European Union (EU)

The European Union (EU) ranks 17th in this year’s CCPI. It receives a medium rating in all four categories: GHG Emissions, Renewable Energy, Energy Use, and Climate Policy.

Finalised climate policy framework show strengths

The EU finalised its 2030 climate policy framework revision to reach 55% net emissions reductions by 2030 and climate neutrality by 2050 and submitted an updated Nationally Determined Contribution (NDC) in October 2023 that reflects this framework. The CCPI national experts assess that the revised policies could enable the EU to slightly exceed its 2030 target, potentially cutting emissions by 57%. However, the EU was unable to formally incorporate this higher reduction into its NDC.

The policy revision did show several strengths. It includes a pathway to phase out free allowances to heavy industrial polluters (though only after 2030) owing to the introduction of a carbon border adjustment mechanism (CBAM) and strengthening of spending criteria for revenues generated by climate policy. It also includes the introduction of access to justice elements in EU climate policy and establishment of a binding target to increase the EU’s carbon removal capacity.

In February 2024, the European Commission tabled its proposal for a 2040 interim climate target on the path to climate neutrality by 2050. The proposal aims for a 90% emissions reduction by 2040 (compared with 1990 levels), which is not fully in line with the recommendations of the newly established European Scientific Board on Climate Change, which advises a 90–95% targeted cut. No further decisions have taken place yet.

Targets and policies insufficient for 1.5°C

The CCPI experts assess that, while the EU has made substantial progress compared with its earlier ambition levels, its overall target and the respective implementing policies remain highly insufficient for representing Europe’s fair share of the 1.5°C Paris Agreement goal. They suggest that the EU should reduce gross emissions by 65%+ by 2030 and achieve net zero no later than 2040.

EU coal production and consumption hit their lowest level in 2023, with a 20%+ decrease from 2022. However, the EU remains off track to meet its 55% reduction target. New supply agreements with the United States, Azerbaijan, Algeria, and others, along with the construction of new infrastructure for importing piped and liquefied gas, represent a great risk of fossil gas lock-in and creating stranded assets. No fossil fuel phase-out policy is in place.

The EU continues to issue fossil fuel subsidies despite its pledge to phase them out by 2025. No coherent and binding plan is in place for achieving this. The EU’s budget still supports selected fossil fuel infrastructure projects at least until 2027, falling short on implementing its goal. Instead of continuing its financial support for fossil fuels, the EU should stop financing them and adhere to the polluter pays principle.

Renewable energy rather than fossil fuel energy is the way forward. The EU’s Renewable Energy Directive sets a clear policy for promoting renewable energy sources, establishing a 2030 target of 42.5%. This is an significant step forward, but a 50%+ renewable energy target (by 2030) would be needed to reach net zero emissions by 2040. Although the target is binding at the EU level, individual national contributions from member states remain non-binding, unlike the binding national targets set for 2020.

The CCPI experts also emphasise accelerating wind and solar energy deployment. The necessary grid infrastructure must be built and storage and system flexibility must be increased. Transmission and distribution-level grid bottlenecks must be addressed to avoid unnecessary loss of already generated electricity. This transformative shift’s success depends on technological advancements and the active participation of citizens and local communities, as well as integrating nature protection measures into existing policies.

Energy use needs greater ambition

Next to changing how energy is sourced, reducing energy consumption and improving energy efficiency—particularly for the building sector—are crucial. The Energy Efficiency Directive (EED), Energy Performance of Buildings Directive (EPBD), and energy labelling and ecodesign legislation address these issues. The EU increased its 2030 energy efficiency target to 11.7% (based on the forecasts for final energy consumption from 2020), but this still lacks the ambition needed to help the EU achieve 65%+ gross emissions reductions by 2030.

Member states should achieve 20%+ energy savings by 2030 with well-designed measures on the ground that enable long-term energy savings. The current annual building renovation rate should be tripled. Thus far, the final energy demand reduction target is only binding at the EU level but not the national level, hampering member states’ accountability. Existing regulations must be supported by a robust enabling framework that includes financing, technical assistance, and social safeguards to ensure an ambitious and socially just transition in the building sector.

Agricultural emissions, especially from crop monoculture and large-scale livestock production, are major drivers of the climate crisis. Despite one-third of the EU’s subsidies being spent on agriculture, the EU has not been able to push the sector toward greater sustainability. Following farmer protests across the EU and in anticipation of the upcoming election, the EU, in a rare move, used accelerated legislative procedures to weaken certain environmental rules related to Common Agricultural Policy funding.

An important step forward was made in June 2024, with the EU adopting the Nature Restauration Law, aiming to restore 20%+ of the EU’s land and sea areas by 2030. However, the introduction of the Carbon Removal Certification Framework (CRCF) Regulation into EU climate policy could potentially weaken the integrity of the EU’s climate ambition. The CRCF allows carbon removal, temporary soil carbon, and emissions reductions to be used to offset emissions. This approach is likely to lead to delayed emissions reductions.

A positive force in international climate efforts, but needing to boost its own contributions

As a historic major emitter, the EU, with its 27 member states, plays a pivotal role in international negotiations. The CCPI experts view the EU as a positive force in international climate negotiations and diplomacy. It actively promoted adopting global energy targets (tripling renewable energy, doubling efficiency, transitioning away from fossil fuels) at COP28 and was among the leading countries in first commitments to the Loss and Damage Fund. At the same time, in negotiations on the New Collective Quantified Goal (NCQG) on post-2025 climate finance, the EU thus far has failed to provide an offer for a quantum leap and is overly insistent on expanding the contributor base without clearly indicating it will step up its own contribution.

Key Outcomes

CCPI Experts

• Wendel Trio
• Germanwatch
• Sven Harmeling (CAN Europe)