In her annual state of the union speech before the European Parliament in Strasbourg on Wednesday (14 September), Commission president Ursula von der Leyen said negotiation would be a more efficient way to lower gas prices, which are set on the global market.

EU energy ministers, meeting last week in Brussels, expressed reservations about a gas price cap, saying it risked undermining the EU’s ability to negotiate supply deals with alternative suppliers.

A new task force will be set up to negotiate deals with Norway and other gas suppliers so that “we lower in a reasonable manner the price for gas,” said von der Leyen, the former German defence minister who took the helm of the EU executive in December 2019.

The move was welcomed by Simone Tagliapietra, a senior fellow at the Bruegel economic think tank in Brussels.

“She is right: this is the way to go – possibly with via EU joint action to leverage the size of the European gas market,” he told Euractiv.

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In parallel, von der Leyen announced the creation of a new gas market benchmark to reflect the EU’s rapid shift from imported pipeline gas to liquified natural gas (LNG), which is traded on the global market and shipped from faraway places such as Qatar and the United States.

“We have to diversify away from Russia,” she insisted, noting that pipeline gas supplies from Moscow have now fallen to 9% of EU gas consumption from around 40% last year.

In the face of soaring gas prices, EU countries have poured billions into social protection measures in order to shield the most vulnerable households.

To help finance this, von der Leyen announced the creation of a windfall tax on the “revenues of companies that produce electricity at a low cost” – typically renewables and nuclear. A draft proposal, seen by Euractiv, puts the limit at €180/MWh, the same level that has been introduced in Spain.

A separate “solidarity contribution” will be demanded of oil and gas companies, which have reaped extraordinary profits from soaring prices on global energy markets.

“Our proposal will raise more than €140 billion” for EU member states to cushion the blow of the energy crisis on European consumers, von der Leyen announced.

European Hydrogen bank

At the same time, the Commission president warned against repeating the mistakes of the 1970s oil crisis by investing too much in new fossil fuel infrastructure.

“Only a few visionaries realised the problem was the fossil fuels themselves – not their price”, she said. “We kept driving on the same road” and “fossil fuels were massively subsidised,” she warned. “That was wrong and we are still paying the price for that.”

To ensure investments in future clean energy infrastructure, von der Leyen announced the creation of a “European hydrogen bank” that will “guarantee” the purchase of hydrogen thanks to funds drawn from the EU carbon market, the Emissions Trading Scheme (ETS).

The new bank “will be able to invest €3 billion to help build the future market for hydrogen,” von der Leyen said.

It is expected to be modelled on the German H2-Global foundation, financed with €900 million, which is expected to enter operation soon. The bank offers a guaranteed price for hydrogen for up to ten years by covering the difference between production costs and the sales price.

Electricity market reform

Turning to the power market, von der Leyen emphasised the need to “decouple the dominant influence of gas on the price of electricity ” in order to ensure consumers “reap the benefits of low-cost renewables”.

Prices on the EU electricity market have soared more than tenfold since Russian gas supplies started decreasing last year.

“My diagnosis is that the current electricity market design based on the principle of merit order, is not fit anymore, it’s not fit for consumers anymore,” von der Leyen said, confirming plans announced earlier this year to fundamentally redesign the EU’s electricity market.

This article was produced by Euractiv and republished under a content sharing agreement.

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Russia’s war in Ukraine is having profound consequences on the EU’s energy and climate policies.

In May, the European Commission already proposed raising the EU’s energy efficiency target to 13% by 2030, up from the 9% figure it originally put on the table in July last year.

The plan, dubbed REPowerEU, is designed to cut imports of Russian fossil fuels by two-thirds before the end of this year and eliminate them completely “well before 2030” by diversifying gas supplies and accelerating the green transition.

Crucially, this will be the first time that energy savings become a legal obligation on EU member states, which increases the odds that the target will be met.

But as the war drags on and Russia threatens to cut supplies to Europe entirely ahead of next winter, lawmakers in the European Parliament have decided to up the ante and raise the EU’s efficiency target even further.

On Monday (11 July), the Parliament’s four largest political groups – the centre-right European People’s Party (EPP), the Socialists and Democrats (S&D), the centrist Renew Europe (RE) and the Greens – put forward joint amendments for the revised energy efficiency directive.

“This deal has broad political support in the European Parliament, which shows a commitment to deliver,” said Niels Fuglsang, a Danish lawmaker from the S&D group who is the Parliament’s leader on the revised directive.

“In this time of energy crisis where Putin shuts off gas deliveries to the EU, we need to save more energy, and we need to do this by setting high and binding energy efficiency targets for the EU as a whole and for the individual member states,” he told Euractiv in emailed comments.

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The highlight is a higher energy efficiency target of 14.5% by 2030 compared to the 2020 reference scenario.

“We acknowledge that 13% in REPowerEU is already ambitious, but we can also go higher – we want to see if possible that we reach 14.5%,” said Pernille Weiss, a Danish Christian Democrat MEP who steers the EPP’s position on the file.

“This corresponds to a reduction of 40% for final energy consumption and 42.5% for primary energy consumption respectively when compared to the 2007 Reference Scenario projections for 2030,” the four parties said. The current EU target is a reduction in energy consumption of 32.5% based on the 2007 projections.

The additional reduction of 14.5% results in 740 million tonnes of oil equivalent (Mtoe) of final energy consumption and 960 Mtoe of primary energy consumption to be reached in 2030 respectively, according to the joint proposal circulated on Monday.

In addition, public authorities in EU countries would have the obligation to reduce their energy consumption by “at least 2%” every year in order to “ensure that the public sector fulfils its exemplary role,” the joint proposal says. This is up from 1.5% in the Commission’s earlier plans.

EU member states would, however, “retain full flexibility regarding the choice of energy efficiency improvement measures” to achieve the target on final energy consumption, the joint text adds.

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A key aspect for Pernille Weiss and the EPP is that the joint amendments recognise the differences between EU member states.

“We have different infrastructures, industries, and buildings all over Europe,” Weiss explained at a press briefing on Monday (11 July). According to her, the compromise gives EU countries “the necessary flexibility” when setting their national contributions “by allowing them to take into account different national circumstances affecting energy consumption – such as GDP forecasts, the uptake of renewable energy, the development of storage technologies and the overall level of ambition in national decarbonisation plans”.

As part of this flexibility, EU countries will be able to count fossil savings towards one-third of their savings obligations until mid-2028, Weiss said. Member states will also have leeway to decide on renovation requirements for social housing, which is not defined uniformly across the 27 EU countries.

Still, the compromise texts also “provides for the establishment of binding national energy efficiency contributions for 2030,” a move that was supported by the Greens. And every four years, large companies will have to perform energy audits, whose recommendations will be mandatory.

“As the European Court of Auditors had found that the implementation of audit recommendations would contribute most to more energy efficiency, it is only logical that the Industry Committee now makes implementation mandatory,” said Jutta Paulus, a German Green MEP who represented the Greens in the negotiations.

With the four largest political groups on board, the amended directive is expected to sail through easily when the Parliament’s industry committee votes on the proposal this Wednesday.

The full Assembly will hold a debate on the revised directive in September. Unless one of the Parliament’s political groups asks for a plenary vote to be held, the file will be sent directly for so-called trialogue talks with the 27 EU member states in the EU Council of Ministers to finalise the legislation.

The final target, and the measures to meet it, will be at the centre of talks with the Council, which agreed its position on 27 June.

This article was produced by Euractiv and republished under a content sharing agreement.

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A motion to veto the European Commission’s proposal to include nuclear and gas in the EU’s sustainable finance taxonomy was defeated by 328 votes to 278.

A minimum of 353 votes was needed to reject the plan, which means it is now officially approved by the European Parliament.

Objection to the inclusion of nuclear and gas in EU green finance taxonomy is rejected: 278 votes in favour, 328 votes against.

This means the proposal goes through: nuclear and gas are now officially recognised as “transitional” activities under the taxonomy. pic.twitter.com/G6se90ZUoi

— Frédéric Simon (@FredSimonEU) July 6, 2022

Before it becomes law, the proposal to include nuclear and gas in the EU’s green finance taxonomy must also face a vote in the EU Council of Ministers representing the EU’s 27 member states.

However, a majority of 20 countries is needed to veto the proposal in the Council, which makes a rejection highly unlikely.

Reacting on Twitter, the energy minister of Luxembourg said he would challenge the decision before the EU Court of Justice.

“Luxembourg and Denmark will press legal charges and the Court will rule about its legality,” wrote Claude Turmes, saying he deeply regrets the Parliament’s decision.

Protestors in the hemicycle reacted immediately after the vote, wearing T-shirts reading “betrayal” and calling MEPs “traitors”.

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Michael Bloss, a German Green MEP, denounced the “madness” of labelling nuclear and gas as sustainable investments, saying it will keep Europe addicted to Russian fossil fuels for many more years.

“France’s nuclear reactors and waste dumps will be renovated and new fossil gas infrastructures created,” Bloss said in a statement. “No serious bank will trust this taxonomy,” he added, saying the Greens were now preparing to take legal action against the decision.

Greta Thunberg, the teenage activist who started the Fridays for Future movement, reacted coldly on Twitter, saying the vote will delay the green transition and “deepen our dependency on Russian fuels”.

“The hypocrisy is striking, but unfortunately not surprising,” she wrote.

The European Parliament just voted to label fossil gas as “green” energy. This will delay a desperately needed real sustainable transition and deepen our dependency on Russian fuels. The hypocrisy is striking, but unfortunately not surprising.
This is still #NotMyTaxonomy

— Greta Thunberg (@GretaThunberg) July 6, 2022

Pascal Canfin, a French MEP who chairs the Parliament’s environment committee, sought to assuage the concerns of green activists, reminding them that the taxonomy does not give a blank cheque to all gas investments.

“The conditions set by the taxonomy for gas are precise: gas is only possible to replace coal, until 2030, under emission thresholds that are not considered dangerous and with reinforced transparency obligations,” he wrote on Twitter.

Nuclear Europe, an industry association, congratulated MEPs after the vote, saying Parliament had taken a “science-based decision” to include nuclear in the taxonomy.

“It is fantastic to see that a majority in the European Parliament has decided to listen to the experts and take the right decision,” said Yves Desbazeille, director-general of Nuclear Europe.

“We have less than 30 years left to decarbonise our economy in a sustainable way. By listening to the science, these MEPs have strengthened the EU’s chances of achieving this ambitious goal.”

Eurogas, an industry lobby group, was also cheerful, saying the Parliament’s decision “provides a decent framework” for future investments.

However, it said the European Commission’s taxonomy proposal “could have done more to promote coal phase-out and the adoption of best-in-class technologies” such as hydrogen and renewable gases.

“It is also crucial that we overcome bottlenecks for imports of diversified natural gas and LNG [liquified natural gas], and renewable hydrogen,” said James Watson, secretary-general of Eurogas.

