The European Commission has proposed an amendment to the EU Climate Law, setting a new EU climate target of 90% reduction in net greenhouse gas (GHG) emissions by 2040, compared to 1990 levels. Most notably, the proposal states that all zero and low carbon energy solutions, including renewables, nuclear, CCS, CCU and carbon removals, are needed to decarbonise the EU energy system by 2040, emphasing technology neutrality.
In addition, the proposal includes a role for international credits starting from 2036 and the use of domestic permanent removals in the EU Emissions Trading System (EU ETS), meaning that EU Member States would be allowed to count carbon credits from developing countries towards their own climate targets, by buying carbon offsets from overseas. The policy architecture beyond 2030 is expected to includes incentives for domestic permanent carbon removals to compensate for residual emissions from hard to abate sectors.
According to the Commission, the first wave of actions delivered feature the Clean Industrial Deal State Aid Framework to further support investment in the clean energy transition, as well as the simplification of the Carbon Border Adjustment Mechanism (CBAM), which exempts 90% of importers. In addition, the proposal sets a frame for the EU’s post-2030 climate and energy legislation, with national being taken into account.
The new proposal builds on the EU’s existing legally binding goal of reducing net GHG emissions by at least 55% by 2030 compared to 1990 levels, with a view towards reaching a decarbonised European economy by 2050.