Reducing carbon emissions: EU targets and policies
Read what measures the European Union is taking to meet targets to reduce carbon emissions as part of the Fit for 55 in 2030 package.
Table of contents
- EU climate change goals and the European Green Deal
- An Emissions Trading System for industry
- Cutting emissions from transport in Europe
- Reducing emissions from the energy sector
- Carbon pricing on imported goods
- Tackling carbon emissions from other sectors
- Using forests to capture emissions
- Reducing greenhouse gases beyond CO2
EU climate change goals and the European Green Deal
To tackle climate change, the European Parliament adopted the European Climate Law, which raises the EU’s target of reducing net greenhouse gas emissions at least 55% by 2030 (from the current 40%) and makes climate neutrality by 2050 legally binding.
The Climate Law is part of the European Green Deal, the EU’s roadmap towards climate neutrality. To reach its climate goal, the European Union has come up with an ambitious package of legislation known as Fit for 55 in 2030. It comprises several interlinked revised laws and new proposed laws on climate and energy.
An Emissions Trading System for industry
The EU's Emissions Trading System (ETS) aims to reduce the industry's carbon emissions by obliging companies to hold a permit for each tonne of CO2 they emit. Companies have to buy them through auctions. There are some incentives to boost innovation in the sector.
The European Emissions Trading System is the world's first major carbon market and remains the largest one. It regulates about 40% of total EU greenhouse gas emissions and covers about 10,000 power stations and manufacturing plants in the EU.
To align it with the emission reduction targets of the European Green Deal, Parliament approved an update of the scheme in April 2023. Reforms include the cutting of emissions in sectors covered by the Emissions Trading System to 62% by 2030, from 2005 levels.
Cutting emissions from transport in Europe
Emissions from planes and ships
Civil aviation accounts for 13.4% of total CO2 emissions from EU transport. In April 2023, Parliament backed a revision of the Emissions Trading System for aviation to apply to all flights departing from the European Economic Area - which is made up of the EU plus Iceland, Liechtenstein and Norway. Those departing and landing outside the area are currently covered by the voluntary Carbon Offsetting and Reduction Scheme for International Aviation (Corsia).
The EU also wants to phase out free allocations for aviation by 2026 and promote the use of sustainable aviation fuels.
Parliament and the Council agreed that used cooking oil, synthetic fuel or even hydrogen should gradually become the norm for aviation fuel. They want suppliers to start delivering sustainable fuel from 2025, reaching 70% of all aviation fuel in EU airports by 2050.
Maritime transport will also be included in the Emissions Trading System. MEPs want the maritime sector to cut greenhouse gas emissions from ships by 2% as of 2025, 14.5% as of 2035 and 80% as of 2050 compared to 2020 levels. The cuts should apply to ships over a gross tonnage of 5,000, which account for 90% of CO2 emissions.
Road emissions from cars
Cars and vans produce 15% of the EU’s CO2 emissions. Parliament backed the Commission proposal of zero CO2 emissions for cars and vans by 2035 with intermediate emissions reduction targets for 2030 of 55% for cars and 50% for vans.
To reach these targets, all new cars that come on the EU market as of 2035 should be zero CO2 emissions. These rules don’t affect existing cars.
The switch to zero-emission vehicles must go hand in hand with a comprehensive infrastructure for sustainable fuels. In negotiations with the Council, MEPs secured electric charging areas for cars at least once every 60 kilometres along main EU roads by 2026 and once every 120 kilometres for trucks and buses by 2028. Hydrogen refuelling stations will have to be deployed at least once every 200 kilometres along EU main roads by 2031.
A separate emissions trading system will be created for buildings and road transport to put a price on emissions from these sectors, as of 2027 (or as of 2028 if energy prices are exceptionally high).
Reducing emissions from the energy sector
Fuel combustion is responsible for more than three quarters of EU greenhouse gas emissions. Decreasing energy consumption and developing cleaner energy sources are key to reaching the EU’s climate goals and reducing its dependency on imports from non-EU countries.
