation will be carried out by 2029. 

2.4.1.4  Cross-cutting and sectoral policies and measures 

The following sections  provide an overview of EU policies and measures in  all economic sectors 
including cross-cutting policies and measures. They focus on the policies and measures currently in 
place, outline some pending legislative proposals and provide information on planned updates. 

The policies and measures presented in this report focus on the EU level. Additional policies and 
measures are implemented at the national, subnational and local levels. Policies at EU level provide 
the  overall  framework  and  help  to  ensure  that  the  EU  and  its  Member  States  will  meet  their 
commitment  to  reduce  greenhouse  gas  emissions.  Each  EU  Member  State  implements  its  own 
policies within this framework. Details on each EU Member State’s policies and measures can be 
found in the transparency reports produced every 2 years and in national communications submitted 
by these countries under the UNFCCC65. 

This chapter is structured as follows: 

•  Section 2.4.2 provides details on the EU’s cross-cutting policies and measures, including the 
EU Emissions Trading System, effort-sharing legislation and other strategies and funds that 
contribute to climate change mitigation. 

•  Sections 2.4.3 to 2.4.8 describe the EU policies and measures in each economic sector. 

In addition to the description of policies and measures in this chapter, structured information on each 
policy and measure can be found in the common tabular format (CTF) tables attached to this report. 
CTF Table 5 includes the following for each policy and measure: 

• 

• 

• 

• 

• 

the name and a brief description; 

the sector(s) and greenhouse gas(es) concerned; 

the type of instrument (regulatory, fiscal, economic, etc.); 

the status (planned, adopted, implemented) and year of implementation; 

the body or bodies responsible for implementation; and 

•  an estimate of the mitigation impact, if available. 

These policies and measures are closely interlinked. For example, the targets under the EU effort-
sharing  legislation  can  only  be  met  if  various  EU  and  national  policies  are  implemented  across 

64 Report from the Commission on the eighth environment action programme mid-term review, COM/2024/123 final, 
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52024DC0123. 
65 First biennial transparency reports, https://unfccc.int/first-biennial-transparency-reports. 

37 

 
 
different sectors, and it is difficult to attribute a planned or achieved emission reduction to a specific 
policy and measure. In many cases, it is not possible to estimate the mitigation impact of a single 
policy or measure. The main reasons why such estimates are not available are the following: 

•  No  policy  can  be  singled  out  as  there  are  numerous  co-benefits  from  policies  specifically 

targeting climate change and other sectoral policies. 

• 

• 

Impact assessments are conducted for all proposals for new EU legislation; however, the final 
legislation may differ from the proposal and may combine various options examined in the 
impact assessment.  

Impact assessments consider a combination of policies and measures. For example, the impact 
assessment for the 2030 climate and energy framework considered a combination of measures 
to  increase  energy  efficiency  and  renewable  shares  and  initiatives  to  complement  and 
strengthen other legislation. 

•  Some policies and measures focus on electricity consumption, and quantitative information on 
reductions in electricity consumption is available. However, the impact of these policies and 
measures  on  GHG  emissions  depends  on  the  electricity  mix,  which  is  influenced  by  other 
European and national policies and changes over time. 

2.4.2  Cross-cutting policies and measures 

The main EU cross-cutting measures under the 2030 climate and energy framework are the EU ETS 
and the Effort-Sharing Regulation. They are complemented by other cross-cutting policies, initiatives 
and funds. 

2.4.2.1  EU Emissions Trading System 
The EU ETS66 works on the ‘cap-and-trade’ principle. A cap is set on the total amount of certain 
greenhouse gases that may be emitted by the installations covered by the system. The cap is reduced 
over time so that total emissions fall. Within the cap, operators must surrender enough allowances to 
cover their emissions and can trade allowances with each other if necessary. The EU ETS came into 
operation in 2005. The second phase ran from 2008 to 2012, and the third phase ran from 2013 to 
2020, contributing substantially to EU-wide reductions in GHG emissions by 2020. The fourth phase 
of the EU ETS runs from 2021 to 2030. 

The EU ETS applies to electricity generation in all EU countries plus Iceland, Liechtenstein, Norway 
and Northern Ireland. The EU ETS limits emissions from around 10 000 installations in the power 
and  heat  sector  and  the  manufacturing  industry  and  from  airlines  operating  within  the  EU  and 
departing to Switzerland and the United Kingdom. In 2022, those emissions accounted for 37% of 
the EU’s total GHG emissions67. Since 2020, the EU ETS has been linked to the Swiss ETS under an 
agreement with Switzerland. As of 2024, the EU ETS also covers emissions from maritime transport. 

66 Directive 2003/87/EC establishing a system for greenhouse gas emission allowance trading within the Union, as 
amended, https://eur-lex.europa.eu/eli/dir/2003/87/2024-03-01. 
67   Greenhouse gas emissions under the EU Emissions Trading System, 

https://www.eea.europa.eu/en/analysis/indicators/greenhouse-gas-emissions-under-the. 

38 

 
 
Figure 25 provides an overview of verified emissions in the EU Member States in 2022. The share of 
combustion  emissions,  other  stationary  emissions  and  aviation  emissions depends  on  the  types  of 
major industries and the main sources of electricity and heat generation, and on whether the Member 
State  administers  a  major  airline.  Total  verified  EU  ETS  emissions  in  2022  amounted  to 
1 333 Mt CO2eq. For reference, the figure also includes emissions of EU ETS participants outside the 
EU, namely Iceland, Norway, Liechtenstein and Northern Ireland. 

Figure 25:EU ETS emissions in 2022 

Note:  Switzerland’s  ETS  emissions  amounted  to  5.7  Mt  of  CO2eq  in  202268.  This  value  is  provided  for 
information as the Swiss ETS is outside the EU ETS, but an agreement links the two systems. 

Source: European Environment Agency69 

The EU ETS covers the following gases and sectors, focusing on emissions that can be measured, 
reported and verified with a high degree of accuracy: 

•  carbon dioxide (CO2) from 

o  electricity and heat generation; 
o  energy-intensive sectors, including oil refineries, steelworks and factories producing iron, 
aluminium, metals, cement, lime, glass, ceramics, pulp, paper, cardboard, acids and bulk 
organic chemicals; 
the capture and transport of CO2 for geological storage in sites permitted under the EU 
Carbon Capture and Storage Directive (see 2.4.2.5); 

o 

68   Swiss Emissions Trading Registry, https://www.emissionsregistry.admin.ch/crweb/public. 
69   EU Emissions Trading System (ETS) data viewer, https://www.eea.europa.eu/data-and-maps/dashboards/emissions-

trading-viewer-1. 

39 

050100150200250300350400PortugalSlovakiaHungarySwedenFinlandIrelandRomaniaAustriaGreeceBulgariaBelgiumCzechiaNetherlandsFranceSpainItalyPolandGermanyVerified ETS emissions (Mt CO2eq)0510152025303540N. IrelandLiechtensteinIcelandNorwayMaltaLuxembourgLatviaCyprusSloveniaLithuaniaCroatiaEstoniaDenmarkVerified ETS emissions (Mt CO2eq)Stationary - combustionStationary - otherAviationNote: Scaleis enlarged by a factor of ten compared to the scale to the left.ETS participants outside the EU. 
 
 
o  aviation, limited to flights within the European Economic Area70 and flights departing to 

Switzerland and the United Kingdom; 

o  maritime  transport,  and  more  specifically  50%  of  emissions  from  voyages  from  third 
countries  to  the  EU  and  from  the  EU  to  third  countries  and  100%  of  emissions  from 
voyages between two EU ports and when ships are in EU ports71; 

•  nitrous oxide (N2O) from the production of nitric, adipic and glyoxylic acids and glyoxal; and 
•  perfluorocarbons (PFCs: CF4 and C2F6) from the production of aluminium. 

Participation in the EU ETS is mandatory for companies in these sectors, but in some sectors only 
installations  above  a  certain  size  are  included.  From  2024,  municipal  waste  incinerators  above  a 
certain threshold also need to monitor and report their emissions under the EU ETS72. 

The legal framework of the EU ETS is set out in the ETS Directive. The Directive was revised in 
2018 to ensure emission reductions that help to meet the 2030 Climate and Energy Framework target. 
Following the update of the EU’s 2030 GHG emissions reduction target from -40% to -55% under 
the  2030  Climate  and  Energy  Framework,  the  ETS  Directive  and  related  legislation  were  revised 
again in 2023 to ensure that the EU ETS can contribute substantially to  the more ambitious 2030 
target. The revisions, most of which came into effect on 1 January 2024, focused on: 

• 

tightening the EU ETS cap to bring down emissions by 62% compared with 2005 levels by 
2030; 
including emissions from maritime transport in the system; 
reducing and eliminating free allocation in the manufacturing industry and aviation; 

• 
• 
•  strengthening the Market Stability Reserve; 
• 

introducing a new emissions trading system (ETS2) for buildings, road transport and other 
sectors from 2027 (see 2.4.2.2); 

•  setting up the Social Climate Fund to address the social impacts of ETS273. 

As shown in Figure 26, the sectors covered by the stationary ETS have shown decreasing emissions 
in recent years. 

70   The European Economic Area consists of the EU, Norway, Iceland and Liechtenstein. 
71   As of 2026, the EU ETS will also cover methane (CH4) and nitrous oxide (N2O) emissions from maritime transport. 

The NDC covers emissions from maritime transport voyages between the EU Member States 

EU Emissions Trading System (EU ETS), https://ec.europa.eu/clima/eu-action/eu-emissions-trading-system-

72  
eu-ets_en. 
73   Report from the Commission to the European Parliament and the Council on the functioning of the European carbon 
market in 2022 as required by Articles 10(5) and 21(2) of Directive 2003/87/EC, COM(2023)654 final, https://eur-
lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52023DC0654. 

40 

 
 
Figure 26: ETS emissions in the EU, 2012-2022  

Source: European Environment Agency74 

Greenhouse gas (GHG) emissions from sectors covered by the EU ETS can be estimated with a high 
degree of accuracy as they are subject to detailed monitoring, reporting and verification. However, 
the impact of the implementation of the EU ETS on GHG emissions compared with a hypothetical 
situation where the EU ETS is not implemented is difficult to estimate. This is due to the interaction 
of several factors, such as GDP growth, the impact of other instruments such as the Renewable Energy 
and Energy Efficiency Directives and the impact of specific policies and measures adopted by EU 
Member States. As a result, there is no comprehensive ex post or ex ante evaluation available of the 
impact that the EU ETS has on GHG emissions alone. This report considers an ‘illustrative impact’ 
of the EU ETS on stationary installations in EU Member States by applying the overall EU ETS target 
(-62%) to the base year emissions from stationary installations. ETS emissions in 2005 are available 
from the EU ETS data viewer 75 and have been corrected upwards to reflect the current scope of the 
EU  ETS  (new  countries,  activities  and  gases  have  been  included  in  the  EU  ETS  since  2005). 
Illustrative GHG emissions consistent with the target can be estimated by applying the ETS targets 
of -62% to the 2005 emissions level, as shown in Table 4. 

Table 4: Illustrative impact of the implementation of the EU ETS in 2030 on stationary sectors 

Year 

Base year (2005) GHG 
emissions 

Reduction target 

Impact on GHG emissions 

2030 

2 059 Mt CO2eq 

-62% 

-1 276 Mt CO2eq 

Note:  GHG  emissions  and  illustrative  impacts  shown  here  include  stationary  installations  located  in  EU 
Member States only. 

74 EU Emissions Trading System (ETS) data viewer,  https://www.eea.europa.eu/data-and-maps/dashboards/emissions-

trading-viewer-1. 

75 Ibid. 

41 

 0 200 400 600 8001 0001 2001 4001 6001 8002013201420152016201720182019202020212022Verified ETS emissions (Mt CO2eq)AviationStationary - otherStationary - combustion 
 
 
Source: EU ETS data viewer, Directive 2003/87/EC as amended 

The latest verified ETS emissions reported by Member States show a 15.5% decrease in emissions in 
2023  relative  to  2022  levels.  The  decrease  was  mainly  due  to  lower  emissions  from  electricity 
production, resulting from an increase in renewable electricity production. ETS emissions in 2023 
were  47%  below  2005  levels76  and  are  therefore  well  on  track  to  meet  the  2030  target  of  a  62% 
reduction across the sectoral and geographical scope of the ETS. 

2.4.2.2  Emissions Trading System 2 
In 2023, a new emissions trading system (ETS2)77 was introduced, which also covers CO2 emissions 
from  road  transport,  buildings  and  small  industries  not  covered  by  the  existing  EU  ETS.  The 
introduction  of  carbon  pricing  in  those  sectors  will  provide  a  market  incentive  for  investments  in 
building renovations and low-emission mobility. Like the existing EU ETS, ETS2 is a ‘cap-and-trade’ 
emission mechanism, but it will address fuel suppliers rather than end consumers such as households 
or car users. Fuel suppliers will have to monitor and report emissions from fuels supplied by them 
and buy sufficient allowances at auctions to cover these emissions. The ETS2 cap will be set in such 
a way as to bring emissions down by 42% by 2030 compared with 2005 levels. Part of the revenues 
will be earmarked for the Social Climate Fund (see 2.4.2.11), and EU Member States will be required 
to use their remaining revenues for climate action and social measures. The annual monitoring and 
reporting cycle will start on 1 January 2025. 

By then, regulated entities covered by ETS2 are required to have a greenhouse gas emissions permit 
and an approved monitoring plan for monitoring and reporting on their annual emissions. Every year, 
they must report on their emissions in the previous year by 30 April. From 2026, the reported data 
for a given year will have to be verified by an accredited verifier. From 2028, once the annual verified 
emissions are reported, regulated entities will have to surrender an equivalent number of allowances 
by 31 May of that year. Over the course of 2027, an additional 30% of allowances will be auctioned 
to provide market liquidity. ETS2 is expected to become fully operational in 2027. However, if gas 
or oil prices are exceptionally high in 2026, the launch of the ETS2 system could be postponed until 
2028 to ensure a smooth implementation. 

2.4.2.3  The Carbon Border Adjustment Mechanism (CBAM) 
The  CBAM  was  established  by  Regulation  (EU)  2023/956  (CBAM  Regulation)78  as  part  of  the 
European Green Deal and was introduced to put a price on GHGs emitted during the production of 
carbon-intensive goods imported into the EU and to encourage cleaner industrial production in non-
EU countries79. 

76 Record reduction in 2023 ETS emissions due largely to boost in renewable energy, https://climate.ec.europa.eu/news-

your-voice/news/record-reduction-2023-ets-emissions-due-largely-boost-renewable-energy-2024-04-03_en. 
77 ETS2: buildings, road transport and additional sectors, https://climate.ec.europa.eu/eu-action/eu-emissions-trading-

system-eu-ets/ets2-buildings-road-transport-and-additional-sectors_en. 

78 Regulation (EU) 2023/956 establishing a carbon border adjustment mechanism, 
http://data.europa.eu/eli/reg/2023/956/oj. 
79   Carbon Border Adjustment Mechanism (CBAM), https://trade.ec.europa.eu/access-to-markets/en/news/carbon-
border-adjustment-mechanism-cbam. 

42 

 
 
The CBAM is  being  introduced in  phases. The transitional phase started in 2023 and is  based on 
Commission  Implementing  Regulation  (EU)  2023/177380.  It  introduces  the  new  mechanism 
gradually,  requiring  only  that  the  reporting  of  GHG  emissions  be  embedded  in  imports,  without 
imposing financial obligations. The transitional phase (2023-2026) covers the following sectors that 
are  most  at  risk  of  carbon  leakage:  cement,  iron  and  steel,  aluminium,  fertilisers,  electricity  and 
hydrogen. The final phase of CBAM will enter into force in January 2026 and will be phased in as 
free allocation in the respective sectors under the EU ETS is phased out. 

Under the final CBAM arrangements, importers of goods in the CBAM sectors will be required to 
register with national authorities. They will also need to purchase CBAM certificates corresponding 
to the carbon price that would have been paid if the goods had been produced under the EU's carbon 
pricing rules. EU importers will then report the emissions embedded in their imports and surrender a 
corresponding number of CBAM certificates to cover them81. 

2.4.2.4  Effort-sharing legislation 

For sectors outside the scope of the EU ETS and the LULUCF Regulation, binding annual greenhouse 
gas emission targets have been set for the EU Member States. These sectors, which include transport, 
buildings, agriculture, non-ETS industries and waste, account for almost 60% of total domestic EU 
emissions.  The  effort-sharing  legislation  set  binding  annual  greenhouse  gas  emission  targets  for 
Member States for 2013–2020 and 2021–2030. 

For the period up to 2020, the Effort-Sharing Decision82 (ESD) set a reduction target of around 10% 
relative to 2005 levels by 2020 for total EU emissions from the sectors covered by the legislation. 
National targets under the ESD ranged from -20% to +20% below 2005 emissions. In 2020, the EU’s 
emissions  in  the  effort-sharing  sectors  were  16.3%  lower  than  in  2005.  This  means  that  the  EU 
overachieved its 2020 ESD target by six percentage points83. 

The Effort-Sharing Regulation (ESR)84, which covers the period up to 2030, was adopted in 2018. 
It originally required economic sectors not covered by the EU ETS to contribute to the overall target 
by reducing emissions by 30% relative to 2005 levels by 2030. The resulting 2030 targets ranged 
from  0%  to 40%  below  2005  levels.  Following  the  update  of  the  EU’s  2030  GHG  emissions 
reduction target from (gross) -40% to (net) -55% as part of the European Green Deal, the ESR was 
amended85 in 2023. As a result, the effort-sharing sectors are required to collectively contribute to a 

80 Commission Implementing Regulation (EU) 2023/1773 of 17 August 2023 laying down the rules for the application of 
Regulation (EU) 2023/956, http://data.europa.eu/eli/reg_impl/2023/1773/oj. 
81  Carbon  Border  Adjustment  Mechanism, 
mechanism_en. 
82  Decision  No  406/2009/EC  on  the  effort  of  Member  States  to  reduce  their  greenhouse  gas  emissions  to  meet  the 
Community’s greenhouse gas emission reduction commitments up to 2020, http://data.europa.eu/eli/dec/2009/406/oj. 
83   Effort  sharing  2013-2020:  targets,  flexibilities  and  results,  https://climate.ec.europa.eu/eu-action/effort-sharing-

https://taxation-customs.ec.europa.eu/carbon-border-adjustment-

member-states-emission-targets/effort-sharing-2013-2020-targets-flexibilities-and-results_en. 

84 Regulation (EU) 2018/842 on binding annual greenhouse gas emission reductions by Member States from 2021 to 2030 
contributing 
amended, 
http://data.europa.eu/eli/reg/2018/842/2023-05-16. 
85 Ibid. 

the  Paris  Agreement, 

commitments  under 

to  meet 

climate 

action 

as 

to 

43 

 
 
40% reduction in GHG emissions at EU level by 2030, with Member States’ targets ranging from -
10% to -50% below 2005 levels. 

The  ESR  accounts  for  Member  States  having  different  capacities  to  take  action  by  setting 
differentiated targets depending on their GDP per capita and requiring higher-income Member States 
to contribute more to the EU target. However, an approach for higher-income Member States based 
solely on relative GDP per capita, like that used for the Member States’ 2020 targets, would mean 
that some of them would incur relatively high costs to reach their targets. Therefore, the targets have 
been adjusted to ensure cost-effectiveness for Member States with an above-average GDP per capita. 
In addition to the EU Member States, Iceland and Norway have agreed to implement the ESR and to 
commit to binding annual emission allocations for 2021 to 203086. 

The ESR maintained most of the flexibilities introduced by its predecessor, the ESD. In years with 
emissions below their annual allocations, Member States can bank surpluses for use in later years. 
For high cumulative surpluses, banking limits have been added. In years with emissions above the 
annual limit, Member States can borrow a limited amount of allocations from the following year. This 
allows Member States flexibility in dealing with annual fluctuations in emissions due to weather or 
economic conditions. Member States can also buy and sell allocations from and to other Member 
States.  This  is  an  important  way  to  ensure  that  emission  reductions  are  cost-effective.  It  allows 
Member States to cut emissions where they are cheapest to cut and to use the revenue to invest in 
modernisation. 

For additional flexibility, the ESR allows nine Member States87 to use a limited amount of their ETS 
allowances to offset emissions in effort-sharing sectors from 2021 to 2030. This applies to Member 
States that have national reduction targets significantly higher than both the EU average and their 
cost-effective  reduction  potential  or  that  did  not  allocate  any  EU  ETS  allowances  to  industrial 
installations free of charge in 2013. 

Finally, to stimulate additional action in the land use sector, from 2021 to 2030 Member States are 
allowed to  use up to  262 million credits from  this sector under the EU LULUCF Regulation  (see 
2.4.7.1) to comply with their national ESR targets. All Member States can use these arrangements to 
achieve their targets, but there is more flexibility for Member States with a larger share of emissions 
from agriculture. This reflects the fact that the mitigation potential of emissions from agriculture is 
lower. 

As with the EU ETS, the impact of the ESR on GHG emissions in 2030 compared with a hypothetical 
situation where this legislation is not implemented is difficult to assess because of its interactions 
with other policies and external factors. This report presents the ‘targeted impact’ of the ESR, which 
is the reduction in emissions in the sectors covered by this legislation between the 2005 base year and 
the 2030 target year. ESR base year emissions were published in Commission Implementing Decision 

86 Effort sharing 2021-2030: targets and flexibilities, https://ec.europa.eu/clima/eu-action/effort-sharing-member-states-

emission-targets/effort-sharing-2021-2030-targets-and-flexibilities_en. 

87 Belgium, Denmark, Ireland, Luxembourg, Malta, Netherlands, Austria, Finland and Sweden. 

44 

 
 
(EU) 2020/212688. Illustrative GHG emissions in the target year 2030 were estimated by applying the 
effort-sharing target of -40% to the 2005 emissions levels, as shown in Table 5.  

Table 5: Illustrative impacts of the implementation of effort-sharing legislation in 2030 

Year 

2030 

Base year (2005) GHG 
emissions 

Reduction target 

Impact on GHG emissions 

2 517 Mt CO2eq 

-40% 

-1 007 Mt CO2eq 

Note: Base year emissions for the 2030 target include GHG emissions in the effort-sharing sectors of EU-27 
and 
IPCC’s  Fifth  Assessment  Report. 
Source: Commission Implementing Decision (EU) 2020/212689 

calculated  using  GWPs 

from 

total 

the 

the 

is 

2.4.2.5  Carbon Capture and Storage Directive 

Some emissions of GHGs (e.g. from cement production) are inherent to industrial processes and are 
difficult to reduce substantially. To minimise such emissions and achieve climate neutrality, carbon 
capture and storage will play an important role. The Carbon Capture and Storage (CCS) Directive90 
constitutes  the  legal  framework  for  the  geological  storage  of  CO2.  It  covers  all  CO2  storage  in 
geological formations in the EU and the entire lifetime of storage sites. It also contains provisions on 
the capture and transport components of CCS91. 

2.4.2.6  Carbon removals and carbon farming (CRCF) 
The Regulation on carbon removals and carbon farming (CRCF) was adopted in 202492. It aims to 
provide  an  EU-wide  harmonised  framework  for  cost-effective  certification  of  permanent  carbon 
removals, carbon farming and carbon storage in products in the EU. It lays down quality criteria and 
provisions  to  streamline  monitoring,  reporting  and  certification  processes  to  ensure  that  carbon 
removals are reliable and meet high standards. With the support of an expert group93, the Commission 
is  currently  developing  certification  methodologies  setting  out  specific  rules  for  carbon  removal, 
carbon farming and carbon storage practices to ensure that these processes comply with the quality 
criteria. Priority is given to the most technologically mature activities, which will be the subject of 
delegated acts to be published in the coming years. The Climate Resilient Debt Clause does not cover 

88 Commission Implementing Decision (EU) 2020/2126 on setting out the  annual emission allocations of the Member 
States for the period from 2021 to 2030, http://data.europa.eu/eli/dec_impl/2020/2126/oj. 
89 Commission Implementing Decision (EU) 2020/2126 on setting out the annual emission allocations of the Member 
States for the period from 2021 to 2030, as amended, http://data.europa.eu/eli/dec_impl/2020/2126/2024-07-31.  

90 Directive 2009/31/EC on the geological storage of carbon dioxide, https://eur-lex.europa.eu/eli/dir/2009/31/oj. 
91  A  legal  framework  for  the  safe  geological  storage  of  carbon  dioxide,  https://ec.europa.eu/clima/eu-action/carbon-
capture-use-and-storage/legal-framework-safe-geological-storage-carbon-dioxide_en. 
92  Union  certification  framework  for  permanent  carbon  removals,  carbon  farming  and  carbon  storage  in  products, 

https://www.europarl.europa.eu/meetdocs/2014_2019/plmrep/COMMITTEES/ENVI/DV/2024/03-11/Item9-
Provisionalagreement-CFCR_2022-0394COD_EN.pdf. 

93 Expert Group on Carbon Removals (E03861), https://ec.europa.eu/transparency/expert-groups-register/screen/expert-
groups/consult?lang=en&groupID=3861. 

45 

 
 
CCS  and  carbon  capture  and  utilisation  (CCU)  using  fossil  carbon,  as  these  technologies  do  not 
remove carbon from the atmosphere.94 

Certification covers: 

•  Permanent removals. These can involve industrial technologies that capture carbon from the 
atmosphere and store it for several centuries. Examples include direct air carbon capture with 
storage (DACCS) and bioenergy with carbon capture and storage (BECCS). 

•  Carbon farming and soil emission reductions. This can include a broad range of practices, such 
as  rewetting  and  restoration  of  peatlands  and  wetlands;  agroforestry  and  mixed  farming, 
integration of trees or shrubs with crop and/or livestock management; implementation of soil 
protection  measures  through  catch  crops,  cover  crops,  conservation  tillage  and  hedgerows; 
reforestation and sustainable forest management; and improved fertiliser use and efficiency. 

•  Carbon storage in long-lasting products. This can include storage of atmospheric or biogenic 
carbon  in  long-lasting  products  like  wood-based  products  for  construction  and  bio-based 
materials,  which  are  used  long-term.  Short-lived  products  like  paper  and  furniture  are  not 
included. 

2.4.2.7  EU taxonomy for sustainable activities 

To meet the EU’s climate targets, it is vital to invest in low greenhouse gas emissions and climate-
resilient development. Ensuring that financial flows are consistent with such development is also one 
of the three goals of the Paris Agreement, as stipulated in its Article 2(1)(c). 

In July 2020, the Taxonomy Regulation95 entered into force. The legislation created the basis for a 
classification  system  that  companies  and  investors  can  use  to  decide  whether  certain  economic 
activities can be considered environmentally sustainable. 

After the Taxonomy Regulation entered into force, the Commission started to develop delegated acts 
laying  down  the  technical  screening  criteria  under  which  specific  economic  activities  could  be 
considered to make a substantial contribution to the six environmental objectives. The first delegated 
act on sustainable activities for climate change mitigation and adaptation objectives was adopted in 
December 202196. In June 2023, the Commission adopted a taxonomy environmental delegated act 
specifying  a  set  of  EU  taxonomy  criteria  for  determining  whether  an  economic  activity  makes 
a substantial  contribution  to  one  or  more  of  the  non-climate  environmental  objectives  (water, 

94Q&A on the provisional agreement on the Regulation establishing an EU-wide 
voluntary framework for certifying permanent carbon removals, carbon farming and 
carbon storage in products (CRCF Regulation), https://climate.ec.europa.eu/document/download/a8abe1c4-a3c6-4c94-

be0e-4b76f7fd0308_en?filename=policy_carbon_faq_crcf_regulation_en.pdf. 

95   Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable investment,  

http://data.europa.eu/eli/reg/2020/852/oj. 

96   Commission Delegated Regulation (EU) 2021/2139 supplementing Regulation (EU) 2020/852, https://eur-

lex.europa.eu/eli/reg_del/2021/2139/oj. 

46 

 
 
pollution,  circular  economy  and  biodiversity).  At  the  same  time,  the  Commission  adopted 
amendments to the above-mentioned delegated act in the area of climate change97. 

2.4.2.8  Corporate Social Responsibility Directive 
The Corporate Sustainability Reporting Directive (CSRD)98, which came into force in January 2023, 
requires  all  large  companies  and  all  listed  companies  (except  microenterprises)  to  disclose 
information on how external sustainability factors (such as climate change) influence their activities 
and how their activities affect people and the environment, including the climate. This helps investors, 
consumers  and  other  stakeholders  to  evaluate  the  sustainability  performance  of  companies.  The 
Directive  strengthens  the  existing  rules  introduced  by  the  Non-Financial  Reporting  Directive 
(NFRD)99 and ensures alignment with other sustainable finance initiatives. 

The CSRD will be applied in several stages and its scope will be gradually extended to include more 
companies. In 2025, companies already subject to the NFRD will be the first to report under the new 
rules for the 2024 financial year. Companies are required to report using the European Sustainability 
Reporting  Standards  (ESRS),  a  set  of  common  mandatory  standards.  The  first  set  of  ESRS  was 
published in December 2023100. The standards apply to all companies, irrespective of their economic 
sector,  and  cover  environmental,  social  and  governance  topics,  including  climate  change  and  the 
circular economy. Sector-specific ESRS will be adopted by mid-2026101. 

2.4.2.9  Bioeconomy strategy 

The bioeconomy strategy, which was first adopted by the European Commission in 2012 and updated 
in 2018, guides the EU’s approach to the production, consumption, processing, storage, recycling and 
disposal  of  biological  resources.  The  strategy  aims  to  ensure  food  and  nutrition  security;  manage 
natural  resources  sustainably;  reduce  dependence  on  non-renewable,  unsustainable  resources; 
mitigate and adapt to climate change; and strengthen competitiveness and create jobs102.  

The updated strategy proposed three main areas for action: strengthening and scaling up bio-based 
sectors,  deploying  local  bioeconomies,  and  understanding  the  ecological  boundaries  of  the 
bioeconomy103. The progress  report on the  EU’s bioeconomy  strategy104, published in  June 2022, 
discussed  new  national  and  regional  bioeconomy  strategies,  achievements  in  central  and  eastern 

97  Implementing  and  delegated  acts,  https://ec.europa.eu/info/law/sustainable-finance-taxonomy-regulation-eu-2020-

852/amending-and-supplementary-acts/implementing-and-delegated-acts_en. 

98 Directive (EU) 2022/2464 amending Regulation (EU) No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and 

Directive 2013/34/EU, as regards corporate sustainability reporting, http://data.europa.eu/eli/dir/2022/2464/oj. 

99 Directive 2014/95/EU amending Directive 2013/34/EU, http://data.europa.eu/eli/dir/2014/95/oj.  

100 Commission Delegated Regulation (EU) 2023/2772 supplementing Directive 2013/34/EU as regards sustainability 

reporting standards, http://data.europa.eu/eli/reg_del/2023/2772/oj. 

101  Corporate 

sustainability 

reporting, 

https://finance.ec.europa.eu/capital-markets-union-and-financial-

markets/company-reporting-and-auditing/company-reporting/corporate-sustainability-reporting_en#legislation. 

102  Bioeconomy 

strategy, 

https://research-and-innovation.ec.europa.eu/research-

area/environment/bioeconomy/bioeconomy-strategy_en. 

103  A sustainable Bioeconomy for Europe: Strengthening the connection between economy, 
society and the environment, https://eur-lex.europa.eu/legal-content/en/ALL/?uri=CELEX%3A52018DC0673.  
104  Progress report on the EU bioeconomy strategy, https://op.europa.eu/s/wqus. 

47 

 
 
European countries and the mobilisation of private investment and research and innovation in food 
and other bio-based industries. 

The updated strategy states that „a sustainable European bioeconomy is necessary to build a climate 
neutral future in line with the climate objectives of the Paris Agreement. This was also reflected by 
highlighting  bioeconomy  as  one  of  the  seven  strategic  priorities  in  the  “A  Clean  Planet  for  all  A 
European  strategic  long-term  vision  for  a  prosperous,  modern,  competitive  and  climate  neutral 
economy”105 communication from the Commission. 

To help achieve the objectives of the EU’s bioeconomy strategy, the European Commission launched 
a bioeconomy monitoring system, which provides comprehensive, robust and reliable information to 
monitor  all  areas  of  the  bioeconomy106.  In  2023,  the  European  Commission  published  a  first 
assessment  based  on  the  bioeconomy  monitoring  system,  in  which  it  concluded  that  Europe  was 
generally moving towards the strategy’s objectives, but that environmental challenges remained, and 
more policy coordination was needed107. 

2.4.2.10 Covenant of Mayors for Climate and Energy 

The  EU  Covenant  of  Mayors  for  Climate  and  Energy  brings  together  more  than  12 000  local 
governments108 voluntarily committed to implementing ambitious climate and energy objectives in 
the EU Member States. Signatory cities pledge action to support the implementation of the EU’s 55% 
GHG  emission  reduction  target  by  2030  and  the  adoption  of  a  joint  approach  to  climate  change 
mitigation  and  adaptation.  To  translate  their  political  commitment  into  practical  measures  and 
projects, Covenant signatories undertake to submit, within 2 years of the date of the local council 
decision, a sustainable energy and climate action plan outlining the key actions they plan to take109 
and to periodically monitor the progress achieved. 

In 2016, the EU Covenant of Mayors joined forces with the Compact of Mayors to form the Global 
Covenant of Mayors for Climate and Energy, the world’s largest climate initiative for cities. It brings 
together  more  than  13 000  local  governments  in  more  than  140  countries  around  the  world110 
voluntarily committed to pursuing ambitious climate and energy objectives. 

2.4.2.11 Other cross-cutting policies and measures: Funds 

Reducing greenhouse gas emissions requires financial resources and investment decisions consistent 
with the long-term goals. The EU’s funds play an important role in financing this transition. Below 
are the main funds111 that are used to finance climate action. There are three main groups of funds: 
funds financed by the revenue from emission trading system, funds under the Cohesion policy and 
common agricultural policy and other funds under the EU budget. 

105 COM(2018) 773 final 
106  EU bioeconomy monitoring system, https://knowledge4policy.ec.europa.eu/bioeconomy/monitoring_en. 
107  Trends in the EU bioeconomy, https://dx.doi.org/10.2760/835046. 
108  Key figures, https://eu-mayors.ec.europa.eu/en/key_figures. 
109  Covenant initiative, https://www.eumayors.eu/about/covenant-initiative/objectives-and-scope.html. 
110  Global Covenant of Mayors for Climate & Energy, https://www.globalcovenantofmayors.org/. 
111 It is to be noted that those EU funds that are provided to EU Member States and are administered by national authorities 

qualify as state aid and are therefore subject to EU State aid rules 

48 

 
 
Funds financed by revenues from emission trading system 

•  Modernisation Fund: Launched in 2018 for the 2021-2030 period, this Fund helps modernise 
the energy system and improve energy efficiency in 13 lower-income EU Member States. It 
focuses  on  investments  in  renewable  energy,  energy  efficiency,  energy  storage,  energy 
networks and just transition in carbon-dependent regions. Its objective is to help beneficiary 
Member States achieve their climate targets. The total revenues to the Modernisation Fund 
are expected to amount to EUR 57 billion from 2021 to 2030, based on a carbon price of EUR 
75/t CO2

112. 

•  Innovation  Fund:  The  Innovation  Fund  provides  funding  for  innovative  low-carbon 
technologies  across  all  EU  Member  States.  The  Fund  focuses  on  highly  innovative  clean 
technologies  and  big  flagship  projects  that  offer  European  added  value  and  can  bring 
significant reductions in emissions and greenhouse gases. The Innovation Fund has a budget 
of EUR 40 billion for 2020-2030 (based on a carbon price of EUR 75/tCO2)113. 

•  Social  Climate  Fund  (SCF):  The  SCF  is  a  new  fund  created  alongside  ETS2  and  set  to 
become operational in 2027 (see section 2.4.2.2). The SCF will provide Member States with 
dedicated funding to support the most vulnerable groups, such as households facing energy 
or transport poverty. The SCF will finance support for structural measures and investments in 
energy  efficiency  and  building  renovation,  clean  heating  and  cooling,  renewable  energy 
integration, zero- and low-emission mobility solutions, and temporary direct income support. 
The  SCF  will  be  financed  by  auctioning  emission  allowances  from  ETS2  and  the  ETS. 
Together with a mandatory 25% contribution from the Member States to their social climate 
plans, the SCF should mobilise at least EUR 86.7 billion over 2026-2032114. 

Cohesion funds and common agricultural policy funds 

•  European Regional Development Fund (ERDF): The ERDF provides funding to public and 
private  bodies  in  all  EU  regions  to  reduce  economic,  social  and  territorial  disparities.  It 
supports investments through specific national and regional programmes. In 2021-2027, the 
ERDF’s objective is to make Europe and its regions more competitive and smarter; greener, 
low-carbon and resilient; more connected; more social, and closer to people. The ERDF has 
a  budget  of  EUR  226.1 billion  for  2021-2027,  of  which  30%  should  contribute  to  climate 
action115. 

•  Cohesion Fund:  The Cohesion  Fund provides support  to  EU Member States with  a gross 
national  income  per  capita  below  90%  of  the  EU-27  average  to  strengthen  the  economic, 
social and territorial cohesion of the EU. It supports investments through specific national and 
regional  programmes.  The  Fund  mainly  contributes  to  investments  in  environmental  and 

112  Modernisation Fund, https://climate.ec.europa.eu/eu-action/eu-funding-climate-action/modernisation-fund_en. 
113  Innovation Fund, https://cinea.ec.europa.eu/programmes/innovation-fund_en. 
114  Social Climate Fund, https://climate.ec.europa.eu/eu-action/eu-emissions-trading-system-eu-ets/social-climate-

fund_en. 

115  European Regional Development Fund, https://ec.europa.eu/info/funding-tenders/find-funding/eu-funding-

programmes/european-regional-development-fund-erdf_en. 

49 

 
 
trans-European transport network projects undertaken by public and regional authorities. The 
Cohesion  Fund  has  a  budget  of  EUR  48.0  billion  for  2021-2027,  of  which  37%  should 
contribute to climate action116. 

•  Just Transition Fund: The transition to a low-carbon economy brings about major socio-
economic changes, particularly in regions dependent on carbon-intensive industries. The Just 
Transition Fund aims to mitigate the socio-economic impact of this transition in regions facing 
the greatest challenges and to support their economic diversification, for example by investing 
in  small  and  medium-sized  enterprises  (SMEs)  worker  upskilling  and  reskilling,  and 
environmental rehabilitation,  so that no region  of the EU is left  behind  in the transition  to 
climate neutrality. The fund alleviates the socio-economic costs of the green transition and 
supports  the  economic  diversification  and  reconversion  of  the  affected  areas.  The  Just 
Transition Fund has a budget of EUR 19.3 billion for 2021-2027117. 

•  European  Agricultural  Guarantee  Fund  (EAGF):  The  EAGF  helps  farmers  provide 
a secure supply of safe, healthy, and affordable food. Through the EAGF, EU countries must 
offer, among other things, green direct payments for sustainable a climate-friendly farming 
methods. The EAGF has a budget of EUR 291.1 billion, with a climate contribution target of 
40% for 2023-2027. 

•  European  Agricultural  Fund  for  Rural  Development  (EAFRD):  The  EAFRD  provides 
funding for rural development programmes. Rural development programmes encourage the 
sustainable management of natural resources and climate action and aim to achieve a balanced 
territorial development of rural economies. The EAFRD has a budget of EUR 95.5 billion, 
with a climate contribution target of 40% for 2023-2027118. 

Other funds 

•  Recovery and Resilience Facility (RRF): The RRF was set up in response to the COVID-
19 pandemic to mitigate the economic and social impact of the pandemic and make European 
economies and societies more sustainable and resilient. It finances reforms and investments 
aligned with EU priorities carried out in EU Member States from the start of the pandemic in 
February  2020  until  31 December 2026.  It  has  a  total  budget  of  around  EUR  650  billion. 
Member States were required to allocate in their national plans for spending RFF support at 
least 37% of their budget to climate measures and 20% to digital measures119. The mid-term 
evaluation of the RFF, which was finalised at the beginning of 2024, showed that the total 

116  Cohesion Fund, https://ec.europa.eu/info/funding-tenders/find-funding/eu-funding-programmes/cohesion-fund-

cf_en. 

117  Just Transition fund, https://commission.europa.eu/funding-tenders/find-funding/eu-funding-programmes/just-

transition-fund_en. 

118  European Agricultural Fund for Rural Development, https://commission.europa.eu/funding-tenders/find-funding/eu-

funding-programmes/european-agricultural-fund-rural-development-eafrd_en. 

119  Recovery and Resilience Facility, https://ec.europa.eu/info/business-economy-euro/recovery-coronavirus/recovery-

and-resilience-facility_en. 

50 

 
 
estimated climate expenditure of around EUR 275 billion amounted to more than 40% of the 
total allocations under the plans, surpassing the 37% target120. 

•  Programme  for  Environment  and  Climate  Action  (LIFE):  One  of  LIFE's  (from 
L’Instrument Financier pour l’Environnement – the financial instrument for the environment) 
objectives is to facilitate the transition to a sustainable, circular, energy-efficient, renewable-
energy-based, climate-neutral and resilient economy. The budget of the LIFE programme is 
implemented through four sub-programmes: nature and biodiversity; circular economy and 
quality of life; climate change mitigation and adaptation; and clean energy transition. All four 
sub-programmes  contribute  to  climate  change  mitigation  and  adaptation.  The  programme 
supports demonstration, and best practice projects, coordination and support actions, capacity 
building, and governance projects. Its budget for 2021-2027 is EUR 5.4 billion121. 

•  InvestEU  Fund:  The  InvestEU  Fund  leverages  substantial  private  and  public  repayable 
financing  (e.g.  loans,  equity  investments)  through  an  EU  budget  guarantee  granted  to 
implementing partners (e.g. the European Investment Bank (EIB) Group, other international 
financial  institutions  or  national  promotional  banks).  It  operates  in  four  policy  areas: 
sustainable infrastructure; research, innovation and digitisation; SMEs; and social investment 
and skills. The total investment to be mobilised is estimated at more than EUR 372 billion 
across the EU, of which at least 30% need to contribute to climate objectives122. 

•  Horizon  Europe:  This  is  the  EU’s  main  funding  programme  for  research  and  innovation, 
with a budget of EUR 95.5 billion for 2021-2027 of which 35% is allocated to climate-related 
actions.  Its  aims  are  to  tackle  climate  change,  help  to  achieve  the  UN  Sustainable 
Development  Goals  and  boost  the  EU’s  competitiveness  and  growth.  Horizon  Europe 
provides funding through specific calls for research and innovation projects for specific EU 
missions, each of which operates as a portfolio of actions such as research projects, policy 
measures and even legislative initiatives. Of the five EU missions, two specifically focus on 
the climate: adaptation to climate change and climate-neutral and smart cities123. 

2.4.3  Energy policies and measures 

In line with its commitments under the Paris Agreement, the EU adopted the ‘Clean energy for all 
Europeans’ package124 in 2019 to support the transition from fossil fuels to clean energy. The package 

120  Mid-term evaluation of the Recovery and Resilience Facility, 

https://commission.europa.eu/document/download/17c82840-518c-4c3d-ba98-
7dae436b3a70_en?filename=SWD_2024_70_1_EN_autre_document_travail_service_part1_v4.pdf. 

121  Programme for Environment and Climate Action (LIFE), https://ec.europa.eu/info/funding-tenders/find-funding/eu-

funding-programmes/programme-environment-and-climate-action-life_en. 

122  InvestEU, https://ec.europa.eu/info/funding-tenders/find-funding/eu-funding-programmes/investeu_en. 

123  Horizon Europe, https://research-and-innovation.ec.europa.eu/funding/funding-opportunities/funding-programmes-

and-open-calls/horizon-europe_en. 

124 Clean energy for all Europeans package, https://energy.ec.europa.eu/topics/energy-strategy/clean-energy-all-
europeans-package_en. 

51 

 
 
consisted of eight laws on buildings, renewable energy, energy efficiency, electricity market design 
and the governance system of the energy union. 

In  July  2021,  the  Commission  took  a  major  step  towards  achieving  the  more  ambitious  target  of 
reducing greenhouse gas emissions by 55% by 2030 by adopting a package of proposals to amend 
the EU’s climate and energy policies (see Section 2.4.1.1). 

In May 2022, the Commission  presented the REPowerEU plan125 in  response to  the hardship  and 
disruption  caused  on  the  global  energy  market  by  the  Russian  Federation’s  unprovoked  and 
unjustified full-scale invasion  of Ukraine. The measures in  the REPowerEU plan relate to  energy 
savings, the diversification of energy supplies, and the accelerated roll-out of renewable energy to 
replace fossil fuels in homes, industry and power generation. For the medium term, the plan proposed 
measures to bring down emissions and energy costs for consumers and industry, including increasing 
the  2030  energy  efficiency  targets  and  increasing  the  share  of  renewables  in  the  EU’s  energy 
consumption beyond the 40% target originally proposed in 2021126. Of the total budget allocated to 
the REPowerEU Plan, EUR 20 billion comes from the EU ETS. 

To  coordinate gas  purchases  among  European  companies,  the  Commission  set  up  the  EU  Energy 
Platform  in  2022  and  launched  a  demand  aggregation  and  joint  purchasing  mechanism,  called 
AggregateEU, in 2023. During four tendering rounds in 2023, buyers and sellers were matched in 
deals covering 42 billion m3 to meet European demand127. 