This article was produced by Euractiv and republished under a content sharing agreement.

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The court said the European Union had missed its target of spending at least 20% of its budget on climate action by around seven percentage points.

The European Commission, which manages and implements the EU budget, previously reported that €216 billion was spent on climate action during the 2014-2020 budgetary period.

In reality, relevant climate spending was more likely to be around 13% of the EU budget – or €144 billion – rather than the reported 20%, ECA found.

“Not all the reported climate-related spending under the EU budget was actually relevant to climate action,” said Joëlle Elvinger, the ECA member who led the audit.

Current reporting is done “before the expenditures are actually spent”, meaning figures are “inflated by unused or non-disbursed funds,” Elvinger told journalists at a press briefing today.

Moreover, “the methodology for tracking climate spending considers only the potential positive impact on climate and does not track potential negative impacts of measures that serve other EU objectives,” she added.

Citing organic farming as an example, Elvinger said the Commission’s figures ignore potential drawbacks such as declining agricultural productivity and rising grain imports from countries with less stringent environmental rules.

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It is in farming policy that climate spending is overstated the most – by almost €60 billion, according to ECA. Similarly, the climate contribution of spending in areas like rail transport, electricity, and biomass tends to be overstated as well, the auditors said.

In its report, ECA made several recommendations to better link the EU’s expenditure to its climate and energy objectives. Among those is a recommendation that the Commission justifies the climate relevance of funding under the Common Agricultural Policy (CAP), which represents around 40% of all EU spending.

“The Commission should report on the contribution made by climate spending to EU climate and energy objectives. It should focus in particular on how to measure the impact of the budget on mitigating climate change,” the report said.

Worryingly, issues are likely to remain in the current budgetary period, which runs from 2021 until 2027, ECA said.

In the current budget, the European Union has committed to spend at least 30% on climate action, a target which rises to 37% when it comes to the EU’s €800 billion recovery fund from the Covid-19 crisis, adopted in 2020.

But the auditors expressed “concerns about the reliability” of climate reporting under the current period, saying “most of the issues identified for 2014-2020 still remain”.

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Those problems are even likely to get worse because of the “unclear links between payments and climate objective” under the EU’s coronavirus recovery fund, which introduces the principle of “do no significant harm” whereby spending should not threaten any of the EU’s environmental or climate objectives.

Under the new €800 billion fund, the Commission will calculate contributions to climate spending upfront, based on the estimated costs laid out in national spending plans. But checking compliance will be tricky, ECA warned, saying there is a significant “risk of misstating climate spending” in relation to budgeted amounts.

“We identified potential issues such as the risk of misstating climate spending” in cases where the difference between the amounts committed and actually spent are significant, Elvinger said.

Another risk is that the milestones and targets that trigger payments under the fund are not clearly linked to climate objectives, Elvinger added. “This raises the question of the reliability of future climate reporting, which might be subject to future audits,” she warned.

The European Commission stood by its initial assessment, saying 20.6% of the EU’s 2014-2020 budget was spent on climate action. “Contrary to the ECA’s assertions, the Commission’s methodology for the EU budget is solid and reliable precisely because its underlying assumptions are clear, reasonable, transparently communicated and correctly applied,” it said.

Looking at the current budgetary period (2021-2027), the Commission said the EU has already “significantly strengthened” its methodology, for example by “moving away from marking climate relevance based on the intent of an intervention to basing it on the expected effect”.

This article was produced by Euractiv and republished under a content sharing agreement.

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The guidelines seek to align EU state aid rules with the European Green Deal, focusing on supporting renewable energies and attaining the bloc’s climate objectives.

If an EU government wants to fund a project that is not in line with the EU’s 2030 or 2050 climate targets, “the balance is not likely to tip in favour of supporting it with aid,” said EU competition chief Margrethe Vestager who presented the new rules.

The guidelines also include a new section on aid for the closure of coal, peat, and oil shale plants to facilitate decarbonisation in the power sector, the EU executive said in a statement.

Once formally adopted early next year, the new guidelines will immediately apply to all EU legal texts. EU member states will have until 2024 to align their existing aid schemes with the new requirements.

The guidelines broaden the scope of areas exempted from the EU’s usually strict state aid rules, supporting new players in the energy field such as small scale renewable energy producers, Vestager explained.

Other new areas covered include government support to improve the energy performance of buildings and clean mobility, such as infrastructure for electric vehicles, clean vessels and aircraft.

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However, the new guidelines also inject “a bit of pragmatism” into state aid rules, added the Danish commissioner who singled out natural gas as “a special case because for now, it acts as a bridge towards our path to more renewables.”

“But a bridge is not a destination, and state aid decisions will reflect hat logic. Our goal is and will remain phasing out our reliance on fossil fuel. And that includes gas,” Vestager insisted.

When pressed by reporters to elaborate further, the Danish commissioner said a “special clause” will apply to natural gas allowing for “member states with the lowest GDP to transition from coal to gas. Because they kind of need a helping hand in order to do so.”

That comment is likely aimed at EU countries like Poland, Greece, and Romania, which are heavily reliant on coal and planning investments in gas projects to displace it.

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Key criteria for fossil gas projects to win EU state aid approval is whether they are future-proof and ready to accept higher shares of green hydrogen or biogas. They must also prevent a lock-in effect into polluting energy by demonstrating a clear pathway to decarbonisation.

“We cannot have gas with a lock-in effect,” Vestager said. “We can make necessary pragmatic exceptions, but it still has to contribute to our green target,” she explained.

Regarding state aid for nuclear, Vestager said that it would continue to be assessed under the 1957 Euratom treaty, which provides a legal basis for EU support to nuclear safety and research projects.

The revised state aid guidelines could play an indirect role for nuclear though, “for instance when hydrogen is produced with nuclear” power, Vestager said. “And that is in the guidelines”.

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Notably, the new state aid guidelines will allow governments to support any clean technology with so-called Contracts for Difference, which entitle the beneficiary to a payment equal to the difference between a fixed ‘strike’ price and a reference price – such as the price of CO2 on the EU carbon market.

“For example, if you’re an energy provider and the market price is below that strike price, then the state pays you the difference,” Vestager explained. If the market price is above, the beneficiary then pays back the difference to the state. “And that ensures stable and predictable revenue streams,” she said.

Contracts for difference were first tested in Germany, which pioneered the scheme last year as part of its €7 billion hydrogen strategy. The scheme is supported by German industry association BDI, which sees it as financing clean technologies in energy-intensive industries like chemicals, cement, and steelmaking.

This story was produced by Climate Home News’ media partner Euractiv. 

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You were in Brussels to discuss global climate diplomacy after the Cop26 summit last month in Glasgow. How can Europe and the United States convince countries like India, the most reluctant about climate action and resisted language at the last minute on coal? What kind of initiatives did you discuss to bring these countries on board and persuade them to raise their ambition for climate action?

First of all, let me let me just say that India did not want to or could not feel that they could sign on to “phasing out” unabated coal because that’s all they have.

And so they were nervous of that, but they accepted “phasing down” coal in the Glasgow Climate Pact. And this is the first time in the history of Cops – 26 of them – that we have ever had Russia, India, China, other countries that use coal actually talk about “phasing down” coal.

And, to phase out, you have to first phase down. So I’ll take the year of phasing down, providing it’s real. And that we build on that to continue to focus on the need to transition away from fossil fuel dependency – particularly unabated fossil fuels. The key here is that if there’s no capture and no utilisation, and no storage, it’s a problem.

So we are focused together with the EU, with Frans Timmermans, on how we will accelerate mitigation. We have 65% of global economic output committed to keeping the 1.5C degree target of the Paris Agreement alive.

And now we have to move to the other countries that are in the other 35%. Because the reductions don’t have to be made in one year or one meeting in Glasgow – they have to be made over the next nine years, at least that’s what the scientists tell us.

So we can achieve a global reduction of 45% or more and keep the 1.5C target alive. And our effort together with Frans Timmermans is how we can work cooperatively with other countries to get them to accelerate their reduction, increase their targets, and help us achieve the goal of Glasgow, which is now keeping 1.5C degrees alive.

So what kind of initiatives will the EU and the US put forward to persuade these countries then?

Well, let me give you an example. In the case of India, prime minister [Narendra] Modi has committed to deploy 450 gigawatts of renewable energy over the next 10 years; we have formed a partnership with India, together with the UAE and some other countries to help them be able to achieve that goal as rapidly as possible by bringing finance and technology to the table. So Frans and I talked about how we can coordinate and partner in that effort to accelerate that.

In Glasgow, the US was one of the countries which did not sign up to an agreement to phase out coal by mid-century. Can you explain the reason behind this? How can the US persuade others if it is not itself leading by example?

Well, first of all, we signed on and agreed with the cover decision. And the cover decision very clearly says “phase down”. So we did agree with that.

The “phase out” language was one that we couldn’t agree to because of our constitutional capacity. We are already phasing out coal, but we can’t give an instruction under our constitution to the states to make that happen, this is just not constitutional. At least that’s the way our lawyers read it.

So we told everybody – look, we’re not against it, we’re trying to proceed forward ourselves. President Biden has set the very ambitious goal of having a power sector that will be completely carbon-free by 2035. We’ve closed over 500 coal plants in the last seven years. And we will only have 100 left as we go into the next 10 years. And we’ve pledged that by 2035, we will be zero carbon in our power sector.

So we’re doing it, we’re going to do it. We just can’t sign on to something which creates a legal authority we don’t have.

Turning to Europe now, there is a new chancellor in Germany, Olaf Scholz, who was sworn in on Wednesday. And one of the things he suggested earlier this year when he was finance minister was to create a so-called “climate club” that would bring together industrialised nations such as the EU, Japan, and the US to lead the fight against global climate change. What are your thoughts about this? Would the United States be interested in joining such a club?

We’re interested in any and every effort that will accelerate the reduction of the carbon problem and reduce the use of unabated coal.

And to some degree, what we’re doing with a Major Economies Forum, is a kind of carbon club in the sense that these 20 countries represent 80% of global emissions. So we welcome any idea that will encourage increased activity, increased commitment, increased focus, and partnership. And we’re willing to talk about any parameters on how we can do that.

In April next year, we’re going to be having a summit on the subject of increased mitigation. We look forward to building partnerships with Chancellor Scholz, and we welcome his commitment and the leadership of Germany.

I just met five minutes ago with the foreign minister responsible for the climate negotiation, Annalena Baerbock. And we just spent half an hour together in Brussels on the same evening. She is making a tour to meet with her counterparts, and we had an opportunity to talk about the next steps. I think we will be very coordinated and maximise all of our efforts. And that’s what we’re going to do.

Probably what Mr Scholz was referring to is the EU’s proposal for a carbon border adjustment mechanism (Cbam), which will essentially apply a tariff on goods imported from countries that do not put a comparable carbon price on their industry. Do you believe a carbon border scheme such as the European one is a legitimate instrument to have when you consider yourself a climate leader?

