Vulcan Insight | EU agrees first legally binding European Climate Law

Just in time for Earth Day and US President Joe Biden’s global climate change summit, the European Parliament and Member States agreed on reducing greenhouse gases by at least 55%, as compared to 1990, in the EU’s first legally binding climate law. The agreement was reached in the early hours of Wednesday morning after six in-depth negotiation rounds. 

Initially proposed by European Commission President Ursula von der Leyen when setting out her 5-year political objectives to the European Parliament in late 2019, the Commission’s senior leadership published the proposal together with its outline for a European Green Deal in the last days before the global COVID-19 pandemic hit.

As is the case with almost any significant and impactful legislative proposals, the final outcome is a compromise that allows everyone to sign on, while also leaving room for further critiques and future adjustments.

While the compromise deal is a “great disappointment” for German Green MEP and rapporteur, Michael Bloss, the European climate law, for the first time, enshrines a legally binding carbon reduction target into EU, and thus, national law – a commitment unimaginable just a few years ago, especially considering the widely different starting points and attitudes towards the economic impacts such would have. In fact, according to according to EurActiv, half of Europe’s 324 coal-fuelled power plants have either closed or are scheduled to be so before 2030.

To compensate for the different starting points among the EU’s 27 countries and get the critical the buy-in of central European countries, particularly Poland, Hungary and Czechia, agreed for the reductions target to be EU-wide. Whilst this allows different countries to go at their own speed, depending on their respective abilities, it should ensure that the EU, as a collective, will reach its net greenhouse gas emissions reduction target  of at least 55% by 2030 compared to 1990 and carbon neutrality by mid-century.

To assuage MEPs’ concerns that counting forests and CO2 removal toward the 2030 goal would weaken Member States’ incentives to actively reduce emissions, the agreement has specific language to promote the growth of so-called forest sinks. The agreement also aims to limit the level to which individual governments can rely on CO2 removals to achieve their respective targets.

Although the 55% reduction target falls short of the Parliament’s proposal of 65%, it is a significant increase from the current voluntary target of 40% by 2030. Moreover, in a similarity to the effect the General Data Protection Regulation has had in the data space, the Portuguese Presidency of the Council of the EU said the now agreed climate law will be a central pillar around which all future EU climate, energy, transport and agriculture legislation will be formed. In that way, it is set to radically affect and transform every aspect of European citizens’ lives in years to come.

Meanwhile, negotiators agreement on the establishment of an independent European Scientific Advisory Board on Climate Change, which will be tasked with providing scientific advice and reporting on EU measures, climate targets and indicative greenhouse gas budgets, as well as their coherence with the European climate law and the EU’s international commitments under the Paris Agreement. They also agreed for the Commission to develop an annual carbon budget and a potential for a 2040 intermediate climate target, if necessary.

Following the agreement, both the Council and the European Parliament, in Committee and plenary, are still set to scrutinise and vote on the draft deal in the coming weeks.

Compliments of Vulcan Consulting – a member of the EACCNY.