Between August 2022 and March 2024, natural gas demand in the EU was reduced by 18%, or 125 
billion m3 of gas. Over the same period, renewable energy production increased. Since 2022, installed 
solar energy capacity in the EU has increased by 96 GW and wind capacity by 33 GW, bringing the 
share of renewables in electricity production to 46%128. 

2.4.3.1  Energy efficiency 

The Energy Efficiency Directive (EED) is the main legal act addressing energy efficiency in the EU. 
In December 2018, an amendment6 to the Directive entered into force, introducing a new EU energy 
efficiency  headline  target  of  at  least  32.5%  by  2030  relative  to  the  2007  Price-Induced  Market 
Equilibrium System (PRIMES) modelling projections for 2030. 

In October 2023, the revised Energy Efficiency Directive129 entered into force. It is part of the EU 
Green Deal package and the REPower EU plan and significantly raises the EU’s energy efficiency 
ambitions, aiming to reduce its dependence on fossil fuel imports from the Russian Federation. The 
‘energy efficiency  first’  principle became legally binding for the first  time, which means that EU 
Member States must take it into account in all relevant policy and major investment decisions taken 

125REPowerEU plan, COM(2022) 230 final 
126Renewable 
energy 
explained/index.php?title=Renewable_energy_statistics. 
127 EU Energy Platform, https://energy.ec.europa.eu/topics/energy-security/eu-energy-platform_en. 
128  REPowerEU  at  a  glance,  https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-

https://ec.europa.eu/eurostat/statistics-

Explained, 

Statistics 

statistics 

- 

deal/repowereu-affordable-secure-and-sustainable-energy-europe_en#saving-energy. 

129  Directive 

(EU)  2023/1791  on  energy  efficiency  and  amending  Regulation 

(EU) 2023/955 

(recast), 

http://data.europa.eu/eli/dir/2023/1791/oj. 

52 

 
 
in the energy and non-energy sectors. Particular attention is paid to sectors with high energy-saving 
potential (heating and cooling, industry and energy services). 

Changes to the previous directives include the following: 

•  The new target is defined as an additional 11.9% reduction in energy consumption by 2030, 
compared with the projections of the 2020 EU reference scenario. As a result, total EU energy 
consumption by 2030 should  not  exceed 992.5 million  tonnes of oil  equivalent  (Mtoe) for 
primary energy and 763 Mtoe for final energy. To set indicative national contributions, EU 
countries  can  use  either  the  projections  of  the  2020  EU  reference  scenario  or  the  version 
updated in 2023. If the national contributions do not add up to the EU target, the Commission 
will implement an ambition gap mechanism. 

•  The binding annual energy savings rate for final energy consumption has been increased from 
0.8% (up to 2023) to 1.3% for 2024-2025, 1.5% for 2026-2027 and 1.9% from 2028 onwards. 

•  Member  States  are  now  required  to  take  measures  to  implement  energy  efficiency 
improvements for people experiencing or at risk of energy poverty and vulnerable customers, 
including,  where appropriate, people living  in  social housing. Some of these measures are 
expected to be financed by revenues from ETS allowances for buildings and transport or from 
the new Social Climate Fund. 

•  Specific energy-saving measures have been put in place for the public sector, including a new 
obligation for the public sector to reduce annual energy consumption by 1.9% each year, an 
extension to all levels of public government of the obligation to renovate at least 3% of the 
total floor area of public buildings each year, and an obligation to include energy efficiency 
requirements more systematically in public procurement procedures. 

•  Requirements have been introduced for businesses based on a new energy-consumption-based 
approach. The largest energy users (consuming more than 100 TJ per year) that do not yet 
have energy management systems in place will have to do so in future. The burden on smaller, 
less energy-using businesses should be reduced. 

•  A new obligation to monitor the energy performance of data centres has been introduced, with 

an EU-level database collecting and publishing data. 

•  Stricter  energy  efficiency  requirements  have  been  laid  down  for  the  heating  and  cooling 
supply, including district heating. For district heating and cooling, the definition of efficient 
systems  will be progressively tightened to  move away from fossil-fuel-based systems.  For 
cogeneration, additional criteria will be introduced for specific emissions for high-efficiency 
cogeneration (270 g CO2/kWh). 

53 

 
The  most  recent  energy  efficiency  statistics  from  Eurostat130,  which  were  published  in  December 
2023, indicate that primary energy consumption in 2020 reached its lowest level since 1990 (the first 
year for which data are available). However, this level remains 24.5% above the 2030 target, which 
means that efforts to improve efficiency need to be maintained in the years ahead. After an increase 
in 2021 to 32.1% above the 2030 target, primary energy consumption dropped again in 2022 but was 
still 26.7% above the 2030 target. Final energy consumption in 2022 was 940.5 Mt, or 23.3% above 
the 2030 target. 

The  main  impact  of  the  revised  EED  will  be  that  the  EU  will  be  able  to  use  less  energy  without 
compromising  the  provision  of  the  desired  services.  This  reduction  in  energy  use  will  bring  co-
benefits such as improved energy security and reduced environmental impacts. As the combustion of 
fuels for energy currently accounts for approximately 75% of the EU’s GHG emissions, reducing 
energy use is vital, alongside decarbonising the energy supply, to achieving the EU’s 2030 emissions 
target131. 

Buildings 

Buildings account for about 40% of the EU’s total energy consumption and for 36% of its  energy 
related  GHG  emissions.  Currently,  about  75%  of  the  building  stock  is  considered  energy-
inefficient132. This means that action in the building sector is crucial for achieving the EU’s energy 
and decarbonisation goals.  

The EU has adopted legislation in this area, including the Energy Performance of Buildings Directive 
(EPBD)133 amending the previous EPBD and the EED (see above).  

A major goal  of the amended EPBD is  to accelerate the renovation of the existing  building stock 
through strengthened long-term renovation strategies and by mobilising investments in this area. All 
EU countries must develop a long-term renovation strategy to ensure that their national building stock 
becomes highly energy-efficient and decarbonised by 2050. These strategies are part of the integrated 
national energy and climate plans (see Section 2.1.2.2)134. Another major goal is that from 2021, all 
new buildings should be nearly-zero-energy buildings, with a very significant share of any remaining 
energy needs to be met by renewable sources. According to the impact assessment accompanying the 
proposal to revise the EPBD, the provisions could reduce CO2 emissions by 38 Mt and improve the 
CO2 emissions of buildings by 1.32 kg/m²135. In addition to the EPBD, the EED also addresses energy 

efficiency 

130Energy 
https://ec.europa.eu/eurostat/statistics-
statistics, 
explained/index.php?title=Energy_efficiency_statistics#Primary_energy_consumption_and_distance_to_2020_and_203
0_targets. 
131 Impact Assessment Report Accompanying the Proposal for a Directive of the European Parliament and of the Council 
on energy efficiency (recast), https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:52021SC0623.   
132 Directive (EU) 2024/1275 on the energy performance of buildings (recast), http://data.europa.eu/eli/dir/2024/1275/oj. 
133  Directive  (EU)  2018/844  amending  Directive  2010/31/EU  on  the  energy  performance  of  buildings  and  Directive 
2012/27/EU on energy efficiency,  http://data.europa.eu/eli/dir/2018/844/oj. 
134  Directive  (EU)  2024/1275  on  the  energy  performance  of  buildings  (recast),  https://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=OJ:L_202401275&pk_keyword=Energy&pk_content=Directive. 
135 Executive Summary of the Impact Assessment Accompanying the document Proposal for a Directive of the European 
Parliament  and  of  the  Council  amending  Directive  2010/31/EU  on  the  energy  performance  of  buildings,  https://eur-
lex.europa.eu/legal-content/EN/ALL/?uri=CELEX%3A52016SC0415. 

54 

 
 
efficiency in buildings and sets, for example, the goal of carrying out energy-efficient renovations on 
at least 3% (by floor area) of buildings owned and occupied by central government.  

The  impact  assessment  also  identifies  a  number  of  positive  social  and  economic  effects.  The 
renovation of old buildings could lift up to 3.2 million households (out of 23.3 million existing ones) 
out of energy poverty and reduce the annual energy expenditure for businesses and households by 
EUR  24-36  billion.  The  revised  EPBD  will  boost  the  sector  by  creating  a  EUR 80-120  billion 
renovation market for SMEs and generate about 220 000 additional jobs by 2030 compared with the 
reference scenario. 

Due to the ambitious 55% net greenhouse gas reduction target in 2030 compared to 1990, further 
improvements to the existing legislation was necessary. Following a proposal for a revision of the 
Energy Performance of Buildings Directive136 in 2021, the revised EPBD entered into force in May 
2024137. It aims to help achieve the target of reducing emissions in the buildings sector by at least 
60 % relative to the 2015 levels by 2030 and sets out a pathway for Europe to achieve a zero-emission 
and fully decarbonised building stock by 2050.  

The specific objectives are to:  

• 

increase  the  rate  and  scope  of  building  renovations:  the  main  measures  include  the 
introduction  of  minimum  energy  performance  standards,  complemented  by  stricter  energy 
performance  certificates,  the  introduction  of  building  renovation  passports,  a  definition  of 
deep renovation, and enhanced long-term renovation strategies (building renovation plans); 

•  ensure  that  new  buildings  are  in  line  with  the  2050  climate  neutrality  objective:  the  main 

measure is the introduction of a standard for zero-emission buildings; 

• 

• 

integrate  buildings  into  decarbonised  and  digitalised  energy  systems:  the  main  measure  is 
strengthened requirements for electric vehicle charging infrastructure in buildings; and 

improve information on the energy performance and sustainability of buildings through the 
use of digital tools: this includes the calculation and disclosure of indicators quantifying the 
global-warming potential of buildings throughout their life cycle. 

In addition, the Commission published the strategy ‘A Renovation Wave for Europe – Greening our 
buildings, creating jobs, improving lives’138 in 2020 to boost renovation in the EU. It aims to double 
annual  energy  renovation  rates  over  the  next  10  years.  It  also  seeks  to  minimise  the  footprint  of 
buildings through resource efficiency and circularity combined with turning parts of the construction 
sector into a carbon sink.  

Proposal 

136 
Directive 
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52021PC0802. 

energy 

the 

for 

on 

a 

performance 

of 

buildings 

(recast),  

137  Directive (EU) 2024/1275 on the energy performance of buildings (recast), . 

138  A  Renovation  Wave  for  Europe  -  greening  our  buildings,  creating  jobs,  improving  lives,  https://eur-
lex.europa.eu/legal-content/EN/TXT/?qid=1603122220757&uri=CELEX:52020DC0662. 

55 

 
 
Energy labelling and ecodesign 

The  EU’s  energy  labelling  and  ecodesign  legislation  helps  to  improve  the  energy  efficiency  of 
products on the EU market.  

The EU Energy Labelling Framework Regulation139 lays down specific labelling requirements for 
energy-related products placed on the EU market. The energy label is a widely recognised feature on 
household products like light bulbs, television sets and washing machines, and has helped consumers 
to choose products that are more energy-efficient and encouraged manufacturers to innovate by using 
more energy-efficient technologies.  

Since  March  2021,  the  energy  label  rating  system  has  used  only  A  to  G  rankings  instead  of  the 
previous A+++ to D ratings. Four product groups were required to implement the new rating system 
from 1 March 2021, with new labels for light bulbs and lamps applicable from 1 September 2021140. 

Ecodesign legislation sets common EU-wide minimum standards to permanently remove the worst-
performing products from the market. The current Ecodesign Directive141 has a long track record of 
delivering benefits to businesses, consumers and the environment. In 2022, primary energy savings 
from  ecodesign  and  labelling  measures  amounted  to  1 072 TWh  for  households  in  EU-27.  This 
represents a 12% reduction142 and is projected to increase to 1418 TWh (or an 18% reduction) by 
2030. As a result of the measures taken, the associated GHG emissions decreased by 135 Mt of CO2eq 
(11%) in 2022 and are projected to increase to 139 Mt of CO2eq (17%) by 2030. Of the energy savings 
in 2022, 60% came from the residential sector, 25% from the tertiary sector, 10% from industry and 
5% from transport and other sectors143. 

A  new  Ecodesign  for  Sustainable  Products  Regulation  for  more  environmentally  sustainable  and 
circular  products  was  adopted  in  April  2024144.  It  extends  the  existing  Ecodesign  legislation  to 
the widest  possible  range  of  products  and  broadens the  scope  of  the requirements  to  be  met  by 
products (see also Section 2.4.8.2)145. 

139  Regulation  (EU)  2017/1369  setting  a  framework  for  energy  labelling  and  repealing  Directive  2010/30/EU,  
http://data.europa.eu/eli/reg/2017/1369/oj. 

140 State of the Energy Union 2021 – Contributing to the European Green Deal and the Union’s recovery,   https://eur-
lex.europa.eu/legal-content/EN/TXT/?uri=COM:2021:950:FIN. 

141 Directive 2009/125/EC establishing a framework for the setting of ecodesign requirements for energy-related products, 
https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=celex%3A32009L0125. 

142  Ecodesign Impact accounting; Overview report 2023, https://circabc.europa.eu/ui/group/418195ae-4919-45fa-a959-

3b695c9aab28/library/cefbb265-3a07-4cf5-82d1-d47e04e8fdd2/details.  

143  Ecodesign 

for 

Sustainable 

Products  Regulation, 

https://commission.europa.eu/energy-climate-change-

environment/standards-tools-and-labels/products-labelling-rules-and-requirements/sustainable-products/ecodesign-
sustainable-products-regulation_en.  

144  Regulation  (EU)  2024/1781  establishing  a  framework  for  the  setting  of  ecodesign  requirements  for  sustainable 
products, amending Directive (EU) 2020/1828 and Regulation (EU) 2023/1542 and repealing Directive 2009/125/EC, 
https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:L_202401781.  

145  Green  Deal:  New  proposals  to  make  sustainable  products  the  norm  and  boost  Europe’s  resource  independence, 

https://ec.europa.eu/commission/presscorner/detail/en/ip_22_2013. 

56 

 
 
Along with the new Regulation, the Commission also adopted an Ecodesign and Energy Labelling 
Working Plan for 2022-2024146 to cover new energy-related products and update and increase the 
level of ambition for products already regulated, as a transitional measure until the new Regulation 
entered into force147. 

2.4.3.2  Renewable energy 
The recast Renewable Energy Directive (RED)148, which came into force in December 2018, is the 
main legal act governing the use of renewable energies in the EU. The recast act: 

•  sets a binding renewable energy target for the EU, which must ensure that at least 32% of its 

gross final energy consumption comes from renewable sources by 2030;  

• 

lays down a set of rules to facilitate the increase of renewable energy in electricity, heating 
and cooling, and transport;  

• 

lays down sustainability criteria for bioenergy; 

•  contains provisions that allow ordinary members of the public to play an active role in the 
development of renewables through renewable energy communities and self-consumption of 
renewable energy; 

•  sets an increased target of 14% for the share of renewable fuels in transport by 2030; and 

•  strengthens the sustainability criteria for bioenergy149. 

Since the first Renewable Energy Directive was adopted, the share of renewable energy sources in 
EU energy consumption has almost doubled from 12.5% in 2010 to 23% in 2022150. 

To  ensure  that  the  higher  climate  ambitions  set  out  in  the European  Green  Deal  are  met,  the 
Commission proposed a revision of the Renewable Energy Directive151 in July 2021. The amending 
Directive entered into force in November 2023 and sets an overall binding EU target for renewable 
energy of at least 42.5%, with an aspirational target of 45%152. In addition, the new Directive aims to 
facilitate  the  electrification  of  various  sectors  and  sets  renewable  energy  targets  for  heating  and 
cooling,  transport,  industry,  buildings  and  district  heating  and  cooling.  It  also  promotes  electric 
vehicles  and  smart  charging.  Permitting  procedures  for  renewable  energy  projects  and  related 

146  Ecodesign  and  Energy  Labelling  Working  Plan  2022-2024  2022/C  182/01,  https://eur-lex.europa.eu/legal-

content/EN/TXT/?uri=CELEX%3A52022XC0504%2801%29&qid=1651649049970. 

147  Green  Deal:  New  proposals  to  make  sustainable  products  the  norm  and  boost  Europe's  resource  independence, 

https://ec.europa.eu/commission/presscorner/detail/en/ip_22_2013. 

148  Directive  (EU)  2018/2001  on 

the  promotion  of  the  use  of  energy  from  renewable  sources  (recast),  

http://data.europa.eu/eli/dir/2018/2001/oj. 

149 Renewable Energy Directive, https://energy.ec.europa.eu/topics/renewable-energy/renewable-energy-directive-
targets-and-rules/renewable-energy-directive_en. 

150  Ibid. 

151 Proposal for a Directive amending Directive (EU) 2018/2001 […] as regards the promotion of energy from 
renewable sources, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52021PC0557. 
152 Directive (EU) 2023/2413 amending Directive (EU) 2018/2001, Regulation (EU) 2018/1999 and 
Directive 98/70/EC,  http://data.europa.eu/eli/dir/2023/2413/oj. 

57 

 
 
infrastructure will be simpler and faster. The new Directive also focuses on bioenergy, which will be 
needed to replace fossil fuels.  

To this end, the sustainability criteria for bioenergy have been improved, and two new delegated acts 
for the use of renewable hydrogen were adopted in 2023. The Delegated Act on a methodology for 
renewable  fuels  of  non-biological  origin153  lays  down  the  conditions  under  which  hydrogen, 
hydrogen-based fuels, and other energy carriers may be considered renewable fuels of non-biological 
origin (RFNBOs). The Act lays down a minimum threshold for GHG emissions savings of recycled 
carbon fuels154 and provides a methodology for calculating life-cycle GHG emissions for RFNBOs. 

Additionally,  in  2021,  the  Commission  published  an  impact  assessment  report  accompanying  its 
proposal to amend the Renewable Energy Directive. All the core scenarios considered in the impact 
assessment achieve the 55% net GHG target in 2030. In all the core scenarios, renewable fuels play 
a major role as they are considered to have zero emissions in the energy system and contribute to 
GHG emissions savings by displacing GHG-emitting fossil fuels155. 

The analysis of energy-related costs shows that by 2030, household energy expenditures, including 
those for transport and buildings, will slightly increase from 2015 levels, rising from 24.1% to around 
25.6-25.8%  of  private  consumption.  Renovation  and  equipment  costs,  especially  for  heating,  are 
highest  in  the  strong  regulatory  scenarios,  driven  by  the  uptake  of  renewables  and  heat  pumps. 
Transport costs are expected to remain stable due to gains from fuel efficiency standards. While high 
carbon prices may lead to higher energy purchase costs, regulatory measures can mitigate this impact. 
Notably, lower-income households tend to spend a larger share of their budgets on energy, which 
underlines  the  need  for  targeted  support.  Employment  projections  show  that  there  is  potential  for 
modest job growth if favourable financing conditions are met. 

In 2022, the share of renewables in EU’s electricity production was 39%. It was a record year for new 
solar photovoltaic capacity, adding 41 GW (a 60% increase), and for the first time, wind and solar 
power overtook fossil fuels in May 2022. The share of renewable energy sources in the overall EU 
energy mix is expected to reach at least 23%, although some Member States are struggling to meet 
their national binding targets156. 

Offshore renewable energy is key to the EU’s ambitious energy and climate targets for 2050. With 
this in mind, in November 2020 the Commission published an EU strategy on offshore renewable 
energy157,  which  assesses  the  potential  contribution  of  this  sector  and  proposes  ways  forward  to 
support its long-term sustainable development. The strategy sets ambitious targets for offshore wind 
capacity – at least 60 GW by 2030 and 300 GW by 2050 – and for ocean (e.g. wave and tidal) energy 

153  Commission Delegated Regulation (EU) 2023/1184 of 10 February 2023 supplementing Directive (EU) 2018/2001 of the 
European Parliament and of the Council by establishing a Union methodology setting out detailed rules for the production 
of renewable liquid and gaseous transport fuels of non-biological origin, http://data.europa.eu/eli/reg_del/2023/1184/oj. 

154  Ibid. 

155  Impact  assessment  report  accompanying  the  proposal  for a  Directive  of  the  European Parliament  and  the  Council 
amending Directive (EU) 2018, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD:2021:621:FIN.  
156Share 
https://ec.europa.eu/eurostat/databrowser/view/nrg_ind_ren/default/table?lang=en. 
157  An  EU  Strategy  to  harness  the  potential  of  offshore  renewable  energy  for  a  climate  neutral  future,  https://eur-
lex.europa.eu/legal-content/EN/TXT/?uri=COM:2020:741:FIN&qid=1605792629666. 

renewable 

sources, 

energy 

from 

of 

58 

 
 
capacity – at least 1 GW by 2030 and 40 GW by 2050 is an impressive shift scale up of ambition for 
the  sector  in  less  than  30  years,  at  a  speed  unparalleled  by  the  past  development  of  other  energy 
technologies.  It  also  encourages  public and private  investment  in  new infrastructure and research, 
makes it easier for different regions to work together more efficiently, and provides a clear and stable 
legal framework158. 

2.4.3.3  Energy taxation 
The Energy Taxation Directive159 sets out EU rules for the minimum taxation of energy products, 
such as motor fuel, heating fuel and electricity. 

However, since its adoption  in  2003, energy markets  and technologies in the EU have undergone 
significant developments, and the EU’s international commitments, including the Paris Agreement, 
and its regulatory framework on energy and climate change, have evolved considerably. 

In July 2021, the Commission adopted a proposal for a revision of the Energy Taxation Directive160. 
The  revision  seeks  to  align  the  taxation  of  energy  products  with  EU  energy  and  climate  policies, 
promote  clean  technologies  and  remove  outdated  exemptions  and  reduced  rates  that  currently 
encourage the use of fossil fuels. The main changes proposed include the following161: 

•  Fuels will be taxed according to their energy content and environmental performance rather 
than their volume. This will better reflect the environmental impact of individual fuels, helping 
businesses and consumers to make cleaner, more climate-friendly choices. 

•  The classification of energy products for taxation purposes will be simplified to ensure that the 
most environmentally harmful fuels are taxed the most. Products covered by the Directive are 
grouped and ranked according to their environmental performance. Fuels that have the greatest 
negative impact on the environment will be subject to higher minimum rates. 

•  Exemptions for certain products and home heating will be phased out so that fossil fuels can 
no longer be taxed below the minimum rates. Member States will be able to support vulnerable 
households and protect people against energy poverty. 

•  Fossil  fuels  used  in  aviation,  shipping  and  fishing  should  no  longer  be  fully  exempt  from 
energy taxation in the EU; this is a crucial measure given the role of these sectors in energy 
consumption and pollution. 

158  Offshore Renewable Energy Strategy, https://ec.europa.eu/commission/presscorner/detail/en/fs_20_2099. 
159  Council Directive 2003/96/EC of 27 October 2003 restructuring the Community framework for the taxation of energy 

products and electricity, http://data.europa.eu/eli/dir/2003/96/oj. 

160 Proposal for a Council Directive restructuring the Union framework for the taxation of energy products and electricity 
(recast), https://eur-lex.europa.eu/legal-content/ EN/ALL/?uri=CELEX%3A52021PC0563. 
161  
energy-taxation-directive_en. 

Revision  of  the  Energy  Taxation  Directive,  https://taxation-customs.ec.europa.eu/green-taxation-0/revision-

59 

 
 
2.4.3.4  Energy system integration and cross-cutting initiatives 
In  July  2020,  the  Commission  presented  the  EU  strategy  for  energy  system  integration162.  This 
strategy  proposes  concrete  policy  and  legislative  measures  at  EU  level  to  gradually  shape  a  new 
integrated energy system, while accommodating the diverse starting points of Member States. Sector 
integration means linking various energy carriers – electricity, heat, cooling, and gas, solid and liquid 
fuels – with each other and with end-use sectors such as buildings, transport and industry163. 

Hydrogen  is  an  important  part  of  the  overall  EU  strategy  for  energy  system  integration.  The  EU 
hydrogen strategy164, which was adopted in 2020, outlines a vision for creating a European hydrogen 
ecosystem  through  research  and  innovation  to  scale  up  production  and  infrastructure  on  an 
international level. It lists 20 action points that were implemented by the second quarter of 2022165. 
The strategy explores how producing and using renewable hydrogen can help to decarbonise the EU 
economy in a cost-effective way, in line with the European Green Deal. For renewable hydrogen, two 
delegated acts relating to the Renewable Energy Directive were adopted in 2023.  

In October 2022, the Commission adopted the EU action plan ‘Digitalising the energy system’166. 
The  system-wide  action  plan  aims  to  support  the  development  of  a  sustainable,  (cyber)secure, 
transparent and competitive market for digital energy services and highlights how new technologies 
can help improve the efficient use of energy resources, facilitate the deployment of renewables and 
optimise  the  energy  system  integration  while  saving  energy  and  costs  for  EU  consumers  and 
companies. It also promotes investments in smart grids. 

The  European  Strategic  Energy  Technology  Plan  (SET  Plan)  is  a  key  stepping-stone  to  boost  the 
transition  towards  a  climate-neutral  energy  system  through  the  development  of  low-carbon 
technologies in a fast and cost-competitive way. Through its 14 implementation working groups167 
(IWGs) and related European Technology and Innovation Platforms (ETIPs), the SET Plan activities 
have focused on the six priorities of the Research, Innovation and Competitiveness dimension of the 
Energy Union. The revised SET Plan (2023) will aim to enable the EU to become a global leader in 
the  development  of  innovative  renewable  energy  technologies  and  to  increase  the  EU’s 
manufacturing capacity for clean energy technologies in line with the ambition of the Green Deal 
Industrial Plan, so that it doubles - in a resilient and competitive way - its current share of renewable 
energy to reach at least 42.5% by 2030, with innovative renewable energy technology representing at 
least 5% of new installed renewable energy capacity. 

162 Powering a climate-neutral economy: An EU Strategy for Energy System Integration,https://eur-lex.europa.eu/legal-
content/EN/ALL/?uri=COM:2020:299:FIN. 
163 EU strategy on energy systems integration, https://energy.ec.europa.eu/topics/energy-system-integration/eu-strategy-
energy-system-integration_en. 
164 
a 
content/EN/TXT/?uri=CELEX%3A52020DC0301. 
165 Energy – Hydrogen, https://energy.ec.europa.eu/topics/energy-systems-integration/hydrogen_en. 
166  Digitalising 

https://eur-lex.europa.eu/legal-

https://eur-lex.europa.eu/legal-

climate-neutral 

hydrogen 

strategy 

Europe, 

system 

energy 

action 

plan, 

EU 

the 

for 

A 

- 

content/EN/TXT/PDF/?uri=CELEX:52022DC0552. 

167 https://setis.ec.europa.eu/implementing-actions_en 

60 

 
 
2.4.3.5  Methane Regulation and action 

Methane is the most important greenhouse gas after carbon dioxide, and there is significant potential 
for mitigation that can lead to methane emission reductions in the short to medium-term. The EU 
methane  strategy168  set  out  a  pathway  for  reducing  methane  emissions  in  the  three  main  emitting 
sectors:  agriculture,  energy  and  waste.  It  outlined  a  comprehensive  policy  framework  combining 
cross-sectoral and sector-specific action within the EU while promoting similar action internationally. 

On the basis of this strategy, a regulation on methane emissions reduction in the energy sector was 
adopted in April 2024 (the Methane Regulation)169. The new Regulation covers: 

improved measurement, reporting and verification of the energy sector’s methane emissions; 

• 
•  mandatory leak detection and repair and a ban on venting and flaring practices; 
•  an  obligation  for  EU  countries  to  develop  mitigation  plans  for  abandoned  coal  mines  and 

inactive oil and fossil gas wells; and 

•  a  methane  transparency  requirement  for  imports,  which  includes  requirement  for  Member 
States  to  collect  information  on  whether  and  how  exporting  countries  or  entities  have  a 
measuring, reporting and verification (MRV) system in place and abate methane emissions. 

In  this  context,  the  Commission  is  a  co-founder  of  the  Global  Methane  Pledge,  which  commits 
participating countries to the collective goal of reducing global methane emissions by at least 30% 
from 2020 levels by 2030170. More than 155 countries, which collectively account for just over 50% 
of global methane emissions caused by human activity, had joined the methane pledge by May 2024. 
The EU is also a partner of the Lowering Organic Waste Methane (LOW-Methane), a spinoff of the 
Global Methane Pledge launch at COP28 in Dubai, which ambition is to deliver at least 1 million 
metric tons of annual waste sector methane reductions well before 2030 working with 40 subnational 
jurisdictions and their national government counterparts, and to unlock over $10 billion in public and 
private investment. 

2.4.4  Transport policies and measures 

In  2022,  transport  emissions  (including  emissions  from  international  aviation  and  navigation) 
comprised 28.9% of the EU’s total greenhouse gas emissions171. Following 6 years of steady growth, 
EU transport emissions dropped in 2020 due to the reduction in transport activity during the COVID-
19 pandemic. However, they rebounded in 2021 and continued their upward trend in 2022, surpassing 
1990 levels172. 

168  EU 

strategy 

to 

reduce 

methane 

emissions, 

https://eur-lex.europa.eu/legal-

content/EN/TXT/?uri=CELEX%3A52020DC0663. 

169  Regulation (EU) 2024/1787 on methane emissions reductions in the energy sector and amending Regulation (EU) 

2019/942, https://eur-lex.europa.eu/eli/reg/2024/1787/oj.  

170  Global Methane Pledge, https://www.globalmethanepledge.org/. 
171 EEA greenhouse gases – data viewer, https://www.eea.europa.eu/data-and-maps/data/data-viewers/greenhouse-gases-
viewer. 
172 Transport and mobility, https://www.eea.europa.eu/en/topics/in-depth/transport-and-mobility. 

61 

 
 
The Commission presented the sustainable and smart mobility strategy in December 2020. It has since 
put in place a set of transport policy proposals to help reduce net greenhouse gas emissions by at least 
55% by 2030 compared to 1990 levels. 

2.4.4.1  Sustainable and smart mobility 
The  sustainable  and  smart  mobility  strategy,  with  its  action  plan173  of  82  initiatives,  lays  the 
foundation for the EU transport system to achieve its green and digital transformation and become 
more resilient to future crises. The strategy’s key features are outlined below. 

By 2030: 

•  at least 30 million zero-emission cars will be in operation on European roads; 
•  100 European cities will be climate-neutral; 
•  high-speed rail traffic will double across Europe; 
• 
•  automated mobility will be deployed on a large scale; 
•  zero-emission marine vessels will be market-ready. 

regular public transport for journeys under 500 km in the EU will be climate neutral; 

By 2035: 

•  zero-emission large aircraft will be market-ready. 

By 2050: 

•  nearly all cars, vans, buses and new heavy-duty vehicles will be zero-emission; 
• 
rail freight traffic will double; 
•  high-speed rail traffic will triple; 
• 

there will be a fully operational, multimodal Trans-European Transport Network (TEN-T) for 
sustainable and smart transport with high-speed connectivity. 

The strategy identifies a total of 82 initiatives and sets out specific measures to be taken in 10 key 
areas (flagship areas): 

•  boosting the uptake of zero-emission vehicles, vessels and aeroplanes, renewable and low-

carbon fuels and related infrastructure; 
•  creating zero-emission airports and ports; 
•  making interurban and urban mobility healthier and more sustainable; 
•  greening freight transport; 
•  pricing carbon and providing better incentives for users; 
•  making connected and automated multimodal mobility a reality; 
•  boosting innovation and the use of data and artificial intelligence for smarter mobility; 
•  strengthening the single market; 
•  making mobility fair and just for all; 

173 Sustainable and Smart Mobility Strategy – putting European transport on track for the future, https://eur-
lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52020DC0789. 

62 

 
 
• 

improving safety and security across all modes of transport. 

2.4.4.2  Transport contribution to 55% emission reduction by 2030 

To deliver a more ambitious climate policy and the targeted reduction of GHG emissions by at least 
55% by 2030 compared to 1990 levels, the Commission launched the following transport proposals 
in 2021: 

•  amendment of the Regulation setting CO2 emission performance standards for new passenger 

cars and for new light commercial vehicles (Section 2.4.4.3); 
revision of the Alternative Fuels Infrastructure Directive (Section 2.4.4.7); 
revision of the Energy Taxation Directive (see this section); 

• 
• 
•  new ReFuelEU Aviation Regulation (Section 2.4.4.5); 
•  new FuelEU Maritime Regulation (Section 2.4.4.6); 
• 

revision of the Renewable Energy Directive (Sections 2.4.4.4 and 2.4.3.2). 

With the exception of the revision of energy taxation, all policies have entered into force since the 
last  biennial  report  was  completed.  Other  policies  and  measures  are  also  closely  related  to  the 
transport sector. These include the new separate emissions trading system for fuel distribution for 
road transport and buildings (ETS 2), the phasing out of free emission allowances for aviation, the 
implementation  of  the  global  carbon  offsetting  and  reduction  scheme  for  international  aviation 
(CORSIA), and the inclusion of shipping emissions in the EU ETS (Section 2.4.4.5). The transport 
sector is also covered by the Effort-Sharing Regulation and the Energy Efficiency Directive (Sections 
2.4.2.4 and 2.4.3.1). 

The proposed revision of the Energy Taxation Directive174
 also directly relates to the transport sector. 
Firstly,  the  proposal  introduces  a  new  tax  rate  structure  based  on  the  energy  content  and 
environmental  performance  of  fuels  and  electricity  (Section  2.4.3.3).  Secondly,  it  broadens  the 
taxable  base  by  including  more  products  and  removing  some  of  the  current  exemptions  and 
reductions. Consequently, kerosene used as fuel in the aviation industry and heavy oil used in the 
maritime  industry  should  no  longer  be  fully  exempt  from  energy  taxation.  Over  10  years,  the 
minimum tax rates for these fuels should gradually increase to at least EUR 10.75/gigajoule (GJ) EU-
wide,  while  sustainable  fuels  for  these  sectors  should  benefit  from  a  minimum  rate  of  zero  to 
encourage their uptake. 

2.4.4.3  Efficiency and technical standards 

On passenger car and light duty vehicle fuel efficiency, in April 2023, the European Parliament and 
the  Council  amended  the  Regulation  on  CO2  emission  performance  standards175.  The  amendment 
increased  the  CO2  emission  performance  standards  for  new  passenger  cars  and  vans  from  2030 
onwards (compared to 2021 levels): 

174 Proposal for a Council Directive restructuring the Union framework for the taxation of energy products and electricity 
(recast), https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX%3A52021PC0563. 

175 Regulation (EU) 2023/851 amending Regulation (EU) 2019/631 as regards strengthening the CO2 emission 
performance standards for new passenger cars and new light commercial vehicles in line with the Union’s increased 
climate ambition,  http://data.europa.eu/eli/reg/2023/851/oj. 

63 

 
 
• 
• 

from 2030: 55% for cars and 50% for vans; 
from 2035: 100% for cars and 100% for vans. 

This is expected to reduce total CO2 emissions from cars and vans by 32-33 % by 2030 and 54-66 % 
by 2035 compared to 2005176. 

From  2025  onwards,  the  fleet  targets  are  based  on  the  worldwide  harmonised  light  vehicles  test 
procedure (WLTP), replacing the new European driving cycle (NEDC) emission test procedure. With 
stricter  CO2  emission  targets  in  place  since  2020,  the  average  WLTP  emissions  from  new  cars 
decreased from 130.3 g CO2/km in 2020 to 108.1 g CO2/km in 2022177. The average WLTP emissions 
from new vans decreased from 200.3 g CO2/km in 2020 to 183.8 g CO2/km in 2022178. The reductions 
are mainly attributable to the increase in electric vehicle registration, which reached 23% for cars and 
6% for vans in 2022. 

On  heavy-duty  vehicle  (HDV)  fuel  efficiency,  in  May  2024,  the  revised  Regulation  setting  CO2 
emission performance standards  for new HDVs179  was adopted. The Regulation’s scope has been 
extended to cover smaller lorries, urban buses, long-distance buses and trailers. Exemptions apply to 
certain types of vehicle, such as those used by the armed forces and fire services. The Regulation 
introduces new, more stringent CO2 emission reduction targets for 2030 (45%), 2035 (90%) and 2040 
(90%)  in  addition  to  the  existing  target  of  15%  by  2025  (reference  period:  1 July 2019  to 
30 June 2020). It also introduces a 100% zero-emission target for urban buses by 2035. The projected 
cumulative emission reductions between 2031 and 2050 are 730-996 Mt CO2eq180. The Commission 
will review the effectiveness of the amended Regulation in 2027. 

Stricter CO2 targets are expected to lead to a gradual increase in employment across the EU. By 2050, 
these  policies  could  create  between  81 000  and  121 000  additional  jobs,  with  the  most  ambitious 
scenarios yielding the highest employment gains. Sectors such as electronics, power and hydrogen 
are looking at significant job growth, while the petroleum refining and automotive sectors are likely 
to shrink due to reduced demand for internal combustion engine components. SMEs generally find 
zero-emission vehicles (ZEVs) affordable, though microenterprises might struggle to purchase new 
ZEVs  in  certain  categories.  Financial  aid  and  second-hand  markets  make  matters  a  bit  easier  by 
gradually making ZEVs more affordable. Smaller enterprises, particularly in less affluent Member 
States, benefit from higher savings relative to earnings, but face relatively higher initial costs.  

176 Revision of the CO2 standards for cars and vans: Questions & Answers, https://climate.ec.europa.eu/system/files/2021-
07/eu-climate-action_delivering_vehicles_qa_co2_standards_en.pdf. 
177 CO2 emissions performance of new passenger cars in Europe, https://www.eea.europa.eu/en/analysis/indicators/co2-
performance-of-new-passenger?activeAccordion=546a7c35-9188-4d23-94ee-005d97c26f2b. 
178  CO2  emissions  performance  of  new  vans  in  Europe,  https://www.eea.europa.eu/en/analysis/indicators/co2-
performance-emissions-of-new. 
179  Regulation  (EU)  2024/1610  amending  Regulation  (EU)  2019/1242  as  regards  strengthening  the  CO2  emission 
performance 
obligations, 
new 
standards 
http://data.europa.eu/eli/reg/2024/1610/oj. 
180 Impact Assessment Part 1, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A52023SC0088. 

heavy-duty 

integrating 

reporting 

vehicles 

and 

for 

64 

 
 
The Monitoring and Reporting Regulation181
 is the basis for the HDV Regulation. The Monitoring 
and Reporting Regulation requires Member States to monitor the numbers of heavy-duty vehicles 
registered for the first time and report this information to the Commission. In 2021, this Regulation 
was amended by a delegated Regulation182

 to include special purpose vehicles. 

On  car  tyre  labelling,  the  Regulation  on  the  labelling  of  tyres183  establishes  a  framework  for 
harmonising the tyre parameter information to be given to end-users. It sets information requirements 
to  facilitate  consumer  purchase  decisions  that  take  both  safety  and  environmental  aspects  into 
account,  promoting fuel-efficient,  long-lasting  and safe tyres  with  low noise levels.  Energy labels 
have been required for car and van tyres since 2012, and the 2021 revision expanded this to tyres for 
buses and lorries. 

On  clean  vehicles,  the  Directive  on  the  promotion  of  clean  and  energy-efficient  road  transport 
vehicles184  promotes  clean  mobility  in  public  procurement  tenders,  boosting  the  demand  for  and 
further deployment of low- and zero-emission vehicles. It defines clean vehicles and sets national 
targets for their procurement. It applies to different means of public procurement, including purchase, 
lease, rent and relevant service contracts. A review is scheduled for 2027. 

2.4.4.4  Fuels from renewable energy sources 

The main EU-wide policies and measures that influence GHG emissions from transport fuels are the 
revised Renewable Energy Directive, the ReFuelEU Aviation Regulation (Section 2.4.4.5) and the 
FuelEU Maritime Regulation (Section 2.4.4.6). 

The revised Renewable Energy Directive entered into force in November 2023 (Section 2.4.3.2)185. 
For the transport sector, it sets a target of 14.5% lower greenhouse gas intensity of transport fuels by 
2030 or 29% renewable energy in final energy consumption by 2030. The Directive also includes a 
target for renewable fuels of non-biological origin186. Member States should also establish a credit 
mechanism  to  promote  electromobility.  Under  this  mechanism,  economic  operators  that  supply 
renewable electricity for electric vehicles at public charging stations will receive credits they can sell 
to fuel suppliers who can use them to fulfil the fuel supplier obligation. 

181  Regulation  (EU)  2018/956  on  the  monitoring  and  reporting  of  CO2  emissions  from  and  fuel  consumption  of  new 
heavy-duty vehicles, https://eur-lex.europa.eu/eli/reg/2018/956/2022-03-14. 
182  Commission  Delegated  Regulation  (EU)  2021/1429  of  31  May  2021  amending  Regulation  (EU)  2018/956  of  the 
European Parliament and of the Council as regards the data on new heavy-duty vehicles to be monitored and reported by 
Members States, https://eur-lex.europa.eu/eli/reg_del/2021/1429/oj. 

183 Regulation (EU) 2020/740 on the labelling of tyres with respect to fuel efficiency and other parameters,  https://eur-
lex.europa.eu/eli/reg/2020/740/2020-06-05. 

184  Directive  (EU)  2019/1161  amending  Directive  2009/33/EC  on  the  promotion  of  clean  and  energy-efficient  road 
transport vehicles, https://eur-lex.europa.eu/eli/dir/2019/1161/oj. 
185 Directive (EU) 2023/2413 amending Directive (EU) 2018/2001, Regulation (EU) 2018/1999 and Directive 98/70/EC, 
http://data.europa.eu/eli/dir/2023/2413/oj. 
186Commission 

Regulation 

2023/1184 

February 

2023, 

(EU) 

10 

of 

Delegated 
http://data.europa.eu/eli/reg_del/2023/1184/oj. 

65 

 
 
The Fuel Quality Directive187 applies to petrol, diesel and biofuels used in road transport and to gasoil 
used in non-road mobile machinery. It required a reduction in the greenhouse gas intensity of fuels 
of  at  least  6%  by  2020.  The  more  ambitious  target  of  the  revised  Renewable  Energy  Directive 
repealed  this  target.  Data  are  still  being  collected  and  reported  for  2022  and  2023.  The  average 
greenhouse gas intensity of the fuels and energy supplied in the 27 Member States in 2021 was 89 g 
CO2eq/Megajoule.  This  is  1  g  lower  than  in  2019.  However,  with  an  average  reduction  of  5.5% 
compared to the 2010 baseline, it still falls short of the target of 6%188.  

2.4.4.5  Aviation 
The ReFuelEU Aviation Regulation189, which entered into force in November 2023, aims to increase 
both demand for and supply of sustainable aviation fuels (SAF). It obliges aviation fuel suppliers at 
EU airports190 to gradually increase the minimum share of SAF supplied to aircraft operators from 
2%  in  2025  to  70%  in  2050.  The  obligation  also  includes  an  increase  in  the  minimum  share  of 
synthetic aviation fuels from 1.2% in 2030 to 35% in 2050. Airports are required to guarantee that 
aircraft  operators  can  access  all  the  necessary  infrastructure  to  deliver,  store  and  refuel  with  the 
required shares of SAF. The Regulation obliges all aircraft operators departing from EU airports to 
refuel with at least 90% of the fuel necessary for their flights. This measure aims to tackle economic 
tankering, whereby aircraft operators load more fuel than necessary at the departure airport to avoid 
refuelling at the destination airport. This leads to excessive weight, which in turn leads to excessive 
emissions.  According  to  its  impact  assessment,  the  Regulation  will  lead  to  life-cycle  emission 
reductions in the aviation sector of up to 6.8% by 2030 and at least 65% by 2050 compared to the 
baseline scenario (development under current trends without further EU action)191. 

The main factor determining the success of the Regulation and the transition in the aviation sector is 
the scaling up of the production of SAF. There is complete scientific agreement about the need for 
and benefits of SAF but SAF prices are still higher than the prices of conventional fuels. These price 
projections  are  based  on  conservative  assumptions,  accounting  for  future  uncertainties.  Biofuel 
production  costs  remain  high,  especially  for  feedstock.  Feedstock  and  renewable  electricity  are 
largely  sourced  from  the  EU,  and  fierce  competition  in  the  transport  sector  drives  up  prices.  The 
policy should lead to substantial job creation in the SAF industry. 

Aviation  activities  have  been  included  in  the  EU  ETS  since  2012.  Starting  in  2024,  20  million 
emissions allowances (estimated market value EUR 1.6 billion) will be reserved to bridge the cost 
gap between conventional jet fuel and sustainable aviation fuels (SAF) to speed up their adoption. 
The  EU  ETS  currently  applies  to  flights  within  the  European  Economic  Area  (EEA)  and  flights 

187  Directive  98/70/EC  relating  to  the  quality  of  petrol  and  diesel  fuels  and  amending  Council  Directive  93/12/EEC, 
http://data.europa.eu/eli/dir/1998/70/2018-12-24. 
188  Quality  of  petrol  and  diesel  fuel  used  for  road  transport  in  the  European  Union  (reporting  year  2021), 
https://data.consilium.europa.eu/doc/document/ST-14662-2023-INIT/en/pdf. 
189  Regulation  (EU)  2023/2405  on  ensuring  a  level  playing  field  for  sustainable  air  transport  (ReFuelEU  Aviation), 
https://eur-lex.europa.eu/eli/reg/2023/2405/oj. 
190 Airports located on the EU mainland with at least 800 000 passengers or 100 000 tonnes of freight (Articles 2(2) and 

3(1) of the ReFuelEU Aviation Directive). 