Absolutely, and we do. We’re examining it right now; President [Joe] Biden has instructed our team to evaluate all the implications and ramifications fully.

And we have said it’s a fair idea to have on the table. But it depends a lot on how it would be implemented, exactly what would be implemented, and how you include a sufficient number of people in it so that it’s meaningful.

So we’re exploring it like other people. And it may be a tool that we have no choice but to employ if other countries are not going to be serious enough about reducing carbon.

What sort of timeline are you looking at?

It’s in the near term. Because we have important meetings coming this year, and 2022 is the year of developing the details based on CBAM that the EU has put in place, which could take effect in 2023. So that’s going to have to really be worked out in the near term.

And I think the whole issue of carbon pricing, Cbam, and carbon leakage – all of these things will be very much on the table over next year.

The European Union and the US-led an initiative in Glasgow to cut methane emissions. In Europe, the Commission will table a proposal next week to regulate methane leaks from the oil and gas sector. What are the next steps on the US side? Are you planning similar legislation in the US?

We will have domestic regulations on methane, yes. Gina McCarthy and her team in the White House are working on that. And we are planning to do our share of reduction on methane to give life to the pledge that we helped lead. And we will join the EU and others to make sure we’re doing our maximum on it.

We’re huge believers in the methane initiative, which is why we started it with the EU. And we already have 110 countries that have signed on to it.

We just worked out an agreement with China in Glasgow, where China has agreed that next year, they will design and implement and announce publicly an ambitious national action plan on methane, which they have to file with the Cop next year.

And so we’re very anxious to continue to press this. In each of the conversations I’ve had in England in the last few days, in Jordan before that, and now here in Brussels, and I will have these conversations in Paris – we are determined to expand as much as possible this effort on methane.

If we successfully implement the 30% global methane reduction, it’s the equivalent of taking every automobile and every truck and every aeroplane and every ship in the world and reducing them to zero emissions by 2030.

It’s a huge game; it’s 0.2C of savings on the planet’s warming. And it’s also easy and not expensive to do. So it’s low hanging fruit, frankly. And if we can get every country to do their part, we might exceed the 30%, which would be monumental. So we’re going all out on the methane pledge.

This article was produced by Euractiv and republished under a content sharing agreement.

The post John Kerry: US supports a coal phaseout but cannot commit appeared first on Climate Home News.

Albeit for entirely opposing reasons, no one in Parliament seems happy with the European Commission’s draft implementing rules for the EU’s green finance taxonomy, tabled in November.

The draft rules – or “delegated acts” in EU jargon – are an essential part of plans to bring private finance onboard with the EU’s green transition. Put simply, they aim to establish a “gold standard” for sustainable investment by listing which economic activities can be considered “sustainable.”

But the proposal caused uproar among eastern and southern EU member states, which complained that natural gas had been denied “transition” fuel status in the draft guidelines, even when it replaces coal in power generation.

Faced with a threat of veto, the Commission was sent back to the drawing board, and asked its green finance advisors to provide a broader definition of “transition” activities under the taxonomy.

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An updated proposal is now due in the coming weeks and will be submitted for scrutiny to the European Parliament and EU member state representatives in the Council of Ministers. They will face a binary choice to either adopt the rules or reject them as a bloc.

In other words, MEPs will have a veto, and many of those consulted by Euractiv said they intend to exercise it.

“It was the right decision to postpone,” said Sirpa Pietikainen, a Finnish lawmaker from the centre-right European People’s Party (EPP) who co-authored the Parliament’s resolution on the green finance taxonomy regulation back in 2019.

“There were many comments and the Commission needed time to look into them,” she said. In particular, “the transition category was too strict or too unclear,” she told Euractiv.

In the EPP, some MEPs were openly critical about the proposal, suggesting the European Parliament’s largest political group would have probably rejected the draft if the proposal had been submitted to a vote.

“What the Commission has designed is, as it stands, an ineffective plan” to support the green transition, said Anna-Michelle Asimakopoulou, a Greek MEP affiliated to the EPP. “The indirect carbon footprint thresholds are unrealistic and penalise energy-intensive industries that don’t have access to a fully decarbonised energy grid,” she said referring to the aluminium sector.

Worse, she added, the proposals would have penalised European aluminium producers who are already struggling with dumped imports coming from China.

“This lack of geopolitical foresight is dumbfounding,” she said at a parliamentary meeting in January. “The EU taxonomy has the potential to be a game changer but it must ensure a level playing field” both within Europe and globally, she said.

A classic left-right divide

In the European Parliament, it looks like a classic left-right divide. While Conservatives and right-wing groups warned the draft rules were too stringent and risked penalising whole sectors of the economy, the Socialists, Greens and leftists said they didn’t go far enough to spur investments into clean technologies.

“We were quite critical about the Commission’s draft delegated act, to be honest,” said Bas Eickhout, a Green lawmaker from the Netherlands who co-authored the Parliament’s resolution on the taxonomy regulation.

“With the taxonomy, Europe is supposed to develop the gold standard for green investment,” he told Euractiv. “But if you read the proposal of the Commission, it’s becoming more and more political bargaining. And we are shifting away from the golden standard that we wanted to make.”

“I think I could have argued for a yes vote, but it would have been borderline, I have to say,” Eickhout replied when asked if the Greens would have backed the Commission’s first draft.

“If we now get further weakening, then it will become more and more difficult for us to vote yes,” he warned.

Gas and nuclear

The debate in Parliament has tended to centre around gas and nuclear energy. In October, a group of 51 MEPs from Eastern EU member states – mostly from the EPP – wrote a letter to the Commission, calling for the taxonomy to secure a “transition fuel” status for the most efficient gas technologies.

For the Greens, however, a further dilution of the taxonomy’s criteria for gas could be a step too far.

According to Eickhout, the Commission’s initial proposal was “already borderline” for the Greens because it still allowed some gas investments to be labelled as sustainable. “We certainly don’t want to see any further weakening there,” he said.

Similar warnings are coming from the Socialists and Democrats (S&D), the second biggest group in Parliament. “I would have given the original proposals by the Commission a passing grade, but only just,” says Paul Tang, a Dutch MEP from the S&D group.

“In areas like agriculture, or energy generation, the Commission should be careful not to weaken the criteria much further, else it loses sight of the level of ambition agreed upon in the Taxonomy Regulation,” he warned. “Particularly, changing the standards to allow investment in a fossil fuel like natural gas would fatally undermine the taxonomy,” he told Euractiv in emailed comments.

The dispute goes far beyond gas, because the EU’s green finance rule book covers nearly every sector of the economy, ranging from agriculture to forestry, transport, energy, digital industries and even education and the media sector.

Methane emissions from Russian pipelines surged during the coronavirus pandemic

While nuclear power is being dealt with separately, forestry and agriculture have emerged as a sector of crucial importance for the EPP and Conservatives, who don’t want to upset farmers with new environmental standards.

However, like for gas, the Greens and Socialists warned against attempts to dilute the taxonomy’s criteria much further.

“On forestry, bioenergy and agriculture, the draft delegated act was already weaker than we had hoped, so how much weaker can we get?,” Eickhout said.

For Pietikainen, the issue for policymakers is to find the right balance. While the EPP generally supports natural gas as a transition fuel “for the next 10-20 years,” she also says “gas cannot be considered as green” in the long run.

“We need to phase out gas at the latest by 2050 if we want to become climate neutral by then. And that is what creates a transitional challenge,” she said.

According to her, a potential solution would be to consider gas investments as part of a company’s broader transition plan to aim for carbon neutrality.

“When a company has a reliable transition plan verified by a third party, that could be categorised as transitional. And therefore, they could be labelled green even though they are not green yet. That way we would allow more companies to be eligible. And if they don’t meet the target, they would be phased out from the category,” Pietikainen said.

A broader ‘transition’ category

More generally, all MEPs consulted by Euractiv said they would support a broader “transition” category in the taxonomy – including the Greens.

“At the moment, the taxonomy only defines green standards, so either you’re in or you’re out,” said Green MEP Bas Eickhout. “This is why we need a broader taxonomy with a third category for ‘in between’ companies. Otherwise you will always have this lobbying by companies that want to be on the green side.”

Pietikainen agreed, indicating that the creation of a broader ‘transition’ category “would indeed facilitate an agreement.” However, she also insisted on setting a clear transition pathway for industry, with clear objectives.

“The worst case would be to set the bar too low,” Pietikainen said. “Because otherwise, you invite industries to invest in technologies which may be considered green today but aren’t sustainable over time. That would send the wrong signal to industry front runners and would prevent them from moving forward.”

As often in Parliament, the swing votes on the taxonomy delegated acts may end up lying in the hands of the centrist Renew Europe political group.

Cormann: Australian contender for OECD top job backtracks on climate scepticism

Pascal Canfin, a senior Renew MEP, said the Commission’s initial proposal on the taxonomy delegated act had “raised questions” within his group because it “did not make it possible to capture the necessary transition of our society towards a carbon-free economy”.

“In too many sectors, the logic of alignment with our climate objectives was simply not present,” he said, underlining that an “all-and-only green now” logic does not have a majority in the European Parliament as it fails to capture the necessity to encourage a green transition among carbon-intensive industries.

Driving the transition “is the whole point of these delegated acts,” said Canfin, who chairs the European Parliament’s environment committee. “The taxonomy must make it possible to accelerate the ecological transition, without creating a fracture in our society,” he told Euractiv.

According to Canfin, the European Commission’s green finance advisory group, must now put forward proposals allowing for a more “dynamic taxonomy” that takes the transition imperative into account.

“If we stay with this idea of a ‘green niche’, then we run the risk that the taxonomy is not widely used and covers only a marginal part of our economy,” he said.

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Canfin’s words echo a study commissioned by Germany’s environment ministry, which concluded that only 1% of blue chip companies listed on the DAX stock exchange would be considered “sustainable” if the Commission’s draft delegated act had been applied in its initial form.

Without more nuance in the classification of companies, the taxonomy risked creating a “green bubble” that would see investors rushing to buy stocks from a handful of firms considered truly “sustainable” under EU rules, the study suggested.

By contrast, Canfin said a more inclusive taxonomy will make it possible to bring more people on board with the green transition. “This is another matter with the taxonomy: its use must be generalised, it must be the reference tool in the context of ecological transition,” he added.

However, the French MEP warned against the temptation to tinker with the higher pollution thresholds listed in the taxonomy delegated acts – those above which technologies are considered to be doing “significant harm” to the environment.

“Touching the ‘Do No Significant Harm’ thresholds is a very clear red line,” Canfin warned. “Withdrawing certain sectors from the delegated acts on the basis that an agreement is too complex to find is another,” he said, insisting that the taxonomy “must cover a very large majority of economic sectors to be relevant”.

This article was produced by Climate Home New’s media partner Euractiv.

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In total, nearly €5 billion in EU taxpayer money was spent since 2013 on 41 gas projects such as pipelines or import terminals known as “Projects of Common Interest” (PCIs), according to the study by Global Witness, an international NGO.

