2023 is bound to have an outsized impact on the EU’s climate policy. The preparation done this year will lay the foundation for the new EU climate target, to be proposed in the spring of 2024. It will shape the policy landscape for the next 15 years. However, so far it’s flying largely under the radar and is not getting the attention it deserves.
2022 was the core year of delivery in EU policymaking. It had a supercharged agenda under the FitFor55 package — so much so that it was a real challenge to keep up with all the developments.
The current year should have a slightly slower pace. Notable developments will include the finalisation of several energy files under the FitFor55 package, the negotiations on the Carbon Removal Certification Framework, and the draft National Climate and Energy Plans. The newly found bandwidth is, however, already being consumed by new developments, including the EU’s response to the Inflation Reduction Act.
Next up — 2024. For many, it is seen as a quiet year in EU policy-making. The year of European elections. The year of campaigning and changing guard in the European Commission and European Parliament.
But it will also be the year of proposing the EU’s 2040 climate target and climate budget1 for 2030-2050. The proposal’s timing is linked to the global stocktake under the Paris Agreement. The first global stocktake takes place in 2023, defining the upcoming COP28 as a “Global Stocktake COP” or an “ambition COP”.
According to the European Climate Law, the proposal for the EU’s 2040 target will be published “at the latest within six months of the first global stocktake”. This means spring 2024. The key proposal which will shape the EU’s climate policy in the medium term will be one of the last crucial deliverables of the current Commission.
EU’s 2040 Climate Target
The EU has already agreed on climate targets for 2030 and 2050 in its Climate Law. Emissions will be cut by 55% compared to 1990 by 2030, with recently agreed policies helping to reduce emissions even more. The 2050 target is EU-wide climate neutrality.
What is currently missing is the defined path from 2030 to 2050, and that is what the 2040 target and its accompanying 2030-2050 climate budget will provide. The answer to the question “how are we going to get there?” whilst providing essential policy predictability to all the stakeholders.
As already mentioned, the 2040 target will be accompanied by a climate budget for 2030-2050. This is the first for the EU. Some Member States have been asking for a climate budget for well over a decade, and the UK has used carbon budgets for a long time. But for the EU, it will be a completely new regulatory tool. It remains to be seen how it impacts other policies in practice.
European Scientific Advisory Board on Climate Change (Advisory Board) is one of the first organisations to provide substantial input for preparing the EU’s 2040 target and climate budget. The Advisory Board, established by the European Climate Law, provides independent scientific advice and produces reports on EU measures, climate targets and indicative greenhouse gas budgets and their coherence with the European Climate Law and the EU’s international commitments under the Paris Agreement.
In January 2023, the Advisory Board submitted its initial recommendations for the 2040 climate target proposal to the European Commission. The recommendations outline the tremendous complexity of the task, set high quality and transparency standards and highlight the unavoidable value judgements in target setting. The visual below shows the five key areas for European Commission to consider in their upcoming analysis.
Source: Setting climate targets based on scientific evidence and EU values: initial recommendations to the European Commission.
The document is a great resource to help understand the considerations around the EU’s “fair share”, quantifying pathways, assessing the implications of different pathways and using value judgements. And it also offers a structured path for the Commission with its templates of steps, assessments and frameworks.
The 2040 target will be shaped in 2023
This is the first round of advice from the Advisory Body. They have sent it in to provide timely input to the process. Indeed, whilst the European Commission proposal will come out in the spring of 2024, the preparations have already started and will largely take place in 2023.
Waiting for the proposal to be published before engaging means lagging behind the process and having much fewer options to influence the outcome. For example, the contents of the Commission’s impact assessment will be instrumental in defining the possibilities and options around the design of the target. It’s nearly impossible to get the legislators to agree to solutions that have not been covered in the impact assessment.
The 2040 target is so broad that one can bring up endless aspects. Let’s take a closer look at carbon removal as an example. The design of the 2040 target defines how well it incentivises emission reductions and carbon removal over the next 15 years or so. The considerations around the coverage of novel removals, separation of emission reduction and removal targets, and the specificity of the removal target(s) all have different impacts. And 2023 is the year when the stakeholders can provide their guidance.
Looking back at previous scenarios takes us to 2018, when the Commission published its Clean Planet for All Communication with an in-depth analysis. This informed the European Green Deal Communication and its Long Term Strategy. However, the underlying data of that analysis raised questions already at the time. The way it covered capturing, reusing and storing CO2 and related climate impact was very confusing. The 2040 target has to rely on a better foundation.
The design of the 2040 target and climate budget will have a trickle-down effect on future policy revisions. Taking again carbon removal as an example, it will define how carbon removal will be incorporated into the policy tools like the EU Emissions Trading System, Effort Sharing Regulation and more.
The Advisory Board will publish additional quantitative advice in the first half of 2023, including interim target values. Meanwhile, the engagement of stakeholders should pick up via an upcoming stakeholder consultation. Look out for the announcement!
The shaping of the EU’s 2040 climate target and 2030-2050 climate budget has started but is currently not getting the attention it deserves. The next few months will see a stakeholder consultation, further input from the Advisory Board, and increasing scrutiny of the upcoming proposal. 2023 will define what shape and form the 2040 target can take during the upcoming negotiations once the proposal is out. And the 2040 target will shape the next revisions of the EU’s climate policy. This is the year to engage and impact.
1 – IPCC’s global carbon budget includes only carbon dioxide, but the EU will prepare a greenhouse gas budget that covers all greenhouse gases. To reflect this, I’m using the term “climate budget” instead of “carbon budget”
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