191 Impact Assessment Accompanying the Proposal for a Regulation on ensuring a level playing field for sustainable air 
transport, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A52021SC0633. 

66 

 
 
departing to Switzerland and the UK. For flights outside the EEA, the EU ETS applies the provisions 
of CORSIA to EU-based carriers (Section 2.4.2.1). 

At  international  level,  ICAO  has  developed  a  framework  CORSIA192  to  offset  part  of  CO2 
emissions from international aviation that is intended to be applied by all major emitters. CORSIA’s 
aim is to offset emissions from international aviation above a pre-defined baseline. From 2024, the 
baseline is set at 85% of 2019 emissions. If that level is exceeded, countries should require airlines 
to  offset  their  share  through  the  cancellation  of  CORSIA  emissions  units  or  the  use  of  CORSIA 
eligible fuels. As of 2024, 126 countries participate in CORSIA.193 

2.4.4.6  Maritime transport 

Reducing greenhouse gases emissions from fossil fuel-dependent sectors, such as maritime transport, 
is pivotal for the implementation of the European Green Deal. It necessitates a mix of policy measures 
combining technological solutions and carbon pricing. As a result, the European Union adopted a 
series of measures to ensure that maritime transport contributes to the increased EU climate effort 
and  to  the  Paris  Agreement  commitments,  alongside  continuing  to  push  for  global  action  at  the 
International  Maritime  Organization.  This  basket  of  measures  included  the  extension  of  the  EU 
Emissions Trading System (ETS) to maritime transport, a new regulation to accelerate the uptake of 
renewable,  low-carbon  fuels  and  clean  energy  technologies  for  ships  (the  ‘FuelEU  Maritime’ 
regulation),  and  a  revision  of  existing  directives  on  alternative  fuel  infrastructures  and  renewable 
energy. 

Starting from 1 January 2024, the EU Emissions Trading System has been extended to cover CO2 
emissions from large ships entering ports in the European Economic Area regardless of the flag they 
fly. By defining the maximum amount of greenhouse gases that can be emitted under the system, the 
EU ETS ensure that all the sectors covered under its scope contribute to the EU’s climate objectives 
following  a  pre-defined  trajectory.  In  addition,  by  sending  a  price  signal,  it  incentivises  energy 
efficiency, low-carbon solutions, and reductions of the price difference between alternative fuels and 
traditional fuels. 

The  EU  ETS  extension  to  maritime  transport  builds  on  the  requirements  of  the  Maritime  MRV 
Regulation, which has required shipping companies to report their emissions on voyages to and from 
EU ports since 2018. In 2023, around 13,000 vessels of over 5,000 gross tonnage (GT) that visited 
EU ports during the year reported verified emissions under the THETIS-MRV system. 

The FuelEU Maritime Regulation193, which enters into force in 2025, lays down rules limiting the 
greenhouse  gas  intensity  of  the  energy  used  on  board  ships  above  5 000  gross  tonnage  calling  at 
European ports, regardless of the flag they fly. The rules apply to 50% of the energy used for voyages 
starting or ending outside the EU and 100% of the energy used for voyages between two EU ports. 
The annual average reduction in greenhouse gas intensity will gradually increase (-2% in 2025 to -
80% in 2050 compared to the average in 2020). The targets cover not only CO2 but also methane and 

192 Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). 
193  ETS 
strike  provisional  deal 
https://www.consilium.europa.eu/en/press/press-releases/2022/12/07/ets-aviation-council-and-parliament-strike-
provisional-deal-to-reduce-flight-emissions/. 

aviation:  Council 

and  Parliament 

reduce 

flight 

to 

emissions, 

67 

 
 
 
nitrous oxide emissions over the full lifecycle of the fuels used onboard, on a Well-to-Wake (WtW) 
basis. The Regulation contains an obligation for passenger and container ships to use onshore power 
supply while moored at a quayside unless they use another zero-emission technology as of 2030. 

Based on the fifth annual report from the European Commission on CO2 emissions from maritime 
transport194, CO2 emissions from ships under the scope of the MRV decreased from 147.1 Mt CO2eq 
in 2019 to their lowest level of 126.5 Mt CO2eq in 2021 (due to the economic effects of the COVID-
19 pandemic combined with the change of scope following the UK’s withdrawal from the EU), then 
reaching  135.5  Mt  CO2eq  in  2022.  In  2022,  container  ships  produced  the  largest  amount  of  total 
emissions, at 28%, followed by bulk carriers (14%) and oil tankers (12%). 

2.4.4.7  Infrastructure 
The Alternative Fuels Infrastructure Regulation195 entered into force in October 2023. It sets specific 
national targets for deploying alternative fuels infrastructure in the EU by 2025 or 2030, in particular: 

• 

• 

recharging stations of at least 150 kW for cars and vans need to be installed every 60 km on 
the EU’s main transport corridors (core TEN-T network) by 2025; 
recharging stations of at least 350 kW for HDVs need to be installed every 60 km along the 
core TEN-T network and every 100 km along the TEN-T comprehensive network by 2030; 
•  hydrogen  refuelling  stations  serving  both  cars  and  lorries  must  be  deployed  from  2030 

onwards in all urban nodes and every 200 km along the TEN-T core network; 

•  maritime ports welcoming a minimum number of large passenger vessels or container vessels 

must provide shore-side electricity for such vessels by 2030; 

•  airports must provide electricity for stationary aircraft at all gates by 2025, and at all remote 

stands by 2030. 

The goal of the Regulation is to ensure there is enough infrastructure for recharging or refuelling with 
alternative fuels across the EU to avoid range anxiety. The Regulation will not directly lead to the 
uptake of alternatively fuelled vehicles and consequently a reduction in greenhouse gas emissions, 
but it does ensure that there is no barrier for the increasing number of vehicles196. 

The  Eurovignette  Directive197  on  the  charging  of  heavy  goods  vehicles  for  the  use  of  certain 
infrastructures lays down rules the Member States must follow. It covers all heavy and light vehicles. 
By applying the polluter pays principle, it aims to gradually move away from a time-based model of 
charging (vignettes) to distance-based charges (tolls). Member States can set up a charging system 
that incorporates a vehicle’s environmental performance (introduce reduced rates or an external cost 
charge related to the cost of CO2 emissions, or both). 

194  2023  Report 

from 

the  European  Commission 

on  CO2 

emissions 

from  maritime 

transport, 

https://climate.ec.europa.eu/document/download/60bf9f7c-6c59-4521-8171-
4ce9ddd29bfb_en?filename=swd_2024_87_en_0.pdf. 

195 Regulation (EU) 2023/1804 on the deployment of alternative fuels infrastructure, and repealing Directive 2014/94/EU, 
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32023R1804. 
196 Impact Assessment Accompanying the Proposal for a Regulation on the deployment of alternative fuels infrastructure, 
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A52021SC0631. 
197  Directive  1999/62/EC  on  the  charging  of  heavy  goods  vehicles  for  the  use  of  certain  infrastructures, 
http://data.europa.eu/eli/dir/1999/62/oj. 

68 

 
 
2.4.4.8  Other relevant policies and measures 

•  Batteries and end-of-life of vehicles: see Section 2.4.8.5. 

•  Trans-European Transport Network (TEN-T): The TEN-T policy aims to develop an EU-wide 
network  of  rail,  inland  waterways  and  short  sea  shipping  routes.  The  revised  TEN-T 
Regulation198, which entered into force in July 2024, aims to make the EU’s transport network 
safer, more sustainable and more convenient for users. It introduces new mandatory targets, 
including enabling speeds of 160 km/h or higher on major TEN-T passenger rail lines by 2040. 
In addition, transport links between neighbouring countries will also be improved. 

• 

Intelligent  Transport  Systems  (ITS):  The  ITS  Directive199  sets  a  legal  framework  for  the 
coordinated  deployment  of  ITS  in  the  EU.  It  aims  to  improve  the  functioning  of  the  road 
transport  system,  including  its  interfaces  with  other  modes,  and  by  doing  so  to  reduce  the 
negative external effects of road transport. Adopted in 2023, the revision of the Directive aims 
to adapt it to new road mobility options, mobility apps and connected and automated mobility, 
leading to a potential annual greenhouse gas emission reduction of 0.6-2.7 Mt CO2eq in 2030 
and 0.5-1.9 Mt CO2eq in 2040 compared to a baseline scenario200. 

•  Greening Freight package: In 2023, the Commission proposed four initiatives to make freight 
more efficient and sustainable. The proposed regulation on the use of railway infrastructure 
capacity in the single European railway area201 will optimise the use of the rail network and 
improve cross-border coordination. Potential greenhouse gas emission savings are estimated 
at 1.5 Mt CO2eq by 2030 and a further 0.9 Mt CO2eq by 2050202 compared to the baseline 
scenario.  The  second  initiative  proposes  new  rules  to  support  the  uptake  of  zero-emission 
lorries  and  encourage  intermodal  operation  by  allowing  heavier  and  longer  vehicles  and 
providing  clarity  on  their  use  in  cross-border  traffic203.  Annual  greenhouse  gas  emission 
reductions  are  assessed  to  be  1.6  Mt  CO2  in  2030  and  0.05  Mt  CO2  in  2050204.  The  third 

2012/34/EU 

198  Regulation  (EU)  2024/1679  on  Union  guidelines  for  the  development  of  the  trans-European  transport  network, 
https://eur-lex.europa.eu/eli/reg/2024/1679/oj. 
199 Directive (EU) 2023/2661 on the framework for the deployment of Intelligent Transport Systems in the field of road 
transport and for interfaces with other modes of transport, http://data.europa.eu/eli/dir/2023/2661/oj. 
200 Impact Assessment Report Accompanying the document Proposal for a Directive on the framework for the deployment 
of Intelligent Transport Systems in the field of road transport and for interfaces with other modes of transport, https://eur-
lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A52021SC0474. 
201 Proposal for a regulation on the use of railway infrastructure capacity in the single European railway area, amending 
Directive 
https://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=COM:2023:443:FIN. 
202 Impact Assessment Report Accompanying the document Proposal for a Regulation on the use of railway infrastructure 
capacity  in  the  single  European  railway  area,  amending  Directive  2012/34/EU  and  repealing  Regulation  (EU)  No 
913/2010, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A52023SC0443. 
203 Proposal for a directive amending Council Directive 96/53/EC laying down for certain road vehicles circulating within 
the Community the maximum authorised dimensions in national and international traffic and the maximum authorised 
weights in international traffic, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52023PC0445. 
204 Impact Assessment Report Accompanying the document Proposal for a Directive of the European Parliament and of 
the  Council  amending  Council  Directive  96/53/EC  laying  down  for  certain  road  vehicles  circulating  within  the 
Community  the  maximum  authorised  dimensions  in  national  and  international  traffic  and  the  maximum  authorised 
weights in international traffic, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A52023SC0445. 

repealing  Regulation 

(EU)  No 

913/2010, 

and 

69 

 
 
initiative, on the accounting of the greenhouse gas emissions of transport services205, aims to 
harmonise the framework for companies to calculate greenhouse gas emissions from transport 
services.  Finally,  the  proposal  to  amend  the  Combined  Transport  Directive  aims  to  make 
freight  transport  more  sustainable  by  improving  the  competitiveness  of  intermodal  freight 
transport through financial and regulatory support measures. 

•  Fisheries and aquaculture: the Commission communication on “On the Energy Transition of 
the  EU  Fisheries  and  Aquaculture  sector”206    adopted  as  part  of  the  Fisheries  and  Oceans 
package in February 2023, proposes to guide and support the fisheries and aquaculture sector 
in this transition, breaking away from the dependency from fossil fuel. The initiative comprises 
actions  to  close  the  gaps  in  the  transfer  of  technology  from  research  and  innovation  to 
application; to promote the development of skills among the workforce; and to improve the 
business environment, including in financing opportunities and awareness.  

•  The 2021-2027 European Maritime, Fisheries and Aquaculture Fund (EMFAF) supports the 
fisheries and aquaculture sectors in the transition towards climate resilience, adaptation and 
mitigation, in addition to helping to protect and restore marine biodiversity and ecosystems to 
achieve  a  good  environmental  status  of  marine  waters.  55%  of  Member  State  EMFAF 
allocations are programmed to contribute to climate change objectives. Allocations by Member 
State range from 41% to 77% of their national envelope, depending on the priorities of the 
Member  State.  For  biodiversity  objectives,  the  corresponding  expected  contribution  of 
Member State programmes is 28%. Allocations from the national envelope range from 14% to 
56%, depending on the priorities of the Member State. 

2.4.5  Policies and measures in industrial processes and product use 

This section covers policies related to industrial emissions and to reducing fluorinated gas emissions. 
Greenhouse  gas  emissions  arising  from  industrial  processes  in  the  mineral,  chemical  and  metal 
industries are covered by the EU Emissions Trading System (see 2.4.2.1 for more details). Industrial 
installations  are  also  subject  to  other  sectoral  policies  and  measures,  in  particular  energy-related 
policies and measures (Section 2.4.3). 

2.4.5.1  Green Deal Industrial Plan 
With the Green Deal  Industrial  Plan207, published in  2023, the Commission wants  to  promote the 
creation  of  a  more  supportive  environment  for  developing  the  clean  tech  manufacturing  capacity 
required for Europe to reach its green targets. The plan is based on four complementary pillars: (1) a 
predictable and simplified regulatory environment, (2) faster access to funding, (3) enhanced skills, 
and (4) open trade for resilient supply chains. 

205  Proposal  on  the  accounting  of  greenhouse  gas  emissions  of  transport  services,  https://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=celex%3A52023PC0441. 
206 COM (2023) 100 final 
207  A 
Deal 
Green 

https://eur-lex.europa.eu/legal-

Net-Zero 

Age, 

the 

for 
content/EN/TXT/?uri=CELEX%3A52023DC0062. 

Industrial 

Plan 

70 

 
 
The first pillar is composed of three key legislative initiatives, all of which were adopted in 2024. 
The  Net-Zero  Industry  Act208  aims  to  provide  less  restrictive  conditions  and  more  certainty  for 
investors and promoters of net-zero technology manufacturing projects with the aim to achieve that 
a  40%  share  across  net  zero  technologies  is  providing  predictability.  The  Critical  Raw  Materials 
Act209  is  the  basis  for  building  up  the  capacity  of  the  EU’s  critical  raw  material  supply  chain.  It 
includes measures to strengthen domestic supply chains and international engagement. The electricity 
market design reform210 aims to make electricity prices less dependent on volatile fossil fuel prices. 

2.4.5.2  Industrial and Livestock Rearing Emissions Directive 
The Industrial and Livestock Rearing Emissions Directive (IED)211 is the main EU instrument for 
preventing and reducing pollution from industrial installations, including intensive livestock farms. 
In August 2024 the revised IED entered into force, extending the scope of the existing directive. More 
large-scale livestock pig  and poultry farms (Section  2.4.6.3), mining  activities and the large-scale 
manufacture of batteries have been added. The new directive requires Member States to implement 
electronic  permitting  procedures  by  2035  and  to  introduce  effective  penalties  in  the  case  of  non-
compliance. 

The  IED  operates  using  a  ‘best  available  techniques’  (BAT)  permitting  system,  including  the 
development  of  BAT  reference  documents  (BREFs).  It  is  relevant  for  greenhouse  gas  emissions 
abatement as it regulates: (1) industrial greenhouse gas emissions not covered by the EU ETS; (2) 
CH4 from livestock installations, and (3) indirect greenhouse gases such as nitrogen oxides (NOX) 
and short-lived climate forcers such as sulphur oxides (SOX) and black carbon. 

BREFs exist for specific agro-industrial activities (sectoral BREFs) and for cross-cutting issues such 
as  energy  efficiency,  industrial  cooling  systems  and  emissions  from  storage  with  relevance  for 
industrial manufacturing in general (horizontal BREFs). 

Since  the  last  biennial  report  was  completed,  the  following  new  BREFs  have  been  adopted:  (1) 
slaughterhouses,  animal  by-products  and/or  edible  co-products  industries,  adopted  in  December 
2023; (2) the textile industry, adopted in December 2022; (3) common waste gas management and 
treatment systems in the chemical sector, adopted in December 2022; (4) the ferrous metal processing 
industry, adopted in November 2022. 

Even if these BREFs do not set emission limits values for greenhouse gases in the scope of the ETS 
they are likely to have an impact on GHG emission levels, for example through energy efficiency 
requirements and co-benefits of abatement technologies focused on other pollutants. 

208  Regulation (EU) 2024/1735 on establishing a framework of measures for strengthening Europe’s net-zero technology 

manufacturing ecosystem, http://data.europa.eu/eli/reg/2024/1735/oj. 

209  Regulation (EU) 2024/1252 establishing a framework for ensuring a secure and sustainable supply of critical raw 

materials, http://data.europa.eu/eli/reg/2024/1252/oj. 

210  Directive (EU) 2024/1711 amending Directives (EU) 2018/2001 and (EU) 2019/944 as regards improving the Union’s 

electricity market design, http://data.europa.eu/eli/dir/2024/1711/oj. 

211  Directive 2010/75/EU on industrial and livestock rearing emissions (integrated pollution prevention and control), as 

amended, https://eur-lex.europa.eu/eli/dir/2010/75/2024-08-04.  

71 

 
 
Innovative  techniques  entering  the  market  are  increasingly  expected  to  reduce  emissions  of  both 
greenhouse gases  from  installations in the scope of the IED and the EU ETS  Directive212. A new 
Innovation Centre for Industrial Transformation and Emissions (INCITE) has been created by the 
revised  IED  and  will  gather  information  on  innovative  low-carbon,  low-pollution  and  circular 
economy  technologies,  helping  to  speed  up  their  development.  This  is  coupled  with  permitting 
flexibilities for the testing and implementation of innovative techniques. Moreover, the Commission 
will review the implementation of the IED in 2028 and every 5 years after that. The Commission will 
also assess how to best address the emissions generated from cattle farming and from agricultural 
products placed on the EU market by 2026. 

2.4.5.3  Emissions from fluorinated gases 

In 2022, fluorinated gases (F-gases) accounted for 2% of total greenhouse gas emissions in the EU. 
To control emissions from F-gases, including HFCs, two legislative acts are in place: the Mobile Air 
Conditioning (MAC) Directive213 on air conditioning systems used in small motor vehicles, and the 
F-gas Regulation214, which covers all other key applications in which F-gases are used. 

The MAC Directive introduced a gradual ban on emissions of F-gases from mobile air conditioning 
systems with a GWP higher than 150 in passenger cars. Since 1 January 2017, the use of fluorinated 
greenhouse gases with a GWP higher than 150 has been banned in all new passenger cars and certain 
lorries put on the EU market. 

Following  a  review  of  the  F-gas  Regulation,  a  revision  laying  down  more  ambitious  targets  was 
adopted in 2024. The aim is to phase out HFCs placed on the EU market by 2050. A quota system 
was established in 2015 to control and reduce HFC emissions. Annual quantitative limits (quotas) on 
HFCs placed on the EU market by producers and importers are set every year and will gradually be 
reduced  over  time,  ending  at  net  zero  in  2050.  This  revision  is  expected  to  cumulatively  prevent 
greenhouse gas emissions of 310 Mt CO2eq by 2050215. 

Further key measures of the new F-gas Regulation are: 

• 

integrating HFCs used in metered dose inhalers into the quota system; 

•  stricter rules to prevent emissions where F-gases are produced or used; 

• 

• 

facilitating  better  enforcement  and  monitoring  through  more  digitalisation  and  electronic 
automation; 

initiating a gradual reduction in the production of HFCs in the EU. Companies will be given 
production  rights  that  will  decrease  over  time  (60%  of  their  2011  to  2013  average  annual 
production in 2025, 15% in 2036). 

212  Wider 

environmental 

impacts 

of 

industry 

decarbonisation,  

https://circulareconomy.europa.eu/platform/sites/default/files/final_report_decarbonisation_industry.pdf. 

213  Directive 2006/40/EC relating to emissions from air conditioning systems in motor vehicles and amending Council 

Directive 70/156/EEC, https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=celex%3A32006L0040. 

214  Regulation  (EU)  2024/573  on  fluorinated  greenhouse  gases,  amending  Directive  (EU)  2019/1937  and  repealing 

Regulation (EU) No 517/2014, https://eur-lex.europa.eu/eli/reg/2024/573/oj. 

215  Fluorinated greenhouse gases, https://climate.ec.europa.eu/eu-action/fluorinated-greenhouse-gases_en. 

72 

 
 
The European Environment Agency monitors the EU’s progress towards reaching the targets set in 
the F-gas Regulation216. In 2022, the amount of HFCs placed on the market was 3% below the overall 
market limit set by the quota system. Production of HFCs in the EU continues to decrease. Between 
2014  and  2022,  F-gas  emissions  dropped  by  25%  in  the  EU,  leading  to  an  emission  reduction  of 
nearly 100 Mt CO2eq217. 

The action taken by the EU and its Member States under the F-gas Regulation will enable the EU to 
comply with the Kigali amendment to the Montreal Protocol on a global phaseout of HFCs. The EU 
has ratified the Kigali amendment, which entered into force on 1 January 2019. EU consumption of 
HFCs in 2022 amounted to 45% of the maximum imposed by the Montreal Protocol. 

2.4.6  Agriculture policies and measures 

The key EU policies and measures to reduce emissions from agriculture target the three greenhouse 
gases  (CO2,  CH4  and  N2O)  related  to  livestock,  manure  management  and  soil  fertilisation.  Some 
cross-cutting policies and measures also affect CO2 emissions and removals in the land use, land-use 
change and forestry (LULUCF) sector, i.e. related to carbon sequestration in biomass and soils due 
to land management. 

Agricultural  policy  has  a  long  tradition  in  the  EU,  and,  with  the  European  Green  Deal,  the 
Commission  has  gone  further  in  its  environmental  ambitions  in  agriculture.  Some  policies  and 
measures are closely related and overlap with the LULUCF sector. This implies that the impact of 
the related agricultural practices is seen in the LULUCF sector, for example policies and measures 
that aim to enhance carbon sequestration in agricultural soils or biomass. 

2.4.6.1  Common agricultural policy 

The common agricultural policy (CAP) is the main EU policy in the agriculture sector. It is managed 
and funded at European level, with approximately one third of the total EU budget allocated to it. 
This  totals  EUR 386.6  billion  for  2021-2027.  It  is  sourced  from  two  main  funds:  the  European 
Agricultural Guarantee Fund (EAGF), which provides direct support and funds market measures, and 
the European Agricultural Fund for Rural Development (EAFRD). The CAP was created in 1962 and 
has undergone several reforms since then. For each CAP period, specific programmes and priorities 
are set out, including the budget from the related funds. Of the CAP budget, 40% has to be for climate 
measures. 

To receive CAP payments, farmers have to follow a set of mandatory rules (conditionality). Statutory 
management  requirements  are  general  EU  rules  and  are  mandatory  for  all  farmers,  whether  they 
receive CAP support or not. Good agricultural and environmental conditions (GAECs) apply only to 
farmers who receive CAP support. Existing GAEC requirements have been increased compared to 
the previous CAP period, for example on crop rotation/diversification. 

The core component of the current CAP period (2023-2027) is the new CAP strategic plans (CSPs), 
which have to be prepared by each Member State for each CAP period. With the introduction of these 
plans, CAP implementation is shifting from a compliance-based to a more performance-based system. 

216  Fluorinated greenhouse gases 2023, https://www.eionet.europa.eu/etcs/etc-cm/products/etc-cm-report-2023-04/. 
217  Achievements, https://climate.ec.europa.eu/eu-action/fluorinated-greenhouse-gases/achievements_en. 

73 

 
 
Countries also have more flexibility to design their support schemes according to their specific needs. 
Climate and environmental objectives should become progressively more ambitious in each period 
(no back-sliding). The CSPs provide information on the planned measures under the CAP and on the 
10 CAP objectives, with the related indicators for the whole period. Member States are required to 
monitor progress against the targets set in the CSP. 

With the new ‘eco-schemes,’ Member States are required to spend at least 25% of the direct payments 
budget on practices that are established at EU level, for example practices related to better nutrient 
management,  agro-ecology,  agroforestry,  carbon  farming  or  animal  welfare.  It  is  mandatory  to 
include eco-schemes in the CSPs, but they are voluntary for farmers. 

In a report to the European Parliament and the Council218, the Commission summarised the Member 
States’  CSPs  for  2023-2027  and  assessed  their  collective  ambition.  On  climate  action,  the  report 
points  out  that  the  new  legal  framework  will  create  more  space  for  nature  and  certain  beneficial 
activities, e.g. paludiculture and agri-photovoltaics. Higher standards for farming practices (enhanced 
conditionality) also now apply to 89% of EU farmland, while 32% of the CSPs’ public expenditure 
is  allocated  to  rewarding  farmers  who  voluntarily  implement  more  ambitious  practices.  Multiple 
actions in the Member States’ CSPs focus on carbon sinks and emission sources. Voluntary carbon 
sequestration  and  N2O  emission  reduction  measures  should  be  implemented  on  35%  of  the  EU’s 
farmland. The plans will also support extensive livestock systems, thereby helping to maintain carbon 
stocks,  and  recognise  the  need  to  reduce  livestock-related  emissions,  especially  methane  from 
ruminants. It is difficult to assess the combined effects of these tools. Member States are expected to 
assess whether the mitigation potential of their strategic plans should be reviewed in the light of the 
new, higher targets in the LULUCF and Effort-Sharing Regulations. 

2.4.6.2  Nitrates Directive 

The primary objective of EU nitrates policy is to improve water quality by reducing nitrate losses 
from agriculture, the Nitrates Directive is also an important policy for reducing N2O emissions caused 
by nitrogen fertilisers and livestock manure applied to agricultural soils. 

A 2021 report219 by the European Commission concluded that, in the 30 years since implementation 
of  the  Directive  began,  nutrient  losses  from  agriculture  have  been  reduced  and  most  farmers  and 
Member  States  have  designed  and  applied  measures  to  reduce  nitrate  losses.  However, 
implementation and enforcement has not been sufficient to achieve the objectives of the Directive. 

In  October  2023,  the  Commission  announced  the  evaluation  of  the  Nitrates  Directive  with  the 
publication of the Commission Work Programme 2024. In December 2023, the Commission launched 
a public consultation for the evaluation, inviting interested parties such as farmers, industries, NGOs, 
citizens and others to share their views. The consultation was closed in March 2024 and is followed 
up by further targeted consultation activities. 

218  Summary  of  CAP  strategic  plans  for  2023-2027,  COM(2023)  707  final,  https://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=CELEX%3A52023DC0707. 
219 Report from the Commission on the implementation of Council Directive 91/676/EEC, https://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=COM%3A2021%3A1000%3AFIN. 

74 

 
 
The evaluation should assess if the Nitrates Directive remains fit for purpose, if it is in line with the 
EU environmental and climate ambitions and contributes to a sustainable and resilient agriculture and 
food security. 

In  early  2024,  the  Commission  launched  a  public  consultation  on  the  evaluation  of  the  Nitrates 
Directive, inviting interested parties such as farmers, industries, NGOs and the general public to share 
their views. 

2.4.6.3  Other climate-related policies 

•  Farm to fork strategy220: Published in 2020, the strategy aims to accelerate the transition to a 
sustainable food system  that has a neutral  or positive impact  on the environment, helps  to 
mitigate climate change and biodiversity loss, and ensures food security and fair prices for 
producers and consumers. Closely linked to the Green Deal, the strategy has the following 
targets: 

o  reducing the use and risk of chemical pesticides by 50% by 2030; 
o  reducing nutrient losses by 50% and fertiliser application by 20% by 2030; 
o  at least 25% of the EU’s agricultural land under organic farming by 2030; 
o  halving per capita food waste at retail and consumer levels by 2030. 

•  Revised  Industrial  Emissions  Directive:  The  revised  Industrial  Emissions  Directive  (IED), 
also covered in Section 2.4.5.2, extends its scope to smaller intensive pig and poultry farms. 
It now covers pig farms with more than 350 livestock units (LSUs) and poultry farms with 
more than 300 LSUs. Previously, the Directive only applied to pig farms with more than 2 000 
pigs  (600  LSUs)  or  750  sows  (1 000  LSUs)  and  farms  with  more  than  40 000  places  for 
poultry (LSUs differentiate between poultry for meat or egg production and species). In the 
original proposal, cattle farms were also included, but no political agreement could be reached 
on this. Therefore, by 31 December 2026, the Commission will assess whether there is a need 
for further action on emissions from rearing livestock, including from cattle. 

According to the impact assessment of the Commission’s proposal for the IED revision221, the rearing 
of cattle, pigs and poultry emits 6 100 kilotons (kt) of methane each year (171 Mt CO2eq). Previously, 
only 3% of those emissions were covered by the IED. That amount will significantly increase with 
the new revision and – if cattle are included in the future – is expected to cover 42-77% of all methane 
emissions from the rearing of cattle, pigs and poultry. 

2.4.7  Policies and measures in the LULUCF sector 

The LULUCF sector has become increasingly important for EU-wide climate policy in recent years. 
Taking climate action in this sector is hard because it is so interconnected with many other policy 
areas, such as agriculture, forestry, spatial and urban planning, biodiversity and energy. The sector is 
also  not  only  affected  by  human  intervention  but  also  subject  to  natural  disturbances  and  climate 
change. The European Green Deal and European Climate Law emphasise the role of the LULUCF 

220 A farm to fork strategy for a fair, healthy and environmentally-friendly food system, https://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=CELEX%3A52020DC0381. 
221  Impact  assessment  report  accompanying  the  proposal  for  a  directive  amending  Directive  2010/75/EU  […], 
SWD/2022/11 final, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52022SC0111. 

75 

 
 
sector as a net sink to help achieve the objective of a climate-neutral EU by 2050 and, as appropriate, 
achieve net negative emissions after that. A wide range of policies and measures have been put in 
place to shape the sector in future decades. Current and future policies and measures aim to increase 
CO2 removals and reduce CO2, CH4 and N2O emissions. 

2.4.7.1  LULUCF Regulation 
The LULUCF Regulation222, originally published in 2018, was amended in 2023 to introduce an EU-
wide net carbon removal target of 310 million tonnes of CO2 equivalent by 2030. From 2021 to 2025, 
countries  have  to  adhere  to  the  ‘no  debit’  rule,  meaning  that  accounted  emissions  from  specific 
managed land categories must be entirely compensated by corresponding accounted CO2 removals. 
In contrast, from 2026 to 2030, Member States will have to reach binding national LULUCF targets 
to contribute to the EU-wide target for 2030. The Member States’ targets for 2030 are defined as the 
average of net emissions/removals in 2016-2018 plus an individual binding target, which collectively 
corresponds to 42 MtCO2e, to be able to reach the EU target. The scope of the revised regulation has 
also been extended to cover all managed land from 2026 onwards.  

The revised LULUCF Regulation will improve the quality of monitoring, reporting and verification 
and promote strong synergies between climate mitigation and environmental protection measures to 
ensure more cohesive national and EU policymaking and implementation. 

2.4.7.2  Link to agricultural policies 

The LULUCF and agriculture sectors are so closely linked that many policies and measures contribute 
to  climate  action  in  both  sectors.  For  example,  measures  relating  to  the  forest  sector  or  carbon 
sequestration in agricultural soils are supported under the CAP. 

2.4.7.3  Other relevant climate-related policies 

•  Forest  Monitoring  Regulation223:  on  22 November 2023,  the  Commission  put  forward  a 
proposal  for  a  regulation  on  a  monitoring  framework  for  resilient  European  forests.  The 
proposal aims to build a common knowledge base on forests to speed up action and ensure 
forest  resilience.  It  will  also  offer  better  data  and  knowledge  for  policymaking  and 
implementation and provide timely information on natural disturbances and forest disasters. 
This will be achieved by establishing a forest data collection framework, using a combination 
of ground surveys and Earth observation, and a forest data sharing framework, which requires 
the Commission and Member States to make forest data publicly available. 
The  Forest  Monitoring  Regulation  can  contribute  significantly  to  the  EU’s  monitoring  of 
carbon removal targets in the LULUCF sector. Having up-to-date and accurate information 
available will enable more targeted, cost-effective implementation of mitigation measures. It 
may lead to policies and decisions better suited to maintaining and improving the forest carbon 
sink. 

222 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, as amended, https://eur-lex.europa.eu/eli/reg/2018/841/2023-05-
11. 

223  Proposal  for  a  Regulation  on  a  monitoring  framework  for  resilient  European  forests,  https://eur-lex.europa.eu/legal-

content/EN/TXT/?uri=COM:2023:728:FIN. 

76 

 
 
•  Soil Monitoring Law224: as announced in the EU soil strategy for 2030225, the Commission 
tabled a proposal for a directive on soil monitoring and resilience on 5 July 2023. The Soil 
Monitoring  Law  should  help  protect  and  restore  soils  and  ensure  that  they  are  used 
sustainably.  Currently,  over  60%  of  EU  soils  are  unhealthy  and  in  danger  of  further 
degradation226.  The  proposed  law  aims  to  address  key  threats  such  as  erosion,  floods, 
landslides, loss of organic matter and sealing. 

•  Soil health is especially relevant for climate change mitigation as it directly affects a soil’s 
capacity to store organic carbon. The 27 EU Member States plus the UK are estimated to have 
lost 4.2 million tonnes of carbon sequestration potential through sealing between 2012 and 
2018227.  Maintaining  and  improving  soil  health  is  therefore  crucial  for  reaching  the  EU’s 
mitigation targets. 

•  Nature Restoration Law228: the Nature Restoration Regulation provides for a general objective 
to put in place effective and area-based restoration measures that cover at least 20% of the 
EU’s  land  and  sea  areas  by  2030  and  all  ecosystems  in  need  of  restoration  by  2050.  The 
Regulation includes in its general objectives to contribute to achieving the EU’s overarching 
objectives  on  climate  change  mitigation,  climate  change  adaptation,  land  degradation 
neutrality and food security as well as meeting EU’s international commitments. The Nature 
Restoration Law includes specific targets for terrestrial/coastal/freshwater ecosystems, marine 
ecosystems,  urban  ecosystems,  rivers  and  floodplains,  pollinators,  agricultural  ecosystems 
and forest ecosystems. Member States will be required to develop national restoration plans, 
which have to include the quantification of areas to be restored to reach restoration targets and 
indicative maps of potential areas to  be restored. In doing  so, Member States will identify 
synergies  with  climate  change  mitigation,  climate  change  adaptation,  land  degradation 
neutrality and disaster prevention and prioritise restoration measures accordingly. They will 
also identify synergies with agriculture and forestry. 
Regulation on Deforestation-Free Products or EU Deforestation Regulation (EUDR): The EU, 
through its consumption, is responsible of between 10% and 20% of deforestation and forest 
degradation worldwide. The purpose of the EUDR is to tackle the main driver of deforestation, 
the expansion of agricultural land that is linked to the production of commodities like cattle, 
wood, cocoa, soy, palm oil, coffee, rubber, and some of their derived products, such as leather, 
chocolate, tyres, or furniture. 
Under the Regulation, any operator or trader who places these commodities on the EU market, 
or  exports  from  it,  must  be  able  to  prove  that  the  products  do  not  originate  from  recently 
deforested land or have contributed to forest degradation. The impact assessment of the EUDR 

224  Proposal for a Directive on Soil Monitoring and Resilience (Soil Monitoring Law),  https://eur-lex.europa.eu/legal-

content/EN/TXT/?uri=CELEX%3A52023PC0416&amp%3Bqid=1706624227744. 

225  Communication from the Commission to the European Parliament, the Council, the European Social and Economic 
Committee  and  the  Committee  of  the  Regions:  EU  Soil  Strategy  for  2030,  https://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:52021DC0699. 
a 

226  
opportunities/funding-programmes-and-open-calls/horizon-europe/eu-missions-horizon-europe/soil-deal-europe_en.  
227  Impact Assessment Report accompanying the proposal for a Directive of the European Parliament and of the Council 
https://eur-lex.europa.eu/legal-

https://research-and-innovation.ec.europa.eu/funding/funding-

on 
Law), 
Resilience 
content/EN/TXT/?uri=CELEX%3A52023SC0417&amp%3Bqid=1706625936410. 

(Soil  Monitoring 

Soil  Monitoring 

EU  mission: 

Europe, 

and 

soil 

for 

228 Nature restoration: https://www.europarl.europa.eu/doceo/document/TA-9-2024-0089_EN.pdf. 

77 

 
 
estimated will reduce at least 31.9 million metric tons of carbon emissions to the atmosphere 
every year due to EU consumption and production of the relevant commodities, which could 
be translated into economic savings of at least 3.2 billion EUR annually, while addressing 
biodiversity loss. 

•  EU  taxonomy  for  sustainable  activities:  this  taxonomy  (Section  2.4.2.7)  is  a  classification 
system with criteria for investments in financially sustainable projects and activities. It also 
includes forestry-related activities such as afforestation and forest conservation, management, 
rehabilitation  and  restoration.  The  taxonomy  can  therefore  have  a  positive  impact  on  the 
LULUCF sector (mainly the forest land category) when such activities are promoted. 

•  Carbon removal and carbon farming (CRCF): the CRCF (Section 2.4.2.6) is the first EU-wide 
voluntary framework for certifying carbon removals, carbon farming and carbon storage in 
products made in Europe. It will directly affect emissions and removals in the LULUCF sector 
by increasing soil organic carbon, reducing emissions from drained organic soils, increasing 
removals in forest land, and increasing the stock of harvested wood products (HWP). This 
will contribute to an expected increase of 42 Mt CO2eq in the land carbon sink, helping to 
achieve the objective of 310 Mt CO2eq net removals by 2030. 

2.4.8  Policies and measures in the circular economy sector 

The history of EU waste policy goes back to 1975 when the first piece of legislation was published. 
Since then, waste policy has been continuously extended to different sources of waste and key waste 
streams. The primary focus of EU waste policy is on management, with the reduction and prevention 
of waste gaining ground. It does not specifically address climate action. However, in most cases, these 
policies and measures also lead to direct or indirect emission reductions (CO2, CH4, N2O) from waste 
and waste management. 

As a key part of the Green Deal, in 2021 the Commission adopted the zero-pollution action plan229. 
The  plan  provides  the  overall  policy  framework  for  reducing  air,  water  and  soil  pollution  and  is 
therefore  closely  connected  to  waste  policy.  It  sets  specific  targets  for  2030  of  reducing  residual 
municipal waste by 50% and significantly reducing total waste generation in the EU. 

In 2020, the European Commission adopted the new circular economy action plan230 as one of the 
main building blocks of the Green Deal. It lists 35 actions to be implemented by the Commission, 
targeting the entire life cycle of products. The main areas with an expected impact on climate change 
mitigation are described in the following sections. The circular economy monitoring framework231 
enables the EU to  assess the effectiveness  of policies. The Commission  revised the framework in 
2023 and added new indicators. 

229  Pathway to a Healthy Planet for All EU Action Plan: Towards Zero Pollution for Air, Water and Soil,  https://eur-

lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52021DC0400. 

230  A  new  circular  economy  action  plan  for  a  cleaner  and  more  competitive  Europe,  https://eur-lex.europa.eu/legal-

content/EN/TXT/?qid=1583933814386&uri=COM:2020:98:FIN. 

231  Circular  Economy  Monitoring  Framework,  https://ec.europa.eu/eurostat/web/circular-economy/monitoring-

framework. 

78 

 
 
2.4.8.1  Waste and recycling 
The Waste Framework Directive232 is the key legal framework for treating and managing waste in 
the EU. It establishes an order of preference for managing and disposing of waste, referred to as the 
waste hierarchy: prevention, preparing for re-use, recycling, recovery and disposal. The Directive sets 
three main targets: 

•  by  2020,  the  preparation  for  re-using  and  recycling  waste  materials  (such  as  paper,  metal, 
plastic and glass) from households is to be increased overall to a minimum of 50% by weight; 

• 

the preparation for the re-use and recycling of municipal waste is to be increased to a minimum 
of 55% by 2025 60% by 2030 and 65% by 2035; 

•  by  2020,  the  preparation  for  the  re-use,  recycling  and  other  material  recovery,  including 
backfilling  operations  that  use  waste  to  substitute  other  materials,  of  non-hazardous 
construction and demolition waste is to be increased to a minimum of 70% by weight; 

•  Based on a report published by the Commission in 2023, 9 Member States were on track to 
reach the 2025 targets, while 18 Member States were at risk of missing one or more233. In 2023, 
the Commission proposed a targeted revision of the Waste Framework Directive, with a focus 
on textile waste and food waste234.  

The  proposed  revision  will  support  the  separate  collection  of  textile  waste,  which  will  become 
mandatory  in  the  EU  in  2025.  It  also  introduces  mandatory  and  harmonised  extended  producer 
responsibility schemes for textiles across all Member States. Producers will have to cover the costs 
of managing textile waste, which will give them incentives to increase the circularity of products and 
boost circular economy business models. It proposes rules to manage textile waste in line with the 
waste hierarchy (used clothes to be identified as a priority to re-use, more textile waste to be recycled). 
The proposal also addresses the issue of illegal exports of textile waste, clarifying what is defined as 
waste  and  what  as  reusable  textiles.  This  complements  measures  under  the  new  Regulation  on 
shipments of waste235 adopted in April 2024, which establishes stricter rules on the export of waste 
to ensure that the EU does not export its waste challenges and that it is managed in an environmentally 
sound manner. 

To accelerate the EU’s progress towards reaching sustainability development goal target 12.3, ‘By 
2030,  halve  per  capita  global  food  waste’,  the  revision  also  proposes  legally  binding  food  waste 
targets to be reached by Member States by 2030 compared to the 2020 baseline: a 10% reduction in 
processing  and  manufacturing  and  a  30%  per  capita  reduction  jointly  in  retail  and  consumption 
(restaurants, food services and households). According to the associated impact assessment, potential 

232  Directive 2008/98/EC on waste and repealing certain Directives, http://data.europa.eu/eli/dir/2008/98/2024-02-18. 
233  Waste Early Warning Report 2023, https://environment.ec.europa.eu/publications/waste-early-warning-report_en. 
234  Proposal 

for  a  directive  amending  Directive  2008/98/EC  on  waste,  https://eur-lex.europa.eu/legal-

content/EN/TXT/?uri=CELEX%3A52015PC0595. 

235  Regulation (EU) 2024/1157 on shipments of waste, http://data.europa.eu/eli/reg/2024/1157/oj. 

79 

 
 
greenhouse gas emission savings range between 8 and 108 Mt CO2eq236. The legislative proposal on 
food waste provides for Member States to formally review progress by the end of 2027. 

2.4.8.2  Sustainable products 

The cornerstone of the EU’s approach to more environmentally sustainable and circular products is 
the new Ecodesign for Sustainable Products Regulation (ESPR)237, which entered into force in July 
2024 and replaces the Ecodesign Directive (Directive 2009/125/EC). The ESPR allows performance 
and  information  requirements  to  be  progressively  set  for  key  products  placed  on  the  EU  market, 
including  product  durability,  recycled  content,  reparability,  recyclability  and  carbon  and 
environmental footprint performance and information requirements. To make more product-specific 
information available for consumers and businesses, a digital product passport has been introduced. 
The ESPR contains measures to prevent the practice of destroying unsold consumer products. The 
impact  assessment  concludes  that  doing  so  will  result  in  global  annual  greenhouse  gas  emission 
reductions of 117-471 Mt CO2eq from all measures238. 

The new circular economy action plan and the new consumer agenda promote a new ‘right to repair’.. 
The Directive on common rules promoting the repair of goods239, which entered into force in July 
2024, promotes after-sales repair (around 18 Mt CO2eq savings within 15 years240). The Directive on 
empowering consumers for the green transition241, which entered into force in March 2024, enables 
consumers to make informed purchasing decisions at the point of sale. The proposal for a Directive 
on  green  claims242  also  aims  to  stop  companies  from  making  misleading  claims  about  the 
environmental merits of their products and services. 

236  Impact Assessment Report Accompanying the document Directive of the European Parliament and of the Council 
https://eur-lex.europa.eu/legal-

Directive 

waste, 

on 

amending 
content/EN/TXT/?uri=CELEX%3A52023SC0421. 

2008/98/EC 

237    Regulation  (EU)  2024/1781  establishing  a  framework  for  the  setting  of  ecodesign  requirements  for  sustainable 

products, http://data.europa.eu/eli/reg/2024/1781/oj. 

238  Commission  Staff  Working  Document  Impact  Assessment  Report  accompanying  the  document  Proposal  for  a 
Regulation of the European Parliament and of the Council establishing a framework for setting ecodesign requirements 
for 
https://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=CELEX%3A52022SC0082https://eur-lex.europa.eu/resource.html?uri=cellar:ccd71fda-b1b5-
11ec-9d96-01aa75ed71a1.0001.02/DOC_1&format=PDF. 

repealing  Directive 

2009/125/EC, 

sustainable 

products 

and 

239  Directive (EU) 2024/1799 on common rules promoting the repair of goods, http://data.europa.eu/eli/dir/2024/1799/oj. 
240  Commission  Staff  Working  Document  Impact  Assessment  Report  accompanying  the  document  Proposal  for  a 
Directive of the European Parliament and of the Council on common rules promoting the repair of goods and amending 
Regulation  (EU)  2017/2394,  Directives  (EU)  2019/771  and  (EU)  2020/1828,  https://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=CELEX%3A52023SC0059https://commission.europa.eu/document/download/512cb8de-
3dc0-49ca-a711-b2beb768e531_en?filename=SWD_2023_59_1_EN_impact_assessment_part1_v5.pdf. 

