European Green Deal or Green Pact for Europe: what's it all about? In this article, we take a look at this new climate policy: objectives, strategy and obstacles, we tell you all about it!
What are the objectives of the Green Deal?
To meet the challenge of ecological transition, the European Union is presenting the European Green Deal, a climate plan aimed at making the European economy modern, competitive and in tune with environmental issues. To achieve this, the green deal aims to be ambitious and socially just, with the following objectives:
- Become the first climate-neutral continent by 2050 (with an intermediate target of 55% reduction in GHG emissions by 2030 compared to 1990 levels).
- Ensuring economic growth "decoupled from resource use".
- Ensure a fair transition by "leaving no one behind".
In order to encourage and oblige European structures (private and public) to evolve in this direction, the Green Deal establishes a binding legislative framework, the progressive deployment of which aims to achieve the objectives by 2050 through :
- the updating of certain regulations.
- the introduction of new measures, including the CSRD for extra-financial reporting and the CSDDD on duty of care.
All economic sectors of the European market are covered by the pact, including transport, energy, agriculture, buildings and industries such as steel, cement, textiles and chemicals, as well as finance.
Why the European green deal?
To put the Green Deal into context, let's look back at the key dates of this European policy:
- 1997: COP3, the Kyoto Protocol is signed. To reduce emissions of six greenhouse gases by 5% between 2008 and 2012, compared to 1990.
- 2015: COP21, the Paris Agreement is signed. To keep the rise in the planet's average temperature well below 2°C compared with the pre-industrial era, if possible at 1.5°C. It also aims to achieve net zero emissions on a global scale for the second half of the 19th century. Putting it into practice: every 5 years, each country must report on the measures it has put in place to reduce its greenhouse gas emissions, with the obligation to present increasingly ambitious actions from one cycle to the next.
- 2019: Ursula von der Leyen is elected President of the European Commission by the European Parliament. Her commitments? To ensure a mandate focused on environmental transition. Putting it into practice: before the end of the year, in November 2019, the European Parliament declares a state of climate emergency.
Following on from these events, the European Commission is making the European Green Deal official in December 2019. This European pact, promised by Ursula von der Leyen during her campaign, unveils ambitious climate targets and a timetable. It aims to establish a binding legislative framework for Europe, with a view to complying with the Paris Agreements.
Who is financing the European Green Deal?
To finance this green transition, which covers all economic sectors, the EU plans to invest up to 1,000 billion euros. In order to mobilize such a budget, the European Union wishes to facilitate both public (EU and member country budgets) and private investment within the framework of its Green Deal, with the help of legislation and an attractive taxonomy for projects linked to sustainable development. For the time being, the breakdown of Green Deal financing is as follows:
- EU budget: €503 billion,
- 279 billion (fund launched in 2021 to boost investment in Europe),
- SEQE funds: 25 billion euros (European carbon market),
- 100 billion (funds to support socio-economically vulnerable territories in the face of the ecological transition),
- National co-financing: €114 billion.
Furthermore, in order to green European finance and bring new funds to the European transition, the EU presented an action plan in 2018 on the"European taxonomy". This will come into force in part in 2022 and in full in 2023.
This, along with the SFDR regulation, another pillar of the Green Deal, aims to steer investments towards low-carbon activities in line with the ecological transition.
What is the European Green Deal's growth strategy?
Europe's climate strategy cuts across all sectors. Here is a non-exhaustive summary of the measures in this green pact for Europe.
Industries: Industrial strategy for a clean and circular economy
To achieve climate neutrality by 2050, preserve our natural environment and strengthen our economic competitiveness, our economy must be fully circular. Today it is still largely linear, with only 12% of secondary materials and resources being reintroduced into it." - Mr Frans Timmermans, Executive Vice President for the Green Deal
In order to move towards a sustainable model, Europe is focusing on a circular economy, which means implementing the following actions:
- Make products more sustainable in the EU, make it a standard: repairability (add consumer indices), reuse, recycling.
- Reducing waste:
- Recovery of waste in the form of second-hand resources (e.g. in construction, battery manufacture, second-hand textiles, etc.),
- Elimination of single-use items, replacement of plastic with biodegradable materials.
Transport: Sustainable and intelligent mobility
Today, 25% of the EU's greenhouse gas emissions come from transport. In order to achieve the desired GHG emissions reduction trajectory, Europe has set itself the target of a 90% reduction in transport-related emissions.
By what means? By promoting rail travel, which alone is responsible for only 0.5% of greenhouse gas emissions linked to travel, with the aim of gradually replacing carbon-intensive modes of transport (airplanes, cars, road transport, etc.). This translates into the following ambitions:
- Abolition of pollution rights for airlines (currently allocated through the ETS, which will be progressively replaced by the carbon tax at the borders),
- End of the sale of internal combustion cars in 2035,
- Development of a European rail core network and liberalisation of the network :
- Promote the use of trains for journeys of less than 500 km, and night trains beyond that,
- Connecting Europe Express: Increase interoperability between existing European networks, i.e. ensure transfer between 3 types of rails (there are currently 3 existing rail spacings in Europe),
- Develop soft mobility in urban areas.
