Europe’s ‘man on the moon moment’: Green Deal to create world’s first climate-neutral continent

European Commission President Ursula von der Leyen unveiled the strategy at a special session at COP25

The European Green Deal was formally unveiled at COP25 on Wednesday (11 December), outlining a comprehensive climate and nature package of measures to make Europe climate neutral by 2050.

Headline targets listed in the Green Deal include a 50-55% emissions reduction target for 2030; a climate law to reach net-zero emissions by 2050; a transition fund worth €100bn and a series of new sector policies to ensure all industries are able to decarbonise.

European Commission President Ursula von der Leyen said: “The European Green Deal is, on the one hand, our vision for a climate-neutral continent in 2050 and it is, on the other hand, a very dedicated roadmap to this goal. It is fifty actions for 2050.

“Our goal is to reconcile the economy with our planet, to reconcile the way we produce and the way we consume with our planet and to make it work for our people. Therefore, the European Green Deal is on the one hand about cutting emissions, but on the other hand it is about creating jobs and boosting innovation.”

Between 1990 and 2018, the EU reduced greenhouse gas emissions by 23% while growing its economy by 61%, However, the Commission’s own projections suggest that only a 60% emissions reduction can be achieved by 2050 based on current trajectories.

In response, the Commission will propose the first European ‘Climate Law’ by March 2020 that will enshrine the net-zero 2050 objective. The Law will also feature mechanisms to ensure that all future EU policies contribute to the climate neutrality objective.

Achieving the current 2030 climate and energy targets is estimated to require €260bn of additional annual investment, according to the Commission, representing 1.5% of GDP. The Commission will create a Sustainable Investment Plan in 2020 to outline that at least 25% of the EU’s long-term budget will need to be funnelled into the Green Deal framework, with the European Investment Bank, Europe’s climate bank providing additional support. A Green Financing Strategy will be presented next year to outline private sector contributions.

A key driver of the decarbonisation process will be through the existing Emissions Trading System, which may be extended to new sectors. Member States will also be called upon to set targets to reduce sector emissions for those currently outside of the trading system.

Anders Nordeng, senior analyst at Refinitiv Carbon Research, commented: “The EU ETS is already more ambitious than it appears at first glance. With the targets for renewable energy and energy efficiency set in June 2018, Europe is de facto on track to a 45% reduction in 2030.

“The current carbon market set-up contains a ‘hidden gem’ in the shape of cancellation of allowances from the market stability reserve. We estimate that the provision to cancel allowances sitting in the reserve implies that by 2030 3.7 billion allowances are taken out of circulation for good. This means a de facto tightening of EU’s long term climate ambition”.

The blueprints mention policy reforms to “ensure effective carbon pricing throughout the economy” and the Commission will propose to revise the Energy Taxation Directive, focusing on environmental issues.

Carbon border

A key new feature of the Green Deal is a “carbon border adjustment mechanism” for selected sectors. It will aim to ensure that the price of imports into the bloc reflects that lifecycle emissions of each import, with prices scaling based on embodied and transportation emissions.

“Member States will present their revised energy and climate plans by the end of 2019. In line with the Regulation on the Governance of the Energy Union and Climate Action, these plans should set out ambitious national contributions to EU-wide targets,” the report notes.

Geert Van Poelvoorde, CEO ArcelorMittal Europe Flat commented: “Europe’s commitment to reduce its carbon emissions to be net-zero should be applauded and we commend the leadership of Mrs von der Leyen and her team.  However, the Green Deal will only work if there are full-scale transformation and support for industries.”

“The climate challenge is unprecedented, and bold action is therefore needed. Achieving our ambition of being carbon neutral by 2050 is a major challenge, but with the right political framework – allowing European steelmakers to remain competitive while the steel industry moves to carbon-neutral steelmaking – we’re convinced it’s achievable. The proposal for a carbon border adjustment, which effectively puts a carbon price on imports, recognizes that every country needs to play its part in reducing global CO2 emissions. By preventing steel production moving to countries where carbon emissions legislation is less strict, and where carbon emissions are therefore higher, means we put a stop to carbon leakage. This is exactly the type of action that is needed.”

