The European Union's climate policy

In the international framework the European Union's climate policy until 2020 is steered by the Kyoto Protocol to the United Nations Framework Convention on Climate Change and, within the European Union, the climate and energy package.

During the first commitment period of the Kyoto Protocol in 2008–2012, the European Union (EU-15) committed to reducing greenhouse gas emissions by 8% from the 1990 levels. The EU's emissions reduction target for the second commitment period 2013–2020 is 20% compared to the 1990 levels.

By 2030 the greenhouse gas emissions should be reduced by at least 40% from the 1990 levels. Besides the concrete measures in the climate and energy package 2021–2030, visions for the EU climate policy until 2050 are set out in the European Commission’s Roadmap for moving to a low carbon economy.

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Climate and energy package 2020

Legislation contained in the EU climate and energy package 2020:

The Emissions Trading System was created to promote the reduction of emissions in the European Union as cost-effectively as possible by using market-driven methods. The Emissions Trading System Directive contains provisions on taking the risk of carbon leakage into account to prevent energy-intensive industries from relocating their production elsewhere. Since 2013 auctions have been the primary means of distributing greenhouse gas emission allowances. The common reduction target for greenhouse gas emissions in the emissions trading sector set for the EU Member States to 2020 is 21%, compared to 2005.

Sectors not covered by the ETS include construction, building-specific heating, housing, agriculture, transport and waste management, and industrial F-gases, although these sectors account for a little more than a half of the EU's greenhouse gas emissions. Emissions in sectors not covered by the ETS are regulated under the Effort Sharing Decision. The common reduction target for greenhouse gas emissions in the non-emissions trading sector set for the EU Member States to 2020 is 10%, compared to 2005. Finland's individual target is to reduce these emissions by 16%.

The Carbon Capture and Storage Directive establishes a permit procedure to ensure that new technologies are used from the very beginning in a way that is safe for the environment and human health.

According to the Renewable Energy Directive, by 2020 the share of energy from renewable sources within the EU will be increased to 20% of energy end-consumption and to 10% of transport energy end-consumption. Finland's individual target was to increase the use of renewable energy to 38%. This was achieved already in 2014 when the share of energy from renewable sources rose to 38.7%.

Climate and energy package 2030

By the European Council conclusions of 14 October 2014 the EU is committed to reducing total greenhouse gas emissions by at least 40% by 2030, compared to 1990. This is also the contribution to the emission reductions under the Paris Agreement notified by the EU. The target is divided between the emissions trading sector on the EU level and national effort sharing in non-emissions trading sectors. The reduction target compared to 2005 in the emissions trading sector is 43% and in the non-emissions trading sector it is 30%. The 2030 package contains the targets and measures for the land use, land use change and forestry sector (LULUCF) as well. The share of renewable energy in the EU is to be increased by 32% and energy efficiency improved by 32.5%.

Key legislation contained in the EU climate and energy package 2030:

  • Revised Emissions Trading System Directive (ETS) (2018/410/EU) (pdf)
  • Effort Sharing Regulation (ESR) (2018/842/EU) (pdf)
  • LULUCF Regulation (2018/841/EU) (pdf)
  • Governance of the Energy Union Regulation
  • Renewable Energy Directive
  • Energy Efficiency Directive

Under the revised ETS Directive, from 2021 the emission allowances to be distributed on an annual basis will decrease by 2.2% instead of the present 1.74%. Thus the emission reduction in the ETS sector to 2030 will be 43%, compared to 2005. After the reform the system will also more efficiently steer the operations as it strengthens the market stability reserve to be established in 2019. This enables to reduce the oversupply of emission allowances more quickly, with part of the oversupply to be automatically annulled. The aim is also to prevent carbon leakage by distribution emission allowances to operators free of charge if certain criteria are met. In future the trade and emission intensity will be considered simultaneously for assessing the risk of carbon leakage.

Sectors not covered by the ETS include construction, heating of buildings, housing, agriculture, transport and waste management, and industrial F-gases, although these sectors account for a little more than a half of the EU's greenhouse gas emissions. Emissions in sectors not covered by the ETS are regulated under the Effort Sharing Regulation.

The Effort Sharing Regulation sets down emission reduction obligations to all EU Member States. Finland must reduce emissions by at least 39% compared to 2005 by 2030. The obligation concerns all non-ETS sectors, including transport, agriculture, heating of buildings and waste management. To meet the obligations, the use of flexibility instruments is allowed, including the transfer of a small number of emission reduction units from sectors covered by ETS or the LULUCF Regulation to the effort sharing sector. Annual surplus of the emission reduction units can also be transferred to the following years or units may be acquired from other Member States.

The LULUCF Regulation determines how the land use, land use change and forestry sectors are taken into account in the climate objectives. The regulation covers the emissions released from forests, agricultural lands and wetlands as well as sinks, i.e. carbon dioxide sequestered by the vegetation and soil. Greenhouse gas emissions and sinks are monitored on the basis of the calculation rules laid down in the regulation. The aim is for the land use sector to sequester more carbon than is being released. There are certain restrictions on how the forest carbon sink is taken into account in the calculation. For this purpose the Member States must prepare a reference level concerning forests for the period 2021 to 2025 and 2026 to 2030.

The Governance of the Energy Union Regulation will create a framework for the activities of the Energy Union, laying down rules for monitoring both the energy sector and greenhouse gas emissions. Among the key elements in the governance are the national climate and energy plans. The draft plans are to be submitted to the Commission by the end of 2018. The final plans will be approved jointly by the Member States and Commission by the end of 2019. The Governance of the Energy Union Regulation also obliges Member States to draft a long-term low-carbon strategy extending to 2050.

The Renewable Energy Directive sets a 32% target for renewable energy to 2030. No national targets have been set, but each Member States will give a proposal for its own objective in the national climate and energy plan. If necessary, the national targets will be adjusted so that the target for the EU as a whole will be met. The directive specifies binding sustainability criteria for the EU concerning transport biofuels and bioliquids, and for the first time also for solid and gaseous biomass fuels used in electricity and heat production. The Energy Efficiency Directive sets a 32.5% target for improving energy efficiency to 2030. Member States are obliged to improve their energy efficiency by 0.8% a year in 2021-2030.

EU climate policy to 2050

In 2011, the European Commission published a Roadmap for moving to a competitive low-carbon economy by 2050. The Roadmap defines a cost-effective path to a low-emission, climate-friendly and competitive Europe. The Roadmap also describes the European Union's vision of how it can reach the target of cutting greenhouse gas emissions by 80% by 2050, and sets concrete targets for achieving this goal.

The Commission is preparing a new long-term climate strategy that is based on the Paris Agreement and the most recent scientific knowledge.

Further information

Magnus Cederlöf, Senior Environmental Adviser, tel. +358 295 250 060, firstname.lastname@ym.fi

Published 2018-09-25 at 9:48, updated 2018-09-20 at 8:48