241  Directive (EU) 2024/825 amending Directives 2005/29/EC and 2011/83/EU as regards empowering consumers for 
the  green  transition  through  better  protection  against  unfair  practices  and  through  better  information, 
http://data.europa.eu/eli/dir/2024/825/oj. 

242  Proposal  for  a  Directive  on  substantiation  and  communication  of  explicit  environmental  claims  (Green  Claims 

Directive), https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A2023%3A0166%3AFIN. 

80 

 
 
2.4.8.3  Wastewater/urban wastewater 
The Urban Wastewater Treatment Directive (UWWTD)243 aims to ensure that domestic and industrial 
wastewater is effectively collected, treated and discharged. According to the European Environment 
Agency 98% of EU wastewater is adequately collected and 92% is adequately treated244. 

In  line  with  the  zero-pollution  action  plan245,  in  January  2024  the  Council  and  the  European 
Parliament reached a provisional agreement on the new Urban Wastewater Treatment Directive. The 
agreed  text  is  due  to  final  adoption  by  the  Council  in  November  2024,  following  this  it  will  be 
published in the Official Journal of the European Union and consequently it will enter into force. 
New  measures  include  extending  the  scope  to  smaller  municipalities  and  new  obligations  and 
timelines to  apply  secondary, tertiary and quaternary treatment  to  urban  wastewater.  The revision 
includes requirements related to reductions in energy use and greenhouse gas emissions. In particular, 
it  introduces  an  energy  neutrality  target  at  national  level  by  2045  for  urban  wastewater  treatment 
plants of 10 000 population equivalent and above; meaning that operators of these plants will have to 
produce energy from renewable sources in order to meet this target. These measures to reach energy 
neutrality will lead to an emission reduction of around 3.4 Mt CO2eq in 2045. The Directive also 
includes an Extended Producer Responsibility scheme for the treatment of micropollutants, improved 
circularity regarding water reuse and the recovery of phosphorus, access to sanitation and wastewater 
surveillance, and improved monitoring and transparency. 

2.4.8.4  Landfill waste 

The EU’s waste hierarchy establishes landfilling as the least preferable option for waste disposal. It 
should  be  kept  to  an  absolute  minimum.  The  Landfill  Directive246  sets  stringent  operational  and 
technical requirements for landfill sites with the goal of minimising any negative effects on human 
health and the environment (including methane emissions). Key measures of the Directive are: 

• 

introducing  restrictions on the landfilling of all waste that is  suitable for recycling or other 
material or energy recovery from 2030; 

• 

limiting the share of municipal waste landfilled to 10% by 2035 (by weight). 

By 31 December 2024, the Commission will review the target of limiting landfilled municipal waste 
to 10% by 2035. In 2020, 19% of municipal waste was landfilled in the EU; the total has steadily 
decreased since 2010 (27% in 2010, 23% in 2016)247. 

243  Council  Directive  91/271/EEC  of  21  May  1991  concerning  urban  wastewater 

treatment,  https://eur-

lex.europa.eu/eli/dir/1991/271/oj. 

244  Evaluation of Council Directive 91/271/EEC of 21 May 1991 concerning urban waste water treatment,  https://eur-

lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52019SC0700. 

245  Communication from the Commission to the European Parliament, the Council, the European Economic and Social 
Committee and the Committee of the Regions: Pathway to a Healthy Planet for All EU Action Plan: Towards Zero 
Pollution for Air, Water and Soil, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A52021DC0400. 

246  Council Directive 1999/31/EC of 26 April 1999 on the landfill of waste, http://data.europa.eu/eli/dir/1999/31/oj.  
247  Landfill 

excluding 

mineral 

major 

waste 

rate 

of 

wastes, 

https://ec.europa.eu/eurostat/databrowser/view/ten00138/default/table?lang=en&category=t_env.t_env_was.t_env_
wasst. 

81 

 
 
2.4.8.5  Other EU waste policies targeting specific waste streams 

•  Packaging waste: The Directive on Packaging and Packaging Waste sets recycling targets for 

various packaging materials for 2025 and 2030. 

•  Biodegradable  waste:  The  Waste  Framework  Directive  introduces  an  obligation  to  collect 
biodegradable waste separately as of 2024. The separate collection of biodegradable waste is 
a prerequisite for its recovery and thereby reduce the amount that is landfilled. 

•  Plastics:  The  EU  plastics  strategy248,  as  part  of  the  circular  economy  action  plan,  aims  to 
transform  the  way  plastic  products  are  designed,  produced,  used  and  recycled  in  the  EU. 
Specific policies apply to certain areas, including the Directive on single-use plastics249, the 
Directive on plastic bags250 and the proposal for a regulation on preventing pellet losses251. 

•  Textiles: The revision of the Waste Framework Directive targets textile waste (Section 2.4.8.1 
for  more  details).  According  to  the  Waste  Framework  Directive,  the  separate  collection  of 
textiles must be implemented by 1 January 2025. 

•  Batteries: The first piece of EU legislation on batteries is the new Battery Regulation252, which 
entered into force on 17 August 2023 and takes a life-cycle approach. Targets for recycling 
efficiency,  material  recovery  and  recycled  content  will  be  introduced  gradually  from  2025 
onwards. All collected batteries will have to be recycled and targets for recycling efficiency 
and material recovery will become stricter over time. To extend the life of electronic products, 
consumers must be able to remove and replace portable batteries at any point in their life cycle, 
starting  in  2027.  A  digital  battery  passport  will  increase  transparency  for  consumers  and 
professionals along the value chain. 

•  Vehicles: The Commission proposed a new regulation on end-of-life vehicles (ELV)253 in July 
2023. The proposed set of rules covers the entire life cycle from design to end-of-life treatment. 
It sets out rules for improved circular design to facilitate the removal of materials, parts and 
components for re-use and recycling. It proposes that 25% of the plastic used to build a new 
vehicle be recycled and includes measures to recover more and better quality raw materials 
from recycling. The scope of the rules should gradually be extended to cover more vehicles 
such as motorcycles, lorries and buses. Implementation of the new legislation would result in 

248  A 

European 

for 
content/EN/TXT/?qid=1516265440535&uri=COM:2018:28:FIN. 

Strategy 

a  Circular 

Plastics 

in 

Economy, 

https://eur-lex.europa.eu/legal-

249  Directive  (EU)  2019/904  on  the  reduction  of  the  impact  of  certain  plastic  products  on  the  environment, 

http://data.europa.eu/eli/dir/2019/904/oj. 

250  Directive (EU) 2015/720 amending Directive 94/62/EC as regards reducing the consumption of lightweight plastic 

carrier bags,  http://data.europa.eu/eli/dir/2015/720/oj. 
preventing 
a  Regulation 

251  Proposal 

for 

on 

pellet 

losses 

to 

reduce  microplastic 

pollution, 

https://environment.ec.europa.eu/publications/proposal-regulation-preventing-pellet-losses_en. 

252  Regulation (EU) 2023/1542 concerning batteries and waste batteries, amending Directive 2008/98/EC and Regulation 

(EU) 2019/1020 and repealing Directive 2006/66/EC, https://eur-lex.europa.eu/eli/reg/2023/1542/oj. 

253  Proposal for a Regulation on circularity requirements for vehicle design and on management of end-of-life vehicles, 
https://environment.ec.europa.eu/publications/proposal-regulation-circularity-requirements-vehicle-design-and-
management-end-life-vehicles_en. 

82 

 
 
annual emission reductions of 12.3 Mt CO2eq by 2035, 10.8 Mt CO2eq by 2030 and 14 Mt 
CO2eq by 2040254. 

•  Waste electrical and electronic equipment (WEEE): The WEEE Directive requires Member 
States to encourage producers to design and produce electrical and electronic equipment which 
takes  into  account  and  facilitates  dismantling  and  recovery.  It  also  sets  targets  for  the 
collection,  recovery  and  recycling  of  WEEE.  In  2023,  the  Commission  adopted  policy 
recommendations255 for national authorities to increase the return of used and waste mobile 
phones, tablets and laptops. The Commission is evaluating the WEEE Directive. 

2.4.9  Methodologies and assumptions 

To describe the impact of policies and measures to reduce or remove greenhouse gas emissions, data 
were taken from impact assessments for the policies in question, from data providers such as Eurostat 
or from assessment or data collection work done by the European Environment Agency (EEA). 

An example of information taken from EEA analysis is verified emissions in the EU Member States. 

Section 2.4.2.1 has more information on impact assessments related to the EU ETS. 

2.4.10 Other information 

2.4.10.1 Policies and measures no longer in place 

The  European  Union’s  climate  change  mitigation  policies  and  measures  are  revised  and  updated 
regularly, which is imperative in the light of the urgent need to step up climate action in all sectors of 
the economy. Typically, the updates are to increase the scope and ambition of current policies and 
measures and to adopt new policies and measures. There are no climate change mitigation policies or 
measures which have been abandoned, hence there are no ‘policies and measures no longer in place’. 

2.4.10.2 Policies and measures in international transport 

The following policies and measures on GHG emissions from international transport are currently in 
place: 

•  The EU Emissions Trading System, which covers emissions from international aviation and 

international maritime transport: see Section 2.4.2.1. 

•  ReFuel EU Aviation, which aims to increase both demand and supply of sustainable aviation 

fuels: see Section 2.4.4.5. 

•  CORSIA: see Section 2.4.4.5. 

254  Impact Assessment Report Accompanying the document Proposal for a Regulation of the European Parliament and 
of the Council on circularity requirements for vehicle design and on management of end-of-life vehicles, amending 
Regulations  (EU)  2018/858  and  2019/1020  and  repealing  Directives  2000/53/EC  and  2005/64/EC,  https://eur-
lex.europa.eu/legal-content/EN/TXT/?uri=SWD%3A2023%3A256%3AFIN. 

255  Commission Recommendation (EU) 2023/2585 of 6 October 2023 on improving the rate of return of used and waste 
mobile phones, tablets and laptops, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ%3AL_202302585. 

83 

 
 
•  The FuelEU Maritime Regulation, which tackles the GHG intensity of energy used by vessels 

calling at European ports: see Section 2.4.4.6. 

2.4.10.3 Impact on longer-term trends 

The  policies  and  measures  introduced  in  this  chapter  help  reduce  greenhouse  gas  emissions  and 
remove greenhouse gases by carbon sinks. While some measures mainly produce results in the short 
term, others are effective in the medium to long term. As an example, vehicle emission standards help 
reduce greenhouse gas emissions from new vehicles. As they only affect new vehicles entering the 
market,  they  become  more  effective  over  time  as  old  vehicles  are  increasingly  replaced  by  new 
vehicles  that  meet  the  new  standard.  Similarly,  research  programmes  can  contribute  to  long-term 
rather than short-term climate change mitigation. 

The European Union has observed that GHG emissions have been trending downward over the past 
decade, as shown in Chapter 1. This trend can be attributed to policies such as the EU ETS and the 
Effort-Sharing Regulation. Both set mandatory and decreasing emission limits over time and can be 
considered the key drivers behind emission reductions in the EU in recent years. 

Both the ETS and the effort-sharing system have been extended to 2030, with more stringent emission 
limits. They will, therefore, contribute to reducing emissions further and keeping GHG emissions on 
their downward trajectory. The results of GHG emission projections also suggest that emissions will 
continue to decrease in the EU in the years ahead (see section 2.6). 

EU policies and measures will continue to push emissions downward, especially given that new and 
more ambitious policies and measures have been recently adopted. 

2.4.10.4 Assessment of economic and social impacts 

Policies and measures to mitigate climate change (also known as ‘response measures’) often have 
multiple effects on countries’ societies and economies. For example, a shift from fossil to renewable 
electricity generation can improve air quality and create new jobs, but it also jeopardises existing jobs 
in sectors and in countries that focus on the production of fossil fuels. Hence it is crucial for policies 
and measures to be designed in such a way that they produce co-benefits, while supporting a just 
transition and minimising adverse economic and social consequences. The Council Recommendation 
of 16 June 2022256
 on ensuring a fair transition towards climate neutrality provides an EU framework 
for  developing  and  implementing  policy  measures  designed  to  leave  no-one  behind  in  the  green 
transition. 

The assessment of the environmental, economic and social consequences of policies and measures is 
a key component of the European Union’s policymaking process. Impact assessments are carried out 
on  all  initiatives  expected  to  have  significant  environmental,  economic  or  social  impacts257.  The 
findings of the impact assessment process are summarised in an impact assessment report, which lays 
out the environmental, social and economic impacts, the stakeholders affected by the initiative and 

256 Council Recommendation of 16 June 2022 on ensuring a fair transition towards climate neutrality, 2022/C 
243/04, https://eur-lex.europa.eu/legal-content/en/TXT/?uri=CELEX%3A32022H0627%2804%29.  
257  Impact  assessments,  https://commission.europa.eu/law/law-making-process/planning-and-proposing-law/impact-
assessments_en. 

84 

 
 
the ways in which they are affected. The impact assessment report also provides information on the 
consultation strategy and the results. Impact assessment reports are published with the proposals or 
with acts adopted by the European Commission. 

The economic and social consequences of new policies and measures are not only assessed within 
the EU, but also in relation to developing countries that may be affected by them. The EU and its 
Member States have committed to policy coherence for development (PCD). This means that they 
seek  to  take  account  of  development  objectives  in  policies  that  are  likely  to  have  an  impact  in 
developing countries. The aim of PCD is  to minimise contradictions  and build synergies between 
different EU policies258. The ‘better regulation’ toolbox, which is used by the European Commission 
when preparing new initiatives, includes specific guidance for analysing the potential impact of EU 
policy initiatives on developing countries. This helps ensure that impacts on developing countries are 
taken into account in the early stages of preparing an initiative259. 

2.5  Summary of greenhouse gas emissions and removals 
For a summary of greenhouse gas emissions and removals, see Chapter 1 of this BTR. 

2.6  Projections of greenhouse gas emissions and removals 

2.6.1  Introduction 

This chapter presents EU projections of greenhouse gas emissions for the ‘with existing measures’ 
(WEM) and the ‘with additional measures’ (WAM) scenarios. Included under both projections is a 
breakdown of emissions by sector and by type of greenhouse gas. The EU data were compiled by 
aggregating EU Member States’ greenhouse gas emission projections reported under the Governance 
Regulation; the detailed methodology is documented in Section 2.6.5. Projections are presented for 
2025,  2030,  2035,  2040,  2045  and  2050.  Data  are  displayed  as  CO2  equivalent.  Projections  of 
emissions related to fuel used in international maritime transport are not included in the totals reported 
in this section, while indirect CO2 emissions are included. 

EU Member States were required to submit their emission projections before March 2023. With 2024 
being  a  non-compulsory  reporting  year,  only  Member  States  with  substantial  changes  in  their 
projections submitted updated reports. These were Belgium, Denmark, Germany, Estonia, Ireland, 
Italy, Latvia, Lithuania, Luxembourg, Austria and Sweden. 

The projection data to be reported in tabular format is available in CTF Tables 7-11, according to the 
reporting guidelines. 

2.6.2  Total greenhouse gas emission projections 

Figure 27 shows historical and projected net total GHG emissions at EU level. The data are presented 
under different scopes with projections including international bunkers and excluding international 

258 Policy coherence for development, https://ec.europa.eu/international-partnerships/policy-coherence-development_en. 
259  ‘Better  regulation’  toolbox,  Tool  34,  https://ec.europa.eu/info/law/law-making-process/planning-and-proposing-

law/better-regulation-why-and-how/better-regulation-guidelines-and-toolbox_en. 

85 

 
 
bunkers both visualised. Inventories under the UNFCCC and under the EU’s NDCs differ in  their 
scope, with emissions from international aviation and maritime transport being included in the latter. 

By 2022, the EU had reduced its net greenhouse gas emissions including international bunkers by 
29.7%  compared  to  1990  levels;  excluding  international  bunkers,  this  reduction  was  32.5%.  The 
substantive emission reductions between 2019 and 2020 seen in the figure are largely attributable to 
the  COVID-19  pandemic.  Projected  emissions  start  in  2025  and  are  displayed  for  mandatory 
projection years under the Governance Regulation (in five-year periods)260. EU-wide projections with 
existing  measures  (excluding  international  bunkers)  indicate  reductions  in  net  greenhouse  gas 
emissions  of  45%  by  2030,  as  compared  to  1990  levels261.  The  corresponding  figure  including 
international  bunkers  is  41%.  When  additional  measures  are  taken  into  account  (‘with  additional 
measures’ (WAM) scenario in Figure 27), the reduction in net emissions by 2030 compared to 1990 
is projected to be 51% excluding international bunkers, and 47% including international bunkers262. 
Like all emission projections, the EU projections come with considerable uncertainties. Changes in 
energy prices or disruptions in supply chains could substantially alter the economic context and hence 
the level of GHG emissions in the years ahead. 

Under the European Climate Law, the EU’s economy-wide climate goal of reducing EU emissions 
by at  least  55% by 2030  is a legal  obligation.  Major new EU legislation was adopted in  2023, as 
described in Section 2.4. The adoption of several important pieces of this legislation – for example 
the updated Renewable Energy Directive – took place after the 2023 deadline for Member States to 
report  their  GHG  emission  projections,  and  only  a  few  EU  Member  States  submitted  updated 
projections in 2024. Thus, the full impact of the most recent EU legislation will be reflected in the 
upcoming projections due in March 2025 for all Member States under the Governance Regulation. 

Figure  27  shows  historical  and  projected  GHG  emissions  from  the  EU,  based  on  the  most  recent 
projection data available from all Member States. As the target of the EU NDC is expressed as net 
GHG emissions, the projections of net GHG emissions (i.e. including LULUCF removals) are shown 
in this figure as key indicators. As explained in Section 2.2, the scope of the EU NDC includes some 
but not all emissions from international aviation and navigation. Hence, the projections both with and 
without international bunkers are shown as key indicators in this figure. For comparison, historical 
emissions in the NDC scope (see Section 2.2 and annex) are also shown. 

260  The latest mandatory reporting deadline for projections under the EU Governance Regulation was March 2023. In 
2024,  a  non-mandatory  reporting  year,  five  EU  Member  States  (Belgium,  Germany,  Ireland,  Estonia  and  Italy) 
provided updated projections, and these are included in the data provided throughout this chapter. 

261  This total includes indirect CO2 emissions. 

262  This total includes indirect CO2 emissions. 

86 

 
 
Figure 27: Historical and projected total net GHG emissions in the EU 

Note: WEM is ‘with existing measures’; WAM is ‘with additional measures’. 

Sources: Annual European Union GHG inventory 1990-2022, EU Member States’ GHG emission projections 
submitted in 2023 and 2024 under the Governance Regulation, NDC scope emissions as calculated in  the 
annex to this BTR. 

The projection results above show that more ambitious measures are needed to meet the 2030 target 
than those considered in the ‘with existing measures’ and ‘with additional measures’ scenarios. As 
discussed above, the scenarios shown here represent a snapshot and do not yet include all policies 
and measures adopted at EU level in 2023 and 2024. Future projection results will provide an updated 
picture of the EU’s progress towards its NDC target. 

2.6.3  Projections by sector 

Absolute historical and projected greenhouse gas emissions by sector in the EU are represented in 
Figure 28. The upper part of the figure shows historical data and projections from the ‘with existing 
measures’ scenario; the lower part combines historical data and projections from the ‘with additional 
measures’  scenario.  Figure  29  provides  insights  into  the  current  and  projected  share  of  GHG 
emissions  by  sector.  Figure  30  shows  historical  2022  and  projected  2030  GHG  emission  levels 
compared to 1990 for each sector. 

Energy emissions (without transport) are projected to fall by 56% in 2030 compared to 1990, taking 
into account existing measures, and by 61% with additional measures. Short and steep decreases took 
place during the financial crisis (2008-2009) and during the COVID-19 pandemic (2020). The general 
decreases in energy emissions are mainly due to the increased use of renewables, the switch from 

87 

 0 5001 0001 5002 0002 5003 0003 5004 0004 5005 0001990199520002005201020152020202520302035204020452050Mt CO2eqEU net GHG emissionsincluding int'l. bunkersEU net GHG emissionsin NDC scopeEU net GHG emissionsexcluding int'l. bunkersProjected net GHG emissionsincluding int'l. bunkers in 'withexisting measures' scenarioProjected net GHG emissionsincluding int'l. bunkers in 'withadditional measures' scenarioProjected net GHG emissionsexluding int'l. bunkers in 'withexisting measures' scenarioProjected net GHG emissionsexcluding int'l. bunkers in 'withadditional measures' scenarioEU 2030 NDC target 
 
solid  fuels  to  gas,  increased  energy  and  technical  efficiency  and  decreases  in  fuel  combustion  in 
manufacturing industries. Policies and measures related to energy (see Section 2.4.3 for more details) 
have driven historical changes and will propel future projected changes. 

Transport is  the only  sector projected to  have higher GHG emissions  in  2030 than in  1990.  After 
2007, domestic transport emissions fell slowly  but  steadily up to  2013, with  emissions increasing 
slightly  again  up  to  2016.  The  COVID-19  pandemic  in  2020 temporarily  reduced  the  mobility  of 
people and goods. Domestic transport emissions are projected to follow a modest downward trend. 
Relevant measures likely to influence the projected emissions are discussed in Section 2.4.4. Under 
existing measures, GHG emissions from the domestic transport sector in 2030 are projected to be 4% 
higher than 1990 levels. If additional measures are taken into account, projected values for 2030 fall 
to 8% below 1990 levels. Emissions from international bunkers are projected to continue increasing 
and  to  reach  73%  above  1990  levels  by  2030  with  existing  measures  and  68%  with  additional 
measures. These projections do not yet take into account the full effects of the recently revised ETS 
Directive, which covers both international aviation and maritime transport. 

Compared with 1990 levels, the GHG emissions of industrial processes and product use are projected 
to decrease by approximately 41% in 2030 in the ‘with existing measures’ scenario and by 44% in 
the ‘with additional measures’ scenario. Measures driving this decrease include the cross-cutting EU 
Emissions Trading System and the F-gas Regulation (see Sections 2.4.2.1 and 2.4.5.3). Compared to 
1990, agricultural GHG emissions in 2030 are projected to decrease by 23% with existing measures 
and  by  26%  with  additional  measures.  Changes  in  agricultural  policy  and  increased  productivity 
contributed  to  reduced  livestock  numbers,  reduced  nitrogen  fertiliser  production  and  use,  and 
improved manure management, resulting in reduced emissions from agricultural soils and livestock 
(Section 2.4.6 elaborates on agricultural policies and measures). 

GHG emissions are projected to steadily decrease in the waste sector. Compared to 1990, emissions 
in 2030 are projected to decrease by 51% under both with existing measures scenario and the with 
additional  measures  scenario.  Past  and  future  emission  decreases  in  this  sector  can  largely  be 
attributed to successful waste legislation (see Section 2.4.8 for waste policies and measures).  

In the land use, land-use change and forestry (LULUCF) sector, net removals in the ‘with existing 
measures’ scenario in 2030 are projected to be 1% above 1990 levels. However, they show a decrease 
of 7% between the most recent historical level (2022) and 2030. This is in part due to the decline of 
the forest sink, which is caused by a combination of several factors including higher harvest rates 
(partly  due  to  natural  disturbances)  and  lower  increment  due  to  droughts  and  age-related  effects. 
Considering additional measures, removals will remain roughly at the same level until 2030. 

88 

 
Figure  28: Historical and projected GHG  emissions and removals by sector  – ‘with  existing 

measures’ and ‘with additional measures’ 

Note: See CTF Tables 7-8 for the data reported in kilotons of CO2eq. 

Sources: Annual European Union GHG inventory 1990-2022, EU Member States’ GHG emission projections 
submitted in 2023 and 2024 under the Governance Regulation. 

The energy sector was responsible for the largest share of total GHG emissions in 2022. The transport 
sector had the second largest share, followed by agriculture, industrial processes and product use, and 
waste. The balance between the sectors is projected to remain the same, for both the ‘with existing 
measures’ and the ‘with additional measures’ scenarios, as shown in Figure 29 for 2030. 

89 

- 500 5001 5002 5003 5004 5005 500199019952000200520102015202020212022202520302035204020452050Energy (excluding transport)3 0692 7912 6512 7232 4752 1681 7641 8701 7981 6501 3611 1671 038981961Domestic transport672725798843815793721779804786696611532492466Industrial processes450430414429364342306318289299266236217219220Agriculture483417408387375383380376366375371366366364362Waste1841871741551361171111101091049179696459LULUCF-217-317-311-348-351-325-241-241-236-231-224-210-195-186-180International bunkers157169214250252235177197240260270272275275274Total net GHG emissions exluding international bunkers(including indirect CO2)4 6494 2404 1414 1943 8193 4823 0453 2163 1332 9842 5632 2502 0301 9351 890Mt CO2eq- 500 5001 5002 5003 5004 5005 500199019952000200520102015202020212022202520302035204020452050Energy (excluding transport)3 0692 7912 6512 7232 4752 1681 7641 8701 7981 5571 202978867808777Domestic transport672725798843815793721779804761619513407363329Industrial processes450430414429364342306318289296251216193191190Agriculture483417408387375383380376366369358353351347343Waste1841871741551361171111101091039078686358LULUCF-217-317-311-348-351-325-241-241-236-243-240-231-220-215-211International bunkers157169214250252235177197240254263263264264267Total net GHG emissions exluding international bunkers(including indirect CO2)4 6494 2404 1414 1943 8193 4823 0453 2163 1332 8462 2811 9071 6681 5601 488Mt CO2eqhistorical'with additionalmeasures'historical'with existingmeasures' 
 
Figure  29:  Historical  and  projected  share  of  total  GHG  emissions  by  sector,  including 

international bunkers and excluding LULUCF  

Note: See CTF Tables 7-8 for the data reported in kilotons of CO2eq. 

Sources: Annual European Union GHG inventory 1990-2022, EU Member States’ GHG emission projections 
submitted in 2023 and 2024 under the Governance Regulation. 

The energy and waste sectors are projected to achieve the largest reduction in GHG emissions in 2030 
as compared to 1990, as shown in Figure 30. 

90 

51%23%8%10%3%5%2022Energy (excluding transport)Domestic transportIndustrial processesAgricultureWasteInternational bunkers43%22%9%13%3%10%2030'with additional measures'44%23%9%12%3%9%2030'with existing measures'3 133Mt CO2eq2 563Mt 2 281Mt  
 
Figure 30: Historical and projected emission changes by sector in 2022 and 2030 compared to 
1990 in the ‘with existing measures’ and ‘with additional measures’ scenarios  

Note: Given the net removals reported for 1990 in the LULUCF sector, a positive percentage for LULUCF in 
this  figure  means  that  net  removals  are  expected  to  increase  and  a  negative  percentage  means  that  net 
removals are expected to fall. See CTF Tables 7-8 for the detailed data reported in kilotons of CO2eq. 

Sources: Annual European Union GHG inventory 1990-2022, EU Member States’ GHG emission projections 
submitted in 2023 and 2024 under the Governance Regulation. 

91 

-80%-60%-40%-20%0%20%40%60%80%100%Energy (excl.transport)DomestictransportIndustrialprocessesAgricultureLULUCFWasteInternationalbunkersTotal(incl. LULUCF,incl.Internationalbunkers)Percent compared to 199020222030 - 'with existing measures'2030 - 'with additional measures' 
 
 
 
2.6.4  Projections by type of gas 

In 2030, CO2 emissions are projected to decrease by approximately 43% compared to 1990 levels, 
with  existing  measures,  excluding  LULUCF  and  excluding  international  bunkers.  With  additional 
measures, the decrease is projected to be approximately 48% compared to 1990. Emissions of CH4 
have decreased steadily in the past and this decrease is projected to continue, albeit at a slower pace. 
In 2030, CH4 emissions are projected to be 43% below 1990 levels under existing measures and 45% 
below 1990 levels with additional measures. N2O emissions are projected to fall to 41% below 1990 
levels in 2030 with existing measures only. With additional measures, N2O emissions are projected 
to reach 43% below 1990 levels by 2030. 

Total  F-gas  emissions  in  2022  (the  sum  of  HFCs,  PFCs,  SF6,  NF3,  unspecified  mix  of  HFCs  and 
PFCs) were substantially higher than they were in 1990. This can be explained by the introduction of 
HFCs after 1990 as a replacement for ozone-depleting substances. They began decreasing after 2016 
following the introduction of legislation to regulate and reduce the use of these gases. This reduction 
is projected to continue, with a level of 25% below 1990 levels by 2030 with existing measures and 
28%  below  1990  levels  with  additional  measures.  The  contribution  of  F-gases  to  total  EU  GHG 
emissions was and remains relatively small. The share of F-gas emissions is projected to decrease 
from 2% in 2022 to approximately 1% in 2030 under both scenarios.  

92 

 
Figure  31:  Historical  and  projected  GHG  emissions  by  gas,  excluding  LULUCF,  excluding 

international bunkers  

Note: Data excluding indirect CO2. See CTF Tables 7-8 for the detailed data reported in kilotons of CO2eq. 

Sources: Annual European Union GHG inventory 1990-2022, EU Member States’ GHG emission projections 
submitted in 2023 and 2024 under the Governance Regulation. 

CO2  emissions  were  responsible  for  the  largest  share  of  total  GHG  emissions  in  2022  at  81%, 
followed  by  methane  emissions  (12%),  nitrous  oxide  emissions  (5%)  and  fluorinated  gases  (2%). 
Projections, both with existing measures and with additional measures, indicate that this breakdown 
will remain much the same in 2030 with only slight changes; the share of N2O emissions is projected 

93 

199019952000200520102015202020212022202520302035204020452050CO23 8733 6403 6063 7433 4333 1042 6352 8112 7412 6012 2101 9121 6961 6101 568CH4650592544497459432406403393388369350336321314N2O287263233220181178173173164172170167166166165Total F-Gases505664789493,0747167533730262422 01 0002 0003 0004 0005 000Mt CO2eqhistorical'with existing measures'199019952000200520102015202020212022202520302035204020452050CO23 8733 6403 6063 7433 4333 1042 6352 8112 7452 4841 9651 6141 3841 2891 224CH4650592544497459432406403394382356335321304296N2O287263233220181178173173164169164161160160158Total F-Gases505664789493747167523627222018 01 0002 0003 0004 0005 000Mt CO2eqhistorical'with additional measures' 
 
to be 2 percentage points higher than in 2022. Absolute values of the volumes of these gases, as well 
as a visualisation of the trends, are provided in Figure 32. 

Figure  32:  Share  of  GHG  emissions  by  gas  in  2022  and  projected  share  by  gas  for  2030, 

excluding LULUCF, excluding international bunkers  

Note: Excluding indirect CO2. 

Sources: Annual European Union GHG inventory 1990-2022, EU Member States’ GHG emission projections 
submitted in 2023 and 2024 under the Governance Regulation. 

Figure 33 shows, by gas, the percentage change in GHG emissions since 1990 versus 2022, versus 
2030 (with existing measures scenario, excl. LULUCF, excl. international bunkers) and versus 2030 
(with additional measures scenario, excl. LULUCF, excl. international bunkers). 

94 

81%12%5%2%2022CO2CH4N2OTotal F-Gases78%14%7%1%2030'with additional measures'80%13%6%1%2030'with existing measures'3 366Mt CO2eq2 786Mt 2 521Mt  
 
Figure 33: Historical and projected emission changes by gas in 2022 and 2030 compared to 1990 
in  the  ‘with  existing  measures’  and  ‘with  additional  measures’  scenarios, 
excluding LULUCF, excluding international bunkers 

Note: See CTF Tables 7 for the detailed data reported in kilotons of CO2eq. 

Sources: Annual European Union GHG inventory 1990-2022, EU Member States’ GHG emission projections 
submitted in 2023 and 2024 under the Governance Regulation. 

2.6.5  Methodology 

2.6.5.1  Models and approaches 

General approach 

The projection data are compiled as the sum of EU Member States’ individual projection data, which 
undergo a comprehensive quality assurance and control procedure (see below). Detailed descriptions 
of the individual projection methodologies that EU Member States used to project their greenhouse 
gas emissions and further information on their sensitivity analyses, key parameters and assumptions 
are available in the reports provided alongside their submissions under Article 18 of the Governance 
Regulation to the ‘Reportnet’ platform hosted by the European Environment Agency263 and in the 
Biennial  Transparency  Reports  of  individual  Member  States.  The  strengths  and  weaknesses  of 
aggregating  the  EU’s  greenhouse  gas  projection  from  individual  European  Member  States’ 
projections are as follows: 

Strengths: 

•  EU Member States have the best knowledge of their national circumstances, e.g. their national 
policies and measures, their exact specifications and expected future development. They are 
thus  in  the  best  position  to  set  national  projections  that  are  best  suited  to  their  national 

263  2023 projections by EU Member States: https://reportnet.europa.eu/public/dataflow/890, 2024 projections by EU --

Member States: https://reportnet.europa.eu/public/dataflow/1057.  

95 

-60%-40%-20%0%20%40%60%CO2CH4N2OTotal F-GasesPercent compared to 199020222030 - 'with existing measures'2030 - 'with additional measures' 
  
 
 
circumstances. They are also best placed to show possible overlaps and synergies between 
national policies and measures in their projection methodology. 

•  EU Member States can apply  tailor-made national  tools and models that are best  suited to 

presenting their individual contexts. 

•  The  European  Commission  provides  guidance  to  Member  States  on  key  parameters  and 
assumptions. This approach helps harmonise elements that may be similar among Member 
States (such as fuel import prices). At the same time, for some Member States there may be 
reasons why these parameters may develop differently. Member States can thus choose to set 
different  values  for  key  parameters  and  assumptions  to  best  represent  their  national 
circumstances. 

Weaknesses:  

•  A  potential  weakness  of  the  projection  methodology  is  that  the  aggregation  of  the  EU’s 
projection becomes less robust if there are errors in the data of individual Member States. This 
risk is mitigated by the comprehensive quality assurance and control procedure applied264.  

Representation of data 

The figures in the projections chapter represent historical GHG emissions up to 2022. From 2025 to 
2050, the figures are projections. Detailed figures are shown for 2030, which is the final year of the 
current NDC period. 

Historical and projected data in this chapter for total greenhouse gas emissions is presented for the 
EU.  The  projected  data  (starting  in  2025)  is  an  aggregation  of  individual  EU  Member  State 
greenhouse gas emission projections submitted to the European Commission in 2023 and updated by 
five European Member States (Belgium, Estonia, Germany, Ireland and Italy) in 2024265. 

This compilation incorporates the most recent available data. The sector breakdown is as follows: 

transport (CRT 1.A.3); 
industrial processes and product use (CRT 2); 

•  energy (Common Reporting Tables - CRT 1, without transport); 
• 
• 
•  agriculture (CRT 3); 
• 
•  waste (CRT 5); 
•  memo items: international bunkers. 

land use, land-use change and forestry (LULUCF) (CRT 4); 

The gases covered are listed below: 

•  CO2 

264  ETC-CM Report 2023/09, Quality assurance and quality control procedure for national and Union GHG projections 

2023, https://www.eionet.europa.eu/etcs/etc-cm/products/etc-cm-report-2023-09.  
greenhouse 

anthropogenic 

projections 

National 

265  GovReg: 

of 

gas 

emissions 

[2024], 

https://reportnet.europa.eu/public/dataflow/1057. 

96 

 
 
•  CH4 
•  N2O 
•  HFCs 
•  PFCs 
•  SF6 
•  unspecified mix of HFCs and PFCs 
•  NF3 

Indirect CO2 emissions are only included in the totals in this chapter. These emissions can be reported 
as a memo item under the Governance Regulation if available. 

Changes in methodology 

As this is the first Biennial Transparency Report submitted by the European Union, no changes to a 
previous report are reported. 

2.6.5.2  Key parameters and assumptions 

The  key  parameters  that  underpin  individual  Member  States’  projections  are  submitted  under 
Article 18 of the Governance Regulation. They undergo the quality assurance and control process 
documented  in  a  methodology  report266.  The  information  has  been  aggregated  to  create  EU-wide 
information either by aggregating to the EU level (GDP, population) or by calculating the weighted 
average value (monetary data, except GDP). Based on this approach, the key parameters at EU level 
are reported in CTF Table 11, which is submitted together with this BTR. 

The EU Reference Scenario 2020 is an additional source of parameters for an EU-wide scenario that 
is  comparable  to  the  WEM  scenario.  A  summary  of  the  EU  Reference  Scenario  2020  context  is 
available on the European Commission’s website267. The report268 also  contains projected data on 
final energy consumption by sector, electricity generation by technology and fuel type, and passenger 
transport  activity  by  mode  of  transport.  Sector-specific  technology  assumptions  for  energy269  and 
transport270 are also available. 

2.6.5.3  Results of the sensitivity analysis 
EU legislation (Annex XXV, Table 6 and 7, of the ‘EU Governance Implementing Regulation’271) 
provides for structured reporting on EU Member States’ sensitivity analyses, which they report along 
with their greenhouse gas emission projections. This provides the opportunity to highlight and to take 

266  ETC-CM Report ETC CM Report 2023/09, Quality assurance and quality control procedure for national and Union 

GHG projections 2023, https://www.eionet.europa.eu/etcs/etc-cm/products/etc-cm-report-2023-09.  

267  EU  Reference  Scenario  2020:  Main  outputs,  https://energy.ec.europa.eu/data-and-analysis/energy-modelling/eu-

reference-scenario-2020_en.  

268  EU  Reference  Scenario  2020,  https://op.europa.eu/en/publication-detail/-/publication/96c2ca82-e85e-11eb-93a8-

01aa75ed71a1/language-en/format-PDF/source-219903975. 

269  REF2020_Technology Assumptions_Energy, https://energy.ec.europa.eu/document/download/7707ee71-0ba3-4ba2-

bc54-d0ee49d657b5_en?filename=REF2020_Technology%20Assumptions_Energy.xlsx. 

270  REF2020_Technology  Assumptions_Transport,  https://energy.ec.europa.eu/document/download/a46ac067-e6d7-

42c2-b836-2c1661916a88_en?filename=REF2020_Technology%20Assumptions_Transport.xlsx.  

271  Commission 

Regulation 
Implementing 
content/EN/TXT/PDF/?uri=CELEX:32020R1208 

(EU) 

2020/1208, 

https://eur-lex.europa.eu/legal-

97 

 
 
into account the effort that Member States make to explore how changes to the different parameters 
impact  their  individual  greenhouse  gas  projections.  19  EU  Member  States  submitted  sensitivity 
scenarios along with their greenhouse gas emission projections. The number of sensitivity scenarios 
per  Member  State  ranged  from  1  to  15.  On  average,  results  for  four  sensitivity  scenarios  were 
reported. Member States used different parameters and parameter combinations compared to their 
‘with  existing  measures’  scenario  submitted  under  the  Governance  Regulation.  Among  the  most 
varied  parameters  were  international  (wholesale)  fuel  import  prices,  gross  value  added,  GDP, 
population and the EU ETS allowance price. 

Due to the wide range of parameters, sensitivity analyses are not aggregated to EU level. Figure 34 
provides  sensitivity  insights  for  2030  and  at  Member  State  level.  This  figure  considers  the  whole 
breadth of Member States’ sensitivity analyses and compares them to their individual ‘with existing 
measures’  scenario.  The  data  shown  refers  to  sensitivity  analyses  provided  for  the  variable  ‘total 
greenhouse gas emissions without LULUCF’. Results for this variable were reported by 12 Member 
States. Compared to the ‘with existing measures’ scenario, the results vary from -32% to +42%. 

Figure  34:  Differences  in  GHG  emissions  between  ‘with  existing  measures’  and  sensitivity 

scenarios 

Source: EU Member States’ GHG emission projections submitted in 2023 and  2024 under the Governance 
Regulation. 

98 

AustriaBelgiumCroatiaEstoniaFinlandGermanyGreeceIrelandLithuaniaLuxembourgPolandSloveniaS13.5%3.0%1.2%0.0%3.3%-0.3%42.1%4.4%-3.4%-31.8%-0.9%-18.7%S2-4.1%-2.7%-0.1%-3.0%-1.0%35.5%-31.9%0.3%-21.8%S3-10.1%1.4%0.3%1.2%41.0%-6.8%-0.5%-29.2%S45.0%4.3%-6.5%0.4%-0.5%-14.7%-19.1%S5-9.6%-0.5%-13.5%S6-6.1%0.0%-14.3%S7-0.8%S85.1%S91.4%S10-0.9%S11-2.9%S120.2%S130.2%S14-0.2%S15-0.3%-45%-35%-25%-15%-5%5%15%25%35%45%Percent difference to'with existing measures' scenario2030: Total GHG emissions without LULUCF in sensitivity scenarios (S1, S2, ...) compared to the 'with existing measures' scenario  
 
3  CLIMATE CHANGE IMPACTS AND ADAPTATION 

3.1  Introduction 
Scientists have made it clear that climate change is one of the biggest threats to humanity and that it 
seriously  affects  people  and  nature272.  A  July  2023  Eurobarometer  survey  found  that  77%  of 
Europeans consider climate change to be a serious problem. More than 8 in 10 respondents think that 
it is important that their national government (86%) and the European Union (85%) act.273 

Despite  our  collective  efforts  to  reduce  and  halt  all  greenhouse  gas  emissions,  climate  change  is 
happening. The frequency and severity of climate and weather extremes is increasing.274 

The EU is stepping up to meet the climate challenge and has set the long-term vision “that in 2050, 
the  EU  will  be  a  climate-resilient  society,  fully  adapted  to  the  unavoidable  impacts  of  climate 
change.”275 

Therefore, climate change adaptation is an integral part of the European Green Deal and its external 
dimension,  and  firmly  anchored  in  the  European  Climate  Law276.  The  European  Climate  Law 
provides the foundation for setting the pathway to ensure that the EU and Member States continuously 
progress  in  enhancing  adaptive  capacity,  strengthening  resilience  and  reducing  vulnerability  to 
climate change. They are fully committed to the Paris Agreement, its long-term goals and associated 
ambition cycle, including on adaptation, in light of the latest available science and aim to ensure a 
just transition in accordance with Article 7 of the Paris Agreement. 

Accordingly, the EU Strategy on Adaptation to Climate Change has equipped the EU for “Forging a 
climate-resilient Europe” (EU adaptation strategy) by paving the way for scaling up more ambitious 
actions, both domestically and internationally, to progress towards its 2050 adaptation and resilience 
vision by making adaptation actions smarter, more systemic, faster and global. 

Hence, the EU’s decision to integrate climate action across the entire EU budget to help achieve its 
climate goals. 30% of the EU funds is dedicated to fighting climate change, the highest share ever of 
the European budget. 

It is worth noting, though, that while Member States are the EU’s main implementation partners, the 
EU  is  engaging  in  dialogue  with  partner  countries  to  increase  cooperation  on  climate  change 

272  Feyen L., et al. (editors) (2020),  Climate change impacts and adaptation in Europe. JRC PESETA IV final report. 
https://joint-research-

Publications 
the 
centre.ec.europa.eu/system/files/2020-05/pesetaiv_summary_final_report.pdf. 

Luxembourg, 

European 

Union, 

Office 

of 

273  Eurobarometer survey - Climate change - July 2023, https://europa.eu/eurobarometer/surveys/detail/2954. 
274 

strategy 

change, 

climate 

https://eur-lex.europa.eu/legal-

on 

to 

EU 

The 

adaptation 
content/EN/TXT/?uri=COM:2021:82:FIN#footnote3 
on  Adaptation 

new  EU 

Strategy 

new 

275  The 

to  Climate  Change, 

https://eur-lex.europa.eu/legal-

content/EN/TXT/PDF/?uri=CELEX:52021DC0082 

276  REGULATION  (EU)  2021/1119  of  the  European  Parliament  and  of  the  Council  of  June  2021  establishing  the 
framework  for  achieving  climate  neutrality  and  amending  Regulations  (EC)  No  401/2009  and  (EU)  2018/1999 
(‘European 
Law’),https://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32021R1119  

(‘European 

Climate 

Climate 

Law’) 

99 

 
 
 
adaptation, achieve a better understanding of adaptation challenges in third countries and promote 
climate change adaptation action and good practices. 

This chapter of the BTR does not provide an exhaustive description of all EU adaptation actions and 
measures. Instead, it gives a snapshot of progress made and underway for enhancing EU’s climate 
adaptation and preparedness for and resilience to climate change impacts. It describes recent actions 
and progress towards enhancing the EU’s adaptive capacity, strengthening resilience and reducing 
vulnerability to climate change impacts as required as required by the reporting guidelines (Decision 
18/CMA.1).277 

3.2  National circumstances, institutional arrangements and legal 

frameworks 

The EU has legal personality and is a unique economic and political union of 27 European countries. 
Climate change is an area of shared competence between the EU and its Member States, therefore 
both may legislate and adopt legally binding acts in this regard. The EU is working across all sectors 
and policies to cut greenhouse gas emissions and make the transition to a clean, climate neutral and 
sustainable  economy,  as  well  as  addressing  unavoidable  consequences  of  climate  change.  To 
contribute  to  keeping  global  rise  of  temperature  well  below  2°C  above  pre-industrial  levels  and 
pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels, as established 
under  the  Paris  Agreement,  the  EU  has  a  range  of  policies  and  instruments  in  place  for  lowering 
emissions and driving the transition towards climate neutrality. Section 2.1 above describes the EU 
and Member States detailed national circumstances and institutional arrangement. 