Of that, an estimated €440 million was splashed on seven gas projects that have either failed or have been put on hold, says Global Witness.

The vast majority of that sum – over €430 million – was spent on the BRUA pipeline, aimed at connecting Bulgaria, Romania, Hungary, and Austria to gas reserves in the Black Sea.

Research for offshore gas in the Black Sea economic zone of Bulgaria and Romania has been a hot topic in the past, but in the case of Bulgaria, work is at a complete standstill.

Designed to ease Europe’s reliance on Russian gas, BRUA aims to carry 1.75 billion cubic metres of gas in its first phase, which cost an estimated €479 million.

EU member states divided over green reforms of energy investment treaty

A section of the pipeline was completed in November 2020, but it is located entirely in Romania and reaches neither the Black Sea nor the country’s neighbours.

Investors are now worried that BRUA will not transport gas from the Black Sea, after Exxon – which had been leading the largest portion of the project – announced it wanted to sell its license.

Plans to extend BRUA into Hungary were cancelled in April last year, and it is unlikely the pipe will now transport gas from the Black Sea – falling short of the project’s initial ambition when the EU labelled it as a project of common interest.

The other six projects are:

• The Portugal-Spain 3rd gas interconnection (cancelled). EU subsidy: €97,359
• The Midcat gas pipeline connecting France and Spain (cancelled). EU subsidy: €6,253,708
• The Poland-Czech Republic gas interconnection (shelved). EU subsidy: 1,360,868
• The Pince-Lendava-Kidričevo gas pipeline (no activity since receiving EU funding in 2014). EU subsidy: €344,500
• The Austria-Czech Republic gas interconnector (halted). EU subsidy: €41,993
• The Eastring gas project linking Slovakia to the Bulgarian-Turkish border via Romania and Hungary (indefinitely postponed). EU subsidy: €438,527

Project selection under scrutiny

Global Witness is now warning Europe against repeating the same mistakes when selecting the next batch of projects under the EU’s updated regulation on trans-European networks for energy (TEN-E).

According to Global Witness, the failure of those projects is explained in large part because the TEN-E regulation gives a role for gas companies – represented by ENTSOG, the association of gas transmission system operators – to select the infrastructure projects shortlisted to receive EU public funding.

“It is unbelievable that the Commission thinks this is a fair process for deciding how to spend public money. When companies that stand to directly benefit are involved in the decision-making process it can come as little surprise that so much of this vital money is wasted,” said Jonathan Gant, Senior Gas Campaigner at Global Witness.

Contacted on Friday, the European Commission did not immediately respond to EURACTIV’s request for comment.

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The updated TEN-E regulation for the first time excludes oil and gas pipelines from receiving EU funding, but it does leave the door open to finance hydrogen networks, which can be constructed by adapting existing gas infrastructure.

EU funding under the TEN-E rules aims to leverage cash from national governments and the private sector, to help mobilise the massive investments needed to meet Europe’s climate aims – including €65 billion in hydrogen infrastructure investments this decade.

“By 2030, total investments needs in hydrogen electrolysers are estimated between €24-42 billion,” the European Commission said when it presented its updated TEN-E regulation last year. And “about €65 billion will be needed for hydrogen transport, distribution and storage,” it added.

According to Global Witness, hydrogen projects will be fully sourced from ENTSOG’s Ten Year Network Development Plan (TYNDP), which is drawn up by its member companies. As part of that plan, gas network operators will identify infrastructure gaps, which Global Witness says will be used to argue for more pipeline investments.

And while the updated TEN-E regulation eliminates oil and gas infrastructure from EU funding, it also creates a new “smart grids” category, which includes gas networks that makes use of digital solutions to integrate low-carbon and renewable gases.

“The Commission’s proposal fails to tackle the fundamental conflict of interest created by leaving ENTSOG in charge of key parts of the project selection process,” Gant says.

Italy creates ecological transition ministry but campaigners warn against gas support

ENTSOG rejected allegations about conflicts of interest, saying its tasks “are based on EU legislation” and network development plans aimed at addressing supply security concerns.

Financial support “is a natural consequence of the structure where the TSO are constructing the gas transmission infrastructure and that all TSOs are obliged to be ENTSOG members,” the network association told EURACTIV in emailed comments.

Looking ahead, ENTSOG said it was now preparing “for a transition of the gas infrastructure from natural gas today to a future with renewable and low-carbon gases,” and referred to its 2050 Roadmap Action Plan to highlight “the key role for the existing gas infrastructure as an efficient way of transporting hydrogen”.

“Therefore, it will still be relevant to have gas infrastructure projects to potentially be included in the PCI list – either for security of supply or market-functioning reasons, but in the future also for repurposing and retrofitting of existing grids to be used for hydrogen transport,” ENTSO-G said.

The updated TEN-E regulation is now being debated by the European Parliament and EU member states in the Council of Ministers. A political agreement on the proposal is expected towards the end of 2021.

This story was produced by Climate Home News’ media partner Euractiv. 

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“I’m quite sure that during the presidency we will have the law approved. It’s our big priority for the semester,” said João Pedro Matos Fernandes, the Portuguese minister for environment and climate action, who briefed journalists on Thursday.

But talks are unlikely to be plain sailing, the Portuguese minister admitted, acknowledging that views between EU countries can sometimes diverge widely.

“We have to recognise that EU countries come from many different levels,” he said referring to eastern member states, which face a bigger challenge to meet the EU’s climate goals because of their greater reliance on coal and other polluting industries.

“We don’t say every country needs to be carbon neutral by 2050,” Fernandes replied when asked by Euractiv to elaborate on the sticking points that he expects to come up in the negotiation. However, he said most EU member states should aim to become carbon neutral by 2050 or earlier, saying only “one or two” should be allowed to overshoot the 2050 target.

China launches world’s largest carbon market for power sector

Despite this, Fernandes said he expected negotiations will be easier to conclude now that EU leaders have come to an agreement on the European Commission’s proposal to reduce emissions by “at least 55%” by 2030.

The hard part will be to convince the European Parliament, which has an equal say on the matter and has pushed for a more ambitious 60% objective.

Both sides have to agree on an identical text before the 2030 objective can be incorporated into the European Climate Law and become a legally binding obligation on the European Union and its member states.

“During March and April, we will start with things that are easy to negotiate,” Fernandes said, expressing confidence that a deal will eventually be found.

“I do believe that we’re going to have an agreement. This is too important,” he said.

UK net zero commitment questioned, as government allows new coal mine

As the holder of the EU Council’s rotating presidency, Portugal will represent the EU’s 27 member states in talks with European lawmakers. And he called on Parliament to show a spirit of compromise.

“We understand that this is a negotiation but we ask also our colleagues in the European Parliament to understand this as well,” he said. “Of course the final document won’t be exactly the same as document that was approved by the Council.”

Possible concessions to Parliament might include the creation of an independent scientific body to monitor the conformity of EU laws with the bloc’s climate objectives, or sanctions for EU countries breaching the rules.

Immediately after the climate law is approved, the Council will have a first exchange of views on the European Commission’s upcoming “fit for 55” package of legislation, which aims at putting Europe on track to reach the bloc’s new 2030 climate goals.

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The package, expected in June, will cover the whole range of EU climate and energy laws, including a reform of the emissions trading scheme, Europe’s flagship carbon trading system which forces big industries to pay a price for every tonne of CO2 emitted in the atmosphere.

“We have to go further than what we did in the past,” Fernandes said.

However, he said a consensus will be easier to reach now that the EU has a clear objective to reach climate neutrality by 2050.

“When we did it in the past, we didn’t exactly have a goal,” Fernandes said. The proposals, although they made sense individually, did not come at the same time and “weren’t necessarily articulated between each other,” he explained.

Things are different today, he continued, because the EU has a clear overarching objective to reach climate neutrality by mid-century.

“If we know where we want to be, it will be more demanding but in some way, it will be more clear and more easy” to reach an agreement, he said.

The story was originally published by Climate Home News’ media partner Euractiv. 

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“Europe is the leader in the fight against climate change,” said Charles Michel, the president of the European Council, who chaired the EU summit.

“Europe will reduce emissions by at least 55% by 2030. It puts us on a clear path towards climate neutrality in 2050,” added Ursula Von der Leyen, the president of the European Commission.

The EU’s updated climate goal will now be written down into a draft European Climate Law and transmitted to the United Nations as the bloc’s formal commitment under the Paris Agreement.

The climate talks lasted for eight hours, dragging a summit that started the day before until Friday morning.

Poland, backed by some other coal-dependent central European countries fought through the night to obtain assurances that their economies will not suffer disproportionate costs from the transition to a net-zero economy.

Poland, Hungary, and the Czech Republic asked for more EU money to finance the green transition and requested greater detail about the “enabling framework” that the European Commission will propose next year to reach the new 2030 goals.

Parisversaire climate ambition summit: who’s in and who’s out

Budapest and Warsaw also pushed for assurances that EU leaders will be consulted in deciding future climate legislation, a move aimed at ensuring that key decisions will be taken by unanimity.

At the heart of their concerns are fears that poorer EU countries will end up carrying a disproportionate share of the burden to meet the 2030 climate goal.

To finance the transition, eastern EU countries called for national targets on EU spending linked to GDP, a move that would ensure a bigger portion of the money is channelled to finance the energy transition in poorer member states.

Poland in particular is 80% reliant on coal for its electricity and has repeatedly voiced concerns that not enough EU funding was available to finance the modernisation of its electricity system.

The Polish electricity association, PKEE, estimates that meeting the EU’s updated 2030 climate goals will cost €68.5 billion by 2030.

To finance this, it called on the European Commission “to substantially increase the number of allowances dedicated to the Modernisation Fund and the ‘solidarity pool’” set up to support 10 lower-income EU countries in their transition to climate neutrality.

Poor nations call for more financial support to cope with climate impacts

Western EU countries, who were pushing for greater ambition on climate change, argued that EU funding was already available, and pointed to the EU’s seven-year budget and recovery fund, worth €1.8 trillion in total, which was agreed earlier on Thursday.

“An overall climate target of at least 30% will apply to the total amount of expenditure” under the €1.8 trillion package, draft summit conclusions said.

The concerns of eastern EU states are not unfounded. According to trade unions, 11 million jobs in Europe are at risk from the transition to a net-zero economy, most of them located in Eastern EU countries.

The green transition “will be much easier in Nordic or western European countries” than in poorer EU member states like Poland, Bulgaria and Romania, where employment in some regions can be entirely dependent on a single, heavily-polluting industry, said Luc Triangle, secretary-general of IndustriAll, a federation of trade unions.

Poland, Hungary, the Czech Republic, Slovakia, Bulgaria and Romania also called for “technology neutrality” to achieve the higher climate target.

