2020 climate and energy package

The climate and energy package comprises complementary legislation, aimed at ensuring the EU meets its ambitious climate and energy targets for 2020. The package sets 3 key targets:

ACT

Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC

SUMMARY

• 20 % reduction in EU greenhouse gas emissions from 1990 levels;
• 20 % improvement in the EU's energy efficiency ;
• 20 % of EU energy from renewables (wind, solar, biomass, etc.).

WHAT DOES THE PACKAGE DO?

These ‘20-20-20’ targets are aimed at combating climate change, increasing the EU's energy security and strengthening its competitiveness. They are also headline targets of the Europe 2020 strategy for smart, sustainable and inclusive growth.

KEY POINTS

Reformed EU Emissions Trading System

At the heart of the package is the revision of the EU Emissions Trading System (EU ETS), which covers around 45 % of the EU’s total greenhouse gas emissions. The system includes all EU countries plus Iceland, Liechtenstein and Norway. It seeks to cut greenhouse gas emissions from the power sector and major industry cost-effectively by putting a market price on emissions through the application of a cap and trade policy*. The EU ETS applies to some 11,000 power stations and other large-scale industrial facilities. In 2012, the EU ETS was expanded to include aviation.

The EU ETS is underpinned by the Emissions Trading Directive, which was significantly revised and strengthened. The revision applied from 2013, the start of the third trading period of the EU ETS, and introduces to the system:

• a single EU-wide cap on emission allowances (cut each year by 1.74 %), replacing the system of national caps, so that by 2020 emissions will be 21 % below 2005 levels;
• auctioning (purchase of emission allowances) to progressively replace the free allocation of allowances, starting with the power sector;
• Broader coverage in terms of sectors and gases (carbon dioxide, nitrous oxide and perfluorocarbons).

National targets for non-EU ETS emissions

The package’s second piece of legislation is the Effort Sharing Decision. It sets binding annual targets for each EU country to reduce its greenhouse gas emissions from the sectors not covered by the EU ETS, such as housing, agriculture, waste and transport (excluding aviation).

The national targets, covering the period 2013-2020, are differentiated according to EU countries’ relative wealth. They range from a 20 % emissions reduction (compared to 2005) by the richest EU countries to a 20 % increase by the least wealthy. However, all countries must strive to limit their emissions. They must also report on their emissions every year, under the EU monitoring mechanism.

National renewable energy targets

Under the Renewable Energy Directive, the package’s third piece of legislation, EU countries are given binding targets to raise the share of renewable energy in their energy consumption by 2020. These targets depend on each country’s use of renewables and the potential to increase their production, ranging from 10 % in Malta to 49 % in Sweden.

The national targets will enable the EU as a whole to reach its 20 % renewable energy target for 2020 - more than double the 2010 level of 9.8 % - and a 10 % share of renewable energy in the transport sector. The targets will also help to cut greenhouse gas emissions and reduce the EU’s dependence on imported energy. At least 10 % of transport fuel in each country must be renewable (e.g. biofuels, hydrogen, ‘green’ electricity). Biofuels must meet agreed sustainability criteria.

Carbon capture and storage

The fourth part of the climate and energy package is a directive creating a legal framework for the environmentally safe use of carbon capture and storage (CCS) technologies. CCS involves capturing the carbon dioxide emitted by industrial processes and storing it in underground geological formations where it does not contribute to global warming.

The directive covers all CO₂ underground storage in the EU and lays down requirements which apply to the entire lifetime of storage sites.

Energy efficiency

The energy efficiency target is being implemented through the 2011 Energy Efficiency Plan and the Energy Efficiency Directive.

More information:

• 2020 climate and energy package

KEY TERMS

* Cap and trade principle: the EU ETS works on the ‘cap and trade’ principle. A ‘cap’, or limit, is set on the total amount of certain greenhouse gases that can be emitted by the factories, power plants and other installations in the system. The cap is reduced over time so that total emissions fall. The system allows trading of emission allowances so that the total emissions of the installations and aircraft operators stay within the cap and the least-cost measures can be taken up to reduce emissions.

RELATED ACTS

Directive 2009/29/EC of the European Parliament and of the Council of 23 April 2009 amending Directive 2003/87/EC so as to improve and extend the greenhouse gas emission allowance trading scheme of the Community (OJ L 140, 5.6.2009, pp. 63-87)

Decision 406/2009/EC of the European Parliament and of the Council of 23 April 2009 on the effort of Member States to reduce their greenhouse gas emissions to meet the Community’s greenhouse gas emission reduction commitments up to 2020 (OJ L 140, 5.6.2009, pp. 136-148)

Directive 2009/31/EC of the European Parliament and of the Council of 23 April 2009 on the geological storage of carbon dioxide and amending Council Directive 85/337/EEC, European Parliament and Council Directives 2000/60/EC, 2001/80/EC, 2004/35/EC, 2006/12/EC, 2008/1/EC and Regulation (EC) No 1013/2006 (OJ L 140, 5.6.2009, pp. 114-135)

last update 10.09.2015