Does the European Climate Law have the support it needs?

The European Commission has unveiled its proposal for a European Climate Law, which proposes a legally binding target of net zero greenhouse gas (GHG) emissions by 2050. The EU Institutions and Member States are therefore collectively bound to take the necessary measures at EU and national levels to meet the target. The new Law also aims to guarantee that all EU policies contribute to this goal and that all sectors play their part. 

The proposal is a clear move by the EU to firm their position as a pioneer in fighting the climate crisis, as European Commission President Ursula von der Leyen pledged to make Europe the first net-zero continent. The Commission also hopes to encourage other global players to follow suit, especially given the upcoming EU-China Summit in September, and COP26 in Glasgow in November. 

What’s in the proposal? 

Aside from making net zero emissions by 2050 a legally binding target for the EU, the proposal sets out a number of other measures aimed at accelerating climate efforts: 

• Based on a comprehensive impact assessment, the Commission will propose a new 2030 EU target for GHG emission reductions by September; the Climate Law will be amended once the impact assessment is completed. 
• By June 2021, the Commission will review, and where necessary propose to revise, all relevant policy instruments to achieve the additional emission reductions for 2030. 
• The Commission proposes the setting of a 2030-2050 EU-wide trajectory for GHG emission reductions, to measure progress and give predictability to public authorities, businesses and citizens by September 2023, and every five years thereafter, the Commission will assess the consistency of EU and national measures with the climate-neutrality objective and this trajectory. 
• The Commission will issue recommendations to Member States whose actions are inconsistent with the climate-neutrality objective, and Member States will be obliged to take due account of these recommendations or to explain their reasoning if they fail to do so.  

What do Member States say? 

All Member States excluding Poland have signed on to the EU’s net zero target; the real fight will be about increasing the bloc’s current goal of cutting emissions by 40% by 2030 - a step that's crucial to hitting the 2050 target, but which the Law dodges for now. 

Ahead of the proposal being published, twelve EU countries (Austria, Denmark, Finland, France, Italy, Latvia, Luxembourg, the Netherlands, Portugal, Slovenia, Spain and Sweden) sent a letter Executive Vice-President Timmermans, urging the Commission to propose a 2030 target by June at the latest, citing the September EU-China summit and the November UN Climate Summit as crucial milestones.  

Most of these countries support the Commission in calling for a 55% target, with some states aiming higher. Denmark, for example, has committed nationally to a 70% cut in emissions by 2030, and Finland are heading for net zero emissions by 2035. 

However, accusations of hypocrisy have arisen as three of the letter’s signatories, France, Luxembourg and Spain, have yet to turn in their National Energy and Climate Plans (NECPs) for 2030. The Commission says these Plans are essential for its ongoing impact assessment which is to be carried out before any increase of the target. 

On the other side, countries such as the Czech Republic and Hungary have said publicly that they will not consider any proposal if there is not a sufficient impact assessment on the costs. Central and Eastern European governments, led by Poland, are also expected to resist binding short-term measures, citing concerns around jobs and competitiveness due to their coal-reliant industries. 

Who will pay for higher ambition? 

Much of the division comes when Member States ask who will pay for the EU’s climate leadership. Wealthy nations such as the Netherlands, Sweden and Denmark are pushing hard for higher climate goals, whilst also resisting boosting their contribution under the EU's next seven-year budget. 

The gap has been exacerbated by the UK’s exit from the bloc, as Member States must find a way to plug a hole of up to €75bn to finance major initiatives such as the Green Deal. Ursula von der Leyen has pledged that at least 25% of the budget should be allocated to fighting climate change and  in losing the UK, who have committed to a 57% emission reduction by 2030, other countries will be asked to step up. 

Member States are already disagreeing over the €7.5bn proposed under the Just Transition Fund (JTF), the Commission initiative that would help carbon-heavy regions go green, and that would most benefit Poland, Germany, Romania and the Czech Republic. 

France and the Netherlands want to tie fund allocation to the 2050 climate-neutrality goal, an idea European Council President Charles Michel partially backed in his failed budget bid. Poland, which could lose half of its promised JTF allocation, is resisting, and it's unclear if the proposal will endure. 

A further complaint, this one coming from Spain, is that the fund rewards coal-reliant nations such as Poland and Germany over countries that went green earlier. These are not divisions which will be healed easily, and there are fears that the Commission’s Climate Law could serve to further divide national politicians.  

What does the Parliament say? 

In a resolution on the European Green Deal in January, the Parliament said the EU should cut emissions by 55% by 2030, and set an “intermediate” target for 2040, with the aim of achieving net-zero greenhouse gas emissions by 2050. The left-wing groups GUE-NGL and Greens-EFA support higher targets of 70% and 65% respectively, whilst most of the ECR group and far-right ID group voted against a 2030 target increase. 

S&D and Greens-EFA have also called for the climate law to offer more than just climate targets. For example, they call for a scientific advisory body to make sure EU policy is in line with climate goals and are vocal on the importance of a socially just transition. 

Chair of the ENVI Committee Pascal Canfin is keen to rush through the final climate law before a UN climate conference in November, leaving the institutions with a short amount of time to battle it out over the details. 

The CBI wants your feedback on the Commission’s plans and how they could affect your business; you can get involved here. For any further information, please contact Elsa Venturini.