“What they mean by this is to allow for investments into gas and nuclear energy to be classified as ‘green’. Bulgaria and Hungary are most explicit about this,” explained Sebastian Mang, climate and energy policy adviser at Greenpeace.

This story was originally published by CHN’s media partner Euractiv. 

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Lawmakers in the EU assembly voted the proposed amendment on the 2030 target by 352 votes to 326, with 18 abstentions, according to initial estimates.

The text will now be forwarded to the EU Council of Ministers representing the EU’s 27 member states for final approval. The EU’s objective is to wrap up negotiations by the end of the year.

The Parliament’s decision on the 2030 climate target took place on Tuesday evening as part of a wider vote on a proposed European Climate Law, which seeks to enshrine into legislation the EU’s goal of reaching climate neutrality by 2050.

“We did it! 60% did win!” said Jytte Guteland, a Swedish MEP from the Socialists and Democrats (S&D) group, who was the Parliament rapporteur on the proposed European Climate Law.

We did it! 60% did win! Now we take the climate policy to a higher level! Thank you EP for givning me that mandate. @TheProgressives pic.twitter.com/ZzlSnwoDjc

— Jytte Guteland (@JytteGuteland) October 7, 2020

“My amendment is now becoming the official position of the Parliament,” said Pascal Canfin, a French centrist MEP who chairs the assembly’s environment committee. “We are more than ever at the forefront of climate ambition!” he tweeted victoriously.

The right wing of the hemicycle was not impressed, however, saying the 60% would be too costly to implement for Europe’s industry.

Peter Liese, a German lawmaker from the centre-right European People’s Party (EPP), said the 60% goal was “overambitous” and called on EU member states to back the European Commission’s initial proposal for a 55% cut instead.

“I regret that the majority in the European Parliament did not support the European Commission’s Climate Law proposal but voted for the overambitious 60%,” Liese said on Twitter.

“We will abstain because we sincerely dislike the 60% and think it really endangers jobs,” he said.

EU faces internal battle as it prepares to increase 2030 climate target

The EPP is the largest political faction in the European Parliament. It said it supports the 55% CO2 reduction target by 2030 because “it is the most feasible,” according to European Commission estimates.

The European Commission tabled the updated 2030 target in September, saying a 55% reduction in greenhouse gas emissions was “achievable” and “beneficial” for the EU economy.

“Going beyond 55% would endanger jobs. Let’s not be ideological,” said Agnes Evren, a French MEP from the EPP group.

A final vote on the climate law is scheduled for Thursday but isn’t expected to be more than a mere rubber-stamping exercise.

Environmental campaigners hailed the vote. “The European Parliament is to be applauded for taking a position that is far more progressive than the Commission’s 55% ‘net’ proposal,” said the WWF.

However, it added that a 60% target for 2030 is still not in line with what the science shows is needed to keep global warming at manageable levels, in line with the 1.5-2C target of the Paris Agreement. “WWF and other NGOs have been calling for at least 65% emissions reductions by 2030, and a separate target for carbon removals from sinks.”

The story was initially published by CHN’s media partner Euractiv.

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“If you look at the logic and the methods applied by UNFCCC, they all include carbon sinks,” said Frans Timmermans, the Commission vice-president in charge of climate policy.

“This is exactly what we have done at the European Commission,” he told journalists at a press briefing. “So I think we’re on solid ground here”.

Timmermans was speaking after the EU executive officially unveiled its plan to reduce the EU’s greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels, up from 40% currently.

The updated 2030 target, announced the day before by Commission President Ursula von der Leyen, aims to put the EU in line with its commitments under the Paris Agreement and the bloc’s broader objective of becoming the first “climate neutral” continent in the world by 2050.

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But environmental campaign groups denounced the Commission’s plan to include carbon sinks in the target, saying this was “an accounting trick” to meet the 2030 goals.

“Relying on forests to reach climate targets sends the wrong signal that it’s OK to keep polluting because the land will absorb it,” said Sam van den Plas, policy director at Carbon Market Watch, an environmental NGO.

“The Commission is greenwashing its own climate target: including carbon dioxide removals in the calculations means emissions will actually go down by a lot less. We’re facing a climate emergency, and there isn’t time for games,” said Alex Mason from the WWF.

In Europe, forests are currently a net carbon sink because they take in more carbon dioxide than they emit. On a global level, oceans and forests are the two biggest carbon sinks.

But the capacity of European forests to absorb CO2 “has been shrinking” over the years, Timmermans warned, saying “the sink has to go back to its previous levels” if Europe wants to reach climate neutrality and preserve biodiversity at the same time.

IMF endorses EU plan to put a carbon price on imports

If left unchecked, forest sinks could further decline to 225 million tons of CO2 equivalent by 2030, down from 300 million tons CO2 in 2010, the Commission says. According to the EU executive, the forests’ declining capacity to absorb carbon dioxide is driven by “further increases in harvesting” and negative impacts from natural hazards such as fires and pests caused by a changing climate and growing demand for biomass.

“We really have to take care of our forests. It’s not enough to say we’ll plant 3 billion trees, we need to make sure our forests stay healthy and this is going to be a momentous task,” Timmermans said.

Environmental groups applauded the Commission’s intention to restore healthy forests and ecosystems. But they pointed to inconsistencies with the EU’s existing climate goal for 2030, which according to them, does not take carbon removals into account.

“The current EU target of ‘at least 40%’ agreed in 2014 does not include sinks,” affirms Bert Metz, a climate scientist who co-chaired the mitigation working group of the UN Intergovernmental Panel on Climate Change from 1997 to 2008.

“Including sinks means that the new 55% target would effectively be less than 50% in the current target’s terms,” he wrote in an opinion piece for EURACTIV.

“We need to restore Europe’s forests and protect and restore our precious ecosystems, but that must be on top of greenhouse gas reductions, not instead,” he insisted, saying the 55% target  “must be a real, absolute reduction,” not a net target that takes carbon removals into account.

Net zero: the story of the target that will shape our future

Timmermans strongly rejected the NGO’s accusation that the net target is an accounting trick.

“I really dispute the idea that this would in fact mean only 50% reduction,” he said. “I don’t understand the logic, carbon sinks play a role, it takes CO2 out of the atmosphere – isn’t that what we want to achieve?”

“I honestly believe there is no problem with that,” Timmermans added, saying all that matters is that the EU achieves its 2030 climate goal.

Officials who briefed the press afterwards told a different story however, and did recognise that the 55% target would be lower by two percentage points without carbon removals. This would translate into an emissions reduction target of 53%, not 55.

“The 53% is calculated without taking into account the removals, and the 55% is calculated with removals,” the official said. And using the EU’s current method to calculate carbon sinks “would shave away probably about half of those 2 percentage points,” he explained, suggesting the target would effectively be around 54% using today’s carbon accounting rules.

Green campaigners who analysed the Commission’s impact assessment on the 2030 target came to different conclusions, however. Depending on the scenarios, the effect of including carbon sinks “varies from just over 2% to nearly 5%, depending on whether you think the sink will be at the low end (225 million tonnes) or the high end (340 million tonnes),” said Alex Mason from the WWF.

“This makes clear that including sinks in the 2030 target makes a significant difference – it means other sectors such as buildings, transport and agriculture won’t have to cut emissions by as much.”

EU faces internal battle as it prepares to increase 2030 climate target

Mason also insisted that the EU’s current 2030 climate target does not take carbon removals into account, and accused the Commission of trying to cover up the change in carbon accounting rules.

“The Commission is trying to downplay the significance of this change – and appears even to have altered text on its website in order to imply that the 40% target has always been a net target,” Mason said.

“But it’s clear that the 55% target Ursula von der Leyen and Frans Timmermans have been trumpeting is not what it seems, and is even further from the 65% cut in emissions that science demands.”

Timmermans himself seemed to admit that carbon sinks were a new element in the EU’s climate target calculation, saying the Commission drew its figures on carbon removals from the most recent findings of the UNFCCC.

“You could wonder why we didn’t include it in the -40% target at the time, because carbon sink is an important element in all of this,” Timmermans said.

“The target is what counts, we use every method to get there.”

This article was produced by Euractiv and republished under a content sharing agreement.

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In addition to Sines, the company is preparing to close one more plant and convert another unit in Spain, EDP said in a statement.

The decision is “part of EDP group’s decarbonisation strategy” and was taken in a context in which energy production increasingly depends on renewable sources, the company said on Monday (13 July).

The falling cost of renewables, coupled with the rising cost of CO2 pollution permits on the EU carbon market, means that “the prospects for the viability of coal plants have drastically decreased,” EDP added.

“Last year, we saw an inevitable reduction in the prospects for profitability of coal power plants, with the rising costs of CO2 emissions and more competitive prices for natural gas,” said Miguel Stilwell d’Andrade, acting executive president of EDP.

“The decision to anticipate the closure of coal power plants in the Iberian Peninsula is thus a natural consequence of this energy transition process, in line with European carbon neutral targets and with the political will to anticipate these deadlines,” he said in a statement.

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The move was hailed by climate campaigners pushing for a quick phase-out of coal power, the most polluting fossil fuel.

“Portugal had already accelerated its coal phase-coal from 2030 to 2023. The fact that it is being brought forward yet again to 2021 shows just how fast a country can clean up its energy system when it commits to clean energy and climate action,” said Kathrin Gutmann, director at the Europe Beyond Coal Campaign.

Portugal will be the third EU country to close its coal plants early, after Austria and Sweden did the same earlier this year.

Belgium was the first EU country to end coal, in 2016.

“Governments that have yet to plan a speedy coal exit are losing precious time to put in place ambitious coal exit plans that reflect market and policy realities,” Gutmann said.

Seven more countries are expected to end coal by 2025: France (2022), Slovakia (2023), Portugal (2023), the UK (2024), Ireland (2025) and Italy (2025), according to Europe Beyond Coal.

This article was produced by our media partners Euractiv.

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“Not all biomass is good biomass,” says Jennifer Jenkins, chief sustainability officer at Enviva, a US-based company which is the world’s largest producer of industrial wood pellets used for electricity and heat production.

“We agree that not all biomass should automatically be categorised as carbon neutral,” Jenkins told an online debate organised on 29 June during EU sustainable energy week.

To bring climate benefits, biomass needs to come from low-value wood residues or smaller trees coming from timber harvests – not from high-value trees that could be used in products like furniture or construction material, Jenkins said.

The question now facing policymakers in Brussels is how to ensure EU energy policies do not encourage the wrong sort of biomass, even inadvertently.

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Biomass currently represents almost 60% of the EU’s renewable energy, more than solar and wind power combined, according to the EU’s statistical office, Eurostat.

And even though wind and solar are growing fast, countries such as Austria, Denmark, Finland, Latvia and Sweden would be unable to achieve their 2020 renewable energy targets without biomass, experts say.

“Bioenergy is basically the backbone for these countries’” renewable energy policies, said Martin Junginger, a professor of energy and resources at Utrecht University who spoke at the online event.

EU bioenergy review

The future of bioenergy in Europe is looking uncertain, however.

