European Union (EU) European Union (EU)

The European Union (EU) ranks 16th in this year’s CCPI, up three spots. It receives a medium ranking in all four categories: GHG Emissions, Renewable Energy, Energy Use, and Climate Policy.

In April 2023, the EU adopted the Fit For 55 package, which includes a series of measures aimed at upgrading the EU‘s climate and energy legislation and ultimately achieving a 55% net emissions reduction (compared with 1990) by 2030 and climate neutrality by 2050. The policy raises ambitions in three main areas. The EU Emissions Trading System (ETS 1) was extended to the maritime sector, and emissions from road transport, buildings and small businesses are covered by a new and separate carbon market (ETS 2), the Effort Sharing Regulation (ESR), and the Land Use, Land-Use Change and Forestry (LULUCF) sector was given more ambitious EU-level carbon removal targets. Collectively, these revisions are expected to enable the EU to slightly overshoot the EU’s current target and achieve 57% net emission cuts by 2030. The EU also updated its Nationally Determined Contribution (NDC) in October. While there were no major changes, and no mentioning of the 57%, it was updated to be consistent with Fit for 55 and the European Climate Law.

2030 target is not ambitious enough

However, while the EU is likely to meet its 55% emissions reduction target by 2030, the CCPI experts conclude that the target level is still not ambitious enough, as it will not keep the EU in line with the 1.5°C target of the Paris Agreement. A report of the newly established European Scientific Advisory Board on Climate Change (ESABCC) on the 2040 target, shows that at least 90-95% net emission cuts by 2040 are needed to increase the EU’s fair contribution to the fight against the climate crisis. There are also several systemic weaknesses, including the continued allocation of free allowances to industry up to and beyond 2030 and a high degree of flexibility for Member States to trade, bank, and borrow their emission allowances. This is likely to delay action considerably.

The experts highlight the potential additional emission reductions driven by the introduction of ETS 2, which will start in 2027 or 2028. The new carbon market will extend carbon pricing to emissions from road transport, buildings and industrial and energy installations. At the same time more efforts are needed to make the transition more socially just, for example by further expanding the Social Climate Fund, a new fund to help low-income households make the transition. The experts criticise the fact that the energy efficiency target is only binding for final energy on the EU level, whereas for primary energy it is non-binding at both EU and national levels, making it difficult to hold Member States to account.. A clear requirement for Member States to apply national bans on the installation of fossil fuel heating systems by 2025 is also needed.

The Renewable Energy Directive (RED) is the EU‘s policy for promoting renewable energy. It was revised as part of the Fit for 55 initiative, as EU lawmakers decided to raise the bar by increasing the share of renewable energy to 42.5% by 2030. The experts say the improved legislation is an important step forward, but a target of at least 50% renewables is needed to achieve net-zero emissions by 2040. In particular, the EU has introduced the REPowerEU plan, aimed at reducing its Member States‘ dependence on Russian fossil fuels. The experts point out that the new supply agreements with the US, Azerbaijan, Algeria, and other countries carry a high risk of fossil fuel gas lock-in and the creation of stranded assets because of the new infrastructure required to import gas. The experts therefore call for a legally binding phase-out of coal by 2030, fossil gas by 2035 and of all fossil fuels by 2040.

The EU should reduce energy demand

The EU should also accelerate its efforts to reduce energy demand. The experts indicate an ambitious Energy Performance in Buildings Directive (EPBD) including building-specific Minimum Energy Performance Standards (MEPS) must be agreed to as soon as possible to increase the speed and scale of building renovation and the use of renewable heating solutions.

While the EU shows progress in some aspects, such as increased ambition on renewables, the EU‘s contribution remains insufficient to contribute to the 1.5°C objective of the Paris Agreement, considering its historical responsibility, global equity principles, and the region‘s capacity to act.

Key Outcomes

  • The EU ranks 16th in this year’s CCPI
  • In April 2023, the EU adopted the Fit For 55 package, which includes a series of measures
  • The EU should accelerate its efforts to reduce energy demand

CCPI experts

The following national experts agreed to be mentioned as contributors for this year’s CCPI:

Key Indicators

CCPI 2024: Target comparison