Carbon Market Watch

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Europe’s leaders must protect the 2030 climate target from loopholes

07 Oct 2014

EU2030_loopholes_labelOn 23 and 24 October 2014, EU’s Heads of State will determine Europe’s future action to avoid dangerous global temperature rise. It is expected that they will propose to reduce Europe’s domestic greenhouse gas emissions by merely 40% below 1990 levels by 2030. While this target is not nearly enough to combat climate change, some governments and companies are trying to water this target down even further by actively pushing to carry-over the hot air from the current climate framework. The failure to set an adequate 2030 climate target that is not riddled with loopholes could be disastrous for the transformational change that Europe needs for the decarbonisation of our energy system and industries.

The loopholes in our current climate policies will lead to 4 billion tonnes of hot air that is currently putting a dark shadow over EU’s 2030 climate target because it could be directly transformed into future rights to pollute. Without immediate and urgent action, this hot air bubble would effectively cause that the actual emissions reductions under a 40% target may be as low as 26%[1].

The 4 billion future rights to pollute are distributed between the two policy instruments: the EU’s Emissions Trading System (EU ETS) and the Effort Sharing Decision (ESD). While the 2.6 billion tonnes of hot air under the EU ETS is automatically carried-over in the 2030 framework, what is done to the 1.35 billion tonnes of hot air under the ESD is in the hands of our governments now.

The Visegrad countries (Poland, Hungary, the Czech Republic, Slovakia, and Bulgaria and Romania) have already stated their wish to carry-over the hot air into the 2030 climate framework. Some other progressive countries that will be faced with relatively high 2030 climate targets are looking into the subject as well. These countries wish to bank the 1.35 billion surplus, equal to 5% phantom rights to pollute, which would then directly undermine the proposed 40% target.

At the same time, Heads of State are expecting the climate target to do the heavy lifting within the 2030 climate and energy framework, whereas under the 2020 framework, the renewables and energy efficiency targets weighted in as well. Putting all your eggs in one basket is a risky strategy, especially when that basket is full of loopholes, as could be the case with EU’s 2030 climate target. A target that leads to only 26% emission reductions by 2030 would do little to promote efficiency or renewables. Worryingly, governments are also unlikely to agree on nationally binding renewable and energy efficiency targets for the year 2030.


This incoherent approach to EU’s future climate and energy policies could turn out to be disastrous for the development of innovative renewable technologies and the uptake of efficiency measures. The emissions reductions that were achieved in Europe so far, have been mostly the result of nationally binding renewables targets spurring successful financing schemes and effective EU regulations that increase the energy efficiency of our appliances, machinery and buildings. In other words: the EU’s weak climate targets or faltering carbon market had little to do with actually driving climate action. Thinking that an unambitious and ineffective 2030 climate target will do the job by itself post-2020 is therefore both naive and dangerous.

It is now up to Europe’s Heads of State to decide how our climate and energy future will look like. Continuing with the successful approach of nationally binding renewable targets and binding energy efficiency policies seems like a no-brainer. But if governments want to let the climate target steal the 2030 show, it should be clear that they will not allow any carry-over of hot air into the 2030 framework while settling on a domestic target that reaches well beyond the 40% greenhouse gas emission reductions.

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[1] Calculation with the assumption that the 3.95 billion surplus is used for compliance in the 2020-2030 period, and assuming that EU-28 1990 emissions equaled 5.626 million tons of CO2 (EEA, 2014).