Energy: Clean, affordable and secure energy
72% of Europe's primary energy is of fossil origin. The energy transition envisaged by the EU is based on the substitution of these resources by decarbonised energy and on energy sobriety/efficiency policies. Among the objectives defined :
- Making the energy system more circular: for example, recovering waste heat from factories to heat nearby houses.
- Increase the share of renewable energy in the European energy mix: from 22% in 2018 to 40% green energy by 2030, 84% by 2050
- In particular by exploiting 3% of the available maritime space for offshore wind power: from a current production capacity of 12 GW to 60 GW in 2030, and 300 GW in 2050,
- Increase the share of green hydrogen in the European energy mix (today it constitutes 2% of European energy consumption).
- Improving energy efficiency (e.g. through building insulation): the EU has set a target of reducing its final energy consumption by 1.5% each year between 2024 and 2030.
- Electrify uses, as electricity is a secondary energy that can be "clean".
Agriculture: From farm to table
Agriculture accounted for 10.3% of the European Union's GHG emissions in 2019 (Eurostat). The European strategy for the sector, known as "Farm to Fork", sets a number of objectives:
- Ensuring food security, while respecting global limits,
- Ensuring access to healthy food and promoting sustainable consumption,
- Reduce biodiversity loss (pesticides),
- Increase the share of organic farming from 8.5% in 2019 to 25% in 2030,
- Reduce pesticide use by 50% by 2030,
- Reduce chemical fertilizers by 20%.
Biodiversity: Preservation and protection of biodiversity
According to estimates by the World Resource Institute, between 150 and 200 wild species disappear every day. In order to halt this decline in biodiversity and preserve the balance of existing ecosystems, the EU plans to :
- Extension of protected areas (Natura 2000) to at least 30% of the EU's land area and marine area,
- Reduction of pesticides (see paragraph on agriculture),
- Allocate a significant budget for monitoring and measuring the progress of existing biodiversity actions,
- Planting three billion trees across Europe by 2030.
Social impact: just transition mechanism
In order to "leave no one behind", the European ecological transition is endowed with a fund intended for the most vulnerable entities. 5 billion over the period 2021-2027 mobilised by the Just Transition Fund. It will benefit :
- Citizens: to access re-qualification for jobs in less carbon-intensive sectors, to help them with energy transition and energy efficiency (home insulation),
- Companies: to invest in greener technologies, attract investors.
- The regions: to support this transition and create jobs in the green economy.
How to achieve carbon neutrality? Fit for 55!
Among the elements mentioned above, some are included in the "Fit for 55" climate package unveiled on July 14, 2021, the details of which are and will be discussed for two years. This set of legislative texts aims to compel member states to reduce their carbon emissions and/or develop GHG capture. It groups together 12 measures to move Europe towards climate neutrality by 2050. These include (but are not limited to)
- Updated regulations for the EU Emissions Trading Scheme:
- Extension to more sectors,
- Gradual replacement of free allocation to the most polluting industries by the border carbon adjustment mechanism,
- Increase carbon sinks: reforestation with the planting of 3 billion trees,
- Upward revision of the ambition on renewable energy,
- Tax on paraffin for intra-European flights,
- End of sales of combustion engine vehicles in 2035,
- Tax the most carbon-intensive fuels and redirect use towards more sustainable fuels, for example in aviation and shipping.
The difficulties of the European green deal
The task of achieving a climate-neutral continent by 2050 is colossal, and Europe is a pioneer on the subject, which is very encouraging. Moreover, this Green Deal opens the way for a rise in international standards on environmental issues by encouraging partners to align themselves with European ambitions. It is also an opportunity for Europe to boost its economy and to export an environmentally sustainable model to the world.
While it is very encouraging, implementing such measures in the time available is a major challenge. This is due to the number and diversity of actors involved.
Inequalities in the initial energy mix
Within the EU, member states are divided. On the subject of energy transition, countries start out unequal, with Poland, for example, whose energy resources are 70% coal-based, and Germany, where the majority of energy is still of fossil origin. This division is reflected in the negotiation of legislation, which is often scaled back in terms of ambition, and even in Poland's refusal to sign the green deal.
Socio-economic inequalities: ensuring a green transition that "leaves no one behind
From a social point of view too, we need to ensure that the transition is fair for the most vulnerable households in the face of any price rises: building renovation, food prices (organic and sustainable), access to energy (heating, mobility)... It's possible to see social movements rise across Europe, like the Yellow Vests in France, for example, if households are not properly supported in this environmental transition.
Stormy discussions with lobbies
Finally, in all sectors, the maneuvering of the lobbies is likely to lead to a downward revision of the initial objectives set by the European Union, and delay their implementation. Their primary argument being exposure to tough international competition, it will be necessary to hold negotiations to support a European pact that is equal to today's environmental challenges.
The dates of the Green Deal
What is happening is historic for the European continent, let's hope that the discussions allow the EU to stay on course for decarbonisation and the preservation of ecosystems! Here is a small timeline to remind you of the key dates in the past and the future.
Resources :
- 1000 billion for the Green Deal
- The European Green Deal Investment Plan and Just Transition Mechanism explained
- Farm to Fork strategy
- Biodiversity strategy
- Energy and Green Deal
- Green Deal and climate package: the EU aims to be carbon neutral by 2050
