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Towards EU climate neutrality: progress, policy gaps and opportunities
In the report 'Towards EU climate neutrality: progress, policy gaps and opportunities’, the European Scientific Advisory Board on Climate Change recommends a series of actions to put the EU on track towards climate neutrality.
Based on an assessment of more than 80 indicators, the Advisory Board found that more efforts are needed across all sectors to achieve the EU climate objectives from 2030 to 2050, and particularly in buildings, transport, agriculture and forestry.
The Advisory Board acknowledges the potential of the Fit for 55 policy package to speed up EU’s decarbonisation, but warns that additional measures are imperative if the EU is to achieve its climate neutrality objective by 2050 at the latest.
With this in mind, the Advisory Board outlines 13 key recommendations for a more effective implementation and design of the EU climate policy framework. This will require action in the coming years, both to effectively implement recently agreed legislation and to start preparations for the post-2030 climate policy framework.
Implementing the Fit for 55 package and phasing out fossil fuel subsidies
Delivering on the Fit for 55 package now largely depends on national action. With only seven years left until 2030, the Advisory Board urgently calls on national governments to enhance and implement their national energy and climate plans to secure EU emission reductions of 55% or more by 2030 compared to 1990.
The Advisory Board recommends EU decision-makers to swiftly conclude negotiations on key initiatives under the European Green Deal that are still pending. The Advisory Board emphasises the overdue revision of the Energy Taxation Directive, which is still blocked at the Council level, to better incentivise the deployment of clean alternatives over fossil fuel use.
The Advisory Board also highlights as a top priority for policy makers the need to put forward clear plans and timelines to urgently and fully phase out harmful fossil fuel subsidies across the EU. Far from decreasing, subsidies have remained stable at €50 billion per year, and even surged in recent years, which undermines the incentive to reduce fossil energy use and decreases the public budget available to support climate action.
Aligning EU policies with energy and climate goals, strengthening emissions trading and addressing demand
The Advisory Board has identified policy options to achieve the necessary emissions reductions to reach climate neutrality in the EU by 2050 at the latest.
The advice includes recommendations that should be implemented as soon as possible, leading to reductions of at least 55% by 2030. Additional advised actions need to be considered in the coming years to be implemented at the beginning of the next decade, leading to climate neutrality by 2050.
One key recommendation is to make EU policies fully consistent with the need to phase out fossil fuels. Whereas the EU has pushed for an ambitious outcome on this topic at the recent COP28, the Advisory Board warns that the EU’s own policies are not yet fully aligned with such phase out and risk locking EU’s energy infrastructure into emission-intensive fossil fuels.
The Advisory Board also calls for further reforms to existing EU policies for the post-2030 period, including additional adjustments to the flagship EU emissions trading systems (EU ETS) and to the overall framework for governing climate action and enforcing compliance of Member States.
In addition to improving existing policies, the Advisory Board recommends introducing new policies to pursue more ambitious reductions in demand for material, energy and greenhouse gas-intensive products. Doing so would result in higher co-benefits and reduced trade-offs compared to an approach that is predominantly focused on cleaning up supply.
Addressing emissions from agriculture and forestry
The Advisory Board found that emissions in agriculture are not decreasing, mainly due to a lack of adequate financial incentives for farmers. At the same time, EU forests are absorbing less and less carbon, as these are getting older and face worsening impacts from climate change. Current incentives for biomass use risk adding further pressure on these forests, as the climate cost of wood harvesting is insufficiently reflected in its price.
To address this, the Advisory Board recommends better aligning the EU’s common agricultural policy with the EU climate ambitions, including by shifting support away from emission-intensive agricultural practices such as livestock production, and towards lower-emitting products and activities.
In addition, the Advisory Board recommends the introduction of some form of emissions pricing in the agricultural and land use sectors by 2031 at the latest. The coming years should be used to design a suitable approach that takes into account the specific characteristics of these sectors.
Ensuring a just transition and public support
A just and fair transition is needed to maintain public support for climate action. To ensure this, the Advisory Board calls for a systematic assessment of the potential socio-economic impacts of climate measures, the implementation of redistributive measures targeted at the most vulnerable and impacted households and businesses. The design of climate policies and complementary social measures should be based on a transparent and participatory process.