Circular Economy & Green Buildings

In March 2020, the Commission will put in place an EU industrial strategy to address the role of digital evolution and technology in assisting with the low-carbon transition. Together with the industrial strategy, a new circular economy action plan will also be introduced.

The Commission wants the EU and the Member States to engage in a ‘renovation wave’ of public and private buildings. From 2020, national renovation strategies will be assessed to see how renovation rates can be increased to lower energy bills and reduce energy poverty.

The plan adds that this can also “boost the construction sector and is an opportunity to support SMEs and local jobs”. The Commission will “rigorously enforce the legislation related to the energy performance of buildings”.


The European Green Deal also set tighter CO2 standards for cars and vans as an interim step towards zero-emission mobility.

Transport accounts for a quarter of the EU’s greenhouse gas emissions. To achieve climate neutrality, a 90% reduction in transport emissions is needed. While no date is set for the phase-out of new polluting vehicles, the strategy includes plans for a final set of pollutant emission standards – named Euro 7 – for road transport and the creation of electric charging and battery rollout initiatives.

Commenting on the transport aspect of the deal, William Todts, Executive Director of T&E, said: “The European Green Deal could be a defining moment in the fight against pollution and climate change. The Commission’s plan to move to completely zero-emission cars and vans through a combination of new standards, ubiquitous charging infrastructure and green batteries are going in the right direction.

“The plan to end aviation’s tax holiday, make sure shipping pays for its emissions and mandate the deployment of clean fuels and technology is welcome. Of course, this is just a declaration of intent. The devil will be in the details of the new laws and whether EU governments support the Green Deal, but it is a good start.”

Biodiversity and nature

The European Green Deal recognises the role of biodiversity and nature in assisting the net-zero target, but green groups believe that the document hosts little in the way of tangible action plans.

The Green Deal does pledge to introduce new policies to reverse biodiversity decline and for new food and farming commitments to reduce pesticides, fertilisers and pollution, but both lack detail

Jagoda Munić, Director, Friends of the Earth Europe responded: “Finally, the EU is waking up to rising public concern about the planetary emergency. However, the promises are too small, too few, and too far off – we’re on a runaway train to ecological and climate collapse and the EU Commission is gently switching gears instead of slamming on the brakes.

“President von der Leyen is still clinging to old consumption- and growth-obsessed economics. Her Commission will still promote climate killing fossil gas, failed carbon trading, over-consumption, and potentially allow new GMOs in our food – this is no transformation.

 “The devil will be in the detail to come – we will be watching closely to see that every single decision the Commission now takes puts the environment, climate, and justice first.”

The laws that will be introduced by the European Green Deal will likely fall outside of the Brexit negotiations, with the UK set to transpose existing environmental standards or replace mechanisms such as the ETS with frameworks that are equal in ambition.

However, for businesses that operate across the bloc, the Green Deal will act as another call for ambitious climate action

Corporate Leaders Group Europe Senior Advisor Dr Martin Porter said: “We welcome this ambitious and far-reaching plan that can act as the new growth strategy for the EU, cutting emissions and delivering jobs.

“The breadth of the European Green Deal indicates how seriously the transition to a net-zero economy is being taken by the Commission and that the need for systemic change is understood to be at the heart of any workable decarbonisation strategy. Its wide-ranging scope – including, energy, agriculture, industry, transport, sustainable finance, and a new climate law – will need joined-up policy development as well as buy-in from all Commissioners to have climate neutrality as a core goal.

“There is much to praise within the text and intent of the Green Deal but its ultimate success will be judged at the end of this Commission term against its ability to set Europe on a Paris-aligned path by 2030. We urge the other EU institutions, as well as their stakeholders, to work with similar urgency and ambition to turn the Green Deal into concrete decisions enabling real action on the ground and in boardrooms immediately.”

Matt Mace

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