With the new 2040 climate targets, Europe will emit 850 MtCO2eq compared to today’s 3.2 Gt
Europe aims to reduce its greenhouse gas emissions by 90% by 2040 compared to 1990. The interim target presented by the Commission today will have to guide future climate policies to bridge the gap between the Fit for 55 legislative package measures, with Horizon 2030 and broadly already approved, and the goal of climate neutrality by half a century. It will not be a short or linear process. Europe’s new 2040 climate targets have been presented in communication, an EU executive act that indicates the course for future legislative initiatives but is not binding. Moreover, it will not be this Commission but the next – after the EU elections in June 2024 – to translate this communication into legislative proposals. Therefore, we will probably see the first concrete acts at the end of the year or the beginning of 2025, depending on how quickly the next Community executive will take office. Given the widespread discontent towards the Green Deal, both among member countries and in an increasing fraction of the electorate, the targets announced today may be drowned.
All details of Europe’s new 2040 climate targets
The EU Commission’s communication on Europe’s 2040 climate targets presents the Community’s emission reduction target in 30 pages and a chapter on “costs of inaction”. The second half of the document describes what it means to target -90% greenhouse gases in 16 years for the various industrial sectors.
All the forecasts are based on some “enabling factors”, without which, according to the Commission, it will not be possible to cut emissions by 90% by 2040. These include “the full implementation of the agreed framework for 2030”, namely the Fit for 55, “the guarantee of the competitiveness of the European industry” and “equal conditions with international partners”, i.e. the application of a sound strategy for industrial decarbonisation and a CBAM that gives the hoped results. And again, “a greater focus on a just transition that leaves no one behind”, the path started with the Social Fund for the Climate, and “a strategic dialogue on the post-2030 framework, including with industry and the agricultural sector”.
What it means to cut emissions by 90% by 2040
The Commission adopts the most ambitious option out of the three outlined by the European Scientific Advisory Board on Climate Change (ESABCC), the EU’s scientific advisory body on climate, which last June recommended a 90-95% reduction in greenhouse gases. It does it by calibrating on the bottom edge of the fork.
Specifically, it means that by 2040, Europe will have to emit less than 850 million tonnes of CO2 equivalent (MtCO2eq) per year (excluding those generated by land use, land use change and forestry – LULUCF) and be able to count on removals of the CO2 from the atmosphere, between solutions based on nature and industrial technologies, equal to 400 MtCO 2eq. According to data from the European Environment Agency (EEA), 2021 the EU generated 3,241 billion tonnes of CO2eq (GtCO2equ) excluding LULUCF emissions and the reduction compared to 1990 was 30.41%.
We’re going to push the “just share” of the global carbon budget
Compared to the ESABCC option aimed at 85-90%, the Commission’s chosen path envisages faster investments for spreading new low-carbon technologies (hydrogen through electrolysis, carbon capture and use and industrial carbon removal) between 2031 and 2040.
Nevertheless, the trajectory would allow to generate cumulatively, between 2030 and 2050, about 16 GtCO2eq – understood as net emissions, that is, counting also those removed through natural or technological solutions. ESABBC instead recommended not exceeding 11-14 GtCO2eq, corresponding to the “fair share” of the global carbon budget for the EU in a scenario compatible with global warming below 1.5°C with a limited and temporary exhaust.
How much do the EU’s new 2040 climate targets cost?
Aligning EU climate policies with the new 2040 targets means mobilising EUR 710 billion in investment for the energy sector every year between 2031 and 2040, with total costs (including capital costs) amounting to 12.9% of European GDP. A little more than was already done in 2011-2020, when the percentage was 11.9%.
At the same time, the cost of importing fossil fuels is expected to fall to less than 1.4 per cent of GDP by 2040. Moreover, with possible progress in other areas, such as the circular economy, the investment needed between 2031 and 2050 for the energy sector could be cut by 7%, i.e. EUR 45 billion per year, and the projected investment for the transport sector by 9%, saving EUR 127 billion.
The costs of inaction, the Commission emphasises, are much higher. “In the period 2031-2050, the cumulative additional cost of GDP of a path that leads to a worsening of global warming could amount to 2.400 billion euros in the EU, compared to the costs forecast by a path compatible with the 1.5°C target of the Paris Agreement,” says the communication on Europe’s new 2040 climate targets.
The Green Deal becomes an Industrial Decarbonization Pact
The Commission argues that Europe’s 2040 climate target “will help European industry, investors, citizens and governments to make decisions in this decade that will keep the EU on the right track towards achieving its climate neutrality target by 2050.” This target also gives signals on how to invest and plan effectively in the long term, minimizing the risks of stranded assets.
“The Green Deal must now become an industrial decarbonization pact that builds on existing industrial strengths, such as wind, hydropower and electrolytes, and continues to increase national production capacity in growing sectors such as batteries, electric vehicles, heat pumps, solar photovoltaics, CCU/CCS, biogas and biomethane and the circular economy. Carbon pricing and access to funding are also crucial to achieving emission reduction targets by European industry,” the Commission adds.
Read here the communication on the new climate targets for 2040 Europe.