Consuming less energy
In July 2023, Parliament approved new rules to boost energy savings. EU countries should collectively ensure a reduction in energy consumption of at least 11.7% at EU level by 2030 (compared to 2020 projections of energy consumption in 2030). There should also be annual energy savings of 1.5% (on average) by countries until the end of 2030.
Today the heating and cooling of buildings accounts for 40% of all the energy consumed in the EU. Parliament is working on rules for the energy performance of buildings with the aim of reaching zero-emission building stock by 2050. Rules include:
- renovation strategies
- the requirement for all new buildings in the EU to produce zero-emissions from 2030
- the installation of solar panels on new buildings
Increasing renewable energy
Developing clean energy sources as alternatives to fossil fuels will also help the EU to reduce emissions. Currently, more than 20% of energy consumed in the EU comes from renewable sources.
In December 2022, MEPs demanded that permits for renewable energy power plants are issued faster, including for solar panels and windmills.
MEPs are looking into boosting renewable hydrogen and offshore renewable sources beyond wind, such as wave power. EU funding for natural gas infrastructure projects is being phased out and the money redirected to hydrogen and offshore renewable energy infrastructures.
In September 2023, Parliament backed a deal to boost the deployment of renewable energy in line with the Green Deal and efforts to cut dependency on Russian energy. The new rules aim to raise the share of renewables in the EU’s final energy consumption to 42.5% by 2030, while EU countries should aim for 45%.
Carbon pricing on imported goods
A carbon border adjustment mechanism would encourage companies in and outside the EU to decarbonise, by placing a carbon price on the imports of certain goods if they come from countries with less ambitious climate legislation. It is intended to avoid carbon leakage, which is when industries move production to countries with less strict greenhouse gas emissions rules.
As part of the Fit for 55 package, the EU will create a Carbon Border Adjustment Mechanism applying a carbon levy on imports of certain goods from outside the EU. It will cover goods from energy-intensive industries such as iron, steel, cement, aluminium, fertilisers and hydrogen.
Importers will have to pay any difference between the carbon price paid in the country of production and the price of carbon allowances under the EU’s Emissions Trading System.
The Carbon Border Adjustment will be phased in from 2026 until 2034 at the same time as the free allowances in the EU Emissions Trading System are being phased out. Parliament adopted the rules in April 2023.
Tackling carbon emissions from other sectors
Sectors not covered by the current Emissions Trading System – such as transport, agriculture, buildings and waste management – still account for about 60% of the EU’s overall emissions. The Commission proposed emissions from these sectors should be cut 40% by 2030 compared to 2005.
This will be done through agreed national emission targets in the effort sharing regulation. The national emission targets are calculated based on countries' gross domestic product per capita. Lower-income EU countries will be provided with support.
In March 2023, the Parliament voted in favour of raising the bar for greenhouse gas reduction by 2030 from 30% to 40% compared to 2005 levels.
Using forests to capture emissions
Forests are natural carbon sinks, meaning they capture more carbon from the atmosphere than they release. EU forests absorb the equivalent of nearly 7% of total EU greenhouse gas emissions each year. The EU wants to use this power to fight climate change.
In March 2023, Parliament and Council approved new rules governing the land use, land use change and forestry sector, increasing EU carbon sinks 15% by 2030.
Deforestation and forest degradation have an impact on the EU’s environmental objectives such as combating climate change and biodiversity loss, but also on human rights, peace and security. That is why the EU strives to combat global forest loss.
In April 2023, Parliament approved new rules obliging companies to verify that products sold on the European market have not contributed to deforestation or forest degradation anywhere in the world.
Reducing greenhouse gases beyond CO2
To mitigate global warming, the EU is also making efforts to regulate other greenhouse gases heating up our planet, such as methane, fluorinated gases and ozone-depleting substances. Although they are present in smaller volumes than CO2 in the atmosphere, they can have a significant warming effect and are covered by the Paris Agreement.
