European Council: 40% Greenhouse Gas Reduction Target and 27% for Renewables and Energy Efficiency Targets for 2030

At the meeting on 24 October 2014 the European Council agreed on the 2030 climate and energy policy framework for the European Union, which the EU will submit as its contribution for a global climate agreement to be concluded in Paris in 2015. The Council endorsed a binding EU target of an at least 40% domestic reduction in greenhouse gas emissions by 2030 compared to 1990. A binding EU-wide target of at least 27% was set for the share of renewable energy consumed in the EU in 2030 and an indicative EU-level target of at least 27% for improving energy efficiency.

1. 40% Greenhouse Gas Reduction Target

The 40% greenhouse gas reduction target shall be “delivered collectively by the EU in the most cost-effective manner possible, with the reductions in the ETS and non-ETS sectors amounting to 43% and 30% by 2030 compared to 2005, respectively”, the Council said, calling a well-functioning, reformed Emissions Trading System (ETS) “the main European instrument to achieve this target”.

The main aspects the Council agreed on with respect to the EU ETS are listed below:

  • The annual factor to reduce the cap on the maximum permitted emissions will be changed from 1.74% to 2.2% from 2021 onwards;
  • Free allocation of emission allowances will continue after 2020 to prevent the risk of carbon leakage due to climate policy, as long as no comparable efforts are undertaken in other major economies;
  • Member States with a GDP per capita below 60% of the EU average may opt to continue to give free allowances to the energy sector up to 2030. A maximum applies for the period after 2020;
  • The existing NER300 facility will be renewed, including for carbon capture and storage and renewables, with the scope extended to low carbon innovation in industrial sectors and the initial endowment increased to 400 million allowances (NER400);
  • A new reserve of 2% of the EU ETS allowances will be set aside to address particularly high additional investment needs in low income Member States (GDP per capita below 60% of the EU average);
  • 10% of the EU ETS allowances to be auctioned by the Member States will be distributed among those countries whose GDP per capita did not exceed 90% of the EU average (in 2013);
  • The rest of allowances will be distributed among all Member States on the basis of verified emissions, without reducing the share of allowances to be auctioned;

Regarding non-ETS covered sectors the Council said

“the methodology to set the national reduction targets for the non-ETS sectors, with all the elements as applied in the Effort Sharing Decision for 2020, will be continued until 2030, with efforts distributed on the basis of relative GDP per capita. All Member States will contribute to the overall EU reduction in 2030 with the targets spanning from 0% to -40% compared to 2005;”

2. 27% Renewables and Energy Efficiency Targets

The EU target for the share of renewable energy consumed in the EU in 2030 was set at 27%. An indicative EU level target of also 27% was set for improving energy efficiency in 2030 compared to projections of future energy consumption based on the current criteria.

The Council pointed out that

“These targets will be achieved while fully respecting the Member States’ freedom to determine their energy mix. Targets will not be translated into nationally binding targets. Individual Member States are free to set their own higher national targets.”

Regarding the 27% energy efficiency target, which is lower than the Commission’s proposal of 30% made in July 2014 (which was welcomed by Germany), the Council said

“This will be reviewed by 2020, having in mind an EU level of 30%. The Commission will propose priority sectors in which significant energy-efficiency gains can be reaped, and ways to address them at EU level, with the EU and the Member States focusing their regulatory and financial efforts on these sectors.”

Further council conclusion relate to achieving a fully functioning and connected internal energy market, energy security and governance.

3. Comments Minister Gabriel

The press release of the German Minister of Economic Affairs and Energy Sigmar Gabriel highlighted that the conclusions adopted by the European Council were also a continuation of effective provisions to secure international industrial competitiveness. While Germany would have preferred to achieve more, the right steps were taken. The decisions also clarified that Germany may proceed quicker towards renewable energies.

Sources: European Council Conclusions, BMWi

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4 Responses to “European Council: 40% Greenhouse Gas Reduction Target and 27% for Renewables and Energy Efficiency Targets for 2030”

  • : In October 2014, the EU:

    – Committed to a 40% reduction of CO2 emissions from the 1990 level by 2030. The EU CO2 emissions were 5,696 mmt in 1990, 4,679 mmt in 2012, are planned to be 3,418 mmt in 2030, per the European Energy Agency. This target is binding on the EU and the national level.
    – Set a target of a 27% reduction of the EU 2030 projected energy consumption by means of energy efficiency. The EU energy consumption was 1,584 mtoe in 2012, is planned to be 1,307 mtoe in 2030, or 1.1%/yr over 18 years. This target is non-binding on the EU level and the national level.
    – Set a target for RE to be 27% of the EU 2030 projected energy consumption. The target is binding on the EU level, but not the national level.

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