The European Commission is the institution responsible for adopting EU wide adaptation strategies, 
as well as for assessing EU and Member States’ measures every five years to ensure that they are 
consistent with the aim to make progress on adaptation under the European Climate Law. Section 
2.1.1.1 presents the detailed on the decision-making process of the EU with its Member States. 

Each  EU  Member  State  has  unique  vulnerabilities  to  climate  change,  influenced  by  geographic, 
economic, and environmental factors. Climate change impacts such as rising temperatures, changing 
precipitation  patterns,  and  extreme  weather  events  affect  sectors  like  agriculture,  water  resources, 
coastal  zones,  and  infrastructure  differently  across  countries.  The  EU  outermost  regions  are  also 
vulnerable to climate change due to rising atmospheric and marine temperatures, ocean acidification, 
sea-level  rise  and  increased  exposure  to  hurricanes.  Despite  this  diversity,  the  EU  emphasizes  a 
coordinated  approach  to  ensure  that  adaptation  is  effectively  integrated  into  national  and  sectoral 
planning.  

A key piece of legislation in the field of adaptation is the 2021 European Climate Law. It enshrines 
into  law  the  EU's  commitment  to  reaching  climate  neutrality  by  2050.  It  requires  the  Union 
institutions  and  Member  States  to  make  continuous  progress  to  enhance  their  adaptive  capacity, 
strengthen resilience and reduce vulnerability to climate change, in accordance with Article 7 of the 
Paris Agreement. 

277 Decision 18/CMA.1, https://unfccc.int/resource/tet/0/00mpg.pdf 

100 

 
 
The EU adaptation strategy adopted in 2021, is the centrepiece of the EU cross-cutting efforts to 
adapt  to  the  unavoidable  impacts  of  climate  change  and  become  climate  resilient  by  2050.  The 
strategy  sets  out  an  ambitious  path  across  an  exceptionally  broad  spectrum  of  policy  areas.  It  is 
conceived around four main objectives: to make adaptation smarter, swifter and more systemic, and 
to step up international action on adaptation to climate change for enhancing resilience to the impacts 
of climate change and for managing the associated risks. 

Progress in implementing adaptation action is primarily reported and monitored under the Regulation 
on the Governance of the Energy Union and Climate Action (see Section 2.4.1.1 and 3.7)278. Every 
two years, EU Member States report information on their national climate change adaptation planning 
and  strategies  to  the  Commission,  outlining  their  implemented  and  planned  actions  to  facilitate 
adaptation to climate change. The Governance Regulation builds on previous EU climate monitoring 
legislation and requires Member States to integrate adaptation goals into their national energy and 
climate plans (NECPs). 

To promote steady implementation progress, the European Environment Agency (EEA)279 is tasked 
with supporting Commission policy development and with providing support to key global processes. 
The EEA whose geographical coverage goes beyond the 27 EU MS, provides analytical expertise and 
an efficient reporting infrastructure to manage national and international data flows. In collaboration 
with  its  network,  EIONET,  the  EEA  informs  decision-makers  and  the  public  about  the  state  of 
Europe’s environment, climate change and sustainability issues. 

Several pieces of sector-specific legislation promote better climate preparedness and resilience. This 
includes the EU Nature Restoration Law280 which has dedicated provisions on climate adaptation; 
it  also  includes  targets  for  urban,  coastal,  wetland  and  riverine  habitats  that  support  disaster  risk 
reduction and climate adaptation. At the same time, the new EU forest strategy for 2030281 outlines 
specific goals and measures for adaptation, including afforestation/reforestation and climate-resilient 
forestry. The Energy Performance of Buildings Directive282 (see Section 2.4.3.1) brought in risk 
and resilience related indicators as part of the Member States’ national building renovation plans.  

The  Floods  Directive  stipulates  that  Member  States  must  undertake  a  flood  risk  assessment  and 
prepare flood hazard maps and flood risk maps which include the future impacts of climate change. 
Based  on  these  assessments,  Member  States  have  developed  flood  risk  management  plans.  The 
Directive on the Resilience of Critical Entities, which entered into force in January 2023, requires 
Member States to better protect entities and services that are essential for the maintenance of vital 
societal functions and economic activities from a wide range of hazards, including climate-related 
and other natural disasters. 

278  Regulation 

(EU)  2018/1999  on 

the  Governance  of 

the  Energy  Union 

and  Climate  Action, 

http://data.europa.eu/eli/reg/2018/1999/oj. 

279  European Environment Agency, https://www.eea.europa.eu/en. 
280  Regulation  (EU)  2024/1991  on  nature  restoration  and  amending  Regulation  (EU)  2022/869,  https://eur-

lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32024R1991&qid=1722240349976.  
281  New EU forest strategy for 2030, https://environment.ec.europa.eu/strategy/forest-strategy_en.  
282  Directive (EU) 2024/1275 of the European Parliament and of the Council of 24 April 2024 on the energy performance 

of buildings (recast), http://data.europa.eu/eli/dir/2024/1275/oj. 

101 

 
 
As EU governance is largely based on the subsidiarity principle, EU legislation can also promote the 
provision of support for national and local adaptation action. While Member States are responsible 
for implementation on the ground and the Commission can provide support and guidance to national 
and local action. The institutional arrangements and initiatives presented here cover several steps of 
the  adaptation  policy  cycle  (Figure  35).  Under  the  United  Arab  Emirates  Framework  for  Global 
Climate Resilience283, specific targets in relation to the dimensions of the iterative adaptation cycle 
have been adopted, and the EU is committed to implementing the Global Goal on Adaptation and its 
framework.   

Figure 35: The adaptation policy cycle 

Source: Based on Climate-Adapt – The Adaptation Support Tool284 

As  climate  change  can  unleash  cascading  risks  and  exacerbate  environmental  degradation  and 
existing  drivers  of  conflict,  displacement  and  migration,  it  is  important  to  mainstream  adaptation 
considerations  into  non-climate  policy  frameworks  such  as  the  common  agricultural  policy,  the 
European  security  strategy,  the  EU  mobility  strategy  and  others.  Here,  risk  ownership  can  be 
identified, and existing responsibilities and resources can be utilised to support adaptation action.  

3.3  Impacts, risks and vulnerabilities 
The European Climate Risk Assessment (EUCRA)290 an independent scientific report, which was 
published in March 2024 by the European Environment Agency (EEA), builds on and complements 
the existing knowledge base on climate impacts and risks for Europe. It provides a first assessment 
of the main climate risks with potentially severe consequences across Europe. This assessment is a 
crucial  step  in  understanding  and  identifying  the  priorities  to  tackle  and  to  strengthen  Europe's 
resilience  to  climate  change.  The  EUCRA  storylines  illustrate  what  an  integrated  climate  risk 
assessment could be. 

This chapter provides a summary of some of the key findings of the EUCRA report on current and 
observed  trends  and  hazards  and  the  approaches,  methodologies  and  tools,  and  associated 

283  Decision 2/CMA.5, Global goal on adaptation, https://unfccc.int/documents/637073.  
284 The Adaption Support Tool, https://climate-adapt.eea.europa.eu/en/knowledge/tools/adaptation-support-tool. 

102 

 
 
 
uncertainties and challenges to assessing climate events trends and impacts. The full report can be 
found on the EEA website.285 

3.3.1  Current and projected climate trends and hazards 

Europe  is  experiencing  more  and  stronger  climate  hazards,  including  heatwaves  and  prolonged 
droughts, heavy precipitation leading to pluvial and fluvial floods, and sea level rise leading to coastal 
floods (See Figure 36). 

Figure 36: Observed and projected trends in key climate-related hazards in different European 

regions 

(maximum  1-day  precipitation),  and  drought 

Notes: Underlying climate variables are: heatwaves (days with maximum temperatures above 35°C), heavy 
precipitation 
(using  a  standardised  precipitation 
evapotranspiration index over 6 months (SPEI-6, Hargreaves' method)). Time periods and scenarios are past 
(1952-2021); future until the end of the century (2081-2100 relative to 1995-2014); low scenario (SSP1-2.6); 
and high scenario (SSP3-7.0). 

Source: EUCRA 

These climatic hazards will lead to more disasters such as droughts, floods, wildfires, diseases, crop 
failures, heat deaths, infrastructure damage, and structural changes to the environment. In practice, 
the societal preparedness, the financial and administrative capacity to recover, and physical location 
are the main factors determining how exposed and vulnerable we are as a society. Southern Europe 
will face stronger climatic pressures than the rest of Europe, as well the Arctic areas. The outermost 
regions  have  a  distinct  set  of  risks.  This  asymmetrical  exposure  to  climate  impacts  exacerbates 

285  European Climate Risk Assessment, EEA Report No 1/2024 

103 

 
 
 
existing  disparities  between  regions  in  terms  of  need  for  climate  adaptation,  risk  prevention  and 
preparedness, which can put pressure on tools for EU-wide cohesion. 

3.3.2  Observed and potential impacts of climate change 

EUCRA confirms  the key findings  of the  chapter on Europe in  the  IPCC AR6, but  it refines and 
extends the IPCC assessment in several ways. 

The EUCRA systematic risk assessment process has identified and assessed 36 major climate risks 
for Europe, grouped into five broad clusters: ecosystems, food, health, infrastructure, and economy 
and finance (see Figure 39). Depending on their nature, each of these risks alone has the potential to 
cause  significant  environmental  degradation,  economic  damage,  social  emergencies  and  political 
turbulences; however, their combined effects are even more impactful. In addition, the assessment 
found that all EU outermost regions (OMR) face critical risks to their marine ecosystems from ocean 
warming and marine heatwaves that require urgent action. 

The report reveals that most EU’s sectorial policies are exposed to climate risks, either directly or 
indirectly.  Public  health,  environment,  agriculture  and  energy  are  among  those  policy  areas  most 
directly  affected  by  major  climate  risks  in  Europe  that  require  urgent  action.  The  EUCRA  report 
points out that various other EU policy areas are also highly exposed, in particular, industry, trade 
and economic, social and territorial cohesion. 

Climate risks and EU policies are interconnected in many ways. Most EU policies already include 
decision-making  processes  that  can  take  climate  risks  into  account.  The  wealth  of  evidence  put 
forward in the EUCRA report feeds into these processes already. 

Example: of extreme climate events in 2021, 2022 and 2023 with severe societal consequence 
(EUCRA) 

Extreme precipitation and large-scale floods took place in Germany and Belgium in 2021 (EUR 44 
billion damage and more than 200 deaths), Slovenia in 2023 (damage estimated at around 16% of 
national  GDP),  and  Greece  in  2023  (submerging  its  breadbasket  region).  These  events  caused 
severe, direct impacts on settlements, infrastructure, agriculture and human health. They also led 
to wider economic impacts in the affected regions and major fiscal challenges at national levels 
and stretched the limits of the existing EU Solidarity Fund. 

3.3.3  Approaches and methodologies 

This section presents the EUCRA report′s knowledge context and analytical approach. The choices 
presented here take into account the fact that the first EUCRA is a fast-track assessment, conducted 
over about 18 months. 

104 

 
Figure 37: Methodological framework of EUCRA 

Source: EUCRA. 

3.3.3.1  European climate risk assessment methodologies 

The report builds largely on available scientific knowledge, integrating various sources of evidence 
such as:  

1.  reports and data from Copernicus Climate Change Service (C3S),  

2.  the IPCC’s Sixth Assessment Report (AR6),  

3.  publications from research projects funded under Horizon 2020 and Horizon Europe,  

4.  other relevant academic publications,  

5.  reports and knowledge sources produced by European institutions, including: 

a. 

b. 

the overview of natural and man-made disaster risks the European Union may face, 

the series of PESETA projects undertaken by the Joint Research Centre, 

6.  other products developed and managed by the EEA such as 

a. 

b. 

the Climate-ADAPT portal and 

the technical report ‘Is Europe on track towards climate resilience?’. 

Building on this evidence, the EUCRA involved a wide range of stakeholders. It presents complex 
risks through risk storylines and identified 36 major climate risks for Europe. The EUCRA assesses 
those major climate risks according to their severity over time and confidence and determines their 
risk urgency in a structured way based on the outcomes of the risk and policy evaluation. The risk 

105 

 
 
evaluation phase assessed the urgency for EU action considering risk severity over time, confidence 
in the risk severity assessment and the temporal aspects of potential adaptation action jointly with 
risk ownership, policy readiness and the policy horizon. 

In  line  with  the  IPCC  AR6  definition,  the  EUCRA  understands  climate  risk  as  the  potential  for 
adverse consequences for human or ecological systems. Two factors influence the severity of climate 
risks,  namely  (1)  climatic  hazards  and  (2)  non-climatic  risk  drivers  (i.e.  environmental  stressors, 
technical factors, socio-economic factors, policy aspects). Generally, the risk assessment approach in 
the EUCRA followed the ISO 31000 standard on risk management and ISO 14091 on adaptation to 
climate change with its phases of risk identification, risk analysis and risk evaluation. 

Figure 38 shows the methodological framework that facilitated the structured risk assessment carried 
out  in  the  EUCRA.  Here,  a  consecutive  four-step  assessment  process  was  conducted,  involving 
a broad range of experts (European Environment Agency, European Topic Centre on Climate Change 
Adaptation, Joint Research Centre, Copernicus Climate Change Service), stakeholders representing 
the  political  level  (Steering  Group,  Commission  Working  Group)  and  a  community  of  practice 
(Expert Advisory Group, Risk Review Panel, European Environment Information and Observation 
Network). 

Figure 38: Methodological Framework of the EUCRA  

Source: EUCRA286 based on EEA information. 

286  European  climate  risk  assessment,  full  report,  https://www.eea.europa.eu/publications/european-climate-risk-

assessment. 

106 

 
 
 
3.3.3.2  Uncertainties and challenges 

According to the EUCRA report climate uncertainty refers to the incomplete knowledge about future 
climate  and  related  non-climatic  conditions.  It  is  a  challenge  for  decision-making  and  adaptation 
planning  because  waiting  for  uncertainties  to  be  resolved  may  leave  little  or  no  time  for 
effective action. To assess risk, it is fundamental to consider how the key driving factors determining 
potential impacts (described in Section 2.2 of the EUCRA report) will evolve into the future. 

In the EUCRA report, specific projections are presented using fixed periods in the future, which is 
relevant  for  understanding  the  rate  of  climate  change  and  its  impacts  and  hence  the  urgency  for 
adaptation. Future changes are discussed for three periods: current/near term (2021-2040), mid-term 
(2041-2060) and long term (2081-2100). Using fixed periods, it is easier to identify the role of key 
risk  drivers  to  explore,  based  on  rates  of  historical  developments  and  the  range  of  future  trends. 
Special attention is paid to the mid-term future, as this is the timeframe for guiding many adaptation 
policies to reduce risks associated with climate change. Scenario uncertainties grow as one proceeds 
into the long-term future. 

Example of uncertainties and challenges (EUCRA)287 

Projecting climate impact drivers and non-climatic impact drivers over time horizons of multiple 
decades  into  the  future  is  a  formidable  challenge,  especially  at  the  fine  temporal  and  spatial 
resolution commonly required for risk analysis. 

For  a  few  regions  and  climate  drivers,  recent  studies  revealed  discrepancies  that  cannot  be 
explained by either natural variability or known deficiencies of climate models that can easily be 
corrected.  For  Europe,  this  includes,  among  others,  an  underestimation  of  extreme  hot  days 
(Vautard et al., 2023) and an underestimation of drying over Europe (Douville and Willett, 2023) 
by CMIP6 models. 

Wildcards  are  unpredictable  and  unexpected  factors  that  may  change  an  expected  climate 
trajectory,  pushing  understanding  out  of  the  linear  view  offered  by  scenarios  that  do  not 
dynamically account for interaction in the responses, learning and new experiences 

3.4  Adaptation priorities and barriers 
Each  of  the  36  major  climate  risks  identified  in  the  EUCRA  report288  can  cause  significant 
environmental  degradation,  economic  damage,  social  emergencies  and  political  turbulence.  When 
combined, their impacts are even more significant. To follow up on the EU adaptation strategy, the 
EUCRA report proposes adaptation priorities for Europe, in line with their assessed risk severity.  

287  European  Climate  Risk  Assessment, 

https://climate-adapt.eea.europa.eu/en/eu-adaptation-policy/key-eu-

actions/climate_risk_assessment. 

288  ibid 

107 

 
 
Figure  39:  Priorities  identified  in  the  EUCRA  report  for  EU  action  on  climate  adaptation 

(EUCRA) 

Source: EUCRA289 report 

289 European Climate Risk Assessment, Full Report, https://www.eea.europa.eu/publications/european-climate-risk-

assessment.  

108 

 
 
 
According  to  the  EUCRA  report,  the  main  barriers  to  tackling  adaptation  priorities  include 
governance-related  barriers  such  as  departmental  silos  hampering  effective  coordination,  limited 
administrative capacity and budgets, and the shortage of accessible tools. Public authorities do not 
always have coordinating bodies with sufficient political mandate. Holistic and integrated analyses 
that consider the socio-economic cost of climate impacts and the benefits of adaptation action and the 
risks of inaction are often missing. 

For the five risk clusters identified by the EUCRA report, the Commission puts forward suggestions 
in its Communication on managing climate risks.290 

290  Commission  Communication 

on  managing 

climate 

risks: 

protecting 

people 

and 

prosperity, 

https://climate.ec.europa.eu/eu-action/adaptation-climate-change/managing-climate-risks-protecting-people-and-
prosperity_en. 

109 

 
 
Barriers  

Food 

Actions 

The  main  barriers  are  related  to 
established  diets,  rigid  agricultural 
production methods, and a lack of the 
knowledge and skillsets needed for an 
efficient 
to  more 
transformation 
climate-resilient agriculture.  

Health 

Public health is under the jurisdiction 
of Member States, but climate 
change-induced health impacts are a 
pan-European issue and will need 
Europe-wide policies. Substantial 
institutional barriers complicate 
widespread implementation of health 
policy measures. 

Ecosystems 

Resources, stakeholder engagement 

Food: as part of the discussions for improving food security in the 
EU, the Commission will continue to work with the Member States 
on future-proofing EU food production. It will be necessary to create 
options  for  adaptation  actions  at  the  level  of  agricultural  farms  or 
fishing operations, with adequate support measures for the transition 
to resilient farming and fishing and sustainable incomes for farmers. 

take  stock  of  water 

Water:  commission  will 
issues 
comprehensively,  building  upon  the  findings  of  the  ongoing 
assessments of River Basin and Flood Risk Management Plans, 
as well as of the marine Programmes of Measures put in place 
by the Member States and on that basis consider the need for 
action. 

In the context of ongoing work, the Commission will strengthen the 
Climate and Health Observatory and consider further action to protect 
workers exposed to high heat. 

The Commission will continue to promote healthy ecosystems which 
support societal functions, including prevention of forest disturbances 
and  protection  of  marine  ecosystems.  To  maintain  and  restore  the 
resilience  of  ecosystems  and 
they  provide, 
approximatively 30-50% of Earth's land, freshwater and oceans will 
need  to  be  preserved.  Together  with  the  Member  States,  the 
Commission will work on guidance on developing climate resilient 
landscapes that can buffer the impacts of climate chance. 

services 

the 

Infrastructure 

The  lack  of  defined  infrastructure 
stress  tests  and  performance  criteria 
poses significant barriers to progress 

The Commission will seek to make building and infrastructure design 
standards  better  equipped  to  address  climate  risks,  and  to  promote 
better  incorporation  of  climate  risks  into  transport  and  energy 
infrastructure planning, supported with relevant guidelines. 

Economy and finance 

The  main  barriers  to  business-led 
adaptation include a lack of access to, 
and the limitations of, risk data, a lack 
of  human  resources  and  expertise, 
relatively  short  time  frames  for  risk 
management, 
lack  of 
and 
incentives  for  actions  in  the  current 
policy landscape (Cote & Mikaelsson, 
2023; World Economic Forum, 2023). 

the 

The Commission will continue its work on helping EU companies, 
notably  SMEs,  to  better  manage  climate  risks,  by  making  sure  the 
evidence is reflected in various EU processes, including in assessing 
vulnerabilities in supply chains. Work is also underway to develop 
the projection of climate impacts on debt sustainability. 

110 

 
 
 
 
Based on this assessment, the Commission Communication on managing climate risks291 notes that 
measures to build resilience to a given climate risk must be taken without transferring that risk to 
someone else in society or increasing the risk down the road (leading to maladaptation). Moreover, 
action must be taken systemically; solutions to address risks in one sector may need to come from 
another  sector.  Future  EU  adaptation  policies  must  therefore  be  designed  with  transformational 
measures in mind, accompanied by appropriate support for affected communities so that no-one is 
left  behind.  To  achieve  that,  the  Communication  suggests  a)  improving  governance,  b)  providing 
tools  for  empowering  risk  owners,  c)  harnessing  structural  policies,  and  d)  setting  the  right 
preconditions for financial resilience. 

3.5  Adaptation strategies and policies 
The European Climate Law292 provides the foundation for increased ambition and policy coherence 
on adaptation. 

The EU Strategy on Adaptation to climate change was adopted in March 2021. It sets out a blueprint 
for the EU to become a climate-resilient society that is fully adapted to the unavoidable impacts of 
climate change by 2050, through four high-level objectives: making adaptation smarter, faster, more 
systemic, and stepping up international action. The strategy outlines 49 actions at the EU level, to 
which  the  European  Commission  has  committed,  to  deliver  against  the  four  objectives  across  a 
broader spectrum of policy areas and aligned with different time horizons: smarter adaptation, faster 
adaptation, more systemic adaptation and stepping up international action on adaptation to climate 
change. 

291  ibid 
292  Regulation (EU) 2021/1119 establishing the framework for achieving climate neutrality and amending Regulations 
(EC) No 401/2009 and (EU) 2018/1999 (‘European Climate Law’), http://data.europa.eu/eli/reg/2021/1119/oj. 

111 

 
 
Objective 1 

Smarter adaptation: improving knowledge and managing uncertainty 

The 2021 EU Adaptation Strategy champions the need for robust data and risk assessments to inform all 
sectors  of  society  on  the  current  and  future  impacts  of  climate  change.  The  objective  acknowledges  and 
targets knowledge gaps and uncertainties that persist in our understanding the impacts of climate change on 
natural and human systems, and it aims to push these frontiers including through acquiring more and better 
climate-related  data.  It  also  recognises  the  increasing  demand  from  society  for  user-friendly  tools  that 
condense complex climate information into actionable knowledge. 

Field  of  actions 
planned  

1.  Pushing the frontiers of knowledge on adaptation 
2.  More and better climate-related risk and losses data 
3.  Making Climate-ADAPT the authoritative European platform for adaptation 

Objective 2 

More systemic adaptation: Support policy development at all levels and sectors 

This objective acknowledges that climate change impacts all societal levels and sectors and reflects 
the need for a correspondingly systemic response. This objective emphasises mainstreaming climate 
resilience considerations across all policy fields, going beyond the sectors traditionally receiving the 
most attention in adaptation such as agriculture and infrastructure. Encompassing 4 fields and 15 
actions, it highlights three cross-cutting priorities: integrating climate adaptation into macro-fiscal 
policy, fostering nature-based solutions, and bolstering local adaptation action.   

Field  of  actions 
planned 

4.  Improving adaptation strategies and plans 
5.  Fostering local, individual, and just resilience 
6.  Integrating climate resilience in national fiscal frameworks 
7.  Promoting nature-based solutions for adaptation 

Objective 3 

Faster adaptation: Speeding up adaptation across the board 

Physical  climate  has  been  outpacing  the  progress  in  the  implementation  of  climate  adaptation 
measures.  To  accelerate  the  implementation  of  adaptation  action,  resources  are  required  that  are 
commensurate with the challenge. Under the objective of faster adaptation 17 actions are presented, 
divided  over  four  challenges:  to  develop  and  roll  out  solutions,  to  help  reduce  climate  risk,  to 
increase climate protection, and to safeguard freshwater access. 

Field  of  actions 
planned 

8.  Accelerating the rollout of adaptation solutions 
9.  Reducing climate-related risk 
10.  Closing the climate protection gap 
11.  Ensuring the availability and sustainability of freshwater 

112 

 
 
Objective 4  

Stepping up international action for climate resilience 

This objective expands the scope of EU Climate Adaptation Strategy and action to a global stage. 
Stronger  international  cooperation  to  achieve  climate  resilience  is  encouraged  in  the  Adaptation 
Strategy through three fields and ten actions. Alignment with the adaptation-related requirements 
and objectives of the Paris Agreement is an important element. The Strategy further develops the  
EU’s  role  in  supporting  international  adaptation,  alongside  its  global  leadership  in  climate 
mitigation.  It  underscores  the  need  for  a  collaborative,  unified  response,  targeting  particularly 
regions vulnerable to  climate impacts.  Encapsulating the spirit of global solidarity, the objective 
outlines the urgent need for additional international finance and innovation in financial mechanisms 
to support climate resilience worldwide. 
The EU will promote sub-national, national and regional approaches to adaptation, with a specific 
focus  on  adaptation  in  Africa,  Small  Island  Developing  States  (SIDS),  and  Least  Developed 
Countries (LDCs). 
The EU will implement the Green Agenda for the Western Balkans and strong partnerships with its 
neighbourhood, in particular the Mediterranean region293 

Field  of  actions 
planned 

12.  Increasing support for international climate resilience and preparedness 
13.  Scaling up international finance to build climate resilience 
14.  Strengthen global engagement and exchanges on adaptation 

Member  States  adopt  and  implement  national  adaptation  strategies  and  plans,  taking  into 
consideration the EU adaptation strategy as required under the European Climate Law. 

The March 2024 Commission Communication ‘Managing climate risks – protecting people and 
property’ 306 builds on the EUCRA report and sets out key steps needed to ensure that, in the face of 
worsening  climate  risks,  the  public  and  businesses  can  rely  on  the  EU  and  its  Member  States  to 
maintain  societal  functions  and  continued  access  to  basic  services.  It  seeks  to  clarify  who  is 
responsible  for  making  the  difficult  choices  and  taking  action,  informed  by  the  best  evidence. 
Furthermore, it shows how the EU can effectively get ahead of climate impacts in the coming years 
and how building resilience makes achieving other policy objectives cheaper and easier. 

Moreover, strengthening preparedness for and resilience to climate impacts is a strong priority for the 
EU as reflected in  the March 2024  European Council conclusions307 which, among  other things, 
propose the development of actions to strengthen preparedness and crisis response at EU level in an 
all-hazards and whole-of-society approach. These efforts are further developed in the EU Strategic 
Agenda of 2024-2029  309 and in the Commission President-elect’s Political Guidelines310 putting 
forward that the Commission will prepare a European Climate Adaptation Plan, to support Member 
States notably on preparedness and planning and ensure regular science-based risk assessments. 

293  The  Mediterranean  is  a  climate  change  hotspot,  warming  20%  faster  than  the  global  average  –  this  shows  the 

importance of supporting adaptation efforts in the Southern Neighbourhood. 

113 

 
 
 
3.6  Progress on implementation of adaptation  
3.6.1  Implementation of adaptation within the EU and in Member States 

As  reported  in  Section  3.5,  the  2021  EU  Adaptation  Strategy294  is  the  centrepiece  for 
implementation of adaptation within the EU. Its implementation and progress articulate around 49 
actions and 4 central objectives. 

Progress in the implementation of adaptation actions is primarily reported and monitored under the 
Regulation on the Governance of the Energy Union and Climate Action295 (see section 3.7 monitoring 
and evaluation). EU Member States must submit to the Commission their national energy and climate 
plans  (NECPs),  which  include  national  objectives  for  both  mitigation  and  adaptation  to  climate 
change. Member States  must  every  two years  report information  on their national  climate  change 
adaptation  planning  and  strategies  to  the  European  Commission,  outlining  their  implemented  and 
planned  actions  to  facilitate  adaptation  to  climate  change.  Additionally,  such  reports  include 
information  on  the  national  climate  risk  assessments,  adaptation  priorities,  and  how  climate 
adaptation is being mainstreamed into national and sectoral policies. 

3.6.1.1  EU level 

In October 2023, the Commission published a progress report on adaptation at EU level. While 
the  EU  has  made  broad  progress  on  adaptation  to  climate  change,  through  the  ongoing 
implementation  of  the  EU  Adaptation  Strategy,  progress  has  been  uneven  across  policy  areas. 
Moreover,  due  to  the  rapidly  changing  climate,  especially  in  Europe,  according  to  science  and 
Member States’ own reporting, there are significant and growing vulnerabilities, e.g. for agriculture, 
water management and the energy sector.   

The  2023  Report  on  the  implementation  of  the  EU  Strategy  on  Adaptation  to  Climate  Change 
provides an update on the ongoing progress on the 49 EU Adaptation Strategy actions. Therefore, in 
this sub-section we will only report some key actions implemented or ongoing. 

A.  Progress under objective 1: Smarter adaptation: Improving knowledge and managing 

uncertainty 

Mission Adaptation 
To  support  faster  adaptation,  in  2021  the  Commission  launched  the  Mission  on  Adaptation  to 
Climate Change296. It pursues three objectives: 1) providing general support to European regions 
and communities to better understand, prepare for and manage climate risks and opportunities, e.g. 
by preparing guidance for the development of comprehensive risk management plans; 2) accelerating 
transformations  to  climate  resilience,  e.g.  by  working  with  at  least  150  regions  and  communities 
covering more than 40 % of the EU to accelerate their transformation to a climate-resilient future, 

294  Forging a climate-resilient Europe - the new EU Strategy on Adaptation to Climate Change. 
295 Governance regulation, article 19 
296 Adaptation to climate change - European Commission, https://research-and-innovation.ec.europa.eu/funding/funding-
opportunities/funding-programmes-and-open-calls/horizon-europe/eu-missions-horizon-europe/adaptation-climate-
change_en 

114 

 
 
 
and  3)  demonstrating  systemic  transformation  to  climate  resilience,  e.g.  by  delivering  at  least  75 
large-scale demonstrations of systemic transformations to climate resilience across European regions 
and  communities.  The  Mission  Implementation  Platform297,  operational  since  spring  2023,  is 
disseminating knowledge on climate adaptation and providing a technical support facility, whereas 
the  Adaptation  Community  of  Practice  offers  multiple  capacity-building  and  networking 
opportunities.  The  first  Horizon  Europe  Mission-funded  projects  began  in  January  2023,  helping 
regions and local authorities develop climate risk and vulnerability assessments and demonstrating 
transformative adaptation solutions. 

Update and expand Climate-ADAPT 

Substantial work and resources were assigned to expand the capabilities, content, user and contributor 
base,  outreach,  and  impact  of  the  Climate-ADAPT  knowledge  exchange  platform  hosted  by  the 
EEA.  Since its launch more than 10 years ago, the European knowledge exchange platform Climate-
ADAPT298 has been supporting and driving EU adaptation policy and practice. It provides access to 
essential adaptation data and information, catalyses the uptake of proven adaptation solutions, and 
mobilises people and organisations across Europe to make adaptation happen. The Climate-ADAPT 
platform also hosts various other sites, such as the European Climate Data Explorer299, and the web 
portals of the European Climate and Health Observatory300 and the Mission on Adaptation to Climate 
Change301. 

B.  Progress under objective 2: More systemic adaptation: Support policy development at 

all levels and sectors 

Improving adaptation strategies and plans  
The European Commission worked with Member States to develop a new set of guidelines for their 
national adaptation strategies and plans, which were published in 2023302. The Commission is helping 
Member States adopt a whole-of-government approach to climate adaptation policymaking by way 
of multilevel coordination and mainstreaming. The guidelines also include a comprehensive list of 
key  features  of  adaptation  policy,  including  a  call  for  legal  frameworks  instead  of  soft  policies, 
regularly  updated  adaptation  strategies  and  plans,  climate  risk  assessments,  involvement  of  all 
relevant stakeholders and all levels of administration, and continuous monitoring and evaluation of 
all  adaptation  actions.  The  guidelines  also  put  forward  topics  that  need  to  be  considered  such  as 
nature-based solutions and just resilience.  

297 EU mission on Adaptation to Climate Change Portal, https://climate-adapt.eea.europa.eu/en/mission 
298 Climate-ADAPT, https://climate-adapt.eea.europa.eu/en 
299 European Climate Data Explorer (europa.eu), https://climate-adapt.eea.europa.eu/en/knowledge/european-climate-data-explorer/ 

300 European Climate and Health Observatory (europa.eu), https://climate-adapt.eea.europa.eu/en/observatory 
301 Adaptation to climate change - European Commission (europa.eu), https://research-and-innovation.ec.europa.eu/funding/funding-
opportunities/funding-programmes-and-open-calls/horizon-europe/eu-missions-horizon-europe/adaptation-climate-change_en 
302  Commission  guidelines  on  Member  States’  adaptation  strategies  and  plans,  https://climate.ec.europa.eu/news-your-

voice/news/building-climate-resilient-future-2023-07-26_en  

115 

 
 
 
 
Advancing towards climate resilience in Europe 

The  EEA  published  a  report  on  advancing  towards  climate  resilience  in  Europe303  providing  an 
overview  of  how  all  EU  Member  States  were  adapting  to  climate  change  at  that  time  and  were 
reporting on their adaptation actions in 2021. 

Fostering local, individual, and just resilience. 

In 2021, the Commission also launched as a pilot initiative,  the Policy Support  Facility (PSF), 
expanding the EU Covenant of Mayors, to assist capacity building on climate action at subnational 
level,  including  adaptation.  The  European  Climate  Pact  was  launched  the  same  year  to  provide 
information and tools to support grassroots mobilisation of climate action among people in the EU.  

Within  the  EU  Covenant  of  Mayors,  as  of  June  2023,  over  4500  of  the  11.700  signatories  –
representing more than 230 million inhabitants – have made commitments to act on adaptation to 
climate change.   

Update its ‘Better regulation’ guidelines 
To  support  a  systemic  approach  to  policy  development,  the  Commission  has  stepped  up  work  to 
systematically  integrate  adaptation  action  in  sectoral  strategies  and  plans.  It  now  also  requires  a 
consistency check with adaptation objectives in its impact assessments, as a result of the update 
to its Better Regulation instruments, to ensure that new EU policies are consistent with climate goals, 
in particular the climate-neutrality objective and the objective to ensure progress on adaptation.  

C.  Progress under objective 3: Faster adaptation: Speeding up adaptation across the board 

Accelerating the rollout of adaptation solutions 

The  implementation  of  the  Horizon  Europe  Mission  on  Adaptation  to  Climate  Change  is  well 
underway, alongside other adaptation-relevant Missions on Soils, Oceans and Water, and Cities. The 
Mission Implementation Platform304 disseminating knowledge on climate adaptation and providing a 
technical support facility, is operational since spring 2023. 
Reducing climate-related risk  

the  Commission  published 

Furthermore, 
climate-proofing 
infrastructure305 in 2021 and on enhancing the climate resilience of buildings in 2023. This guidance 
supports  the  mainstreaming  of  climate  considerations  in  present  and  future  investment  and  in  the 
development of infrastructure projects. The guidance helps investors to make informed decisions on 
projects deemed compatible with the Paris Agreement and the EU’s climate objectives.  Section 3.8 
presents the EU’s measures for averting, minimising and addressing climate risk loss and damage. 

technical  guidelines  on 

D.  Progress under objective 4: Stepping up international action for climate resilience will 

be further developed in  

303  EEA Report No 11/2022  
304 EU Mission on Adaptation to Climate Change Portal, see https://climate-adapt.eea.europa.eu/en/mission 
305 Commission Notice — Technical guidance on the climate proofing of infrastructure in the period 2021-2027. EUR-

Lex - 52021XC0916(03) - EN - EUR-Lex (europa.eu) 

116 

 
 
The Commission supports EU Partner Countries as part of its bilateral and regional dialogues and 
financial programming exercises, including in their efforts to set up and implement their Nationally 
Determined  Contributions,  National  Adaptation  Plans,  Disaster  Risk  Reduction  Strategies,  and 
reporting on the Sendai Framework indicators, which sets out the overall objective to substantially 
reduce  disaster  risk  and  losses,  including  those  related  to  climate.  An  example  of  EU  continued 
support to help increase climate resilience globally can be found in Section 4.6.3 below. 

To improve knowledge and develop solutions for smarter adaptation, and to address knowledge gaps 
on  climate  impacts  and  resilience,  the  Commission  has  regularly  published  new  calls  for  projects 
under different pillars and clusters of the Horizon Europe research programme. 

3.6.1.2  Member States level 

In December 2023, the Commission published a progress report on adaptation in each individual 
EU  Member  State306.  It  notes  that  further  progress  has  been  made  in  assessing  climate-related 
hazards,  vulnerabilities  and  risks,  confirming  that  enhancement,  expansion,  and  deepening  of  the 
knowledge base on climate risks is a continuous and ongoing process in many countries. It shows that 
Member States need to take significantly more action to adapt to climate change – for instance, 
on governance, funding, risk assessments, nature-based solutions, as well as on monitoring, reporting 
and evaluation in order to reduce their social and economic vulnerabilities to the intensifying climate-
related risks. The number of countries with legal obligations to conduct climate risk assessments has 
increased. In several of those countries in which climate laws have been newly enacted or amended, 
preparation and periodic updates of climate risk assessments have been legally anchored in legislation 
and are usually coupled to revision cycles of the national adaptation strategy, the national adaptation 
plan, and sectoral and/or regional adaptation plans. However, countries with legal commitments are 
still in the minority.  On the basis of this assessment, the Commission issued recommendations to 
Member States in December 2023.  

The Commission is also assessing the draft updated NECPs of the Member States following the 
recommendation sent to Member States from December 2023 onwards. 

Finally,  in  May  2024,  the  European  Commission  published  a  report307  on  the  operation  of  the 
European Climate Law and of the Effort Sharing Regulation and on the Emissions Trading 
System Directive in the context of the global stocktake. It finds that the EU has successfully set 
the  long-term  directions  for  policies  and  investments.  This  goes  hand  in  hand  with  the  efforts  to 
enhance  adaptive  capacity,  strengthen  resilience  and  reduce  vulnerability  to  climate  change,  as 
demonstrated in the Communication on managing climate risks308 and the EUCRA. 

306  Assessment 

on 
https://climate.ec.europa.eu/document/download/398491c4-4c35-4d9d-a4ac-
929c8edf8f44_en?filename=SWD_2023_932_1_EN.pdf 

adaptation 

progress 

climate 

of 

in 

the 

individual  Member 

States, 

307  Commission Communication COM/2024/196 on the operation of the European Climate Law and of the Effort Sharing 
Regulation,  and  on  the  Emissions  Trading  System  Directive  in  the  context  of  the  global  stocktake,  p.12, 
https://data.consilium.europa.eu/doc/document/ST-10053-2024-INIT/en/pdf 
climate 

308  Commission  Communication COM/2024/91 on  managing 

risks, https://climate.ec.europa.eu/eu-

action/adaptation-climate-change/managing-climate-risks-protecting-people-and-prosperity_en. 

117 

 
 
3.6.2  Findings of the IPCC Sixth Assessment Report (AR6) 

Very much in line with the EUCRA, the 2022 IPCC AR6 Working Group II report concludes that, in 
recent  years,  the  EU  and  its  Member  States  have  significantly  increased  (1)  the  knowledge  on 
adaptation  in  public  and  private  sectors,  (2)  the  number  of  policy  and  legal  frameworks,  and  (3) 
dedicated spending on adaptation309. While the range of available adaptation options has increased in 
most of Europe in recent years, information provision, technical measures and government policies 
are  the  most  commonly  implemented310.  The  IPCC  found  that  transformative  adaptation  actions 
across  Europe  were  limited  to  only  a  few  local  examples311;  thus,  many  regions  remained  under-
prepared. This assessment was confirmed by the EUCRA report and the IPCC statements that current 
adaptation implementation is not happening at the ‘scale, depth and speed needed to avoid risks’ and 
that ‘existing and planned adaptation measures are not sufficient to avoid the residual risk, especially 
beyond 1.5 °C global warming level’312.  

3.6.3  EU contributions to international adaptation efforts  

As  part  of  the  international  component  of  the  EU  Adaptation  Strategy,  and  other  international 
commitments, the EU supports international climate resilience and preparedness by scaling up finance 
and encouraging stronger global engagement and exchanges on adaptation. The EU’s international 
support  for  scaling  up  climate  resilience  beyond  Europe  fall  under  objective  4  of  its  Adaptation 
Strategy (see Section 4.5) 

Detailed  information  on  financial,  technological  and  capacity-building  support  provided  to 
developing countries can be found in Chapter 4 (support provided and mobilised). 

Examples of the EU international engagement that are focussed on adaptation, or include adaptation 
components, are: the Team Europe Initiative (TEI) on Climate Change Adaptation and Resilience in 
Africa, introduced to strengthen the resilience of the most vulnerable populations against climate and 
natural  hazard risks  ;  in Central  Asia, the TEI on Water313, Energy and Climate Change;  in  Latin 
America, the TEI in the Amazon Basin, including one on Tropical Forests in Brazil. The EU has also 
joined initiatives such as the Africa Adaptation Initiative, the International Coral Reef Initiative, and 
the All-Atlantic Ocean Research and innovation Alliance. 

Another example of the EU’s engagement is the support to partner countries in the design of policies 
and incentives to promote climate resilient investment, including in nature-based solutions through 
multilateral  outreach, including  through the High Ambition Coalition and the Leaders’ Pledge for 
Nature, to ensure that the internationally agreed definition of a nature-based solution is ambitious in 
terms of climate and biodiversity and is accompanied by robust sustainability safeguards.  

309  IPCC WG II AR6 chapter 13. 
310  Ibid. 
311  Ibid. 
312  Ibid. 
313  EU  Transboundary  water  cooperation,  https://international-partnerships.ec.europa.eu/policies/climate-environment-and-

energy/transboundary-water-cooperation_en 

118 

 
 
All  these  actions  contribute  to  the  thematic  targets  in  paragraph  9  of  the  decision  on  the  UAE 
Framework  for  Global  Climate  Resilience314.  In  addition,  these  activities  support  the  dimensional 
targets  contained  in  paragraph  10  of  the  same  decision,  namely  impact,  vulnerability  and  risk 
assessment; planning; implementation; and monitoring, evaluation and learning. 

3.6.4  Funding climate change action 

The EU has a number of instruments in place to finance adaptation to climate change in Europe. 
The 2021-2027 multiannual financial framework ensures that the contribution of the EU budget to 
achieve climate objectives overall (both mitigation and adaptation) is set at a minimum of 25% and 
will rise to at least 30% no later than 2027315.  

Within  this, at  least  30% of the European Regional  Development  Fund  and 37% of the Cohesion 
Fund investments will contribute to climate objectives. The planned amount of EU investments under 
the  Cohesion  Policy  2021-2027  related  to  climate  adaptation  is  EUR 12.9  billion,  adding  up  to 
EUR 17.3  billion  with  national  contributions  also  included.  The  Recovery  and  Resilience  Facility 
(with  about  EUR 648  billion  committed  in  the  national  recovery  and  resilience  plans)  includes  a 
requirement  to  contribute  to  the  green  transition  pillar,  and  measures  attributed  to  the  policy  area 
dedicated amounts to about 2% of the funding linked to the green pillar. 

Further important funding streams related to adaptation are, for example, the European Structural and 
Investment Funds316 (including the European Regional Development Fund, which includes priorities 
for a smarter, greener Europe317 and the Cohesion fund to support investments in environment and 
trans-European networks in transport infrastructure318), the Common Agricultural Policy319, the LIFE 
Programme with a sub-programme for adaptation320, the Horizon Europe programme, which funds 
research and innovation321, and InvestEU. As one of the world’s main financiers of climate action, 
the European Investment Bank (EIB) invests in a wide range of climate change adaptation projects322. 
Further  EU  funding  of  adaptation  is  summarised  on  the  European  Climate  Adaptation  Platform 
CLIMATE-ADAPT.3230 

314  Decision 2/CMA.5, Global goal on adaptation. 
315  Multiannual financial framework, 2nd Draft - closed for comments BTR1 - 20240830_Commented 
316  European Structural and Investment Funds, https://ec.europa.eu/info/funding-tenders/funding-opportunities/funding-

programmes/overview-funding-programmes/european-structural-and-investment-funds_en 

317  European  Regional  Development  Fund,  https://ec.europa.eu/info/funding-tenders/funding-opportunities/funding-

programmes/overview-funding-programmes/european-structural-and-investment-funds_en 

318  Cohesion Fund, https://ec.europa.eu/regional_policy/en/funding/cohesion-fund/ 
319  Common 
glance_en 

agriculture 

policy, 

https://agriculture.ec.europa.eu/common-agricultural-policy/cap-overview/cap-

320  LIFE Programme, https://cinea.ec.europa.eu/programmes/life_en 
321Horizon 2020, https://ec.europa.eu/info/research-and-innovation/funding/funding-opportunities/funding-programmes-

and-open-calls/horizon-europe_en 

322  EIB climate action explained, https://www.eib.org/en/projects/topics/climate-action/explained 
323  EU funding of adaptation, https://climate-adapt.eea.europa.eu/eu-adaptation-policy/funding 

119 

 
 
3.7  Monitoring and evaluation 
Monitoring progress on adaptation implementation is critical for assessing if and when further actions 
are needed and for evaluating whether adaptation is successful324. In the EU, monitoring, reporting 
and evaluation have therefore been planned or implemented at different levels for different purposes. 
The  European  Climate  Law  requires  the  European  Commission  to  regularly  assess  progress  in 
adapting to climate change based on the reports submitted by the Member States and other sources. 
These reports are due every second year under the Governance Regulation325. Article 19 of this 
Regulation requires Member States to report information on their national climate change adaptation 
planning  and  strategies,  outlining  their  implemented  and  planned  actions  for  adapting  to  climate 
change. The EEA has set up a platform to facilitate the fulfilment of these reporting requirements, 
called Reportnet326. 

