EU’s Long Term Strategy offers hope for net-zero carbon future
Today, the EU Commission released its “Long Term Strategy for a Clean Planet For All”, an ambitious plan for Europe to tackle climate change and fulfill its commitment to the Paris Agreement. Carbon Market Watch welcomes the strategy, in particular the EU Commission’s open support for net-zero emissions by 2050.
Of the 8 scenarios outlined in the strategy, two reach net-zero greenhouse gas (GHG) emissions by 2050, but only one, the “1.5LIFE”, truly represents the best and more inclusive option for Europe.
Agnese Ruggiero, Carbon Market Watch policy officer:
“This long-term strategy comes at a pivotal moment for Europe. Net- zero by 2050 is not only a realistic option but also the best way forward to avoid catastrophic climate change. We urge the European Parliament, Council and Member States to fully endorse the net-zero scenario, so that the strategy can be put into action as soon as possible.”
The 388 page strategy includes in-depth analysis of current policy measures and future scenarios that cover all sectors producing greenhouse gas emissions. All scenarios foresee dramatic cuts in emissions from the power and industry sector, especially energy intensive industry and list several measures to achieving these cuts.
Carbon pricing is identified as a key transition enabler for the industry and power sectors. In all scenarios presented the “carbon price would be […] reaching 28 EUR/tCO2 in 2030 and then increasing to 250 EUR/tCO2 in 2050 under the 80% reduction scenarios and 350 EUR/tCO2 under the scenarios that achieve net zero GHG emissions by 2050”.
The sharp increase in carbon prices foreseen in all scenarios is impressive but necessary. How exactly this will happen without a revision of the EU Emission Trading System (ETS) before 2030 remains unclear.
Gilles Dufrasne, Carbon Market Watch policy officer:
“While the recent increase in EU allowance prices is encouraging, reaching the Commission’s net-zero objective will be impossible without a much stronger EU ETS to enforce the polluter pays principle in the industry, power, and aviation sectors.”
The current EU ETS directive, recently revised for its 4th phase, does not set a high enough linear reduction factor -the rate at which annual emissions are reduced- and still includes free allocation of permits to most industrial installations. Indeed, even according to the strategy, if the reduction of the EU ETS cap is kept at 2.2% per year, then by 2050, emissions will be reduced by only 65% compared to 1990 level.
In order to reach carbon price levels that can realistically deliver on the goal of reaching 1.5oC (250-350€/tCO2), Europe must set about making improvements to strengthen the EU ETS already today.
For now, the EU Commission has stated that 2030 targets will not be revised and that this strategy does not intend to launch new policies. However, in 2020 the EU will have to submit its new nationally determined contribution (NDC) to the UNFCCC and the current policies are clearly not enough to meet the Paris Agreement’s objective. The submission of a revised, and more ambitious NDC can therefore be an opportunity to review several targets, including carbon pricing policies.
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25 Feb 2021