The impact of EU’s 2030 new climate and energy framework

On October 23rd, the European Council agreed on a new climate and energy framework for post-2020. Much was written before, and many opinions have been voiced afterwards, about the potential impact of the policy framework presented.

When the EU adopted its 20-20-20 targets, it was heralded as daring, ambitious and the benchmark for other nations. Now the EU moves forward and launches 40-27-27 targets for 2030. The targets again cover greenhouse gas reductions, renewable energy and energy efficiency. The question debated is where this will take Europe, and how this framework will impact the global challenge of curbing global warming.

Opinions vary

On one hand, there are numerous voices, in the media, government, industry, and among NGOs, that are satisfied with the framework presented by the EU. Part of their reasoning is that just getting an agreement at all, is a victory with the current political and economic situation in Europe. The coal-intensive, and increasingly strong and confident Poland has also played an important role. Poland actively teamed up with neighboring countries, like the Czech Republic, Hungary and Slovakia, and threatened to block the agreement, if extra support and compensation for lower income countries were not included. Proponents of the agreed targets emphasize the central role given back to the EU ETS. Reductions in GREENHOUSE GAS emissions should primarily take place “domestically”.

On the other hand there are strong voices that are extremely disappointed, and fear that the climate just lost a very important battle. They especially debate the target of 40% reductions in greenhouse emissions compared to the 1990 baseline. It is not nearly high enough to be on the necessary path toward a global two-degree warming scenario. The other targets are also viewed as weak. A 27% renewable target does not represent a shift beyond an extension of the current 2020 path. And possibly the biggest disappoint is the lack of commitment given energy efficiency, with no binding commitments required on EU or national levels.

Is all bleak?

I believe not. 2030 is not an end-point for EU policymakers. It is merely a stopping-point toward 2050. Today, Europe and most of the global community realize the need to fully decarbonize. The big question is: Does the proposed EU framework contribute to reaching our goals in 2050?

For Europe to play a significant role in the UN climate talks in Paris 2015, and continue to take a leading role in driving change, the EU needed concrete targets. This is now in place. Although they could have been more ambitious, they will still function as an important benchmark for the upcoming negotiations.

A renewable energy target higher than 27% could obviously have accelerated the current deployment of renewable energy across Europe. At the same time, Europe has already undergone a major “energy overhaul” over the last 10 years. The energy landscape is changing fast, and a renewable energy future is the focus. This includes new market structures, smarter infrastructure, and cost-effective solar and wind power generation. But most importantly, we can glimpse outlines of new business and financing models. The EU’s decision to move forward with a binding renewable target will reinforce this energy transition. The direction is set, and there is no way back.

We see nations, individuals and businesses setting ambitious targets and defining detailed roadmaps of how they can reduce their GREENHOUSE GAS-footprint. The rationale is not only about “doing the right thing”, but it is linked to sound business decisions and strategic market positioning. Households and businesses across Europe are rapidly changing their energy behavior, and engaging directly in producing new renewable energy. Some are attempting to produce as much energy as they use, while others have increased their stakes by aiming to produce more renewable energy than they use. In other words, they are working to become energy positive.

Ahead of the EU decision, a group of eleven leading European businesses (“De Groene Zaak”), including IKEA, Philips and Unilever, published a declaration pushing for even tougher targets. Their main message was that “Europe needs to move rapidly towards a sustainable economy based on renewable energy and energy efficiency. By promoting renewable energy and energy efficiency technologies, we will be able to improve our energy security and reduce carbon emissions, while boosting the economy and creating high quality green jobs”.

We are steadily moving towards a point of no return, where the forces of change are strong, and the momentum created is irreversible. The 2030 targets and policy framework play an important role in setting the course.

When this tipping point is reached, we will see a self-reinforced drive by industry and market players to move toward a renewable, low-emission and sustainable society. The race to take the lead is on.