In addition to the mandatory reporting by EU Member States, EEA member countries that are not EU 
Member  States  were  invited  to  report  on  adaptation  voluntarily.  The  analysis  of  the  information 
reported from 2021 is in the 2022 EEA report ‘Advancing towards climate resilience in Europe  – 
Status of reported national adaptation actions in 2021’327. All information reported by countries under 
the  Governance  Regulation  can  be  found  in  the  country  profiles  on  Climate-ADAPT328,  and 
adaptation-relevant information in Member States’ NECPs is available on the Climate and Energy in 
the EU portal329. 

Article  17  of  the  Governance  Regulation  requires  Member  States  to  report  through  their  national 
energy and climate plans (NECP) on how they are contributing to the achievement of the goals of the 
Energy Union and the Paris Agreement (see also Section 2.1.2). In 2023-2024, EU Member States 
submitted draft and final updated NECPs, and the European Commission assessed the information in 
them, in particular on national adaptation goals. The results of this assessment are available as an EU-
wide report and individually for each Member State330. 

The country profiles present the latest information as updated by each country. The Technical Paper 
‘Is Europe on track with climate resilience? – Status of reported national adaptation actions in 2023’ 
also summarises the available reported information on adaptation from Member States331. 

324  IPCC WG II AR6 chapter 13. 
325  Regulation (EU) 2018/1999 on the Governance of the Energy Union and Climate Action,  
326  https://reportnet.europa.eu/ and https://cdr.eionet.europa.eu/. 
327  Advancing towards climate resilience in Europe: status of reported national adaptation actions in 2021. 
328  Country  profiles  at  Climate  –  ADAPT,  https://www.eea.europa.eu/publications/advancing-towards-climate-

resilience-in-europe 

329  Climate  and  Energy  in  the  EU,  https://climate-energy.eea.europa.eu/topics/climate-change-adaptation/adaptation-

progress-to-targets/data 

330  National 

energy 

plans, 
environment/implementation-eu-countries/energy-and-climate-governance-and-reporting/national-energy-and-
climate-plans_en 

https://commission.europa.eu/energy-climate-change-

climate 

and 

331  Is  Europe  on  track  with  climate  resilience?  –  Status  of  reported  national  adaptation  actions  in  2023, 
https://www.eionet.europa.eu/etcs/etc-ca/products/etc-ca-technical-paper-2-23-is-europe-on-track-with-climate-
resilience-2013-status-of-reported-national-adaptation-actions-in-2023 

120 

 
 
The implementation status of the EU Adaptation Strategy was summarised by the Commission in the 
Climate Action Progress Report in October 2023332. A detailed assessment of progress on climate 
adaptation  in  the  individual  Member  States  in  accordance  with  the  European  Climate  Law  was 
published in December 2023333. A first detailed assessment of Member States’ adaptation policies 
can  be  found  in  the  2020  EEA  report  ‘Monitoring  and  evaluation  of  national  adaptation  policies 
throughout the policy cycle’334.  

An  analysis  of  the  information  reported  by  Member  States  in  March  2023  under  the  Governance 
Regulation included the following key findings335: 

•  Heat waves, droughts, floods and heavy precipitation are the most reported observed extreme 
weather  events,  while  changing  temperatures  and  hydrological  variability  are  the  most 
common chronic hazards. For most temperature- and water-related hazards  most countries 
report an expected increase of frequency and/or intensity for the future.  

•  National  climate  risk  assessments  are  increasingly  used  to  inform  adaptation  policy 
development. Almost half of the reporting countries have delivered these new assessments 
since 2021, although countries with legal obligations for repeated climate risk assessments 
are  still  an  exception  and  a  minority  of  countries  have  yet  to  produce  their  first  national 
overarching assessment.  

•  The  adaptation  policy  landscape  is  gradually  evolving,  and  climate  laws  are  increasingly 
emerging as an instrument to give greater legal power to such policies. Nine new national 
adaptation strategies and/or plans have been approved and adopted by countries since 2021, 
while other countries are still in the process of revising and adopting them.  

•  Subnational  adaptation  policymaking  is  further  progressing  in  all  countries,  mostly  due  to 
voluntary and bottom-up initiatives. Multilevel networks and collaborative mechanisms are 
reported to be crucial for advancing local adaptation and supporting subnational governments 
and stakeholders through capacity-building activities, information provision,  guidance, and 
financing schemes.   

•  Governance-related  challenges  are  a  persistent  barrier  to  the  implementation  of  adaptation 
actions in many countries, even where well-developed governance frameworks are in place. 
These  challenges  include  difficulties  with  coordination  due  to  limitations  in  financial, 
technical and human capacities.  

332  Report 

on 

the 

on 
https://climate.ec.europa.eu/document/download/72286a42-61af-4e8a-a51a-
29a58c90274e_en?filename=swd_2023_338_en.pdf 

implementation 

the  EU 

strategy 

of 

adaptation 

to 

climate 

change, 

333  Assessment of progress on climate adaptation in the individual Member States according to the European Climate 

Law,  https://climate.ec.europa.eu/system/files/2023-12/SWD_2023_932_1_EN.pdf 

334  Monitoring 

and 

evaluation 

of 

national 

adaptation 

policies 

throughout 

the 

policy 

cycle, 

https://www.eea.europa.eu/publications/national-adaptation-policies 

335  Is  Europe  on  track  with  climate  resilience?  –  Status  of  reported  national  adaptation  actions  in  2023, 
https://www.eionet.europa.eu/etcs/etc-ca/products/etc-ca-technical-paper-2-23-is-europe-on-track-with-climate-
resilience-2013-status-of-reported-national-adaptation-actions-in-2023 

121 

 
 
•  EU  funds  play  a  major  role  in  financing  adaptation  action  for  most Member  States.  Some 
Member States also reported having dedicated national adaptation funds in place to finance 
the implementation of national or sectoral adaptation actions.  

•  An  indicator-based  approach  to  monitoring,  reporting  and  evaluation  is  often  reported, 
although the indicator types and how they contribute to evaluation purposes are not always 
clear. 

The 2024 report ‘Preventing and managing disaster risk in Europe’336 shows that climate-related risks 
are high on the disaster risk management agenda across Europe. However, it also shows that while 
climate  risks  are  mostly  acknowledged,  civil  protection  risk  assessments  rarely  consider  climate 
scenarios and uncertainties.  

The Member States’ assessments of risks to critical infrastructure are due by January 2026 under the 
Critical Entities Resilience Directive. Current budgetary outlook assessments do not consider climate 
risks  systematically.  Overall,  while  the  processes  and  requirements  agreed  upon  in  EU  policy 
frameworks can address climate risks, implementation falls short of providing reasonable assurance. 
Progress is therefore uneven and is not keeping pace with accelerating climate change. The report 
found that both the EU and its Member States must become significantly better at preparing for and 
effectively addressing climate risks337.  

The Commission report on the Review of the Regulation on the Governance of the Energy Union 
and Climate Action338, published on 11 September 2024, acknowledges that the NECPR process 
under the Governance Regulation contributed to enhancing the completeness of information reported 
by  Member  States.  However,  the  report  identified  several  areas  which  could  be  improved.  This 
specifically  relates  to  the  scope  and  quality  of  reported  information  on  climate  change  adaptation 
measures (Article 19(1)). 

The Commission is further improving user access to guidance documents, tools, information and data, 
including  at  local  level,  and  will  monitor  the  use  of  the  guidance  tools.  It  will  also  seek  better 
qualitative and quantitative indicators on progress on resilience, including in conjunction with other 
interlinked and relevant indicators, to ensure a systemic approach (see Section 3.3.3). The EU and its 
Member States strongly support the work being done on indicators for measuring the Global Goal on 
Adaptation, also in the context of the UAE Framework for Global Climate Resilience. 

3.8  Averting, minimising and addressing loss and damage 
Extreme  events  around  the  world  in  2023  had  significant  impacts  on  human  health,  ecosystems, 
nature and infrastructure. Among the most exceptional were flooding, wildfires, drought and extreme 

336  Preventing 

and 

managing 

disaster 

risk 

in 

Europe, 

https://civil-protection-knowledge-

network.europa.eu/media/preventing-and-managing-disaster-risk-europe 

337  Commission Communication on protecting people and prosperity, https://climate.ec.europa.eu/eu-action/adaptation-

climate-change/managing-climate-risks-protecting-people-and-prosperity_en 
338 COM(2024) 550 final, p. 12 to 14. EUR-Lex - 52024DC0550 - EN - EUR-Lex 

122 

 
 
 
heat339. „ Glaciers are melting and there are changes in the pattern of precipitation. An increase in 
extreme  rainfall  is  leading  to  catastrophic  events,  such  as  the  widespread  flooding  seen  in  Italy, 
Greece, Slovenia, Norway and Sweden in 2023. Meanwhile, southern Europe is seeing widespread 
droughts”340.  Slow  onset  events,  such  as  desertification,  loss  of  biodiversity,  land  and  ecosystem 
degradation, ocean acidification or sea level rise are equally destructive over the long term341. 

 Such  climate-related hazards,  pose  risks  to human  health,  the  environment,  food  production  and 
supply, infrastructure and can lead to economic losses. 

As  mentioned  above,  the  new  EU  strategy  on  adaptation  to  climate  change  is  the  cornerstone  for 
scaling  up  ambitious  EU  domestic  and  international  actions  and  measures  for  making  adaptation 
actions smarter, more systemic, faster and global and building resilience and preparedness. 

As a consistent understanding of ‘loss’ and ‘damage’ has not yet been established – loss is sometimes 
understood to  mean harm to  (non-)human life and health and at  other times economic loss, while 
damage is sometimes understood as damage to infrastructure and at other times metaphorically as 
climate damage342 – this report cannot adhere to a consistent usage of these terms. Nevertheless, their 
impact can be diverse (drought, coastal erosion, flooding etc...)  devastating and long-lasting affecting 
not  only  the  environment  but  also  human  health,  livelihoods,  and  well-being.  Thus,  the  need  to 
distinguish  between  economic  and  non-economic  loss  and  damage.  However,  they  all  required 
proactive approach to adaptation and building resilience is needed. 

Economic loss and d damage 343 

Non-economic loss and damage344 

Can  be  understood  as  the  loss  of  resources, 
goods and services that are commonly traded 
in  markets  (e.g.  infrastructure,  economic 
disturbance) 

Can be understood as the remainder of items 
that are not commonly traded in markets (e.g. 
loss of life or health, loss of territory, cultural 
heritage and identity, indigenous knowledge, 
loss of biodiversity or loss of entire 
ecosystems). 

Ample information on impacts, risks and vulnerabilities and the EU’s institutional arrangement to 
implementation of EU’s strategy on adaptation to climate change is provided above (see Sections 3.3, 
3.5 and 3.6). 

This section will focus on a sample of EU’s measures and instruments in place to avert and minimise 
and address adverse effects of climate change loss and damage. 

339 Copernicus climate highlights 2023, https://climate.copernicus.eu/global-climate-highlights-2023 
340 ibid 
341 Kees van der Geest, Romy van den Berg, Slow-onset events: a review of the evidence from the IPCC Special 

Reports on Land, Oceans and Cryosphere, Current Opinion in Environmental Sustainability, Volume 50, 2021, 
Pages 109-120, 

342  Understanding Loss and Damage, 

https://www.europarl.europa.eu/RegData/etudes/BRIE/2022/733598/EPRS_BRI(2022)733598_EN.pdf 
343 Loss and damage online guide, https://unfccc.int/sites/default/files/resource/Online_Guide_feb_2020.pdf 
344 ibid 

123 

 
 
 
 
 
 
The EU has several initiatives, programmes, sectorial legislations, strategies and projects in place to 
help avert, minimise and address loss and damage. These range from early warning systems to helping 
communities, livelihoods and ecosystems be resilient. 

Type of initiatives 

Initiatives 

Civil protection345 and 
disaster management 

EU Mission in Europe: 
Adaptation  to  Climate 
Change 

- the EU Civil Protection Mechanism;  
- the Emergency Response Coordination Centre;  
- the European Civil Protection Pool 
- Disaster Risk Management Knowledge Centre346 
- EU Mission: Adaptation to Climate Change 
- Restore our Ocean and Waters 
- EU Mission: Climate-Neutral and Smart Cities 
- EU Mission: A Soil Deal for Europe 

Example: Preparing society for climate risks in Europe — lessons and inspiration from 
Climate-ADAPT case studies347 

Climate -ADAPT:  new EEA briefing shares lessons learnt from the analysis of more than 
one  hundred  Climate-ADAPT  case  studies.  It  shows  that  sharing  examples  of  adaptation 
actions  can  boost  learning  across  the  EU,  Member  States  as  well  as  regional  and  local 
authorities to help societies better prepare for climate change.  

Nature and 
Biodiversity 
LIFE Programme 

- 

the EU Nature Restoration Law348 and the Marine Action 
Plan349 
the Birds350 and Habitats Directives351 

- 
-  Natura 2000352 

Example: EU action plan for protecting and restoring marine ecosystems354 

-  Biodiversity strategy for 2030353 

In 2023 the EU action plan Protecting and restoring marine ecosystems for sustainable and 
resilient fisheries resents the outcome of the targeted consultation and call for evidence to 
support the “Action Plan to conserve fisheries resources and protect marine ecosystems”, 

345 EU Civil Protection Mechanism - European Commission 
346 EU disaster management centre  
347 Preparing society for climate risks in Europe — lessons and inspiration from Climate-ADAPT case studies 
348  EU  Nature  Restoration  Law,  https://environment.ec.europa.eu/topics/nature-and-biodiversity/nature-restoration-

law_en 

349 EU Action plan: Protecting and restoring marine ecosystems for sustainable and resilient fisheries, https://oceans-and-
fisheries.ec.europa.eu/policy/common-fisheries-policy-cfp/action-plan-protecting-and-restoring-marine-ecosystems-
sustainable-and-resilient-fisheries_en 

350 Birds Directive, https://environment.ec.europa.eu/topics/nature-and-biodiversity/birds-directive_en 
351 Habitats Directive, https://environment.ec.europa.eu/topics/nature-and-biodiversity/habitats-directive_en  
352 Natura 2000, https://biodiversity.europa.eu/europes-biodiversity/protected-areas/explore-natura-2000 
353  Biodiversity  strategy  for  2030  -  European  Commission,  https://environment.ec.europa.eu/strategy/biodiversity-

strategy-2030_en 

354  European  Commission:  Directorate-General  for  Maritime  Affairs  and  Fisheries, EU  action  plan  –  Protecting  and 
restoring  marine  ecosystems  for  sustainable  and  resilient  fisheries  –  Synopsis  of  the  open  targeted  consultation 
outcomes, Publications Office of the European Union, 2023, https://data.europa.eu/doi/10.2771/731784 

124 

 
 
 
announced  in  the  EU  Biodiversity  Strategy  for  2030,  and  renamed  “EU  Action  plan: 
Protecting and restoring marine ecosystems for sustainable and resilient fisheries”.  

European early 
warning and 
information355Systems 

-  Global disaster alert and coordination system 
-  The European flood awareness system and global flood 

awareness system 

-  The European forest fire information system and global 

wildfire information system 

-  The European and global drought observatories 

Example:  MeteoAlarm356,  an  early  warning  dissemination  system  that  visualises, 
aggregates  and  provides  accessible  awareness  information  from  38  European  national 
meteorological and hydrological services. 

Earth observation 

Research and 
knowledge sharing 

-  Copernicus climate change service357 
-  Copernicus Data Space Ecosystem358 and WEkEO359 
-  Galileo Emergency Warning Satellite Service is underway360 
-  PESETA report361 

Example: Destination Earth (DestinE)362 

The  weather-Induced  Extremes  Digital  Twin  offers  global  information  at  kilometer-scale 
resolution for several days ahead, also creating a capability to ‘zoom in’ on severe events 
across Europe. It intends to support authorities to safeguard lives and properties and prepare 
for extreme events in a warming world.  

The following are related to risk insurance facilities, sustainable finance solutions: 

Between  2022  and  2024,  the  Climate  Resilience  Dialogue363  brought  together  policymakers, 
insurers,  risk  managers,  consumers,  municipal  authorities  and  other  stakeholders  to  discuss  and 
identify possible actions, both on insurance and investment in adaptation, to help narrow the climate 
protection gap (the gulf between how much is lost and how much is insured). 

The EU sustainable finance strategy364 has a key role to play in delivering on the policy objectives 
under  the European  Green  Deal as  well  as  the  EU’s  international  commitments  on  climate  and 
sustainability objectives. It does this by channelling private investment into the transition to a climate-

355  European  Early  Warning  and  Information  Systems  -  European  Commission,  https://civil-protection-humanitarian-

aid.ec.europa.eu/what/civil-protection/european-early-warning-and-information-systems_en 

356MeteoAlarm, https://www.meteoalarm.org/en/live/page/about-meteoalarm#list 
357 Copernicus climate change service 
358  Copernicus Data Space Ecosystem, https://dataspace.copernicus.eu/ 
359 ibid 
360 Galileo emergency warning satellite service, https://defence-industry-space.ec.europa.eu/galileo-emergency-warning-

satellite-service-underway-2024-01-24_en 

361  JRC  Peseta  iv,  https://joint-research-centre.ec.europa.eu/scientific-activities-z/peseta-climate-change-projects/jrc-

peseta-iv_en 

362  Destination earth, https://digital-strategy.ec.europa.eu/en/policies/destination-earth 
363  EU Climate resilience dialogue, https://climate.ec.europa.eu/eu-action/adaptation-climate-change/climate-resilience-

dialogue_en 

364  EU sustainable finance strategy, https://commission.europa.eu/business-economy-euro/banking-and-

finance/sustainable-finance_en 

125 

 
 
 
neutral,  climate-resilient,  environmentally  sustainable,  resource-efficient  and  fair  economy,  as  a 
complement to public money. 

The new EU strategy for adaption to climate change the EU committed to ‘support and promote 
partner countries in developing local, national and regional adaptation and strategies for disaster 
risk reduction. It will continue working with African initiatives and institutions supporting regional 
adaptation  and  disaster  risk  management.  These  efforts  will  capitalise  on  the  “Team  Europe” 
approach  and  will  pursue  integration  between  adaptation,  development  and  humanitarian  aid.’ 
Chapter  4  and  Section  3.6.3  outline  how  the  EU  is  increasing  support  for  international  climate 
resilience and preparedness. 

3.9  Cooperation and good practices 
The rapid rise in climate risks across Europe requires new ways of cooperating across governance 
levels  to  make  tangible  and  measurable  progress  in  reducing  the  most  urgent  climate  risks.  Such 
approaches are informed by experiences with the EU Mission on Adaptation to Climate Change and 
other relevant EU instruments and policies (see Sections 3.2 and 3.5). 

The EU Mission on Adaptation to Climate Change supports a group of pioneering regions and local 
authorities with tools and innovative solutions to help them become climate-resilient by 2030, so they 
can serve as examples of best practice for all interested parties365. As of 2024, more than 100 regions 
are participating in Mission projects. A total of 311 regional and local authorities from 25 EU Member 
States have signed the Mission Charter, thereby committing themselves to becoming climate-resilient 
by 2030 by boosting regional and local adaptation efforts to reach their adaptation goals. In addition, 
63 other organisations, including research institutions and businesses, have become Friends of the 
Mission, endorsing it and contributing to its 750-member Community of Practice366. 

The tools developed by the Mission on Adaptation to meet the needs of local and regional authorities 
include the Regional Adaptation Support Tool (RAST). It has been explicitly designed to help with 
their climate change adaptation strategies and plans – from development and implementation through 
to monitoring, evaluating and updates. RAST provides practical guidance in six steps aligned with 
the key features of climate adaptation policy processes. Each step includes an overview and a detailed 
support section, with practical and actionable guidance supplemented by resources (data providers, 
examples and tools) from the EU Mission on Adaptation, Climate-ADAPT (see below) and other 
partners helping local and regional authorities across the EU367. 

The Mission on Adaptation is also supporting cooperation to help regions and local authorities in 
their adaptation  journey. This  happens, for example, by sharing stories showcasing  the successful 
implementation of effective climate adaptation solutions across Europe, and by sharing mission case 
studies,  resources,  and  effective  ways  to  get  people  engaged.  This  demonstrates  the  power  of 

365  EU Mission: Adaptation to climate change, https://research-and-innovation.ec.europa.eu/funding/funding-

opportunities/funding-programmes-and-open-calls/horizon-europe/eu-missions-horizon-europe/adaptation-climate-
change_en 

366  EU  Mission  on  adaptation  :  Regions  and  local  authorities,  https://climate-adapt.eea.europa.eu/en/mission/the-

mission/regions-and-local-authorities 

367  EU  Mission  on  Adaptation:  RAST  support  tool,  https://climate-adapt.eea.europa.eu/en/mission/knowledge-and-

data/regional-adaptation-support-tool 

126 

 
 
collaborative action and innovative approaches in addressing climate challenges and creating a more 
resilient and sustainable future for Europe368. 

Other elements of European efforts to share information, good practices, experience and lessons learnt 
to improve adaptation action comprise, among others, the following initiatives. 

(a) Horizon Europe. This is the EU’s key funding programme for research and innovation with an 
overall budget of EUR 95.5 billion of which 35% is allocated to climate-related actions. It tackles 
climate  change,  helps  to  achieve  the  UN’s  Sustainable  Development  Goals  and  boosts  the  EU’s 
competitiveness and growth. Through its design  and participation rules, the programme  facilitates 
collaboration across the EU and strengthens the impact  of research  and innovation  in  developing, 
supporting and implementing EU policies while tackling global challenges. It supports the creation 
and better dissemination of excellent knowledge and technologies across the EU369. 

(b)  Climate-ADAPT.  This  is  a  partnership  between  the  European  Commission  and  the  EEA, 
maintained by the EEA with the support of the European Topic Centre on Climate Change Impacts, 
Vulnerability and Adaptation (ETC/CCA). Climate-ADAPT aims to support Europe in adapting to 
climate change by helping users to access and share data and information on expected climate change 
in Europe; the current and future vulnerability of regions and sectors; EU, national and transnational 
adaptation strategies and actions; adaptation case studies and potential adaptation options, and tools 
that  support  adaptation  planning.  The  platform  includes  a  database  that  contains  quality-checked 
information that can be easily searched370. 

(c) Interreg. This is one of the key EU instruments for supporting cooperation across borders through 
project funding. It aims to jointly tackle common challenges and find shared solutions in areas such 
as health, the environment, research, education, transport, sustainable energy and more. The current 
period’s  EUR 10  billion  budget  features  strengthened  cooperation  with  partner  countries  and  a 
dedicated strand for the EU’s outermost regions and neighbouring countries. 

(d) LIFE programme. This is the EU’s funding instrument for the environment and climate action. 
It was launched in 1992 and has co-financed thousands of projects in environmental protection. While 
it has always had a strong focus on nature protection and biodiversity, the current programme period 
also includes funding projects on the circular economy and quality of life, climate change mitigation 
and adaptation, and clean energy transition371. 

Beyond  these  efforts  to  develop  science,  planning  and  policies  relevant  to  adaptation,  policy 
innovation  and  pilot  and  demonstration  projects,  the  EU  puts  a  specific  focus  on  strengthening 
scientific research. For example, it supports research aimed at deepening understanding of climate 
change  (including  research,  systematic  observation  and  early  warning  systems),  vulnerability  and 

368  EU Mission on Adaptation: adaptation solutions, https://climate-adapt.eea.europa.eu/en/mission/solutions. 
369  Horizon  Europe,  https://research-and-innovation.ec.europa.eu/funding/funding-opportunities/funding-programmes-

and-open-calls/horizon-europe_en 

370  Climate-ADAPT, https://climate-adapt.eea.europa.eu/en/about 
371  LIFE programme, https://cinea.ec.europa.eu/programmes/life_en 

127 

 
 
adaptation options, as well as monitoring and evaluation. This is done, among others, through the 
following.  

(a) The European Climate and Health Observatory. This is a joint initiative of the Commission, 
the  EEA  and  several  other  organisations.  The  Observatory  covers  the  38  EEA  member  and 
cooperating countries and aims to support Europe in preparing for and adapting to the impacts of 
climate  change  on  human  health  by  providing  access  to  relevant  information  and  tools.  It  also 
supports information exchange and cooperation between relevant international, European, national, 
subnational and non-governmental actors372.  

(b) Copernicus climate change services. This, the Earth observation component of the EU’s space 
programme,  offers  information  services  that  draw  on  satellite  Earth  observation  and  in  situ  (non-
space) data. The Commission manages the programme, implemented in partnership with the Member 
States,  the  European  Space  Agency  (ESA),  the  European  Organisation  for  the  Exploitation  of 
Meteorological Satellites (EUMETSAT), the European Centre for Medium-Range Weather Forecasts 
(ECMWF),  EU  agencies,  Mercator  Ocean  International,  the  EEA  and  the  JRC.  Vast  amounts  of 
global data from satellites and ground-based, airborne, and seaborne measurement systems provide 
information to help service providers, public authorities and other international organisations improve 
people’s quality of life. The information services provided are free and openly accessible to users 
through the CDSE and WEkEO data access platforms 373. 

(c) Climate Digital Twin. This is a new type of climate information system that focuses on assessing 
the impacts of climate change and different adaptation strategies locally and regionally over multiple 
decades.  A  virtual  representation  of  products,  people,  processes  and  even  spatial  environments, 
Digital Twin uses a fusion of numerical simulations and observations to create a virtual replica of 
Earth.  Built  in  close  partnership  with  over  90  institutions  across  Europe,  Digital  Twin  combines 
several  cutting-edge  Earth  system  models  and  observations  with  the  most  advanced  digital 
technologies, machine learning and artificial intelligence, and is integrated into applications for the 
sectors most affected by climate change374.  

(d) European Climate Data Explorer. This provides interactive access to a growing selection of 
climate indices reflecting the priorities of the EEA. The underlying data are from the Climate Data 
Store of the Copernicus Climate Change Service375. 

The European Climate Risk Assessment report376 makes a substantial contribution to the objective 
of closer European cooperation by: (1) providing a systematic assessment of the magnitude of current 
and future key climate risks; (2) addressing compound hazards, cross-border risks, cascading risks, 
and systemic risks; (3) involving Commission stakeholders throughout the assessment process; (4) 
assessing the European policy context, risk ownership, and urgency for action for each key risk; and 

372  European Climate and Health Observatory, https://climate-adapt.eea.europa.eu/en/observatory/About. 
373  EU  Copernicus  DIAS  reference  service  for  environmental  data,  virtual  processing  environments  and  skilled  user 

support (WEkEO), https://www.wekeo.eu/ 

374  Climate Digital Twin, https://stories.ecmwf.int/explainer-digitaltwins/index.html 
375  European Climate Data Explorer, https://climate-adapt.eea.europa.eu/en/knowledge/european-climate-data-explorer/ 
376  European  Climate  Risk  Assessment, 
https://climate-adapt.eea.europa.eu/en/eu-adaptation-policy/key-eu-

actions/climate_risk_assessment  

128 

 
 
(5) providing complementary interactive tools on climate hazards and risks. As explained previously, 
an assessment of the EUCRA findings  can be found in  the 2024 Commission Communication on 
managing climate risk377. 

The EU Climate Resilience Dialogue aims to narrow the climate protection gap (the gulf between 
how much is lost and how much is insured) and find ways to stimulate investment in good adaptation. 
Its  primary  task  is  to  exchange  views  on  how  to  address  the  losses  incurred  from  climate-related 
disasters and to identify how the insurance industry can contribute more to climate adaptation, from 
actions that increase the penetration of climate risk insurance for industry and all of society to making 
the conditions right for more investment in good adaptation solutions378. 

The Reflection Group on mobilising Climate Resilience Financing is bringing together key industrial 
players and representatives of public and private financial institutions and draw on the knowledge of 
the European Insurance and Occupational Pensions Authority (EIOPA) and the European Investment 
Bank (EIB) of financing adaptation and resilience-building. The aim of the reflection group is to map 
best practices and identify obstacles and enabling conditions for the financing of climate resilience. 
The Commission will take the outcome of these discussions into account to bolster finance for climate 
resilience. 

3.10 Any other information 
Climate  change  risks  and  responses  do  not  happen  in  a  vacuum.  There  are  historical  contexts  to 
consider,  as  well  as  other  changes  in  society,  including  shifting  resources,  new  dependencies, 
technological  advancements  and  changing  social  structures  and  institutions.  Climate  risks  are 
especially  felt  by  the  most  vulnerable  people  due  to  a  range  of  socio-economic  factors,  such  as 
income,  gender,  age,  disability,  health,  and  social  exclusion  (migrants,  ethnic  minorities  and 
indigenous  peoples  are  particularly  affected).  Pre-existing  disadvantages  reduce  the  capacity  to 
recover from climate-induced disasters and poorly designed adaptation solutions can further deepen 
inequalities in the following four intersecting dimensions379. 

(i) 

Group-based  vulnerabilities:  Immigrants,  ethnic  minorities  and  indigenous  peoples  are 
subject  to  structural  and  historically  embedded  inequalities,  making  them  particularly 
vulnerable  to  climate  risks  and  maladaptive  interventions.  However,  few  studies  have 
examined ethnicity-based vulnerabilities in the European context. For example, the chronic 
exclusion  of  indigenous  communities  from  decision-making  processes  tends  to  reinforce 
maladaptive pathways and existing vulnerabilities and inequalities. 

(ii)  Gender-based vulnerabilities: Gender inequalities are one of the most widespread forms of 
group-based inequalities. For instance, gendered social norms often result in women’s bearing 
a greater burden of family care-giving responsibilities, having their mobility restricted and 

377  Commission Communication on protecting people and prosperity, https://climate.ec.europa.eu/eu-action/adaptation-

climate-change/climate-resilience-dialogue_en 

378  EU  Climate  Resilience  Dialogue,  https://climate.ec.europa.eu/eu-action/adaptation-climate-change/climate-

resilience-dialogue_en 

379  European 

climate 

risk 

assessment, 

https://climate-adapt.eea.europa.eu/en/eu-adaptation-policy/key-eu-

actions/european-climate-risk-assessment 

129 

 
 
having less access to resources, including training and educational opportunities, which can 
lead to  disproportionate  vulnerability to  climate impacts.  Gender norms may also  result in 
men’s greater involvement in certain forms of work that increase vulnerability, such as work 
outdoors exposed to the sun or indoors with machinery that generates heat.  

(iii) 

Socio-economic and occupation-based vulnerabilities: Low-income households are likely 
to suffer more from climate change due to tighter financial constraints that limit their adaptive 
capacities. In many EU countries, more vulnerable communities tend to live in dense urban 
environments. They may therefore be exposed to higher temperatures than others due to urban 
heat  island  effects.  Workers  with  some  specific  occupations  are  particularly  exposed  to 
climate risks, both from direct exposure to climate-related hazards (e.g. outdoor workers in 
agriculture, construction and emergency services, such as firefighters) and indirectly through 
impacts on their livelihoods (e.g. workers in tourism). 

(iv)  Age-  and  health-based  vulnerabilities:  Existing  health  conditions  (e.g.  cardiovascular, 
respiratory and kidney disease, obesity and diabetes), disability status and age are significant 
biological risk factors for several climate-related health impacts (e.g. heatwaves as associated 
health  risks  and  vector-borne  diseases).  For  instance,  pregnant  women,  infants,  young 
children  and  older  people  are  more  vulnerable  to  heat  extremes  due  to  biological  factors, 
which may also interact with social factors such as discrimination. 

Near-term  adaptation  responses  shape  future  inequalities,  poverty,  livelihood  security  and  overall 
well-being.  When  social  justice  dimensions  are  not  adequately  considered,  adaptation  actions  can 
lead to maladaptation.  

Avoiding such consequences requires concerted action at all levels and developing a clear pathway 
towards  improving  preparedness  and  resilience.  Therefore,  the  Commission  proactively  includes 
relevant  topics in  bilateral  dialogues, through green alliances  and green  partnerships as  well as in 
relevant UN and other multilateral fora. Moreover, the Commission aims to organise an international 
symposium on managing global climate risks in 2025, bringing together government representatives, 
financiers and expert organisations from around the world. The Commission will continue to work 
with the Member States, the public, businesses and other EU institutions to increase the resilience of 
the EU’s society and economy. 

4  SUPPORT PROVIDED AND MOBILISED 

4.1  Introduction 
This chapter contains information on financial, technology development and transfer, and capacity-
building support provided and mobilised under Articles 9, 10 and 11 of the Paris Agreement by EU 
institutions and the European Investment Bank (EIB in 2021 and 2022). 

4.2  National circumstances and institutional arrangements 
The EU and its Member States are the world’s biggest contributor of development assistance. Since 
2021, the EU’s strategic response to foreign and development policy issues is the Global Gateway, 
implemented using a ‘Team Europe’ approach that underscores the importance of close coordination 

130 

 
between partner countries, EU institutions, Member States and EU development finance institutions 
for effective international cooperation380. 

Between  2021  and  2027,  Team  Europe  will  mobilise  up  to  EUR 300  billion  of  investments  for 
sustainable and high-quality projects, taking into account the needs of partner countries and ensuring 
lasting benefits for local communities. This will allow the EU’s partners not only to develop their 
societies and economies, but also to create opportunities for the EU Member States’ private sector to 
invest and remain competitive while ensuring the highest environmental and labour standards and 
sound financial management. 

The Global Gateway is the EU’s contribution to narrowing the global investment gap worldwide. It 
is in line with the commitment of the Group of Seven (G7) leaders from June 2021 to launch a values-
driven,  high-standard  and  transparent  infrastructure  partnership  to  meet  global  infrastructure 
development needs. The Global Gateway is also fully aligned with the UN’s Agenda 2030 and its 
Sustainable Development Goals and with the Paris Agreement. 

The  inaugural  milestone  of  the  Global  Gateway  was  the  Africa-Europe  Investment  Package  with 
approximately  EUR 150  billion  of  investment  dedicated  to  bolstering  cooperation  with  African 
partners. Implementation of the Global Gateway has already begun in Asia and the Pacific and in 
Latin  America  and  the  Caribbean,  where  President  Ursula  von  der  Leyen  announced  an  overall 
investment by the EU and its Member States of over EUR 45 billion. 

The Global Gateway is underpinned by the following financial instruments: 

• 

• 

• 

• 

the Neighbourhood, Development and International Cooperation Instrument – Global Europe 
(NDICI-Global Europe); 

the Instrument for Pre-Accession Assistance (IPA) III; 

Interreg; 

InvestEU;  

•  Horizon Europe. 

The most relevant for climate finance is NDICI-Global Europe, which has a budget of approximately 
EUR 79  billion  for  2021-2027  and  a  spending  target  of  30%  for  climate.  It  consolidates  previous 
development cooperation funds into one instrument and consists of three pillars: 

• 

• 

the geographical pillar supports dialogue and cooperation with third countries with a budget 
of approximately EUR 60 billion; 

the  thematic  pillar,  with  a  budget  of  approximately  EUR 6  billion,  complements  the 
geographic pillar by funding support for human rights and democracy, civil society, peace, 
stability and conflict prevention, and for global challenges; 

380  European Commission, Global Gateway. 

131 

 
 
• 

the rapid response pillar, with a budget of approximately EUR 3 billion, is reserved for non-
programmable actions for foreign policy needs, crisis response and resilience; 

•  an additional EUR 10 billion of unallocated funds is available to react to emerging challenges 

and priorities. 

IPA III has a spending target for climate change of 18%, with the objective of its being increased to 
20% by 2027. 

A  central  part  of  NDICI-Global  Europe  is  the  European  Fund  for  Sustainable  Development  Plus 
(EFSD+), used for mobilising additional public and private investment for sustainable development. 

The following chapters contain information on the support provided and mobilised by EU institutions 
and the EIB in 2021 and 2022. Information on support provided and mobilised by individual Member 
States can be found in their respective BTRs. 

4.2.1  Systems and processes used to identify, track and report on support 

provided and mobilised 

The EU tracks the provision of its support through a project-based monitoring and reporting system. 
The system uses the Rio markers set up by the Development Assistance Committee (DAC) of the 
Organisation for Economic Co-operation and Development (OECD) to categorise and track the extent 
to  which  a  project  is  deemed  to  provide  support  for  climate  change  mitigation  and  adaptation, 
alongside  more  than  50 additional  project  markers  that  allow  for  further  support  tracking,  e.g.  by 
geographical location, economic sector, financial instrument or funding source. 

4.2.2  Challenges and limitations 

In  compiling the data and information  for this section of the BTR,  the following challenges were 
encountered. 

•  Existing  reporting  systems  such  as  the  OECD  DAC’s  Creditor  Reporting  System  (CRS) 
database do not enable the systematic tracking of the impacts related to capacity building and 
the technology transfer of funded projects. Many projects contribute to these objectives, but it 
is not possible to apply tracking metrics such as the Rio markers for these areas, which would 
provide  more  aggregated  and  quantitative  information.  In  the  absence  of  such  systems,  the 
information provided is largely of a qualitative nature, using examples where possible. For this 
reason, the information provided in common tabular format (CTF) tables III.4 and III.5 is non-
exhaustive and not representative of the full scope of resources provided and mobilised. 

•  Some reporting requirements, such as reporting information on how projects support different 
stages of the technology cycle, are very in-depth. Significant staff resources would be required 
for systematic reporting across the full portfolio of projects. However, it was useful to reflect 
on the overall approach to the programming of resources by illustrating how projects support 
the technology cycle. 

132 

 
4.2.3  Experience and good practices 

The European Climate Law makes it a legal obligation to fulfil the EU’s target of reducing emissions 
by  at  least  55%  by  2030.  This  sends  a  strong  and  durable  signal  to  financial  markets  and  private 
investors and reduces uncertainty about the direction of the EU economy in the decades ahead. The 
stability of this framework is further strengthened by the European Green Deal, which revises and 
updates  corresponding  EU  legislation  to  develop  a  coherent  framework  for  achieving  the  EU’s 
climate objective. 

The European Green Deal is underpinned by the European Green Deal Investment Plan (EGDIP), 
which is also referred to as the Sustainable Europe Investment Plan (SEIP). It has the following three 
objectives: 

• 

• 

• 

to mobilise at least EUR 1 trillion to support sustainable investments over the next decade 
through the EU budget and associated instruments, in particular InvestEU; 

to  create  an  enabling  framework  for  private  investors  and  the  public  sector  to  facilitate 
sustainable investments; 

to  help  public  administrations  and  project  promoters  identify,  structure  and  implement 
sustainable projects. 

As  part  of  the  EGDIP,  the  Just  Transition  Mechanism,  which  aims  to  facilitate  a  fair  and  green 
transition, will mobilise at least EUR 100 billion over the 2021-2027 period. 

With the adoption of the EU taxonomy for sustainable activities, the EU  also created an EU-wide 
classification  system  for  sustainable  activities.  This  instrument  aims  to  direct  investments  to  the 
economic activities most needed for achieving the goals enshrined in the European Climate Law. It 
requires, among other things, that financial institutions and companies screen, assess and report the 
extent to which their investments are aligned with the taxonomy. As financial systems are a tightly 
interwoven network of often global actors, the EU taxonomy will also have an impact on investments 
in non-EU countries. In addition, the EU has cooperated with other countries such as South Africa, 
Colombia and China in the development of domestic taxonomies, creating opportunities for mutual 
learning and knowledge transfer. 

4.2.4  Efforts taken to enhance the comparability and accuracy of information 

Under  the  Enhanced  Transparency  Framework  (ETF)  of  the  Paris  Agreement,  the  EU  works  to 
harmonise and align its reporting with other international standards, institutions, and systems. It bases 
its reporting  on the OECD DAC Creditor Reporting System database, which uses the Rio  marker 
system to identify flows with principal and significant climate adaptation and mitigation objectives. 
The  Commission  further  reports  its  climate  finance  under  Article  19  of  the  Regulation  (EU) 
2018/1999 on the Governance of the Energy Union and Climate Action and in the formats laid down 
in Implementing Regulation (EU) 2020/1208. The respective reporting tables in the Annex to this 
Implementing Regulation were developed with a view towards harmonisation with the draft CTFs 
discussed at the 2019 United Nations Climate Change Conference. Further updates to the Governance 
Regulation provide an opportunity to make additional alignments after assessing the lessons learnt 
from the first reporting cycle under the ETF. 

133 

 
The  EIB  works  closely  with  multilateral  development  banks  (MDBs)  and  European  development 
finance institutions (EDFIs) to enhance the comparability and the accuracy of information reported 
on the financial support provided and mobilised through public interventions. In 2018, MDBs and 
EDFIs  developed  a  reference  guide  for  calculating  and  jointly  reporting  private  investment 
mobilisation.  The  purpose  of  the  methodology  is  to  recognise  and  measure  the  private  capital 
mobilised  in  MDB  project  activities.  The  reference  guide  includes  key  definitions  used  to  ensure 
harmonisation  across  MDBs  and  EFDIs.  In  addition,  guidelines  for  measurements  of  different 
financial instruments have been created and rules developed for attribution in cases in which several 
MDBs are involved in one project to avoid double counting. Efforts are ongoing to further refine and 
specify this methodology and accommodate new products, and to expand the scope to include the 
catalysation of private finance. 

4.2.5  National circumstances and institutional arrangements for the provision 

of technology development and transfer and capacity-building support 

Cooperation  on  technology  development  and  capacity-building  support  is  an  integral  part  of  the 
institutional arrangements for global cooperation. Both the NDICI-Global Europe instrument and the 
external  component  of  the  Horizon  Europe  programme  mainstream  capacity  building  across  the 
supported  programmes  and  initiatives.  The  external  component  of  Horizon  Europe  introduces  the 
ability of the EU to enter into bilateral science and technology agreements with individual non-EU 
countries and engage in research dialogues with non-EU institutions. 

4.3  Assumptions, definitions and methodologies 
This  section  gives  an  overview  of  the  methodology  used  by  the  EU  and  the  EIB  for  tracking  the 
provision  of finance, technology  and capacity-building  support. It  describes  the EU’s approach to 
applying  the  Rio  markers  and  the  EIB’s  approach  to  tracking  climate-relevant  financial  flows, 
followed  by  a  brief  description  of  how  the  EU  completes  the  annual  OECD  survey  on  mobilised 
climate finance from the private sector. A list of definitions for important terms used in the EU’s 
methodologies is provided in this section. 

The  Rio  markers,  which  are  used  to  categorise  climate-specific  support,  are  policy  indicators  and 
were not originally intended to accurately quantify climate finance. Therefore, an activity can have 
more than one principal or significant policy objective (i.e. it can be marked for several Rio markers; 
for mitigation, adaptation and for the other Rio Conventions on biodiversity and desertification). The 
EU has adopted the following approach to ‘translate’ the Rio-marked data into estimated flows of 
climate finance (Table 6): 

134 

 
Table 6: Rio marker approach 

Markers 

Mitigation (%) 

Adaptation (%)  Cross-cutting (%)  Total (%) 

2 M & 0 A 

1 M & 0 A 

0 M & 2 A 

0 M & 1 A 

2 M & 1 A 

1 M & 2 A 

2 M & 2 A 

1 M & 1 A 

100 

40 

0 

0 

100 

0 

0 

0 

0 

0 

100 

40 

0 

100 

0 

0 

0 

0 

0 

0 

0 

0 

100 

40 

100 

40 

100 

40 

100 

100 

100 

40 

2: ‘Principal’; 1: ‘Significant’; 0: ‘Not targeted’. M: Mitigation; A: Adaptation. 

Source: Own compilation 

For example, if an EU commitment of EUR 1 million was made to a project going to a developing 
country Party that was marked as ‘Principal’ for mitigation (‘2 M’ in Table 4 above) and ‘Significant’ 
for  adaptation  (‘1  A’  in  Table  4  above),  100%  of  that  EUR  1  million  would  be  categorised  as 
mitigation and 0% as adaptation. Similarly, if the above project was not marked for mitigation but 
was  marked  as  ‘Significant’  for  adaptation,  40%  of  that  EUR  1  million  would  be  categorised  as 
adaptation, and 0% as mitigation. 

The  EIB’s  climate-relevant  financial  flows  are  tracked  using  the  joint  approach  developed  by  the 
MDBs,  which  does  not  use  the  Rio  markers.  In  2015,  common  principles  for  tracking  mitigation 
finance  were  developed  with  the  International  Development  Finance  Club  (IDFC)  and  other 
multilateral development banks. The Common Principles for Climate Mitigation Finance Tracking 
were updated in October 2021. In 2020, the EIB Board further approved the EIB Group Climate Bank 
Roadmap, which sets out how the Group will deliver on its new climate and environment ambitions. 
This includes a commitment to gradually implement the EU Taxonomy381 criteria in relation to its 
tracking of climate action and environmental sustainability. The EIB started to apply the “substantial 
contribution” criteria of the first EU Taxonomy Delegated Act382 covering climate change mitigation 
and  adaptation  from  the  start  of  2022,  while  remaining  within  the  overall  framework  of  the  Joint 
MDB/IDFC Common Principles. Further details on the EIB tracking methodology are available on 
the EIB website383. Also, the Joint Reports on MDB Climate Finance include climate co-financing 

381  EU  taxonomy  for  sustainable  activities,  https://finance.ec.europa.eu/sustainable-finance/tools-and-standards/eu-

taxonomy-sustainable-activities_en. 

