Parliament endorsed the Climate Law, agreed informally with member states in April, with 442 votes to 203 and 51 abstentions. It transforms the European Green Deal’s political commitment to EU climate neutrality by 2050 into a binding obligation. It gives European citizens and businesses the legal certainty and predictability they need to plan for this transition. After 2050, the EU will aim for negative emissions.

Stepping up ambition in 2030

The new EU Climate Law increases the EU’s target for reduction of greenhouse gas (GHG) emissions by 2030 from 40% to at least 55%, compared to 1990 levels. Additionally, an upcoming proposal from the Commission on the LULUCF Regulation to regulate GHG emissions and removals from land use, land use change and forestry, will increase EU carbon sinks and will hence de facto increase the 2030 EU’s target to 57%.

Greenhouse gas budget must guide upcoming 2040 target

The Commission will make a proposal for a 2040 target at the latest six months after the first global review in 2023 foreseen in the Paris Agreement. In line with Parliament’s proposal, the Commission will publish the maximum amount of GHG emissions estimated the EU can emit until 2050 without endangering the EU’s commitments under the Agreement. This so-called ‘GHG budget’ will be one of the criteria to define the EU’s revised 2040 target.

By 30 September 2023, and every five years thereafter, the Commission will assess the collective progress made by all EU countries, as well as the consistency of national measures, towards the EU’s goal of becoming climate neutral by 2050.

European Scientific Advisory Board on Climate Change

Given the importance of independent scientific advice, and on the basis of a proposal from Parliament, a European Scientific Advisory Board on Climate Change will be set-up to monitor progress and to assess whether European policy is consistent with these objectives.

Quote

Parliament rapporteur Jytte Guteland (S&D, Sweden) said: “I am proud that we finally have a climate law. We confirmed a net emissions reductions target of at least 55%, closer to 57% by 2030 according to our agreement with the Commission. I would have preferred to go even further, but this is a good deal based on science that will make a big difference. The EU must now reduce emissions more in the next decade than it has in the previous three decades combined, and we have new and more ambitious targets that can inspire more countries to step up.”

Next steps

The deal is expected to be approved by the Council shortly. The Regulation will then be published in the Official Journal and enter into force 20 days later. The Commission plans to present a series of proposals on 14 July 2021 in order for the EU to be able to reach the more ambitious 2030-target.

Background

Parliament has played an important role in pushing for more ambitious EU climate legislation and declared a climate emergency on 28 November 2019.

On Friday, the Committee on Environment, Public Health and Food Safety adopted a resolution on a WTO-compatible EU carbon border adjustment mechanism (CBAM) with 58 votes for, 8 against and 10 abstentions.

The resolution underlines that the EU’s increased ambition on climate change must not lead to ‘carbon leakage’ as global climate efforts will not benefit if EU production is just moved to non-EU countries that have less ambitious emissions rules.

MEPs therefore support the introduction of a WTO-compatible CBAM to place a carbon price on imports of certain goods from outside the EU, if these countries are not ambitious enough about climate change. This would create an incentive for EU and non-EU trade industries to decarbonize in line with the Paris Agreement objectives.

MEPs underline that it should be designed with the sole aim of pursuing climate objectives and a global level playing field, and not be misused as a tool to enhance protectionism.

CBAM must be linked to a reformed EU Emissions Trading System (ETS)

The CBAM should be part of a broader EU industrial strategy and cover all imports of products and commodities under the EU ETS. MEPs add that by 2023, and following an impact assessment, it should cover the power sector and energy-intensive industrial sectors like cement, steel, aluminium, oil refinery, paper, glass, chemicals and fertilisers, which continue to receive substantial free allocations, and still represent 94 % of EU industrial emissions.

To prevent carbon leakage, carbon pricing under the CBAM should be linked to the price of EU allowances under the EU ETS, they add.

Quote

After the vote, Parliament rapporteur Yannick Jadot (Greens, FR) said:

“The CBAM is a great opportunity to reconcile climate, industry, employment, resilience, sovereignty and relocation issues. It is a major political and democratic test for the EU, which must stop being naïve and impose the same carbon price on products, whether they are produced in or outside the EU, to ensure the most polluting sectors also take part in fighting climate change and innovate towards zero carbon. This will give us the best chance of remaining below the 1.5°C warming limit, whilst also pushing our trading partners to be equally ambitious in order to enter the EU market. Parliament is leading the way and we expect the same level of ambition from the Commission and member states.”

Next steps

Plenary is set to vote on the resolution in its session 8-11 March 2021. The Commission is expected to present a proposal in the second quarter of 2021.

Background

While the EU has already substantially reduced its domestic greenhouse gas emissions (GHG), those from imports have been rising, thereby undermining the EU’s efforts to reduce its global GHG footprint.

Parliament has played an important role in pushing for more ambitious EU climate legislation and declared a climate emergency on 28 November 2019.