Earlier this year, the European Commission announced it would perform a comprehensive assessment of biomass supply and demand in Europe and globally with a view to “ensure that EU biomass-related policies are sustainable”.

“The overall objective is to ensure that EU regulatory framework on bioenergy is in line with the increased ambition set out in the European Green Deal,” the Commission said in its biodiversity strategy, published on 20 May.

Among other things, the biodiversity plan aims to protect primary and old-growth forests, which “keep removing carbon from the atmosphere, while storing significant carbon stocks,” the EU paper said.

“The use of whole trees and food and feed crops for energy production – whether produced in the EU or imported – should be minimised,” the policy paper added.

Leaked UN science report warns of clash between bioenergy and food

But sorting out “good” from “bad” biomass is notoriously tricky.

Last year, a group of climate activists filed a lawsuit against the European Union to challenge the notion that forest biomass is carbon neutral, a principle which is currently enshrined in the bloc’s renewable energy directive.

“The treatment of biomass as carbon neutral runs counter to scientific findings” showing that burning wood for energy typically emits 1.5 times more CO2 than coal and 3 times more than natural gas, the plaintiffs claimed.

The European Court of Justice dismissed the case in May this year, saying the activists had failed to demonstrate how the directive was of “individual concern” to them.

Still, the Commission appeared to give credit to the plaintiffs, saying its bioenergy review will include new “operational guidance” on the sustainability criteria for forest biomass currently laid down in the EU’s renewable energy directive.

Timeframe

So how could policymakers distinguish “good” from “bad” biomass? According to some experts, one way could be to contrast the impact of biomass on global carbon stocks in the short and long term.

“If you burn biomass, then of course there is CO2 being emitted,” said Junginger, adding that from that point of view, biomass “critics have a point” and that climate scientists are concerned about the immediate CO2 emissions, which can be “up to twice more than natural gas”.

However, what critics fail to acknowledge is the long-term positive effects of biomass on the climate, Junginger added, saying bioenergy from sustainably managed forests is carbon neutral in the long run because trees re-absorb carbon dioxide as they grow.

“Ultimately within two or three decades, even the less sustainable kinds of biomass will have repaid their carbon debt and perform better than fossil fuels,” he argued.

For him, the choice to rely on biomass therefore depends more on the timeframe in which policymakers place themselves.

“If within ten years, we have to decarbonise everything, then yes, biomass is not a very attractive option” because of the “carbon debt” that biomass creates for the coming decades, Junginger said.

But if policymakers consider that climate change is “a matter of decades and centuries” then biomass has a role to play in mitigating climate change, he claimed.

G20 aids fossil fuels more than clean energies amid pandemic, researchers find

The timeframe criteria does not necessarily speak in favour of biomass. In November last year, the European Parliament declared a “climate emergency”, calling on the Commission and member states “to urgently take the concrete action needed in order to fight and contain this threat before it is too late”.

According to UN scientists, the coming 10 years will be critical to ensure the world stays on track with the Paris Agreement, which seeks to limit global warming to well below 2C, and aim for 1.5C.

To hold warming to this limit, carbon pollution must fall to ‘net zero’ by 2050, according to scientists at the Intergovernmental Panel on Climate Change (IPCC).

The idea that biomass could be discriminated based on timeframe is making the bioenergy sector cringe, though. According to Enviva’s Jennifer Jenkins, biomass brings immediate benefits as long as it comes from “working forests”, whose tree stocks are “stable or increasing”.

“I would argue the benefits are immediate, we don’t need to worry about the short versus long term time frame,” Jenkins argued.

To her, land use change is a more relevant criteria to measure sustainability. In order to bring climate benefits, biomass “needs to come from a working forest that is returned to forests after harvest – not from forests that are converted to agriculture” or other uses after trees are felled, she said.

‘Transitions’ in biomass use

Another potential way to manage the climate impact of biomass is to prioritise the sectors in which it should be used in priority.

“Sustainable biomass is scarce,” said Martin Junginger. “So we have to think cleverly where we want to deploy it,” he added, citing hard-to-abate sectors of industry and transport as areas where scarce biomass resources could be put to best use.

“At the moment we use biomass mainly for low-temperature heating – so, for heating houses,” Junginger pointed out, saying this was “not very clever” because other solutions like insulation or heat pumps are more efficient.

Instead, he said biomass should be used in priority “for industrial purposes which are harder to decarbonise,” as well as heavy-duty road transport, shipping and aviation where biofuels can provide an alternative to hydrocarbon-based fossil fuels.

Another transition is the way biomass is used for electricity. “With intermittent wind and solar,” biomass is well positioned to provide peak load instead of base load, Junginger said.

Biomass played “a substantial role” in the coal-free run that the UK electricity sector enjoyed in May and June this year, said Rebecca Heaton, head of climate change at Drax, a British power station running on biomass and coal.

“Obviously the grid will be predominantly solar and wind” in the future, but biomass can help “when the wind doesn’t blow and the sun doesn’t shine,” Heaton said.

This story was originally published by CHN’s media partner Euractiv.

The post Not all biomass is carbon neutral, industry admits as EU reviews policy appeared first on Climate Home News.

It’s now official: the EU’s updated seven-year €1 trillion budget proposal and a €750 billion recovery plan will both be geared towards the green and digital transitions.

Commission President Ursula von der Leyen made the announcement on Wednesday (27 May) in a speech before the European Parliament.

“The recovery plan turns the immense challenge we face into an opportunity, not only by supporting the recovery but also by investing in our future: the European Green Deal and digitalisation,” von der Leyen said.

Earlier plans to reserve 25% of EU spending for climate-friendly expenditure “will apply throughout” the EU’s updated budget proposal and recovery programme from the Covid-19 crisis, EU officials explained.

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Spending will also be guided by a sustainable finance taxonomy, which aims to channel private investments into technologies that contribute to at least one of six pre-defined environmental objectives, such as climate change mitigation.

And a “do no harm” test embedded in the taxonomy will in principle exclude technologies like nuclear power, which are seen to be undermining other environmental objectives such as pollution prevention and control.

“The ‘do no harm’ principle is very much also applying to this recovery instrument,” said a senior EU official who briefed journalists on Tuesday, ahead of the plan’s publication.

The announcement was welcomed by pension funds and asset managers at the Institutional Investors Group on Climate Change (IIGCC), who said a green recovery is “the only option” to avoid investments that would otherwise risk “fuelling the climate crisis for decades to come”.

Alignment with the green finance taxonomy “will ensure public money is helping support a cleaner, more resilient future,” said Stephanie Pfeifer, CEO of the IIGCC, which has more than €30 trillion assets under management.

Loans and grants distributed to EU member states under the recovery fund will need to support “investments and reforms” in the applicant country, an EU official explained, saying green aspects will be part of the criteria.

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In addition, green criteria will also apply to the so-called solvency instrument aimed at shoring up companies in need of liquidity.

“The philosophy is very much helping the economy to recover. But we want the economy to recover in a certain direction, which is green, digital and more resilient,” the official explained.

By adding green conditions to its recovery fund, the European Commission is also trying to restore a level playing field between rich and poor EU member states.

During the corona crisis, national governments have spent nearly €2 trillion in state aid for ailing companies and small businesses, without any green conditions attached. And 52% of that aid was spent by Germany alone, raising fears that the crisis will deepen economic disparities within the 27-member EU bloc.

“This is not an even game,” said Teresa Ribera, the Spanish ecology minister.

“Allowing countries to get an unfair advantage may create more problems” related to economic and social cohesion, she told a recent Euractiv online event, calling for “a level playing field” where “everybody sets the same targets”.

Comment: How to raise an easy $1 billion per day for the Covid-19 recovery

Crucially, there will be tight political oversight on how EU recovery funds will be spent.

Any request to tap into the fund “must be signed off by the Commission and the Council,” an EU official said, referring to the EU Council of Ministers which brings together the 27 member states.

The tight political scrutiny is partly aimed at ensuring EU funds are spent on “investments and reforms” in the regions and sectors most affected by the crisis, EU officials said.

But it is first and foremost aimed at placating the “Frugal Four” group of countries – Austria, Denmark, Sweden and The Netherlands – who fear southern and eastern EU states lack the discipline to spend wisely.

First, EU countries will have to formally apply to the fund and submit a national plan to “explain” how it will support economic reforms agreed at the EU level during the so-called European “semester” of economic policy coordination.

The Commission will then assess national programmes against the country-specific recommendations adopted under the European semester as well as broader EU objectives such as the European Green Deal and the digital agenda.

“The link to the European semester is very important because it is the guarantee that all the recommendations that the EU is making are respected,” a senior EU official explained. “We need to ensure all the budget delivers on the priorities” such as the green and digital transitions in order to ensure “a collective ownership” of the recovery fund, the official added.

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EU countries will be able to exert scrutiny by holding a vote to approve or reject national applications. The vote will take place by a qualified majority, meaning no single country will have a veto right.

The European Parliament will also be fully involved as co-legislator on the EU budget and “will therefore have a say on the whole of the expenditure,” another official added.

Countries will be able to appeal decisions if their national programmes are rejected, EU officials confirmed. But all decisions will be taken in full transparency, officials said and added that all approved national plans will be published online and will include details such as “investment milestones”.

Environmentalists expressed mixed feelings about the recovery plan, with reactions ranging from enthusiasm to scepticism.

“I commend President von der Leyen and her Commission for their 21st-century leadership and foresight,” said Sandrine Dixson-Declève, co-president of The Club of Rome, an informal, high-level body of scientists, businessmen and former politicians. “They have listened to calls from economists, scientists, and NGOs to not go back to business as usual,” she said in emailed comments to Euractiv.

Declève was particularly impressed by the Commission’s proposal to align recovery spending with the Green Deal and the Sustainable Finance Taxonomy.

“Applying the ‘Do No Significant Harm’ principle will guarantee that we continue to build a low-carbon economy as we exit and recover from Covid,” said Declève, who sat on the Technical Expert Group advising the Commission on the green finance taxonomy.

“Make no mistake this will strengthen our economy, not weaken it. Europe has truly opted for a ‘just transition’, new jobs, and innovation over a ‘business as usual’ economic model that was broken.”

Climate think-tank E3G was also broadly positive although it expressed reservations.

The Commission plan “puts in place the necessary structure for a pan-European recovery,” said Manon Dufour, head of E3G’s Brussels office. The proposal “upholds the European vision of achieving climate neutrality and economic growth, and puts in place strong European governance to ensure that no investment made for the sake of recovery can harm the bloc’s climate efforts,” Dufour said.

However, she also warned that strong governance of the fund was “not sufficient in itself” and that the 25% climate quota in the EU budget “is too low given the scale of the challenge”.

This story was originally published by CHN’s media partner Euractiv

The post EU €750 billion Covid recovery fund comes with green conditions appeared first on Climate Home News.

