Implementing the European Green Deal has become the smartest economic and security choice. However, the current framework until 2030 doesn’t adequately address the magnitude of interconnected challenges the EU is facing: volatility of energy prices, industrial competition from the US and China as well as high import dependence on few fossil fuel exporters and China for key technologies.
Our new report ‘Choices for a more Strategic Europe’ sets out sectoral transition pathways, related greenhouse gas emission reductions and policy recommendations that can inform EU policy making in the following years based on a ‘Visionary Scenario’ with a 90% net emissions reduction by 2040.
The transition to climate neutrality by 2050 at the latest constitutes an opportunity for the EU to strengthen its energy security, industrial competitiveness and resilience of supply chains while creating future-proof jobs.
Three key choices provide the solutions to the multiple challenges the EU faces and require planning beyond 2030:
The timely publication of the EU 2040 climate pathway by the European Commission will be essential for guiding those choices.
Industry and investors plan for 10-15 years ahead, they need predictability and a clear sense of direction beyond 2030. Systemic transformations and innovation take time to scale up. Our findings show that advancing the power decarbonisation and industrial transformation (circularity, net-zero technology manufacturing and electrification) have the biggest emissions reduction potential until 2035. A just transition, smart allocation of factories and upskilling of workforce are key components for success.
Defining a 2040 pathway allows the EU to plan these structural changes in advance, determining the right level of investment and the policy framework that will support these trends.
COP28 and the Global Stocktake coming up this year start the international “ambition cycle”. Countries are invited to pledge new 2035 targets in the first quarter of 2025 as well as an update of their 2030 targets with a view on the window to keep the 1.5C within reach closing rapidly.
With international conversations focusing on “fossil fuel phase out”, the 2035 and 2040 horizons provide an excellent context to discuss what it means for the EU. Setting out its own fossil fuel phase out trajectories enhances the EU’s credibility at the international level.
On the basis of the full analysis, we developed our report with trajectories and policy recommendations for the energy and industry sector.
The modelling happened in partnership with CLIMACT and using their Pathways Explorer. The Pathways explorer shows the evolution of societal and technology choices, manually optimising multiple dimensions along the context evolution. Investments needs and job creation have not been assessed in this work but could be in future publications. In terms of results and data, the current exercise models the EU27 region as a whole. The online tool has a yearly granularity.