382  Commission  Delegated  Regulation  (EU)  2021/2139  supplementing  Regulation (EU)  2020/852 by  establishing  the 
technical screening criteria for determining the conditions under which an economic activity qualifies as contributing 
substantially to climate change mitigation or climate change adaptation and for determining whether that economic 
activity  causes  no 
the  other  environmental  objectives,  https://eur-
lex.europa.eu/eli/reg_del/2021/2139/oj. 

significant  harm 

to  any  of 

383  European 

and 
https://www.eib.org/en/publications/climate-action-lending-eligibility-list. 

Investment 

Climate 

Action 

Bank 

Environmental 

Sustainability, 

135 

 
 
flows that are invested alongside the climate finance activities of MDBs, together with an explanation 
of  how  these  are  determined.  Climate  co-finance  is  defined  as  the  volume  of  financial  resources 
contributed by external public and private entities alongside climate finance invested by MDBs. 

Table 7 provides a description of the underlying assumptions, definitions and methodologies. Unless 
otherwise noted, the same assumptions, definitions and methodologies are used to report on:  

financial support; 
technology development and transfers; and  

• 
• 
•  capacity-building support. 

Table 7: Assumptions, definitions, and methodologies 

Element 

Description 

Reporting years  2021 and 2022 

Conversion 
between 
domestic 
currency and 
United States 
dollars 

Status 

Channel 

Funding sources 

Financial 
instruments 

Additional 
information on 
instruments and 
funding sources 

Identification of 
the type of 
support 

The currency exchange rates used throughout the climate finance chapter and its 
CTF tables are average annual conversion rates and were sourced from the OECD 
website 
(https://www.oecd.org/en/data/indicators/exchange-rates.html).  845 
EUR; 2022: 1 USD to 0.95 EUR. 

The Commission categorises the status of its climate finance as ‘committed’ or 
‘provided’ but reports on committed funding for a given calendar year, in this 
case 2021 and 2022. The status of the EIB’s climate finance is ‘committed’ for 
2021 and ‘provided’ for 2022. 

The  EU  distinguishes  between  bilateral  and  multilateral  channels,  using  the 
following OECD DAC definitions: 
Multilateral:  Flows  for  which  the  governing  boards  of  the  multilateral 
organisations have the unqualified right to allocate funds as they see fit within 
the limits prescribed by the organisations’ mandate. 
Bilateral:  Direct  bilateral  funding,  as  well  as  funding  via  multilateral 
organisations earmarked for specific uses, are reported as bilateral flows. 

The Commission categorises the funding source of its climate finance as official 
development assistance (ODA). The EIB categorises its funding sources as ODA, 
Other Official Flows (OOF) and Other. 

The Commission categorises the financial instrument used in its climate finance 
as  grants.  All  EIB  funds  are  reported  here  are  provided  in  the  form  of  loans 
alongside several grants and equity investments as well as guarantees. 

All flows from the Commission are 100% grants.  

The EU defines the type of support as follows: 

136 

 
Element 

Description 

•  Mitigation: An activity should be considered as related to climate change 
mitigation  if  it  contributes  to  the  objective  of  stabilising  GHG 
concentrations in the atmosphere at a level that would prevent dangerous 
anthropogenic interference with the climate system; the activity would do 
so by promoting efforts to reduce or limit GHG emissions or to enhance 
GHG sequestration (adapted from the operational definition and criteria 
for eligibility used in the OECD DAC (Policy Markers). 

•  Adaptation:  An  activity  should  be  regarded  as  adaptation-related  if  it 
intends  to  reduce  the  vulnerability  of  human  or  natural  systems  to  the 
impacts  of  climate  change  and  climate-related  risks  by  maintaining  or 
increasing adaptive capacity and resilience. This encompasses activities 
ranging  from  information  and  knowledge  generation  to  capacity 
development,  planning  and  implementing  climate  change  adaptation 
actions (adapted from the operational definition and criteria for eligibility 
used in the OECD DAC Policy Markers). 

The  EU  categorises  the  provision  of  climate  finance  into  the  following  eight 
sectors: Energy, Transport, Industry, Agriculture, Forestry, Water and sanitation, 
Cross-cutting, Other. 
In order to reduce the number of DAC CRS codes allocated to the sector "Other," 
sector categories were integrated as follows: 
Code 313 “Fishing” was moved to Sector code 311 “Agriculture”. 
Codes 322 “Mineral resources and mining” and 323 “Construction” were moved 
to sector Code 321 “Industry”.  
Code 410 (General environmental protection) was added to "Cross-cutting". 

The  EU  uses  the  following  definitions  to  identify  initiatives,  programmes  and 
projects  that  contribute  to  technology  development  and  transfer  as  well  as 
capacity building: 

•  Climate-relevant technology development and transfer:  A broad set 
of  processes  covering  exchnages  of  know-how  and  experience,  and 
providing  equipment,  for  mitigating  and  adapting  to  climate  change 
among various stakeholders such as governments, private sector entities, 
financial  institutions,  non-governmental  organisations  (NGOs)  and 
research/education  institutions.  The  broad  and  inclusive  term  ‘transfer’ 
comprises  the  process  of  learning  to  understand,  use  and  replicate  the 
technology,  including  the capacity  to the most suitable technology  and 
adapt it to local conditions and integrate it with indigenous technologies 
(adapted  from  the  IPCC  definition  of  climate-relevant  technology 
transfer). 

Sectors and 
subsectors 

Identification of 
capacity building 
and/or 
technology 
development 
objectives 

137 

 
Element 

Description 

•  Climate-relevant  capacity  building:  Capacity  building  is  a  process 
which seeks to build, develop, strengthen, enhance and improve existing 
scientific and technical skills, capabilities and institutions, particularly in 
developing  countries,  to  enable  them  to  assess,  adapt,  manage  and 
develop  technologies.  Capacity  building  must  be  country-driven, 
addressing the specific needs and conditions of the countries concerned 
and reflecting their national sustainable development strategies, priorities 
and  initiatives  (adapted  from  the  UNFCCC  definition  of  capacity-
building activities). 

Climate-specific 

The Commission categorises flows as climate-specific if they are labelled with a 
Rio marker under the OECD DAC Creditor Reporting System. The EIB identifies 
its  adaptation  and  mitigation  flows  using  the  joint  approach  developed  by  the 
Multilateral Development Banks (MDBs)384. 

The EU addresses double counting in its report as follows: 

Avoiding double 
counting 

•  Double counting among multiple Parties: 

This report covers support from the Commission and the EIB. Support 
provided or mobilised by EU Member States is not reported here, but in 
the  respective  BTRs  of  the  EU  Member  States.  The  EIB  reports 
contributions on an outflow basis. If information included in this report is 
aggregated with other flows, e.g. reported by the MDBs, corresponding 
deductions must be made to prevent double counting. 

•  Double counting among multiple Parties involved in the mobilisation of 

private finance through public interventions. 

•  As  part  of  their  joint  reporting,  the  MDBs  net  out  potentially  double-
counted  co-financing  (including  private  finance  mobilisation)  by 
adjusting  reported  figures  in  cases  where  multiple  MDBs  provide  co-
financing for a project.  

•  Double counting with resources used under Article 6: 

The  EU  does  not  use  internationally  transferred  mitigation  outcomes 
towards its NDC. The support provided and mobilised does not include 
resources used under Article 6. 

•  Double counting of actions targeting both adaptation and mitigation: 

As a single action can target both mitigation and adaptation, the EU approach to 
using the Rio  markers has been to  introduce the cross-cutting  category and to 
establish a system for attributing Rio marker scores when both  adaptation and 
mitigation  are  targeted,  avoiding  double  counting  between  adaptation  and 
mitigation.  Total  contributions  are  thus  the  sum  of  adaptation,  mitigation  and 
cross-cutting. 
Attribution approach for projects with multiple recipient countries: 

384  See  Annex  C.2 

the  methodological  steps, 
https://thedocs.worldbank.org/en/doc/3258e1d4c1e84fd961b79fe54e7df85c-0020012023/original/2023-0128-MDB-
Report-2022-NEW.pdf. 

for  a  description  of 

(adaptation)  and  C.3 

(mitigation) 

138 

 
 
Element 

Description 

The EU institutions and the EIB do not apply attribution in its reporting when 
flows target multiple recipient countries. In these cases, the category “regional” 
is used or the name of the region is specified. 

The  Commission  reports  grant-based  ODA  flows  as  public  finance.  The  EIB 
reports  its  climate-specific  outflows  as  public  climate  finance  and  its  climate-
specific private co-financing as private climate finance.  

The EIB applies the methodological approach outlined in the MDBs and EDFIs 
reference guide for calculating and reporting private investment mobilisation385. 
Private  co-financing  is  defined  as  the  investment  made  by  a  private  entity, 
meaning  a  legal  entity  that  is  carrying  out  or  was  established  for  business 
purposes  and  that  is  financially  or  managerially  autonomous  from  national  or 
local governments. 
The methodology distinguishes between two elements: 

a.  private direct mobilisation: financing from a private entity on commercial 
terms due to the active and direct involvement of an MDB leading to the 
commitment of funds. Evidence of active and direct involvement include 
mandate letters, fees linked to a financial commitment or other validated 
or auditable evidence of an MDB’s active and direct role leading to other 
private financiers committing funds; 

a.  private indirect mobilisation: financing from private entities provided in 
connection  with  a  specific  activity  for  which  an  MDB  is  providing 
financing, where MDBs do not play an active or direct role that leads to 
the private entity committing funds. 

The EIB uses detailed financing data for each operation and counterparty data to 
determine public and private sources, and, in line with its methodology, attributes 
shares to the various institutions providing development finance. 

Many climate finance programmes and initiatives supported by the EU are the 
result  of  joint  programming  processes.  In  this  approach  to  programming 
international  support,  the  national  authorities  of  the  partner  country  develop  a 
strategy together with the EU, its Member States, the EIB and the European Bank 
for Reconstruction and Development (EBRD) which is aligned with its national 
development  plan.  Such  coordination  ensures  that  EU  partners  are  more 
responsive to the national needs and priorities of developing countries. 

Definition of 
public and 
private climate 
finance 

Approach to 
determining 
private finance 
as mobilised by 
public 
interventions 

Addresses the 
needs and 
priorities of 
developing 
country Parties 

385  Reference 

guide 

for 

calculating 

and 

reporting 

private 

investment 

mobilisation, 

https://documents1.worldbank.org/curated/en/495061492543870701/pdf/114403-REVISED-June25-
DocumentsPrivInvestMob-Draft-Ref-Guide-Master-June2018-v4.pdf. 

139 

 
 
Element 

Description 

Alignment with 
the long-term 
goals of the Paris 
Agreement 

Determination of 
new and 
additional 

Progression from 
previous levels 
in the provision 
and mobilisation 
of finance under 
the Paris 
Agreement 

Approach to 
reporting 
multilateral 
finance 

The EIB was  the first  international  finance institution to withdraw support for 
fossil  fuels  in  the  energy  sector.  In  2019  it  adopted  an  energy  lending  policy 
phasing  out  the  financing  of  ‘unabated’  fossil  fuel  energy  projects,  including 
natural gas. The policy applies to all EIB financing in the energy sector, covering 
operations both in Europe and around the world. In 2020 the EIB adopted a Paris 
Alignment  framework  outlining  the  eligibility  criteria  for  all  sectors  receiving 
funding from the EIB386. The framework was updated in 2023387. 

The financial resources reported in the EU’s First Biennial Transparency Report   
are considered ‘new and additional resources,’ meaning that they were committed 
after and not included in the most recent Biennial Report under the UNFCCC 
(i.e. the new and additional resources were committed in either 2021 or 2022). 
As EU budgets are determined on an annual basis, each annual commitment cycle 
comprises new and additional resources. 

This  is  the first  time that  support under the Paris Agreement is  reported.  This 
support  constitutes  a  progression  from  previous  levels  of  support  reported  in 
Biennial Reports under the UNFCCC. Between 2014 and 2022, EU support from 
public sources to developing countries increased by 96.5%. 

• 

Inflows/outflows: All multilateral finance is provided by the EIB, which 
reports based on outflows. 

•  Climate-specific shares: The EIB identifies its adaptation and mitigation 
flows  using  the  joint  approach  developed  by  the  MDBs.  For  all 
programmes/projects,  only 
the  climate-specific  components  are 
aggregated into overall EU multilateral finance. 

•  Core/general:  The  Commission  does  not  report  core/general  support  to 
multilateral institutions for 2021 and 2022. The EIB reports on an outflow 
basis; therefore, a distinction between core/general and climate-specific 
flows is not applicable as this is only relevant when reporting inflows to 
multilateral institutions.  

•  Attribution to the reporting Party: As the EIB reports outflows, attribution 
does not apply as it is only relevant when reporting inflows to multilateral 
institutions. EU Member States do not report inflows to the EIB in line 
with EU regulations to avoid double counting. 

Source: Own compilation  

386  Climate Bank Roadmap 2021-2025, 

https://www.eib.org/attachments/thematic/eib_group_climate_bank_roadmap_en.pdf.  

387  Paris Alignment Framework – Low carbon, Version 1.1, 

https://www.eib.org/attachments/lucalli/20230342_paris_alignment_framework_low_carbon_v1_1_en.pdf. 

140 

 
 
4.4  Providing and mobilising financial support 
This section provides information on the total public climate finance provided to developing countries 
through bilateral and multilateral channels in 2021 and 2022 as well as on additional private climate 
finance mobilised by the EIB in  2022388. Climate finance  committed through bilateral  channels  is 
reported  in  Section  4.4.1,  climate  finance  provided  through  multilateral  channels  is  reported  in 
Section 4.4.2, and additional climate finance is reported in Section 4.4.3. 

Since  2013,  the  total  public  climate  finance  provided  by  the  Commission,  the  EIB,  and  the  EU 
Member States has tripled, from EUR 9.5 billion in 2013 to EUR 28.5 billion in 2022. EU institutions 
and the EIB contributed approximately 25% of the total finance each year (see Figure 38). 

Figure 38: Public climate finance by the EU and its Member States, 2013-2022 

Source: Own illustration based on Commission and EIB data and submissions from the EU Member States 

Over the  past  10 years,  the  total  climate  finance  contributed  by the Commission and the EIB has 
increased by 118%, from approximately EUR 3 billion in 2013 to approximately EUR 6.6 billion in 
2022 (see Figure 39). 

388 The EU reports in this BTR support provided to all countries eligible to receive official development assistance (ODA), 
as  listed  in  the  ‘DAC  List  of  ODA  Recipients’,  https://www.oecd.org/en/topics/sub-issues/oda-eligibility-and-
conditions/dac-list-of-oda-recipients.html.  

141 

9.514.517.620.220.421.721.923.423.028.50510152025302013201420152016201720182019202020212022Public climate finance comitted (EUR billion)European CommissionEuropean Investment BankEU Member States 
 
Figure 39: Climate finance to developing countries provided by the Commission and the EIB, 

2013 - 2022 

Note: Individual Commission and EIB funding in the graph may not add up to the total due to rounding.  

Source: Own illustration based on Commission and EIB data 

During  2021  and  2022,  the  total  climate  finance  contributed  by  the  Commission  and  the  EIB 
amounted to EUR 11.6 billion, of which 56% was allocated to mitigation, 16% to adaptation and 29% 
to  cross-cutting389.  44%  of  the  finance  was  channelled  multilaterally,  i.e.  by  the  EIB,  and  56% 
bilaterally, i.e. by the Commission. The total bilateral and multilateral climate finance according to 
type of support is presented in Figure 40. 

389  Percentages do not add up to 100% due to rounding. 

142 

0.960.681.522.732.822.652.542.58 2.50 4.03 2.052.102.281.952.642.973.182.71 2.56 2.52 3.012.783.804.685.465.625.725.395.076.55012345672013201420152016201720182019202020212022Climate finance committed (EUR billion)European CommissionEuropean Investment Bank 
 
 
Figure 40: Total climate finance by channel and type of support, 2021-2022 

Note: Percentages do not add up to 100% due to rounding. 

Source: Own illustration based on Commission and EIB data 

4.4.1  Financial support through bilateral channels 

Bilateral climate finance reported in this BTR are funds committed by the Commission. All climate 
finance committed by the Commission to developing countries in 2021 and 2022 was in the form of 
grants. 99.9% of this total was classified as official development assistance (ODA) and only 0.1% 
was classified as Other Official Flows (OOF). This climate finance was marked by the Rio markers, 
as described in section 4.34.3, and is summarised below for the years 2021 and 2022. The summary 
highlights the amounts ear marked for mitigation, adaptation and cross-cutting activities, and how 
much of these funds went to Least Developed Countries (LDCs). 

In 2021 and 2022, the Commission committed a total of EUR 6.53 billion in bilateral climate finance 
to  developing  countries.  Of  the  total  bilateral  climate  finance  committed,  EUR  2.09  billion  was 
marked for mitigation, EUR 1.51 billion for adaptation, and EUR 2.92 billion for cross-cutting. Of 
the  total  climate  finance  provided  by  the  Commission  in  2021  and  2022,  almost  EUR  1.2  billion 
(18.4%) was committed to LDCs. The funding is marked by country and by region, but in some cases 
a regional marker is used as climate finance goes to a group of countries, making it impossible to 
assign specific amounts to individual countries in that group. Of the total climate finance committed 
to LDCs in 2021 and 2022, at least EUR 228 million (19%) was marked for mitigation, EUR 762 
million (64%) for adaptation and EUR 210 million (18%) for cross-cutting. 

Further disaggregation of the climate finance provided by the Commission in 2021 and 2022 is set 
out in Table 8 and Table 9 (by subsector), and in Table 10 and Table 11 (by region). 

143 

38%3%4%18%13%25%Total of 2021 and 2022: EUR 11.6 bnMultilateral MitigationMultilateral AdaptationMultilateral Cross-cuttingBilateral MitigationBilateral AdaptationBilateral Cross-cutting 
 
Table 8: Bilateral climate finance committed by the Commission for mitigation, adaptation and 

cross-cutting by subsector, 2021 

Note: Figures for individual sectors may not add up to the total due to rounding. Percentages may not add up 
to 100% due to rounding. 

Source: European Commission

 
 
 
Table 9: Bilateral climate finance committed by the Commission for mitigation, adaptation and 

cross-cutting by subsector, 2022 

Note: Figures for individual sectors may not add up to the total due to rounding. Percentages may not add up 
to 100% due to rounding. 

Source: European Commission

 
 
  
Table 10: Bilateral climate finance committed by the Commission for mitigation, adaptation 

and cross-cutting by region, 2021 

Note: Figures for individual sub-regions may not add up to the total due to rounding. Percentages may not 
add  up  to  100%  due  to  rounding.  Countries  are  classified  into  regions  according  to  the  UN  region 
classification. 

Source: European Commission 

146 

 
 
 
Table 11: Bilateral climate finance committed by the Commission for mitigation, adaptation 

and cross-cutting by region, 2022 

Note: Figures for individual sub-regions may not add up to the total due to rounding. Percentages may not 
add  up  to  100%  due  to  rounding.  Countries  are  classified  into  regions  according  to  the  UN  region 
classification. 

Source: European Commission 

Detailed information on bilateral climate finance can be found in CTF Table III.1 which is submitted 
with this BTR. 

4.4.2  Financial support through multilateral channels 

The EU and its Member States support a variety of global programmes and trust funds managed by 
multilateral organisations, including the United Nations Development Programme (UNDP), the UN 
Environment, the Food and Agriculture Organization and the World Bank. 

For  example,  in  2022  the  Commission  committed  EUR 100 million  to  the  Adaptation  Fund  and 
EUR 10 million  to  the  International  Maritime  Organization’s  Global  Maritime  Technology 
Cooperation Centre and Network. The Commission’s statistical system categorises most of its climate 
finance support as bilateral  with  multiple recipients,  even when the funds are delivered through a 
multilateral organisation. Contributions to multilateral institutions operating in the field of climate 
change  that  are  not  earmarked  for  specific  purposes  are  reported  as  climate-specific  multilateral 

147 

 
  
support. All other finance earmarked for a specific climate-related purpose and provided through a 
multilateral organisation is reported as bilateral support. 

The  EIB  channels  significant  volumes  of  climate  finance  to  developing  countries.  The  EIB  funds 
reported here take the form of loans, equity investments, grants and other financial instruments. Due 
to changes in reporting from 2021 to 2022, multilateral climate finance refers to finance committed 
by the EIB in reporting year 2021 and finance provided by the EIB in reporting year 2022. 

EIB  financial  support  is  categorised  as  multilateral  as  the  EIB  is  considered  a  multilateral 
development bank. Only the EIB’s climate-specific outflows are reported here.  

Detailed information on bilateral climate finance can be  
this BTR. 

found in CTF Table III.2 submitted with 

The EIB contributed climate finance amounting to EUR 2.6 billion and EUR 2.5 billion, respectively. 
Total multilateral climate finance by type of support is provided in Table 12, which is based on the 
EIB’s established procedure for tracking its climate finance. 

Table 12: Multilateral financial support by the EIB in 2021 and 2022 

Source: EIB. 2021 data are based on commitments and 2022 data are based on disbursements. 

Of total climate finance committed by the EIB in 2021, EUR 241 million was channelled as ODA, 
while 211 million was channelled as OOF. Of total climate finance provided by the EIB in 2022, 
EUR 2.26 billion was channelled as ODA, while EUR 195 million was channelled as OOF. For the 
remaining amounts in both 2021 and 2022, this information is not available because at the time of 
signature, the interest rate of the loan is not known as it is set at first disbursement. It is therefore not 
possible to establish whether a given loan is concessional or not at the time of signature, and therefore 
whether it is classified as ODA or OOF; as a result, they are classified as ‘other’ in CTF Table III.2. 

4.4.3  Mobilising financial support 

The  EU  is  using  innovative  ways  of  engaging  the  private  sector  in  adaptation  and  mitigation 
activities in developing countries. Private investment, alongside public investment, is seen as crucial 
to  scaling  up  climate  finance  and  closing  current  finance  gaps.  Although  private  investors  show 
increasing  interest  in  funding  low-carbon  investment,  this  potentially  significant  source  of  capital 
remains  relatively  untapped.  Therefore,  attracting  private  investment  in  recipient  countries  is 
essential. 

The EU is developing public initiatives to mobilise private climate finance directly and supports the 
creation  of  appropriate  enabling  environments,  also  as  part  of  implementing  its  Global  Gateway 
strategy.  In  addition  to  the  EFSD+  (see  Section  4.2  national  circumstances),  the  Commission  has 
helped increase the provision of risk capital for sustainable energy investments and has thus made a 
significant contribution to securing additional funds and therefore boosting the total volume of funds 
available  for  financing  (e.g.  through  the  Electrification  Financing  Initiative  (ElectriFI),  Climate 

148 

 
 
Investor  One,  the  African  Renewable  Energy  Scale-Up  Facility,  the  Digital  Energy  Facility,  the 
Transferability & Convertibility Facility and the Facility for Energy Inclusion). 

The amount of financial support mobilised at EU level in 2021 is not known, but in 2022 the EU 
started to  report private financial support mobilised for climate through the EIB. Private financial 
support mobilised by the EIB in 2022 amounted to EUR 3.99 billion, as shown in Figure 41. 

Figure 41: Climate finance mobilised by the EIB in 2022 

Source: EIB 

4.5  Support for technology development and transfer 
Technology  development  and  transfer  is  a  key  component  of  many  development  cooperation 
activities  supported  by  the  EU.  Often  support  for  technology  development  and  transfer  is  one 
component  of  multi-purpose  projects  that  target  both  mitigation  and  adaptation  objectives. 
Disaggregating the portion of a financial flow that specifically supports technology development and 
transfer  is  therefore  not  always  possible.  Section  4.5.1  provides  textual  information  on  the  EU’s 
overarching strategic approach. Quantitative information on measures and activities related to support 
for  technology  development  and  transfer  is  provided  in  CTF  Table  III.4,  which  accompanies  this 
BTR. 

4.5.1  Strategies employed to support technology development and transfers 

The  EU  acknowledges  the  institutional  framework  for  technology  transfer  created  under  the 
UNFCCC  and  is  committed  to  supporting  its  implementation.  The  Commission  is  the  largest 
contributor to the operations of the United Nations Climate Technology Centre and Network (CTCN), 
with  total  voluntary  contributions  of  USD  19.6  million390  since  2014.  This  funding  supports  the 

390  As of 15 October 2023, see page 63 of the UN CTCN (2023) 2022-2023 CTCN Progress Report https://www.ctc-

n.org/file-download/download/public/38659. 

149 

                                                       
 
 
CTCN’s  mandate  to  provide  technical  assistance  to  step  up  technology  transfers  to  developing 
countries. In 2022 and 2023, the Commission announced two grants to the CTCN of a total value of 
EUR  5  million,  linked  to  the  implementation  of  17  CTCN  technical  assistance  requests  for  ten 
projects391in communities at risk of conflict.392, 393 

The EU and the CTCN also cooperate on the programme ‘Climate Change and Security: Innovative 
Community-based  Climate  Technology  for  Communities  at  Risks  of  Conflicts  Due  to  Climate 
Impact’. This programme aims to strengthen the resilience of communities in conflict due to climate 
impacts by promoting conflict-sensitive, community-based technological solutions to climate change. 
To receive support under the programme, projects must meet the following eligibility criteria: 

they must support a new, existing, or improved technology; 

• 
•  eligible technologies can be of two types: hard or soft technology – i.e. hardware or 

software; 
they should be scalable (e.g. supported by suppliers, by private entrepreneurs, by financially 
viable and scalable business models); and 
they should empower women and girls. 

• 

• 

The types of technology whose market growth can be supported via the programme include: 

1.  technologies in which the domestic private sector is currently involved, but there is a need to 

scale up the existing market; 

2.  technologies that are not financially viable because they are supplied by the government or 
by the non-profit sector (often for free or at a modest price, only covering the costs of 
running the technology and the providing organisation); and  

3.  technologies for which there is currently not enough demand, meaning efforts should be 

focused on informing potential final users and removing policy or market barriers to market 
development. 

The programme has a budget of EUR 3 million  over 3 years and will be managed by the CTCN. 
Resources  will  be  made  available  on  request  for  assistance  from  National  Determined  Entities  in 
countries at risk of conflict. 

In  2021,  the  Commission  committed  a  further  EUR  10  million  to  the  Adaptation  Fund  Climate 
Innovation  Accelerator  (AFCIA)  Programme  administrated  by  UNDP.  The  programme  aims  at 
developing and disseminating innovative adaptation practices, tools and technologies.394 

The  EU  further  supports  technology  transfers  and  related  capacity  building  through  Just  Energy 
Transition Partnerships (JETPs). The EU contribution to the JETP with South Africa, for example, 

392  Climate Change and Security: a Joint EU-CTCN programme for Innovative Community-based Climate Technology 
for  Communities  at  Risks  of  Conflicts,  https://www.ctc-n.org/news/climate-change-and-security-joint-eu-ctcn-
programme. 

393  Walking  the  talk:  EU's  Latest  EUR  2  Million  Grant  Bolsters  Technology  for  Climate  Action  via  CTCN,  

https://www.ctc-n.org/EuropeanUnion_Latest_Grant_Bolsters_Technology_for_Climate_Action. 

394  Adaption Fund Climate Innovation Accelerator, https://www.adaptation-undp.org/sites/default/files/resources/afcia-

undp_grant_window_2nd_call_for_proposals.pdf. 

150 

 
 
 
includes  a  component  on  technology  incubation  and  workforce  skills  that  provides  research  and 
development  funding  for  public  and  private  innovation  to  help  South  Africa  gain  a  competitive 
advantage. 

4.5.2  Support provided at different stages of the technology cycle 

EU  programmes  and  initiatives  target  different  stages  of  the  technology  cycle.  These  stages  are 
described below. 

Research and development stage 

The EU’s key funding programme for research and innovation is Horizon Europe, with a budget of 
EUR 95.5 billion over the 2021-2027 period. The programme has a 35% allocation target for climate 
expenditure, representing a total investment of EUR 33.4 billion. Though it is focused on the EU, 
international cooperation is a key pillar of the programme, through bilateral science and technology 
agreements with individual countries. These agreements aim to increase cooperation in research and 
innovation. In addition, the EU maintains regional science and technology cooperation dialogues with 
many regions around the world. The African Union – European Union High Level Policy Dialogue 
(HLPD) on Science, Technology and Innovation, for example, sets long-term research and innovation 
policy priorities to strengthen cooperation between Africa and Europe. 

Growth stage 

Development of Smart Innovation through Research in Agriculture (DeSIRA) is an initiative aimed 
at  contributing  to  a  climate-relevant,  productive  and  sustainable  transformation  of  agriculture  and 
food systems in low- and middle-income countries. Alongside a research component, the initiative 
also supports projects that test and scale up innovative technologies for sustainable development and 
resilient production in crop and livestock farming. An example is the ‘climate-smart agriculture and 
value chains project’ in Costa Rica. It supports on-farm pilot projects implemented by producers in 
cooperation  with  research  institutes,  helps  farmers  to  access  financing  mechanisms  to  scale  up 
projects, and supports measures for better promoting low-carbon agricultural products on national 
and  international  markets.  The  project  takes  a  multi-stakeholder  approach  and  is  led  by  a  project 
steering  committee  composed  of  the  Costa  Rican  Ministries  of  Environment  and  Energy  and  of 
Agriculture and Livestock, the EU and the German Federal Ministry for the Environment, Nature 
Conservation, Nuclear Safety and Consumer Protection (BMUV). The project runs from 2021 to 2025 
and is a multi-donor action supported by the EU with EUR 4.2 million and the BMUV with EUR 1.6 
million395. 

Another  example  of  an  EU-supported  initiative  that  focuses  on  supporting  the  growth  phase  of 
adaptation technologies is the Climate Resilience and Adaptation Finance and Technology Transfer 
Facility  (CRAFT).  The  facility,  implemented  by  The  Lightsmith  Group,  will  make  growth  equity 
investments  in  selected  private  companies  proposing  climate  resilience  solutions.  This  includes 
companies  offering  services  and  products  related  to  weather  analytics,  agricultural  analytics, 
catastrophe risk modelling and distributed water solutions. At least two thirds of CRAFT investments 

395  Climate-smart 

Costa 
https://capacity4dev.europa.eu/media/125744/download/7c0f5220-c44d-4895-aeb7-975e08caf767_en.  

agriculture 

chains 

value 

and 

in 

Rica, 

151 

 
 
will  go  to  developing  countries.  The  EIB  will  contribute  funding  of  around  EUR 24 million  over 
several years. 

Maturity stage 

The  EU  supports  many  projects  that  focus  on  making  widely  used  and  increasingly  standardised 
technologies, such as photovoltaics, more efficient by supporting measures that reduce the cost of 
deploying them. While the deployment of wind and solar needs to grow rapidly in order to meet the 
temperature target of the Paris Agreement, the technologies are mature, and interventions now need 
to focus on deploying them more efficiently instead of investing in new innovations. 

An example of a project that focuses on cost reduction is the AFRIGREEN Debt Impact Fund. This 
fund offers long-term debt solutions for financing solar infrastructure projects in Central and West 
Africa through direct loans and asset-based credit facilities. It takes a two-pronged approach which 
focuses on helping African SMEs reduce their energy costs and on expanding the use of photovoltaics 
in Africa. Projects funded by AFRIGREEN include a USD 15 million senior debt facility for building 
photovoltaic plants in Nigeria396. The EIB will contribute funding to AFRIGREEN of some EUR 25 
million over several years. 

Decline stage 

In  the  decline  stage,  technologies  become  obsolete  or  are  replaced  by  other,  more  innovative 
technologies. In line with current policies there are no projects to support technologies at the decline 
stage. 

4.5.3  Support for development and enhancement of endogenous capacities and 

technologies 

According to the CTCN, endogenous technologies refer to ‘new technologies developed within (or 
based on the initiative of) a country through research, development  and demonstration’. It  further 
refers  to  technologies  acquired  through  understanding,  adapting,  utilising  and  replicating  already 
existing technologies397. 

Several  EU-funded  projects  focus  on  supporting  country-driven  innovation  and  solutions  that 
enhance  endogenous  capacities  and  technologies  of  developing  countries.  An  example  of  such  a 
project  is  the  Pacific  Solutions  to  Save  Our  Ocean  –  Integrated  Ocean  Management  Programme, 
which aims to capture science and knowledge, including traditional knowledge, for the purposes of 
integrated ocean management. One of the project’s objectives is to improve decision support systems 
by integrating Pacific traditional knowledge, culture and wisdom in inclusive, consultative decision-
making on national ocean policies 398 The project is implemented by the Pacific Community Centre 
for Ocean Science, and the Commission committed EUR 600 000 to the project in 2022. 

396  Invest Afrigreen debt impact fund – our projects, https://www.rgreeninvest.com/en/afrigreen/afrigreen-debt-impact-

fund-portfolio/.  

397  See the CTCN definition here: https://www.ctc-n.org/technology-sectors/endogenous-technologies?page=33.  
398  Pacific  Community  Centre  for  Ocean  Science,  https://pccos.spc.int/work-areas/projects/pacific-solutions-save-our-

ocean-integrated-ocean-management-programme.   

152 

 
 
4.5.4  Efforts to encourage private sector activities related to technology 

development and transfers 

Many  projects  supported  by  EU  institutions  attract  additional  private-sector  investment  in 
technologies such as renewable energy or climate-smart agriculture. For example, in connection with 
the Global Gateway initiative ‘Solar Development in Brazil,’ the EIB is providing a EUR 200 million 
intermediated  framework  loan  to  Sicredi,  a  cooperative  financial  institution  with  more  than 
6.5 million members and 2 500 branches across all regions of Brazil. Sicredi will use the funding to 
finance the installation of photovoltaic panels on homes, SMEs and rural properties. It will help to 
further  develop  the  deployment  of  photovoltaic  technology  in  Brazil  through  private  sector 
investment in renewable energy399.  

4.5.5  Efforts to step up, encourage and boost innovation 

Collaboration and multi-stakeholder approaches are an important part of many projects supported by 
the  EU.  On  an  overarching  level,  these  approaches  are  guided  by  the  2021  Commission 
Communication on the Global Approach to Research and Innovation400, which commits the EU to 
promoting  rules-based  multilateralism,  pursuing  reciprocal  openness  in  research  and  innovation 
cooperation to facilitate global responses to global challenges, and exchanging best practices.  

Several projects supported by the EU include specific components that focus on engagement with 
stakeholders, co-creation of knowledge and building partnerships on a local, regional, national and 
international  level  to  step  up  and  enable  innovation  and  collaborative  approaches  to  research  and 
development. The DeSIRA initiative, described in detail in Section 4.5.6, is one example. 

4.5.6  Generating knowledge 

Many  projects  supported  by  the  EU  contain  specific  objectives  or  specify  outputs  that  focus  on 
synthesising  knowledge generated during project implementation  and making it available to  other 
stakeholders to help disseminate lessons learnt and allow the scaling-up and replication of successful 
approaches.  Again,  the  DeSIRA  initiative  is  an  example  of  this;  it  includes  a  specific  strand  for 
capturing and making accessible knowledge and evidence generated during the implementation of 
DeSIRA  projects.  This  strand,  called  DeSIRA-LIFT,  focuses  on  knowledge  co-production  and 
strengthening  of  innovation  capacity.  It  uses  a  three-pronged  approach  that  focuses  on  the  local, 
institutional and policy levels, as described below 401: 

•  providing services on demand for DeSIRA grant holders that support capacity strengthening, 
knowledge  sharing  and  mutual  learning,  partnership  building,  making  synergies  between 
different projects, synthesis studies and other knowledge products; 

399  Brazil:  EIB  grants  €200  million 

to  Sicredi  for  SMEs  and  solar  energy  investment  by  households, 

https://www.eib.org/en/press/all/2023-215-brazil-eib-grants-eur200-million-to-sicredi-for-smes-and-households-
solar-energy-investments. 

400 Communication from the Commission on the Global Approach to Research and Innovation, COM(2021) 252 final, 

https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A2021%3A252%3AFIN.  

401  Leveraging 

the 

DeSIRA 

initiative 

for 

agri-food 

systems 

transformation, 

https://capacity4dev.europa.eu/library/communication-global-monitoring-and-evaluation-framework-desira_en.  

153 

 
 
•  supporting a policy dialogue and regional and international partnerships to take up knowledge 

and experience generated in DeSIRA projects; and 

•  providing support for deriving evidence-based knowledge to develop an international policy 
environment for research and innovation in food systems, focusing on the African Union-EU 
relationship. 

The EU is supporting DeSIRA-LIFT with a total contribution of EUR 6.5 million from 2021 to 2024. 
The knowledge brief and updates are provided through a dedicated website, supporting accessibility 
and sharing knowledge and experience402. 

4.6  Capacity-building support 
4.6.1  Strategies employed to provide capacity-building support 

The EU has mainstreamed capacity-building activities into all development assistance, in line with 
the Paris Declaration on Aid Effectiveness and the Accra Agenda for Action. The EU’s development 
activities in the field of climate change are based on the principles of national ownership, stakeholder 
participation,  country-driven  demand,  cooperation  between  donors  and  across  programmes,  and 
impact assessment and monitoring. 

The following case studies are examples of capacity-building support provided by the EU. 

The Commission’s Green Deal Knowledge Hub, a group of technical assistance facilities in the areas 
of  environment  and  climate,  also  provide  support  to  various  bodies,  organisations  and  partner 
countries to ensure that climate and climate-resilient development is integrated into the EU’s external 
action. Facilities under this Hub include the EU Global Support Facility for Nationally Determined 
Contributions, Euroclima and the Greening Facility for international cooperation. 

EU Global Support Facility for Nationally Determined Contributions 

The EU Global Support Facility for Nationally Determined Contributions (NDC Facility) is a facility 
under the EU Green Deal Knowledge Hub. It helps partner countries speed up their transition towards 
low-carbon, resource-efficient and resilient economies by delivering high-level technical assistance 
and  policy  advice  at  country,  regional  and  global  level.  Services  include:  (i)  helping  to  design, 
upgrade  and  implement  NDCs  and  long-term  strategies  to  reduce  greenhouse  gas  emissions  and 
improve  sustainability;  (ii)  assisting  in  the  development  of  climate  mitigation  and  adaptation 
measures;  (iii)  offering  technical  support,  advice,  training  and  knowledge  sharing  on  a  variety  of 
topics;  and  (iv)  contributing  to  the  design  of  economic  policies  that  help  achieve  climate  change 
mitigation and adaptation objectives403. 

The  NDC  Facility  is  designed  according  to  a  results-oriented  and  demand-driven  approach, 
responding to the needs of EU Delegations and their partner countries. For example, it helped EU 
Delegations to draw up actions that contribute to fighting climate change while also providing ad hoc 

402  DeSIRA Lift – Resources, https://www.desiralift.org/resources/.  
403  EU  Global  NDC  Facility  Brochure  2023,  https://capacity4dev.europa.eu/library/eu-global-ndc-facility-brochure-

2023_en?refpage=search. 

154 

 
 
technical  assistance,  support,  training  and  advice  on  how  these  actions  should  be  designed  and 
implemented  in  beneficiary  countries.  In  this  context,  the  NDC  Facility  has  also  helped  partner 
countries enhance their capacity to mobilise and access climate finance. This capacity-building effort 
helps countries scale up investments in renewable energy, sustainable agriculture, and other climate-
related sectors. 

Euroclima 

The Euroclima programme seeks to contribute to the green and just transition of the Latin America 
and Caribbean (LAC) region. Euroclima has been the EU’s flagship regional programme on climate 
action  in  Latin  America  since  2010.  In  2023  it  expanded  to  the  Caribbean  and  it  is  now  being 
implemented in all 33 LAC countries.  

The programme aims at reducing the impact of climate change in the 33 LAC countries by promoting 
mitigation of and adaptation to climate change and promoting resilience, investment and conservation 
of biological diversity. It will assist the transition of Latin American and Caribbean countries to a 
decarbonised, environmentally friendly and inclusive economy, helping to ensure a socially just and 
green recovery in line with the EU Green Deal404. 

Between 2010 and 2022, 206 capacity-building processes have been carried out with the support of 
the programme. Moreover, 248 Latin American public or private organisations have been involved 
in developing and implementing plans, strategies and policies; and more than 66 000 individuals have 
been trained in the many areas linked to climate change405. 

The  Commission’s  Greening  Facility  for  Neighbourhood,  Development  and  International 
Cooperation 

The Greening Facility for Neighbourhood, Development and International Cooperation managed by 
the Commission helps build knowledge and skills in integrating the environment and climate change 
in  external  actions.  It  provides  guidance  on  how  to  identify  and  maximise  opportunities  for 
programmes and projects to contribute to climate and environment objectives and ensure compliance 
with the ‘do no significant harm’ principle. Furthermore, it offers remote and on-site assistance to EU 
staff and national partners to develop skills and knowledge among all stakeholders544. The Greening 
Facility also provides quality control of the Rio markers for EU international cooperation actions to 
ensure the eligibility criteria, rules and guidance established by the OECD DAC are applied correctly 
and consistently. The new Greening Toolbox, which comprises all relevant green tools and guidance, 
will be available as an online resource. 

EU4Climate 

The EU4Climate project supported the governments of Eastern European partner countries (Armenia, 
Azerbaijan, Belarus, Georgia, the Republic of Moldova and Ukraine) in their implementation of the 
Paris Agreement through mitigating climate change and transitioning towards a low-emissions and 
climate-resilient economy. The project was funded by the EU and was implemented by the UNDP 

404  See https://www.euroclima.org/en/.  
405  EUROCLIMA+  Annual  Report  2022,  https://www.euroclima.org/en/knowledge-portal/library/annual-report-

euroclima-2022-english-version. 

155 

 
 
from  2019 to  2023. The four key objectives were to: (i) boost  countries’ capacity to  develop and 
implement  climate  policies  aligned  with  their  Paris  Agreement  commitments;  (ii)  improve 
transparency  on  emissions  and  climate  action;  (iii)  mainstream  climate  aspects  in  sector-specific 
policies; and (iv) advance the implementation of climate-related provisions of bilateral agreements 
with the EU and in the Energy Community Treaty framework. 

Four partner NDCs have been updated and two NDC implementation plans developed with support 
from the project. Furthermore, three partner countries developed a long-term development strategy 
for reducing greenhouse gas emissions by mid-century, and four countries developed a robust MRV 
framework.  In  addition,  countries  were  supported  in  the  development  of  sectoral  policies  or 
recommendations  on  climate  mainstreaming.  The  project  also  assisted  in  mobilising  new  climate 
finance for financial frameworks and in developing the National Adaptation Strategy for Ukraine406. 

Twinning and TAIEX 

The Twinning and TAIEX (Technical Assistance and Information Exchange) instruments546 facilitate 
institutional capacity building in a ‘Team Europe’ approach that involves sharing EU best practices 
through peer-to-peer exchanges to  support reforms  in  partner countries. These short and medium-
term projects typically involve workshops, training sessions, expert missions and study visits, all of 
which are designed to foster long-term reform processes. Based on experience gained over more than 
20 years in neighbourhood countries and countries preparing to join the EU, Twinning and TAIEX 
were also made available to countries in Sub-Saharan Africa, the Middle East, Asia and the Pacific, 
the  Americas  and  the  Caribbean  and  to  Overseas  Countries  and  Territories  from  2020.  The  tools 
contribute  to  strengthening  the  partner  countries’  national  and  regional  policies,  supports  the 
implementation  of  the  Sustainable  Development  Goals,  and  contributes  to  the  Global  Gateway 
strategy. 

4.6.2  Responding to existing and emerging capacity-building needs 
The EU’s capacity-building support is grounded in the principle of national ownership407. This means 
that the beneficiaries have ownership over their capacity building, as they independently assess their 
capacity  needs,  priorities  and  gaps,  design  the  process  of  change  and  manage  it,  while  external 
partners like the EU only provide support. Consequently, capacity-building activities are demand-
driven,  typically  arising  from  donor  cooperation  and  cross-programme  collaboration,  and  always 
involve stakeholder participation. 

To achieve a better understanding of the challenges faced by third countries, the EU uses its external 
policy instruments, including high-level dialogues, green alliances and green partnerships, policy and 
political dialogues, Just Energy Transition Partnerships and climate dialogues408. This work is carried 

406  Towards Low Emission and Climate Resilient Economy, https://www.undp.org/eurasia/projects/eu4climate.  
407  Addressing  capacity  development  in  planning/programming,  monitoring  and  evaluation,  https://neighbourhood-

enlargement.ec.europa.eu/system/files/2018-10/dg_near_guidance_note_-
_addressing_capacity_development_in_programming_me.pdf. 

408  Cooperation  on  climate  action  with  non-EU  countries,  https://climate.ec.europa.eu/eu-action/international-action-
climate-change/eu-engagement-climate-action-non-eu-countries/cooperation-climate-action-non-eu-countries_en. 

156 

 
 
out by or in collaboration with the EU Delegations and Offices representing the EU in 144 non-EU 
countries, which help implement climate programmes around the world. 

Since EU support is provided in response to partner countries, information from the partner countries 
(e.g. through their national communications) is important to be able to assess their capacity-building 
needs and the effectiveness of ongoing activities. 

4.6.3  Policies promoting capacity-building support 

The EU supports capacity building in partner countries through regulations, strategies, policies and 
programmes. Some key examples are presented below. 

