07. 06. 2023
AUTHOR: Linda Kalcher
As the EU institutions are finalising laws to implement the 2030 climate and energy goals, the discussion on the EU’s 2040 climate target has already started. Providing the necessary clarity beyond 2030 is the natural next step on the road toward achieving climate neutrality at the latest by 2050. Some of the laws of the “Fit for 55” and REPowerEU package already set milestones for after 2030, for example on electric vehicles and industrial transformation.
The seamless transition to the policy choices that define the decarbonisation trajectory for 2035 and 2040 can guide net zero production capacities, investments, new economic partnerships and enabling policies. This is vital for investment cycles as industry and investors plan for 10-15 years ahead to have predictability and a clear sense of direction. Systemic transformations and innovation take time to scale up, especially in manufacturing and the energy-intensive sectors. Early action can be a competitive advantage for the EU as China and the US are trying to secure market dominance.
The European Commission 2024-2029 mandate can thus enable and support the big transitional trends with a time horizon up to 2040. The Strategic Agenda to be adopted by Heads of States in June 2024 is an important landing point for agreeing the 2040 climate and energy targets. If they get adopted by next summer, it can inform the implementing package as well as the conversations on the next EU budget.
At the international level, the 28th UN climate summit (COP28) marks the “Global Stocktake”, thus the first formal assessment if countries are collectively on track to meet the goals of the Paris Agreement. Subsequently, countries are invited to submit their 2035 climate targets well before the climate summit in 2025 as well as an update of their 2030 targets with a view on 1.5C window closing rapidly. A global debate on the need to phase out fossil fuels has already started. The conversation on 2035 and 2040 provide an excellent opportunity to discuss what it means for the EU.
In this context, Strategic Perspectives today publishes the analytical backbone and factsheets on three decarbonisation pathways. Climact has modelled net emission reductions of -85%, -90% and -95% by 2040 with inclusion of international maritime and aviation emissions.
Key findings:
- Advancing the power decarbonisation and industrial transformation (circularity, net-zero technology manufacturing and electrification) have the biggest GHG reduction potential until 2035. A just transition, smart allocation of factories and upskilling of workforce are key components for success.
- A well-managed fossil fuel phase down turns into a political necessity to enhance energy security. The 2030 policy framework allows to cut gas and oil consumption by a third. A full phase down trajectory requires additional policies. Targeted support schemes can ensure that climate friendly technologies and the benefits of the transition are accessible to all citizens (electrified equipment, deep renovation, …).
- Investments, availability of revenues across countries and cohesion across the EU need special attention in 2024-2029. EU policies can address the growing risk of an unequal distribution of the economic benefits and of the impacts related to climate change.
A full report will be published in July.
