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Commission publishes package on low-carbon economy

On 20th July, the European Commission published a package of measures aiming to accelerate Europe's transition to a low-carbon economy. The package included:

  • A proposal on national emission reduction targets (also dubbed Effort Sharing Decision targets). This proposal aims at setting binding annual greenhouse gas emission targets for Member States for the period 2021–2030 in non-ETS sectors such as transport, agriculture, waste and buildings. The proposed targets require the EU’s richest economies set binding targets to cut emissions by between 30%-40% against 2005 levels, whilst EU nations with lower GDP per capita would be required to deliver more modest emissions reductions of between 0% for Bulgaria and 16 % for Greece. The proposal also intends to provide clarity for businesses and investors so that they know where is worth investing.

  • A proposal on the land use and forestry sector with the aim to integrate the sector into the EU's target to reduce greenhouse gas emissions by 40% by 2030 under the Paris agreement on climate change. The proposal requires each Member State to ensure that accounted CO₂ emissions from land use (e.g. deforestation) are entirely compensated by an equivalent removal of CO₂ from the atmosphere through action in the same sector (e.g. afforestation). In addition, the proposal gives Member States the flexibility to meet their national emission targets through cuts on the Land Use, Land Use Change and Forestry (LULUCF).

A European strategy on low emission mobility, which will set new CO2 and fuel efficiency standards for cars, vans and trucks –currently under assessment by the European Commission. The strategy also signals at the implementation of new “real driving” emissions tests – following the VW’s car emission scandal–, as well as the consideration of different measures to incentivise low- and zero-emission vehicles in a “technology neutral way”, such as setting specific targets for them. This low mobility strategy barely addresses air, shipping and rail emissions.

The package has already been widely criticised by the industry and NGOs for lack of ambition, and for sending mixed messages on the need for Europe to raise the bar when it comes to climate change. In particular, the effort Sharing Decision has been condemned for rewarding worst performers, as small and high polluting Member States would only have to minimally reduce their carbon emissions.

Moreover, there has been strong opposition to the proposal on land use and forestry, prompting NGOs to sign a letter urging the Commission to promote carbon removals from forest and land use in addition to (and not replacing) emission reductions in agriculture, waste, buildings.

Next steps

These proposals will now be reviewed by the European Parliament and Council, with the aim to reach an agreement by end of 2017 at earliest (mid-2018 more likely).

What does this mean for businesses?

Agreements reached taken on these proposals, whether in terms of targets, measures or incentives will have an impact on how the transport, buildings, waste and forestry sectors are regulated both at European and national level. The legislative process is now starting, and this would be a good moment to engage with policy-makers and provide your own point of view on these measures and what they mean to your specific business. New Ways can help you with that. If you want to know more, please contact:

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