Neighbourhood, Development and International Cooperation Instrument – Global Europe 

The  Regulation  establishing  the  Neighbourhood,  Development  and  International  Cooperation 
Instrument  –  Global  Europe  (NDICI-Global  Europe  Regulation)409  aims  to  foster  dialogue  and 
cooperation with third countries and regions in the European Neighbourhood (Eastern Europe and 
Northern Africa), Sub-Saharan Africa, Asia and the Pacific and the Americas and the Caribbean. 

The Regulation explicitly mentions capacity building relating to environment and climate change as 
areas  of  cooperation  across  all  geographic  regions.  Specific  areas  for  cooperation  under  NDICI-
Global Challenges priority area ‘Planet’ include: 

•  strengthening  scientific,  technical,  human  and  institutional  capacity  for  climate  and 
environmental  management,  mainstreaming,  and  monitoring.  This  includes  enhancing 
regional, national and local climate and environmental governance and facilitating access to 
public  and  private  resources  for  disaster  risk  reduction,  ecosystem  and  biodiversity 
conservation, climate finance and insurance; 

• 

integrating environmental sustainability and climate change objectives into national and local 
development strategies, also in terms of including sustainability criteria in public procurement. 

NDICI – Global Europe also emphasises the importance of empowering civil society organisations 
and local communities, in particular women’s and youth organisations. 

EU Global Gateway strategy 
The EU Global Gateway410 is the EU’s main strategy for boosting investments in partner countries. 
It encourages smart, clean and secure investments in physical sustainable infrastructure and promotes 
capacity  building  through  investments  in  education  and  research  in  partner  countries.  ‘Green  and 
Clean’ is one of the six guiding principles of the Global Gateway, which define it as a climate-neutral 
strategy  for  investing  in  infrastructure  that  is  clean,  climate-resilient  and  aligned  with  pathways 
towards net-zero emissions. Multiple initiatives are being rolled out across the world, mainly through 

409  Regulation  (EU)  2021/establishing  the  Neighbourhood,  Development  and  International  Cooperation  Instrument  – 

Global Europe, https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32021R0947. 

410  Global 

Gateway, 

https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/stronger-europe-

world/global-gateway_en. 

157 

 
 
Team Europe Initiatives, which are funded both by the EU and its Member States and by European 
development banks. 

These policies and programmes demonstrate the EU’s commitment to building capacities in partner 
countries across various sectors, with a particular focus on climate change, while at the same time 
promoting stability, development and mutual cooperation. 

Samoa Agreement 

The Samoa agreement411 is the overarching framework for EU relations with African, Caribbean and 
Pacific countries. The aim of the agreement is to strengthen the capacity of the EU and ACP countries 
to address global challenges together. The agreement succeeds the Cotonou agreement and serves as 
the legal framework for EU relations with 79 countries over the next twenty years. The agreement 
highlights  the importance of capacity building  across several  areas of collaboration, including  the 
environment, climate change and water and sanitation. 

European Fund for Sustainable Development Plus (EFSD+) 

The EFSD+ aims to mobilise EUR 135 of public and private financing to help partner countries to 
achieve  the  Sustainable  Development  Goals  (SDGs).  Support  provided  through  the  ESDF+  will 
include  technical  assistance  and  support  for  institutional  capacity  building.  In  addition  guarantees 
extended through the EFSD+ will support programmes that include capacity building components. 
An  example  is  the  “Guarantee  Facility  for  Sustainable  Cities”  managed  by  the  UN  Capital 
Development Fund (UNCDF) that will include a component of capacity building at the local level to 
build a transformative pipeline if sustainable urban development projects, implemented through UN 
Habitat.412 

The new EU Adaptation to Climate Change strategy (2021) 

The new EU Adaptation to Climate Change strategy413 (see Section 3.6) aims to turn the vision of a 
climate-resilient EU into reality by 2050, by making adaptation smarter, more systemic and swifter 
and stepping up international action. This means improved knowledge and data throughout the policy 
cycle,  support  for  policy  development  and  climate  risk  management  at  all  levels  and  swifter 
adaptation.  As  part  of  its  external  action,  the  EU  promotes  national,  sub-national  and  regional 
approaches to  adaptation, focusing  in  particular on adaptation  in  Africa, Small  Island Developing 
States (SIDS) and Least Developed Countries (LDCs).  

An  important  new  component  of  the  new  Adaptation  Strategy  is  its  external  dimension,  entitled 
’Stepping  Up  International  Action  for  Climate  Resilience’.  It  aims  to  increase  support  for 
international climate resilience and preparedness and supports capacity-building activities in partner 
countries. The EU’s activities in this area are considered a significant contribution to the United Arab 

411 

European 

– 
https://www.consilium.europa.eu/en/policies/samoa-agreement/  

Council 

Council 

the 

of 

European 

Union: 

Samoa 

agreement: 

412  UNDCF  Becomes  First  Entity 

to  Access 

the  European  Union’s  EFSD+  Guarantee  Program: 

https://www.uncdf.org/article/8078/european-union-greenlights-uncdf-guarantee-facility-for-cities-amounting-to-
eur-154-million  

413  Forging  a  climate-resilient  Europe  -  the  new  EU  Strategy  on  Adaptation  to  Climate  Change,  https://eur-

lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:52021DC0082. 

158 

 
 
Emirates  Framework  for  Global  Climate  Resilience414,  whose  purpose  is  to  enhance  adaptation 
support. 

Capacity building in EU candidate countries 

It is worth mentioning that institutional capacity building is a crucial part of the Commission’s actions 
to  support  candidate  and  potential  candidate  countries  in  their  efforts  to  modernise  their  public 
administration in preparation for joining the EU. Consequently, a guidance has been published on 
better  addressing  capacity  building  in  interventions  at  the  planning/programming,  monitoring  and 
evaluation  stages.  These  interventions  target  both  public  institutions  and  non-state  operators, 
including the private sector and civil society organisations415. 

4.6.4  Involving stakeholders 

The  Regulation  establishing  the  Neighbourhood,  Development  and  International  Cooperation 
Instrument – Global Europe (NDICI - Global Europe)416 lays out the general principles for projects 
implemented  under  the  instrument.  This  includes  the  principle  of  inclusive  partnership  and 
transparency,  which  requires  the  Commission  to  ensure  that  relevant  stakeholders  of  partner 
countries,  including  civil  society  organisations  and  local  authorities,  are  duly  consulted  and  have 
timely access to relevant information. The aim is to actively involve them and to play a meaningful 
role in the design, implementation and monitoring of programmes funded through the instrument. It 
further provides that, in line with the principle of ownership, the Commission should favour the use 
of partner countries’ institutions and systems for the implementation of programmes. 

These general principles are further applied through regular and inclusive multi-stakeholder dialogues 
with  other  donors  and  other  players,  including  local  authorities,  representatives  of  civil  society, 
foundations and the private sector. 

The following project is an example of how stakeholders are involved in EU-funded projects. 

Transition towards a low-emission and climate-resilient economy in the Western Balkans and 
Türkiye (TRATOLOW) 

The TRATOLOW project is an example of how stakeholders are involved in EU-funded projects. 
The project’s objective is to contribute to climate change mitigation and adaptation in the Western 
Balkan region and Türkyie and to help those countries move towards resource-efficient, low-emission 
and  climate-resilient  economies.  The  project  focuses  on  strengthening  institutional  capacities  and 
cooperation and on involving stakeholders, in line with the principle of stakeholder ownership417. 

414  Decision 2/CMA.5, Global goal on adaptation, https://unfccc.int/documents/637073. 
415  Addressing  capacity  development  in  planning/programming,  monitoring  and  evaluation,  https://neighbourhood-

enlargement.ec.europa.eu/system/files/2018-10/dg_near_guidance_note_-
_addressing_capacity_development_in_programming_me.pdf. 

416  Regulation (EU) 2021/947 establishing the Neighbourhood, Development and International Cooperation Instrument 

– Global Europe, https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32021R0947.  

417  EU Support for Climate Action in IPA II Beneficiaries Transition towards the low emissions and climate-resilient 
(TRATOLOW), 

economy 
https://www.tratolownetwork.eu/fileadmin/inhalte/tratolow/eu_support_for_climate_action_imagebrochure.pdf. 

Western 

Balkans 

Türkiye 

and 

the 

in 

159 

 
 
4.6.5  Sharing lessons learnt and best practices 

The Commission’s Directorate-General for International Partnerships (DG INTPA) is responsible for 
formulating  the  EU’s  international  partnership  and  development  policy,  with  the  ultimate  goal  of 
reducing poverty, ensuring sustainable development, and promoting democracy, human rights and 
the rule of law across the world. DG INTPA strives to be a learning organisation taking advantage of 
knowledge and expertise and has developed tools supporting the sharing of best practices and lessons 
learnt418. 

DG INTPA created Capacity4dev419, the Commission’s online knowledge-sharing platform which 
connects international cooperation professionals and allows them to learn, share, and collaborate with 
other  colleagues  and  stakeholders.  Users  include  staff  of  the  EU  institutions  and  international 
cooperation  professionals  from  EU  Member  States,  partner  governments,  civil  society,  NGOs, 
international organisations and the private sector. 

The platform aims to facilitate collaboration and engagement among peers by enabling cross-learning 
among  practitioners  from  EU  institutions  and  other  organisations,  allowing  them  to  share  lessons 
learnt and exchange innovative approaches. It also aims to consolidate knowledge-sharing tools and 
to bring together communities of practitioners in a common environment to improve the efficiency, 
effectiveness and quality of EU development cooperation. 

In addition, DG INTPA has developed a comprehensive Greening toolbox to support environment 
and climate-change mainstreaming in EU international cooperation and partnerships420. The toolbox 
includes a guidance document highlighting greening opportunities across the intervention cycle, notes 
on the integration of environment and climate change in specific sectors, an environment and climate 
risk screening tool and various impact assessment and validation tools. 

All programmes managed by DG INTPA include lessons learnt from previous projects. The following 
are recent examples of projects with a particular focus on sharing lessons learnt. 

Global Climate Change Alliance Plus Scaling up Pacific Adaptation (GCCA+ SUPA) 

The  GCCA+  SUPA  project,  which  fell  under  the  GCCA+  flagship  initiative,  aimed  to  enhance 
climate  change  adaptation  and  resilience  in  10  Pacific  island  countries.  The  2019-2023  project 
specifically  focused  on  strengthening  the  implementation  of  sector-based,  but  integrated,  climate 
change and disaster risk management strategies and plans421. 

The  project  led  to  the  development  of  a  methodology  for  impact  analysis,  and  a  trial  of  the 
methodology has been conducted in four countries. The purpose of the methodology was to inform 
target groups about best practices and to promote more effective and sustainable interventions in the 
future. Results of the trials were shared in an online learning series in 2022 (233 participants). The 

418  DG 

INTPA’s 

Knowledge  Management 

strategy 

2020 

– 

2024, 

https://international-

partnerships.ec.europa.eu/document/download/2dc364c5-a538-47c1-93d1-56fc91f8087b_en?filename=intpa-km-
strategy-2020-2024_en.pdf.  

419  See https://capacity4dev.europa.eu/_en. 
420  The European Union Greening Facility – tools, https://www.switchtogreen.eu/mainstreaming-facility/.   
421  Project fiche GCCA+ scaling up Pacific Adaptation (GCCA+ SUPA), https://capacity4dev.europa.eu/library/project-

fiche-gcca-scaling-pacific-adaptation-gcca-supa_en. 

160 

 
 
project  involved  developing  and  testing  criteria  for  scaling  up  climate  change  adaptation  in 
development  sectors,  such  as  the  coastal  protection  sector,  the  health  sector,  the  marine  resource 
sector, and the water security sector. The criteria were: (i) identification and analysis of past measures; 
(ii) alignment with national development priorities; (iii) application of a people-centred approach; 
and (iv) existence of a framework for maintenance and sustainability.  

Moreover, a people-centred approach has been applied to all project activities involving the strands 
human  rights,  gender  and  social  inclusion,  Pacific  culture  and  environmental  sustainability.  Fact 
sheets,  web  stories,  videos  and  further  project  documentation  are  available  online  on  the  relevant 
regional and country pages422. 

Advancing climate adaptation in the southern Mediterranean (ACA-MED) 

The  overall  objective  of  the  programme,  launched  at  the  2022  United  Nations  Climate  Change 
Conference, is to promote the green transition and strengthen the environmental and climate resilience 
of  economies  and  communities  in  the  Southern  Mediterranean  region.  This  includes  improving 
knowledge,  climate  governance,  policies  and  action  plans  at  national/central  level  to  ensure  the 
successful implementation of NDCs and NAPs and facilitate access to climate finance for adaptation 
purposes, as well as to give local authorities better access to climate finance with a view to investing 
in climate change adaptation. 

The  programme  will  include  two  separate  but  closely  coordinated  actions  that  build  on  the 
achievements of current and previous regional and bilateral projects: 

• 

• 

the AdaptAction programme run by the French Development Agency (AFD), already being 
implemented  with  good  results  in  other  countries,  will  be  extended  to  the  Southern 
Neighbourhood where it will promote climate integration and planning across Ministries and 
prepare the ground for large-scale investments using a tested methodology; 

the  Local  Climate  Adaptive  Living  Facility  (LoCAL),  designed  and  hosted  by  the  United 
Nation’s  Capital  Development  Fund  and  supported  by  the  EU,  helps  local  governments in 
developing  and  least  developed  countries  access  the  climate  finance, capacity  building  and 
technical  support  they  need  to  respond  and  adapt  to  climate  change. The  facility  is  already 
being  successfully  implemented  in  other  countries  and  will  be  extended  to  the  Southern 
Neighbourhood. Actions will use the tried-and-tested ‘LoCAL mechanism’ to integrate climate 
change into local governments’ planning and budgeting systems to increase awareness of and 
thus  improve the response to  climate change at  local  level.  It  will thereby promote climate 
integration in a vertical approach from central governments to local authorities. 

The programme complements other ongoing and planned bilateral and regional interventions, notably 
the  EU  for  Climate  Action  in  the  Southern  Neighbourhood  (Clima  MED)  project,  which  is  still 
ongoing, and six Climate for Cities projects launched in early 2022. Clima MED has provided a solid 
basis on which the programme will build. In particular, the programme will make use of the National 

422  Global Climate Change Alliance Plus Scaling up Pacific Adaptation, Final Report, Learning from the past and scaling 
up  climate  change  adaptation  measures  for  the  future,  https://library.sprep.org/sites/default/files/2023-12/GCCA-
SUPA-report.pdf. 

161 

 
 
Coordination  Groups  established  in  each  participating  country  and  will  use  the  Climate  Action 
Strategies developed by Clima MED that provide guidance on effective climate mainstreaming.  

Clima  MED  has  also  promoted  local-level  climate  action  by  helping  cities  develop  Sustainable 
Energy  Access  and  Climate  Action  Plans  (SEACAPs)  and  join  the  Global  Covenant  of  Mayors 
initiative for climate and energy (CoM) via CoM MED, a regional branch for Northern Africa and 
the Middle East. The programme will build on these achievements and interact with the SEACAP 
Support  Mechanisms  established  in  each  country  to  raise  funding  for  the  financing  of  existing 
SEACAPs423. 

423  Action  Document 

for  Advancing  Climate  Adaptation 

in 

the  Southern  Mediterranean 

(ACA-MED), 

https://neighbourhood-enlargement.ec.europa.eu/document/download/9fab0c56-18cd-416d-b546-
22aacc703410_en?filename=C_2022_8009_F1_ANNEX_EN_V2_P1_2322952.PDF. 

162 

 
 
 
 
5  MAKING  FINANCE  FLOWS  CONSISTENT  WITH  A  PATHWAY 
TOWARDS  LOW  GHG  EMISSIONS  AND  CLIMATE-RESILIENT 
DEVELOPMENT 

Article  2  of  the  Paris  Agreement  lays  down  three  goals;  a  temperature  goal  in  Article  2.1(a);  an 
adaptability goal in Article 2.1(b); and a ‘finance flows’ goal in Article 2.1(c), worded as ‘Making 
finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient 
development.’ 

The EU views this ‘finance flows’ goal not only as a goal in itself, but also as a critical enabler for 
achieving the Paris Agreement’s other goals. It has the double objective of scaling down flows that 
are detrimental  to  achieving  climate neutrality  and resilience, and mobilising  finance flows  at  the 
scale needed to address climate change worldwide. 

The EU is taking the following steps to implement Article 2.1(c) of the Paris Agreement. The EU 
Staff Working Document ‘Consistency of finance flows with the Paris Agreement objectives – the 
EU navigating the transition towards climate neutrality and resilience’ of July 2024424 provides an 
overview of the current international context, as well as the policies and measures already in place in 
the EU to align finance flows with the Paris Agreement. The EU is also working with its international 
partners to better align finance flows with global climate objectives and improve the mobilisation of 
climate finance. For instance, it has partnered up with Argentina, Canada, Chile, China, India, Kenya 
and Morocco to launch the International Platform on Sustainable Finance (which more countries have 
since joined). This platform aims to scale up the mobilisation of private capital for environmentally 
sustainable  investment.  The  European  Commission  has  also  set  up  a  high-level  expert  group  on 
scaling up sustainable finance in low- and middle-income countries in 2022 to identify challenges 
and opportunities related to sustainable finance in those countries. In April 2024, the group sent the 
Commission a report with its recommendations on this topic. 

The  EU’s  Sustainable  Finance  Framework  also  supports  the  alignment  of  finance  flows  with  the 
ambitious climate policies of the European Green Deal and the European Climate Law’s objectives. 
The EU has also done a lot to make sure a significant part of the EU budget contributes to climate 
action. 

At EU level, investment for the green transition comes from three main sources: the EU multiannual 
financial framework (MFF) for 2021-2027 and the ‘NextGenerationEU’ instrument – the cornerstone 
of which is the EU’s Recovery and Resilience Facility – that supports the EU’s recovery from the 
economic downturn caused by COVID-19, and financial instruments financed by the EU Emissions 
Trading System - the Innovation fund, the Modernization fund and the upcoming Social Climate fund. 
To help achieve climate goals set out in the European Climate Law and the European Green Deal, the 
EU  has  decided  to  integrate  climate  action  into  the  entire  EU  budget.  According  to  the  ‘Annual 
Management  and  Performance  Report  for  the  EU  Budget  –  2023  financial  year’  (COM/2024/401 

424  European  Commission,  Directorate-General  for  Climate  Action, Consistency  of  financial  flows  with  the  Paris 
Agreement  objectives  –  The  EU  navigating  the  transition  towards  climate  neutrality  and  resilience,  Publications 
Office of the European Union, 2024, https://data.europa.eu/doi/10.2834/637101. 

163 

 
 
final) published on 19 June 2024, the EU budget  –  including  NextGenerationEU  –  is  projected to 
contribute  EUR 658 billion  to  climate  spending,  representing  34.3%  of  the  budget.  The  ‘do  no 
significant harm’ principle is also being applied (in different ways) across the different instruments. 
An amendment of the Financial Regulation has been agreed for the next MFF to further integrate the 
‘do no significant harm’ principle. 

5.1  Budgeting and spending programmes 
The European Commission is committed to integrating climate change mitigation and adaptation into 
all major EU spending programmes. Of the EU’s 2021-2027 budget, 30% will be spent on combating 
climate change425.  

Under the EU Emissions Trading System (see Section 2.4.2.1), at least 50% of revenues from the 
auctioning of emission allowances should be used for climate and energy-related purposes. Between 
2013 and 2022, EU Member States spent 76% of total auctioning revenues on climate and renewable 
energy and energy efficiency-related purposes426. 

The  EU  and  its  Member  States  are  committed  to  providing  financial,  technological  and  capacity-
building  support  for  developing  countries.  Climate  finance  by  EU  institutions  more  than  doubled 
between 2013 and 2023 (see Chapter 4 support provided). 

5.2  Tools and standards 
The EU taxonomy enables financial and non-financial companies to share a definition of economic 
activities  that  can  be  considered  environmentally  sustainable  (see  Section  2.4.2.7).  It  plays  an 
important role in helping the EU scale up sustainable investment by creating security for investors, 
protecting private investors from greenwashing, helping companies become more climate-friendly 
and mitigating market fragmentation427.  

With the European Green Bond Standard428, the EU is aiming to set a clear gold standard for green 
bonds, which play an important role in financing assets needed for the low-carbon transition. This 
voluntary standard uses the detailed criteria of the EU taxonomy to define green economic activities, 
ensures levels of transparency in line with market best practice, and establishes a supervision process 
for companies that carry out pre- and post-issuance reviews429. 

425  The  2021-2027 EU budget  – What’s new?, https://commission.europa.eu/strategy-and-policy/eu-budget/long-term-

426  Use 

of 

eu-budget/2021-2027/whats-new_en#a-modernised-eu-long-term-budget-powered-by-nextgenerationeu.  
Trading 

System, 
https://www.eea.europa.eu/en/analysis/indicators/use-of-auctioning-revenues-generated?activeAccordion=309c5ef9-
de09-4759-bc02-802370dfa366.  

auctioning 

Emissions 

generated 

revenues 

under 

EU 

the 

427  EU  taxonomy  for  sustainable  activities,  https://finance.ec.europa.eu/sustainable-finance/tools-and-standards/eu-

taxonomy-sustainable-activities_en. 

428  Regulation  (EU)  2023/2631  on  European  Green  Bonds  and  optional  disclosures  for  bonds  marketed  as 
environmentally sustainable and for sustainability-linked bonds, https://eur-lex.europa.eu/eli/reg/2023/2631/oj. 
429  The European green bond standard – Supporting the transition, https://finance.ec.europa.eu/sustainable-finance/tools-

and-standards/european-green-bond-standard-supporting-transition_en. 

164 

 
 
5.3  Disclosures 
The Corporate Sustainability Reporting Directive430 requires companies to disclose information on 
how external sustainability factors (such as climate change) influence their activities and how their 
activities affect people and the environment, including the climate. This helps investors, consumers 
and  other  stakeholders  to  evaluate  the  sustainability  performance  of  companies  (see  Section 
2.4.2.8)431. 

The  Sustainable  Finance  Disclosure  Regulation432  sets  out  the  way  in  which  financial  market 
participants must disclose sustainability information. It helps investors make informed choices about 
investing in companies and projects supporting sustainability objectives. It is also designed to enable 
investors  to  properly  assess  how  sustainability  risks  are  integrated  into  the  investment  decision 
process.  It  thus  contributes to  the objective of  attracting private  funding to  help  Europe make the 
transition to a net-zero economy433. 

5.4  International Platform on Sustainable Finance 
The International Platform on Sustainable Finance is a forum for dialogue between policymakers with 
the overall aim of increasing the amount of private capital being invested in sustainable investments. 
The  platform  offers  a  multilateral  forum  of  dialogue  between  policymakers  who  are  in  charge  of 
developing sustainable finance regulatory measures to help investors identify and seize sustainable 
investment opportunities. Platform members can exchange and disseminate information to promote 
best  practices,  compare  their  different  initiatives,  and  identify  sustainable  finance  barriers  and 
opportunities, taking national and regional contexts into account434. 

5.5  Activities of the European Investment Bank 
In 2019 the EIB Group committed itself to the following for climate and the environment:  

•  All new financing should be aligned with the principles and goals of the Paris Agreement by 
the end of 2020 and, as part of the revised energy lending policy, support for fossil fuel energy 
projects should end by the end of 2021435.  

•  The share of EIB financing for climate action and environmental sustainability should increase 

to more than 50% of its financing by 2025 and afterwards436. 

430  Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022 amending Regulation 
(EU) No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive 2013/34/EU, as regards corporate 
sustainability reporting, http://data.europa.eu/eli/dir/2022/2464/oj. 

431  Corporate 

sustainability 

reporting, 

https://finance.ec.europa.eu/capital-markets-union-and-financial-

markets/company-reporting-and-auditing/company-reporting/corporate-sustainability-reporting_en. 

sustainability-related  disclosures  on 

the 

financial 

services 

sector,  https://eur-

432  Regulation 

(EU)  on 
lex.europa.eu/eli/reg/2019/2088/oj. 
433  Sustainability-related  disclosure 

in 

the 

financial  services  sector,  https://finance.ec.europa.eu/sustainable-

finance/disclosures/sustainability-related-disclosure-financial-services-sector_en. 

434  International  Platform  on  Sustainable  Finance,  https://ec.europa.eu/info/business-economy-euro/banking-and-

finance/sustainable-finance/international-platform-sustainable-finance_en.  

435  EIB energy lending policy, https://www.eib.org/attachments/strategies/eib_energy_lending_policy_en.pdf.  
436  EIB Group Climate Bank Roadmap, https://www.eib.org/en/about/priorities/climate-action/cbr/index.htm. 

165 

 
 
•  EUR 1 trillion  of  investments  in  climate  action  and  environmental  sustainability  should  be 

supported from 2021 to 2030.  

These commitments  cover the EIB’s activities inside and outside the EU. In 2020 the EIB Group 
published  a  Climate  Bank  Roadmap437  setting  out  how  it  would  follow  through  on  these  new 
commitments. This included presenting specific approaches to ensure projects were aligned with the 
Paris Agreement from both a low-carbon and climate resilience perspective. In 2021 the group went 
a step further by publishing a framework to support the alignment of counterparties with the Paris 
Agreement (the ‘PATH framework’438). EIB corporate clients now need to develop and disclose their 
decarbonisation and resilience plans. In general, the EIB will no longer finance standard low-carbon 
projects of high-emitting corporations if they continue to operate or invest in activities that are not 
aligned with the Paris Agreement’s objectives. Counterparts that are large financial institutions are 
asked to increase their climate-related disclosures. The EIB Group is offering technical support to 
clients to help them prepare credible and robust climate plans. 

The EIB is one of the largest multilateral providers of climate finance worldwide. It is on course to 
reach its target of exceeding 50% of climate funding by 2025, having already reached 51% in 2021, 
58% in 2022 and 60% in 2023439. Between 2021 and 2023, the EIB invested over EUR 103 billion in 
climate action (over EUR 108 billion including environmental sustainability projects that do not also 
contribute to climate action) worldwide, most of which was invested in the EU.440  

EIB financing  is  a catalyst  for mobilising  finance for climate action by encouraging  others to  co-
finance with its long-term lending. In this respect, the EIB Group is on track to reach its target of 
supporting  EUR 1 trillion  in  climate  action  and  environmental  sustainability  investments  between 
now and 2030, with total investments supported by the EIB Group reaching EUR 354 billion between 
2021 and 2023441. 

The EIB contributes to the achievement of the EU’s climate and energy objectives by supporting a 
range of climate change mitigation projects (e.g. in renewable energy, energy efficiency and low-
carbon transport) and investing in climate change adaptation measures. All EIB-financed projects, 
regardless of sector, must comply with EIB environmental and social standards that reflect EU climate 
objectives. 

437  EIB 

Climate 
https://www.eib.org/attachments/strategies/eib_group_climate_bank_roadmap_en.pdf. 

Group 

Bank 

Roadmap 

2021-2025, 

438  The EIB Group PATH Framework, https://www.eib.org/en/publications/the-eib-group-path-framework. 
439  Mid-term 

Roadmap, 
https://www.eib.org/attachments/lucalli/20230176_mid_term_review_of_the_eib_group_climate_bank_roadmap_en
.pdf. 

Climate 

review 

Group 

Bank 

EIB 

the 

of 

440  Sustainability Report 2021, https://www.eib.org/attachments/publications/sustainability_report_2021_en.pdf. 

Sustainability Report 2022, https://www.eib.org/attachments/lucalli/20230023_sustainability_report_2022_en.pdf. 
441  EIB Group 2023 Climate Bank Roadmap Progress Report, https://www.eib.org/en/publications/20240145-eib-group-

climate-bank-roadmap-progress-report-2023. 

166 

 
 
6  IMPROVEMENTS IN REPORTING 

As per the modalities, procedure and guidelines, each Party should, to the extent possible, identify, 
regularly  update  and  include  as  part  of  its  biennial  transparency  report  information  on  areas  of 
improvement in relation to its reporting. The EU will strive to improve its biennial transparency report 
continuously. 

Improving  reporting  over  time  is  crucial  for  increasing  and  further  promoting  transparency.  This 
Biennial Transparency Report (BTR) is the first such report under the Paris Agreement, but the EU 
has learnt from earlier reporting cycles under the United Nations Framework Convention on Climate 
Change, and it provided additional information on aspects such as the following: 
the impact of migration policies and measures on GHG emissions; 

• 
•  climate change impacts, adaptation, risk and vulnerability; 
•  case studies for capacity-building support. 

The EU is planning to further improve its reporting in subsequent BTRs. It is awaiting the technical 
expert  review  of  this  BTR  to  be  able  to  engage  in  an  open  dialogue  with  the  Parties  to  the  Paris 
Agreement during the Facilitative Multilateral Consideration of Progress (FMCP). It will then use the 
technical expert review team’s recommendations, and the lessons learnt during the FMCP to decide 
what its priorities are for further improving its reporting on climate action and support. 

167 

 
 
 
7  LIST OF ABBREVIATIONS 

Abbreviation 

Description 

ACA-MED 

Advancing Climate Adaptation in the Southern Mediterranean 

AFCIA 

Adaptation Fund Climate Innovation Accelerator  

AFD 

AR6 

ATJ 

BECCS 

BMUV 

BTR 

C3S 

CAP 

CBAM 

CCS 

CCU 

CEMS 

CH4 

French Development Agency  

Sixth assessment report 

Alcohol-to-jet  

Bioenergy with carbon capture and storage 

German Federal Ministry for the Environment, Nature Conservation, 
Nuclear Safety and Consumer Protection 

Biennial transparency report 

Copernicus Climate Change Service 

Common agricultural policy 

Carbon Border Adjustment Mechanism 

Carbon capture and storage 

Carbon capture and utilisation 

Copernicus Emergency Management Service 

Methane 

Clima MED 

Climate Action in the Southern Neighbourhood project 

CMA 

CO2 

CO2eq 

CoM 

CORSIA 

COVID-19 

CRAFT 

CRCF 

CRM 

CRT 

CRS 

Conference of the Parties serving as the meeting of the Parties to the 
Paris Agreement 

Carbon dioxide 

Carbon dioxide equivalent 

Covenant of Mayors initiative for climate and energy 

Carbon Offsetting and Reduction Scheme for International Aviation 

Coronavirus disease 

Climate Resilience and Adaptation Finance and Technology Transfer 
Facility 

Carbon removals and carbon farming 

Climate risk management 

Common reporting tables 

Creditor Reporting System 

168 

 
CSRD 

CTCN 

CTF 

DAC 

DACCS 

DeSIRA 

DG 

DG INTPA 

EAFRD 

EAGF 

EC 

ECMWF 

EDFIs 

EEA 

EED 

EGDIP 

EIB 

Corporate Sustainability Reporting Directive 

Climate Technology Centre and Network 

Common tabular format 

Development Assistance Committee 

Direct air carbon capture with storage 

Development of Smart Innovation through Research in Agriculture 

Directorate-General 

European Commission’s Directorate-General for International 
Partnerships 

European Agricultural Fund for Rural Development 

European Agricultural Guarantee Fund 

European Commission 

European Centre for Medium-Range Weather Forecasts 

European Development Finance Institutions 

European Environment Agency 

Energy Efficiency Directive 

European Green Deal Investment Plan 

European Investment Bank 

ElectriFI 

Electrification Financing Initiative 

EPBD 

EPR 

ERDF 

ESA 

ESD 

EFSD+ 

ESR 

ESRS 

ESPR 

ETF 

Energy Performance of Buildings Directive 

Extended producer responsibility 

European Regional Development Fund 

European Space Agency 

Effort-Sharing Decision 

European Fund for Sustainable Development Plus 

Effort-Sharing Regulation 

European Sustainability Reporting Standards 

Ecodesign for Sustainable Products Regulation 

Enhanced Transparency Framework 

ETC/CCA 

European Topic Centre on Climate Change Impacts, Vulnerability and 
Adaptation 

169 

 
ETC/CM 

EU 

EU-27 

EUCRA 

EUMETSAT 

EUR 

EU ETS 

EU ETS2 

EU OMR 

EWSS 

FMCP 

G7 

GCCA+ 

European Topic Centre on Climate Change Mitigation 

European Union 

27 Member States of the European Union 

European climate risk assessment 

European Organisation for the Exploitation of Meteorological 
Satellites 

Euro 

European Union Emissions Trading System 

European Union Emissions Trading System for fuel distribution for 
road transport and buildings 

European Union territories in the Outermost Regions 

Galileo Emergency Warning Satellite Service 

Facilitative multilateral consideration of progress 

Group of Seven 

Global Climate Change Alliance Plus Initiative 

GCCA+ SUPA 

Global Climate Change Alliance Plus Scaling up Pacific Adaptation 

GCF 

GDP 

GEF 

GHG 

GJ 

GVA 

GWL 

HDV 

HFCs 

HLPD 

HWP 

IDFC 

IED 

IPA 

IPCC 

Green Climate Fund 

Gross domestic product 

Global Environment Facility 

Greenhouse gas 

Gigajoule 

Gross value added 

Global warming level 

Heavy-duty vehicle 

Hydrofluorocarbons 

European Union High Level Policy Dialogue 

Harvested wood products 

International Development Finance Club 

Industrial and Livestock Rearing Emissions Directive 

Instrument for Pre-Accession Assistance 

Intergovernmental Panel on Climate Change 

170 

 
IPPU 

IPSF 

JRC 

km2 

kt 

LAC 

LDCs 

LIFE  

Industrial processes and product use 

International Platform on Sustainable Finance 

Joint Research Centre 

Square kilometre 

Kilotonne 

Latin America and the Caribbean 

Least developed countries 

L’instrument financier pour l’environnement – the EU financial 
instrument for the environment   

LoCAL 

LULUCF 

Local Climate Adaptive Living Facility 

Land use, land-use change and forestry 

Mt 

MDBs 

MFF 

MPGs 

MRV  

MS 

N2O  

NA 

NDC 

Megatonne 

Multilateral Development Banks 

Multiannual financial framework 

Modalities, procedures and guidelines for the transparency framework 
for action and support referred to in Article 13 of the Paris Agreement 

Measuring, reporting and verification 

Member State(s) 

Nitrous oxide 

Not applicable 

Nationally determined contribution 

NDICI-Global Europe 

Neighbourhood, Development and International Cooperation 
Instrument-Global Europe 

NECP 

NEDC 

NGOs 

NF3 

NFRD 

NID 

NUTS 

ODA 

OECD 

National energy and climate plan 

New European Driving Cycle 

Non-governmental organisations 

Nitrogen trifluoride 

Non-Financial Reporting Directive 

National Inventory Document 

Nomenclature of Territorial Units for Statistics 

Official development assistance 

Organisation for Economic Co-operation and Development 

171 

 
OOF 

PCD 

PFCs 

pkm 

PRIMES 

RAST  

RED  

RFF 

RFNBO 

SAF 

SCF 

SF6 

SEIP 

Other official flows 

Policy coherence for development  

Perfluorinated compounds 

Passenger-kilometre 

Price-Induced Market Equilibrium System  

Regional Adaptation Support Tool 

Renewable Energy Directive 

Recovery and Resilience Facility 

Renewable fuels of non-biological origin 

Sustainable aviation fuels 

Social Climate Fund 

Sulphur hexafluoride 

Sustainable Europe Investment Plan 

SEACAPs 

Sustainable energy access and climate action plans 

SFDR 

SIDS 

SMEs 

STEP 

SWD 

TEN-E  

TEN-T 

tkm 

TRACE 

UK 

UN 

UNDP 

UNFCCC 

UWWTD 

WAM 

WEEE 

Sustainable Finance Disclosure Regulation 

Small island developing states 

Small and medium-sized enterprises 

Strategic Technologies for Europe Platform 

Staff working document 

Trans-European Networks for Energy 

Trans-European Transport Network 

Tonne-kilometre 

Territorial Risk Assessment of Climate in Europe 

United Kingdom 

United Nations 

United Nations Development Programme 

United Nations Framework Convention on Climate Change 

Urban Wastewater Treatment Directive 

With additional measures 

Waste of electrical and electronic equipment 

172 

 
WEM 

WG 

WLTP  

ZEVs 

With existing measures 

Working group  

Worldwide harmonised light vehicles test procedure 

Zero-emission vehicles 

173 

 
 
 
8  ANNEX TO THE BIENNIAL TRANSPARENCY REPORT 

The following annexes are available as separate submissions on the UNFCCC website: 

•  Common reporting tables for GHG emissions and removals 

•  Common tabular formats for information necessary to track progress 

•  Common tabular formats for information on support provided and mobilised 

The National Inventory document is submitted as a stand-alone document. 

This BTR contains an annex on the Methodology applied for the identification of GHG emissions 
from international aviation and navigation in the scope of the EU NDC. 

8.1  Annex: Methodology used to identify GHG emissions from 

international aviation and navigation in the scope of the EU’s 
NDC 

The scope of the EU’s NDC goes beyond national GHG emissions and removals in the scope of the 
national  GHG  inventory;  it  also  includes  specific  emissions  from  international  aviation  and 
navigation. This annex describes the methodology for identifying these emissions.  

International  aviation  and  maritime  emissions  are  estimated  using  the  Joint  Research  Centre’s 
Integrated  Database  of  the  European  Energy  System  (JRC-IDEES)442.    It  allows  to  split  the 
international  transport  CO2  emissions  into  intraEU/extraEU  and  intraEEA/extraEEA  categories 
backwards in time (i.e. 1990)443. EEA stands for the European Economic Area, comprising the 27 EU 
Member States, Iceland, Liechtenstein and Norway. 

For international transport, JRC-IDEES uses a decomposition methodology that reconciles the scopes 
of available primary statistics and harmonises historical data on international aviation and maritime 
emissions,  energy  use  and  transport  activity.  The  resulting  annual  dataset  covers  1990-2021  and 
distinguishes between domestic, intra-EU/intra-EEA and extra-EU/extra-EEA activity for each EU 
Member State, Norway and Iceland. 

In aviation, JRC-IDEES distinguishes between passenger and freight modes, with three geographical 
categories of flight origin/destination for each mode: domestic, intra-EEA plus the UK, and extra-
EEA plus the UK. Intra-EU, the UK and EEA categories are also used internally during calibration 
but aggregated for reporting. For each mode/category combination, JRC-IDEES estimates activity 
(as  passenger-km  or  tonnes-km),  energy  use  and  CO2  emissions,  aircraft  stock  (expressed  as 

442  European Commission, Joint Research Centre, Rózsai, M., Jaxa-Rozen, M., Salvucci, R., Sikora, P., Tattini, J. and 
Neuwahl, F., JRC-IDEES-2021: the Integrated Database of the European Energy System – Data update and technical 
documentation, Publications Office of the European Union, Luxembourg, 2024, doi:10.2760/614599. 

443  The  JRC-IDEES  analytical  database  is  designed  to  support  energy  modelling  and  policy  analysis,  by  combining 
primary statistics with technical assumptions to compile detailed energy-economy-emissions historical data for each 
key energy sector. For aviation, EEA emissions include emissions related to the UK but not to Switzerland, where 
total CO2 emissions for the scope are additionally estimated using EUROCONTROL data. 

174 

 
 
representative aircraft), load factors, and aircraft efficiencies. As country-specific activity statistics 
are  not  available,  the  breakdown  first  allocates  EU-level  activity  data  from  the  Transport 
Pocketbook444 of the European Commission’s Directorate-General for Mobility and Transport to each 
country and flight category.  

For  passenger  modes,  this  allocation  calculates  average  load  factors  using  Eurostat  data  on  total 
passengers and flights. These load factors and total flight numbers are combined with average flight 
distances  from  EUROCONTROL,  the  pan-European  organisation  dedicated  to  air  traffic 
management,  to  yield  an  initial  estimate  for  passenger  transport  activity.  For  intra-EU  activity,  a 
uniform  scaling  factor  is  then  applied  across  Member  States  to  match  total  EU-level  Transport 
Pocketbook data. Freight activity follows a similar process, using a ‘representative flight’ concept 
with a common load factor across all Member States to account for mixed passenger-freight flights. 

Next,  the  decomposition  estimates  fuel  use  from  EUROCONTROL  data,  by  deriving  a  distance-
dependent average aircraft efficiency, then applying it to the country-specific ensemble of flights and 
routes. The final step scales the estimates to meet Eurostat energy balances for total domestic and 
international  consumption  back  to  1990  values,  maintaining  intra-EEA/extra-EEA  fuel  use  ratios 
derived  from  EUROCONTROL.  JRC-IDEES  additionally  reports  resulting  differences  with 
submissions  by  Parties  to  the  UNFCCC.  The  above  process  is  followed  throughout  the  entire 
decomposition period (1990-2021). Data gaps are estimated from the existing indicators as follows: 

•  The process iterates backwards towards 1990, starting from the oldest years in which data are 

available in each Member State. 

•  Average  flight  distance  is  kept  constant  for  early  years  without  EUROCONTROL  data 

(generally before 2004). 

• 

If the load factor (passengers per flight) cannot be calculated due to a lack of passenger and/or 
flight data, it is estimated from the trend of the existing time series. 

•  Missing numbers of flights are calculated from the load factor and the passengers carried. 

• 

If no passenger data are available, the total mileage is estimated from the energy consumption, 
and combined with average flight distance to estimate the number of flights. The number of 
flights is then combined with the load factor to estimate the total passengers carried. 

•  For early years without data, constant values are assumed for the factors used to i) scale intra-
EU activity to the Transport Pocketbook, ii) adjust the estimated fuel use to EUROCONTROL 
data for specific routes, and iii) scale this adjusted fuel use to Eurostat energy balances (e.g. 
before 1995 for Transport Pocketbook data; before 2004 for EUROCONTROL data). 

For  international  maritime  transport,  JRC-IDEES  estimates  data  both  for  intra-EU/extra-EU  and 
intra-EEA/extra-EEA geographical categories. The emission estimates in the GHG inventory already 
include CO2, CH4, and N2O gases. Transport activity (tonnes-km) is estimated from Eurostat data on 

444  Statistical pocketbook 2023, https://transport.ec.europa.eu/facts-funding/studies-data/eu-transport-figures-statistical-

pocketbook/statistical-pocketbook-2023_en.  

175 

 
 
gross weight of transported goods, using port-level and country-level data for intra-EU and extra-EU 
categories, respectively. Intra-EU activities are then scaled to match the Transport Pocketbook totals, 
accounting  for  domestic  coastal  shipping  (calibrated  separately  in  JRC-IDEES).  Next,  transport 
activity is combined with data reported under the monitoring, reporting and verification system for 
maritime  transport  under  the  EU  ETS  (‘THETIS  MRV’445),  namely  EU-level  mileage  data  and 
country-specific vessel sizes to estimate load factors (tonnes per movement). The load factors and 
resulting annual mileage (km) are calibrated to meet EU-level THETIS MRV mileage. The annual 
mileage is in turn combined with THETIS MRV average efficiency to yield a total technical energy 
consumption,  with  corresponding  emissions  derived  from  default  emissions  factors.  This  energy 
consumption is scaled to Eurostat energy balances so as to minimise discrepancy to total intra-EU 
THETIS  MRV  emissions.  As  with  aviation,  JRC-IDEES  reports  corresponding  differences  to 
submissions under the UNFCCC. Early years with data gaps are estimated from existing indicators 
as follows. 

•  The process iterates backwards towards 1990, starting from the oldest years in which data are 

available in each Member State. 

•  Average  distance  of  voyages  is  kept  constant  for  early  years  without  Eurostat  activity  data 

(generally before 1997-2000). 

• 

If the load factor (tonnes per movement) cannot be estimated due a lack of activity data, it is 
kept constant. 

• 

If activity data are not available, it is estimated from Eurostat energy consumption. 

•  Missing mileage data are derived from the activity and load factor estimates. 

•  For early years without data, constant values are assumed for the factors used to i) scale intra-
EU activity to the Transport Pocketbook, ii) scale estimated mileage to meet EU-level THETIS 
MRV  mileage,  and  iii)  scale  domestic  and  intra-EU  CO2  emissions  estimated  from  energy 
consumption so as to match total THETIS MRV CO2 emissions. 

•  Finally,  the  ratios  between  the  estimated  MRV  emissions  and  the  CO2  emissions  for  the 
reported  transport  activity  (for  intra-EU/EEA  and  extra-EU/EEA  categories)  between  2018 
and 2021 are used to calculate the MRV compliant estimates back to 1990 levels. 

For the year 2022, the international navigation and aviation emissions under the EU NDC scope have 
been estimated by applying the same share of those emissions on the total international navigation 
and aviation emissions (as reported in the GHG inventory) as in 2021. 

Table 13 provides an overview of the resulting net GHG emissions in the scope of the NDC. 

445  THETIS MRV, https://mrv.emsa.europa.eu/#public/eumrv. 

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Table 13:Summary of GHG emissions in the scope of the NDC  

Scope 

Unit 

1990 

2021 

2022 

Net GHG emissions from the national GHG 
inventory of the EU 

kt CO2eq 

4 649 007 

3 215 997 

3 132 670 

GHG emissions from international aviation in the 
scope of the NDC 

kt CO2eq 

GHG emissions from international navigation in 
the scope of the NDC 

kt CO2eq 

23 906 

26 326 

41 405 

26 492 

30 327 

31 149 

Net GHG emissions in the scope of the NDC 
(used for tracking progress and presented in CTF 
Table 4) 

kt CO2eq 

4 699 405 

3 272 650 

3 205 223 

Source: GHG inventory of the EU; calculations based on JRC-IDEES, EUROCONTROL and THETIS MRV 
as described above. 

177