With oil prices hovering around $20 per barrel, world markets are awash with excess oil that risks putting the clean energy transition in jeopardy, France has warned.

“Extremely low fossil fuel prices” seen recently on world markets “do not reflect their true cost for climate,” the French say in a position paper sent to other EU member states.

“The cost of fossil energies should be proportionate to their true environmental impact,” argues the document, obtained by Euractiv.

The French paper was circulated to national delegations ahead of an informal video meeting of EU energy ministers on Tuesday (28 April).

UN development chief calls for green shift away from ‘irrational’ oil dependence

“French authorities consider that these market conditions make a clear case for mechanisms ensuring that these energies remain consistently above a certain floor price” from the perspective of both consumers and investors, it states.

Such a mechanism could take the form of “a carbon price floor” that could be implemented either through the EU’s emissions trading scheme or the energy taxation directive, which is up for review as part of the European Green Deal, the paper argues.

The UK has led by example in the European Union, by introducing a carbon price floor in 2013. But the idea is controversial in coal-dependent Poland and other countries in Central and Eastern Europe, which are likely to be hit hardest by the measure.

If adopted, the EU carbon price floor should be accompanied by social policies for regions in transition where jobs will be destroyed, French President Emmanuel Macron said during a visit to Brussels in 2018.

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The French are also worried about the impact of falling electricity prices on the EU carbon market, saying urgent measures should be taken in order to avoid a glut of emission allowances that would send carbon prices crashing.

“In that regard, French authorities consider that a reinforcement of the EU ETS Market Stability Reserve must be implemented without delay to address the risk of resurgence of structural surplus,” the paper says.

According to the French, “the current situation also calls for a rapid establishment of the carbon border adjustment mechanism” in order to prevent factories from moving out of Europe in the face of higher carbon costs at home.

But these measures on their own will not be sufficient to boost investments in clean energy and secure a green recovery from the coronavirus crisis, the paper argues.

More fundamentally, France expresses worries about structurally low electricity prices, saying they hinder investments in new low-carbon power generation capacity, which is badly needed to meet the EU’s decarbonisation goals.

It says EU policy reforms are needed to “secure the financing of decarbonised electricity production,” which “does not exclude low carbon technologies” – a veiled reference to nuclear power.

This story was originally published by CHN’s media partner Euractiv. 

The post France calls for minimum carbon price to counter oil crash appeared first on Climate Home News.

Officially, the show must go on. But in private, officials admit that Brussels is having to review its priorities in order to throw all its weight behind the ongoing fight against the coronavirus crisis.

“At this point in time, we do not have any comment to make on any knock-on effect that this could have on legislative work in general,” said Eric Mamer, chief spokesperson of the European Commission, during a regular press briefing on Tuesday.

However, he also suggested that a reshuffling of priorities was underway at the EU executive, also because of constraints posed by teleworking.

“For legislative activity to work, we need to have the institutions able to operate,” Mamer admitted, saying Commission services and other EU institutions “will definitely have to prioritise their work in order to cater for the current needs.”

As a result, “non-essential” initiatives like the biodiversity strategy and the farm-to-fork strategy are likely to be delayed by a few weeks. According to the Commission’s work programme, those were supposed to be adopted before the end of March. Other Green Deal-related initiatives likely to be delayed include the raw materials strategy.

“If we adopt those strategies in two or three weeks, that won’t make such a big difference,” one official speaking on condition of anonymity. “We have to concentrate on the corona crisis,” the official explained.

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But that doesn’t mean Europe should “forget about the Green Deal” to focus on the coronavirus, as suggested by Czech prime minister Andrej Babiš on Monday. Nor will the Commission put its carbon trading scheme on hold, like Poland requested through the voice of its deputy minister for state assets, Janusz Kowalski, officials said.

“The long-term work on the Green Deal continues in parallel” to the coronavirus firefighting “and continues to be one of the priorities as well,” said Vivian Loonela, EU Commission spokesperson for the European Green Deal.

“We have preparations ongoing for the next initiatives and this work is continuing,” Loonela said. That work is “underway through our colleagues who are in teleworking,” she said in response to press questions.

To be sure, teleworking hardly speeds up the Commission’s internal processes. On Monday, the executive’s internal servers reportedly broke down as thousands of officials tried connecting simultaneously to the Commission servers, Euractiv has learned.

Commission staff aren’t working at full speed as a consequence. And their leaders aren’t either, due to teleworking constraints or to the coronavirus itself.

Frans Timmermans, the Commission’s executive vice-president in charge of the Green Deal, put himself on self-imposed quarantine until 20 March, after attending a meeting with French secretary of state for ecological transition, Brune Poirson, who tested positive with COVID-19.

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Although Loonela said Timmermans “is in a good state of health” and “does not have any symptoms,” his self-isolation won’t speed up any Green Deal-related initiatives.

More generally, policymakers said the fight against the coronavirus, although the top priority at the moment, should not distract Europe from longer-term goals such as climate change.

Austria’s federal minister for climate action, Leonore Gewessler, rejected calls by Czech prime minister Andrej Babiš who said the EU Green Deal should be scrapped in order to focus on the coronavirus.

“I do not agree with Andrej Babiš,” Gewessler said. Although she insisted that the corona crisis must be overcome “now,” she said politicians had a responsibility to offer a long-term perspective to their citizens.

“Climate change is an existential threat which can be tackled with an economic program, the Green New Deal,” Gewessler said.

“This strategic programme defines how we can invest together with businesses and re-structure, modernise our economies. This will trigger an enormous boost for innovation. As a European, I am convinced that this is the right way forward and that we should pursue it,” she added.

Governments have ‘historic opportunity’ to accelerate clean energy transition, IEA says

“We need to start planning already now” for the post-coronavirus economic stimulus, she continued, saying that “the old growth model fuelled by fossil energy is a thing of the past”.

In the European Parliament, others were supportive as well.

“Failure to respond to the climate crisis will not help solve the coronavirus so those who use this pretext against the green deal are irresponsible,” said Pascal Canfin, a French lawmaker who chairs the European Parliament’s environment and public health committee.

“After the peak of the crisis, when the economic recovery has to be accelerated, we will be at a crossroads: any investment in infrastructure, in the building sector or in automotive, will have to be consistent with the climate issue,” Canfin said.

“We have the possibility of making this crisis an opportunity for the climate – let us seize it,” said Canfin, who hails from French President’s Emmanuel Macron’s Renew Europe political group in the European Parliament.

This story was originally published by CHN’s media partner Euractiv. 

The post Coronavirus response to delay EU Green Deal by weeks appeared first on Climate Home News.

Ten new offshore wind farms came online last year, bringing the total to 22 GW, according to figures published by WindEurope, a trade association.

The UK accounted for nearly half of the newly-installed capacity, with 1.7 GW, according to WindEurope. Second came Germany (1.1 GW), followed by Denmark (374 MW) and Belgium (370 MW). Portugal was next with 8 MW of newly installed floating offshore wind.

The good news is that costs of new offshore wind farms continued to fall significantly, according to industry figures. Last year’s auctions – in the UK, France and the Netherlands – delivered prices for consumers in the range of €40-50/MWh, WindEurope said.

“Europe really embraced offshore wind in 2019,” said Giles Dickson, CEO of WindEurope. “Auction prices showed it’s now cheaper to build offshore wind than new gas or coal plants,” he pointed out.

And the project pipeline keeps filling up. “This time last year we were looking at 76 GW by 2030. Now it’s 100 GW,” Dickson said.

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So all is for the best, then? Not quite. In spite of solid growth, new offshore wind projects are falling short of what’s needed to meet the EU’s climate targets for 2030. And they are far behind the pace required to keep up with Europe’s long-term climate neutrality objective for 2050.

The European Commission says Europe needs between 230 and 450 GW of offshore wind by 2050 to decarbonise the energy system and deliver on the objectives of the Green Deal, WindEurope points out. This, it adds, requires building 7 GW of new offshore wind a year by 2030, and ramping up to 18 GW a year by 2050.

“But the current level of new installations and investments is a long way behind that,” WindEurope warned. “We’re not currently building enough to deliver on that, let alone the more ambitious volumes needed to deliver the Green Deal,” Dickson said in reference to the 2050 carbon neutrality objective.

Those concerns are shared by Eurelectric, the EU power sector association. “Manufacturing more wind turbines is not an issue, you can ramp up production pretty fast,” said Kristian Ruby, Eurelectric secretary-general.

“The problem is installing the grids that go along with them, getting the permits and the buy-in of local populations to this additional capacity. This is where the challenges are,” he told Euractiv.

Deployment of wind energy in Europe faces obstacles, mainly related to slow permitting procedures and resistance from local populations. The European Commission said it will address them in a new “offshore wind strategy” due to be presented before the end of the year.

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In January, EU Energy Commissioner Kadri Simson said the new strategy will address challenges linked to the large-scale development of offshore wind and ocean energy, “such as impact on energy grids and markets, management of maritime space and industrial policy dimensions”.

Dickson called on the new strategy to “map out clearly how to mobilise the investments needed” to reach 450 GW of offshore wind capacity by 2050. “Crucially, it should provide a masterplan (a) to develop the offshore and onshore grid connections and (b) to get the maritime spatial planning right,” Dickson said.

Achieving that will also require “ever closer cooperation” between governments in the North Sea and the Baltic, WindEurope argues, calling for the cooperation to be extended to the UK after Brexit.

Britain represented “half of Europe’s investment in offshore wind in the last decade and will remain by far the biggest market” in Europe, Dickson pointed out.

The story was first published by CHN’s media partner Euractiv. 

The post Offshore wind deployment boom ‘too slow’ to meet EU climate target appeared first on Climate Home News.

“This is Europe’s man on the moon moment,” she said in a video statement. “Our goal is to reconcile the economy with our planet” and “to make it work for our people,” she added, describing climate policy as Europe’s new growth strategy.

Europe wants to be a front-runner in climate friendly industries and clean technologies, the former German defence minister explained, adding: “I am convinced that the old growth model based on fossil fuels and pollution is out of date and out of touch with our planet”.

Here are the 10 main points in the commission plan:

1. ‘Climate neutral’ Europe. This is the overarching objective of the European Green Deal. The EU will aim to reach net-zero greenhouse gas emissions by 2050, a goal that will be enshrined in a ‘climate law’ to be presented in March 2020.

That means updating the EU’s climate ambition for 2030, with a 50-55% cut in greenhouse gas emissions to replace the current 40% objective. The 55% figure will be subject to a cost-benefit analysis.

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The commission wants to leave no stone unturned and plans to review every EU law and regulation in order to align them with the new climate goals. This will start with the Renewable Energy Directive and the Energy Efficiency Directive, but also the Emissions Trading Directive and the Effort Sharing Regulation, as well as the infamous LULUCF directive dealing with land use change. Proposals there will be submitted as part of a package in March 2021.

A plan for “smart sector integration”, bringing together the electricity, gas and heating sectors closer together “in one system”, will be presented in 2020. This will come with a new initiative to harness “the enormous potential” of offshore wind, officials said.

2. Circular economy. A new circular economy action plan will be tabled in March 2020, as part of a broader EU industrial strategy. It will include a sustainable product policy with “prescriptions on how we make things” in order to use less materials, and ensure products can be reused and recycled.

Carbon-intensive industries like steel, cement and textiles, will also focus the attention under the new circular economy plan. One key objective is to prepare for “clean steelmaking” using hydrogen by 2030, an EU official said. “Why 2030? Because if you want clean industry in 2050, 2030 is the last investment cycle,” he said.

New legislation will also be presented in 2020 to make batteries reusable and recyclable.

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3. Building renovation. This is meant to be one of the flagship programmes of the Green Deal. The key objective there is to “at least double or even triple” the renovation rate of buildings, which currently stands at around 1%.

4. Zero-pollution. Whether in air, soil or water, the objective is to reach a “pollution-free environment” by 2050. New initiatives there include a chemical strategy for a “toxic-free environment”.

5. Ecosystems & biodiversity. A new biodiversity strategy will be presented in March 2020, in the run-up to a UN biodiversity summit taking place in China in October. “Europe wants to lead by example” with new measures to address the main drivers of biodiversity loss, an EU official said. That includes measures to tackle soil and water pollution as well as a new forest strategy. “We need more trees in Europe,” the official said, both in cities and in the countryside. New labelling rules will be tabled to promote deforestation-free agricultural products.

6. Farm to fork strategy. To be tabled in Spring 2020, the new strategy will aim for a “green and healthier agriculture” system. This includes plans to “significantly reduce the use of chemical pesticides, fertilisers and antibiotics,” an EU official said. New national strategic plans due to be submitted next year by member states under the Common Agricultural Policy will be scrutinised to see whether they are aligned with the objectives of the Green Deal.

7. Transport. One year after the EU agreed new CO2 emission standards for cars, the automotive sector is once again in the commission’s firing line. The current objective is to reach 95gCO2/km by 2021. Now, “we need to work towards zero,” sometime in the 2030s an EU official said.

Electric vehicles will be further encouraged with an objective of deploying 1 million public charging points across Europe by 2025. “Every family in Europe needs to be able to drive their electric car without having to worry about the next charging station,” the official explained.

“Sustainable alternative fuels” – biofuels and hydrogen – will be promoted in aviation, shipping and heavy duty road transport where electrification is currently not possible.

8. Money. To “leave no-one behind,” the commission proposes a ‘Just Transition Mechanism’ to help regions most heavily dependent on fossil fuels. “We have the ambition to mobilise €100 billion precisely targeted to the most vulnerable regions and sectors,” said von der Leyen as she presented the Green Deal on Wednesday.

The proposed €100bn instrument has three legs:

• A just transition fund that will mobilise resources from the EU’s regional policy budget;
• The “InvestEU” programme, with money coming from the European Investment Bank;
• EIB funding coming from the EU bank’s own capital.

Every euro spent from the fund could be complemented by 2 or 3 euros coming from the region. EU’s state aid guidelines will be reviewed in that context so that national governments are able to directly support investments in clean energy, with blessing from the commission’s powerful competition directorate.

Regions will also be offered technical assistance in order to help them “absorb” the funds while respecting the EU’s strict spending rules.

However, any state aid would have to be vetted by the commission as part of new regional transition plans submitted beforehand to Brussels.

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9. R&D and innovation. With a proposed budget of €100bn over the next seven years (2021-2027), the Horizon Europe research and innovation programme will also contribute to the Green Deal. 35% of the EU’s research funding will be set aside for climate-friendly technologies under an agreement struck earlier this year. And a series of EU research “moonshots” will focus chiefly on environmental objectives.

10. External relations. Finally, EU diplomatic efforts will be mobilised in support of the Green Deal. One measure likely to attract attention – and controversy – is a proposal for a carbon border tax. As Europe increases its climate ambitions, “we expect the rest of the world to play its role too,” an EU official explained. But if not, Europe is “not going to be naïve,” and will protect its industry against unfair competition, he added.

To lead by example, the EU commission itself will aim for climate neutrality by 2030. “That’s a bold objective, but after all we don’t make steel so we might have an easier job,” the official said.

This piece was originally published on EURACTIV

The post The EU releases its Green Deal. Here are the key points appeared first on Climate Home News.

The draft version of the European Green Deal obtained by Euractiv outlines “a set of deeply transformative policies” that the new Commission intends to put forward in order to tackle climate change, clean up the environment and green the economy.

The document is a summary of the early draft proposal – marked “for internal use only” – that was circulated to EU countries’ national representations in Brussels in order to get some feedback. At the moment, it looks more like a shopping list, filled with numerous bullet points stacked under a series of headlines.

Topping the list is Europe’s objective of reaching climate neutrality. A “European ‘Climate Law’ enshrining the 2050 climate neutrality objective” will be submitted “by March 2020,” the paper says.

And the Commission “will present a comprehensive plan on how to increase the EU’s greenhouse gas emission reduction target for 2030 to at least 50% and towards 55%” by October 2020.

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Further down, the Commission promises “mainstreaming sustainability” into all policies, by adopting “a green oath: ‘do no harm’”. In practice, Brussels will seek to eliminate “incoherent legislation that reduces the effectiveness in delivering the Green Deal”.

This includes financial aspects with a proposal to “screen and benchmark green budgeting practices” both at EU and national level. An “action plan on green financing” will be submitted in June 2020 in this regard. A review of “the state aid guidelines for environment and energy” is also on the agenda.

Other known initiatives include a proposal to revise the Energy Taxation Directive with a view to “align it” with Europe’s climate ambitions.

Under the “zero-emission nobility” heading, the Commission plans to extend the EU’s cap-and-trade scheme for carbon emissions, to the maritime sector and reduce the amount of free pollution credits allocated to airlines.

Brussels will also “assess the possibility of including road transport emissions” in the scheme, a proposal which has long been resisted by environmental groups. And it plans to “withdraw and resubmit” proposals on the Eurovignette directive to charge heavy-duty trucks on European roads, a proposal which is currently stuck with EU member states in the Council of Ministers.

Under the ecosystem and biodiversity preservation heading, the Commission proposes to “review all existing legislation affecting agriculture and forestry to ensure it is in line with renewed climate and biodiversity ambition”.

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And under the “farm to fork” strategy, the EU executive intends to adopt “a toolbox for alternatives to pesticides” and reform food information rules “to improve consumers’ information”.

Finally, the Commission intends to review air, water and chemicals legislation with a view to “eliminating all sources of pollution.”

Although environmental campaigners generally hailed the “vast policy programme” put forward by the Commission, they said the proposals were “not up to the task”.

“The EU’s proposal to increase the targets to 50% or 55% is not in line with the Paris Agreement and its objective to limit global heating to below 2C, and as close as possible to 1.5C,” said Franziska Achterberg from Greenpeace.

Greenpeace and other environmental organisations are calling for a target of at least 65% by 2030, compared to 1990.

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Besides, campaigners say October 2020 is too late to propose a new 2030 climate target. “EU leaders will not agree a new 2030 target until after an impact assessment, which would not leave enough time for the EU to submit a new 2030 target by the Cop26 in Glasgow in November 2020, as required under the Paris climate agreement,” Achterberg said in a statement.

Greenpeace was also disappointed by the Commission’s “flawed policies” on transport, noting there was no mention of a kerosene tax to tackle aviation emissions. And farm policy proposals lack measures to tackle “the over-consumption of meat and dairy products, the impact of factory farms or overuse of artificial fertilisers”.

Clean air and water policies were also deemed insufficient to tackle pollution at source. “The sources are known, such as toxic effluents from factory farming that end up in rivers and groundwater,” Achterberg said.

Finally, on trade, Greenpeace said the inclusion of a sustainable chapter in trade deals was nothing new. “Both Mercosur and Ceta have a sustainable development chapter. The problem is that the contents of the chapters are not legally enforceable,” Achterberg said.

This story was first published by CHN’s media partner Euractiv. 

The post Leak reveals Brussels’ draft plan for European green deal appeared first on Climate Home News.

Last month, the European Commission issued its recommendations on the draft national energy and climate plans (NECPs) submitted by the 28 EU member states to achieve their 2030 objectives.

But “while the plans include ambitious goals, they lack concrete policies and measures to deliver on the promises,” according to new research by the PlanUp project coordinated by Carbon Market Watch, an environmental NGO.

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Finland, Sweden and Portugal in particular were praised for their “overall high ambition” when it comes to setting long-term energy and climate goals. But deeper analysis “reveals a lack of details and quantifiable expected results with regard to policy measures in the transport, buildings and agricultural sectors,” said Carbon Market Watch.

The NGO’s analysis is hardly surprising. In fact, it largely corroborates the European Commission’s own findings. When it issued its recommendations last month, the EU executive identified “substantial” gaps in the draft national plans – particularly when it comes to energy efficiency – and urged all EU countries to submit improved versions before the end of the year.

On transport, the five draft national plans were generally praised for addressing issues such as light transport, biofuels and electro-mobility. “However, they largely fail to recognise the importance of tackling emissions from heavy-duty transport, shipping and aviation,” according to the analysis by the PlanUp project.

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The building sector, responsible for 40% of energy consumption in Europe, was also neglected. Even though buildings are addressed in all of the five plans, they fall short, “especially when it comes to planning for deep renovation rates and energy efficiency improvements”. Germany stood out in this area however, because it set goals to achieve carbon-neutral buildings by 2050.

Agriculture is the other sector where the five countries were found to be missing the mark. With the exception of France and Portugal, “agriculture is again largely omitted” from the draft national plans, the analysis said, even though it has significant potential to contribute to carbon reduction efforts.

Finland’s forestry sector comes under particular scrutiny in this regard. Although the country won plaudits for setting an ambitious goal of reaching carbon neutrality by 2035, the current EU Presidency holder plans to rely heavily on surplus carbon credits from forestry to compensate for greenhouse gas emissions in other sectors.

Finland puts new climate target top of EU leadership agenda

“Finland’s commitment to becoming carbon neutral by 2035 is very promising,” said Agnese Ruggiero, policy officer at Carbon Market Watch. “Yet, relying on policy loopholes to reach climate goals is dangerous because it means that targets are met on paper but not in practice,” she said in a statement.

“The final plan is an opportunity for the new government and the current EU Presidency holder to live up to its claims to lead on climate by committing to concrete measures in sectors such as transport and agriculture,” Ruggiero said.

A final area where all plans seem to be falling short is public involvement. While Finland and Sweden held public consultations to draft their national plans, France, Germany and Portugal failed to involve interested parties and the general public.

“A more transparent process…would ensure greater support and commitment from all parties involved,” the NGOs said.

EU countries have until the end of the year to submit revised versions of their draft national energy and climate plans (NECPs).

This piece was originally published on CHN’s media partner Euractiv.

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