EUROPEAN COMMISSION

Brussels, 28.11.2018

COM(2018) 773 final

COMMUNICATION FROM THE COMMISSION

A Clean Planet for all





A European strategic long-term vision for a prosperous, modern, competitive and climate neutral economy

1.Introduction – The urgency to protect the Planet

Climate change is a serious concern for Europeans 1 . The current changes in our planet's climate are redrawing the world and magnifying the risks for instability in all forms. The last two decades included 18 of the warmest years on record. The trend is clear. Immediate and decisive climate action is essential.

The impact of global warming is transforming our environment, increasing the frequency and intensity of extreme weather events. Europe experienced extreme heat waves in four of the last five years. This past summer, temperatures above the Arctic Circle were 5C higher than usual. Large parts of Europe suffered from severe droughts while flood events have particularly affected Central and Eastern Europe in recent years. Climate related extremes such as forest fires, flash floods, typhoons and hurricanes are also causing massive devastation and loss of lives, as hurricanes Irma and Maria proved in 2017 when they hit the Caribbean, including a number of European outermost regions. This is now affecting the European continent with storm Ophelia in 2017 being the first strong East Atlantic hurricane ever to reach Ireland and in 2018 storm Leslie bringing destruction to Portugal and Spain.

The Intergovernmental Panel on Climate Change (IPCC) issued in October 2018 its Special Report on the impacts of global warming of 1.5°C above pre-industrial levels and related global greenhouse gas emission pathways. Based on scientific evidence, this demonstrates that human-induced global warming has already reached 1°C above preindustrial levels and is increasing at approximately 0.2°C per decade. Without stepping up international climate action, global average temperature increase could reach 2C soon after 2060 and continue rising afterwards.

Such unconstrained climate change has the potential to turn the Earth into a “hothouse”, making large-scale irreversible climate impacts more likely. The IPCC report confirms that approximately 4% of the global land area is projected to undergo a transformation of ecosystems from one type to another at 1ºC of global warming, increasing to 13% at 2°C temperature change. For example, 99% of coral reefs are projected to disappear globally at a temperature increase of 2ºC. Irreversible loss of the Greenland ice sheet could be triggered at around 1.5°C to 2°C of global warming. This would eventually lead to up to 7 meters of sea level rise affecting directly coastal areas around the world including low-lying lands and islands in Europe. The rapid loss of Arctic sea ice during summer is already happening today, with negative impacts on biodiversity in the Nordic region and the livelihood of the local population.

This would also have severe consequences on the productivity of Europe's economy, infrastructure, ability to produce food, public health, biodiversity and political stability. Weather-related disasters caused a record € 283 billion in economic damages last year and could affect about two-thirds of the European population by 2100, compared with 5% today. For instance annual damages due to river floods in Europe could reach € 112 billion, from the current €5 billion. 16% of the present Mediterranean climate zone may become arid by the end of the century and in several Southern European countries outdoor labour productivity may decline by around 10-15% from present-day levels. It is also estimated that reductions in projected food availability are more significant at 2ºC than at 1.5°C of global warming, including in regions of key importance to EU security such as Northern Africa and the rest of the Mediterranean. This could undermine security and prosperity in the broadest sense, damaging economic, food, water and energy systems, and in turn triggering further conflicts and migratory pressures. Overall, failing to take climate action will make it impossible to ensure Europe’s sustainable development and to deliver on the globally agreed UN Sustainable Development Goals.

Figure 1. Climate change impacts in Europe

2.A European vision for a modern, competitive, prosperous and climate neutral economy

The aim of this long-term strategy is to confirm Europe's commitment to lead in global climate action and to present a vision that can lead to achieving net-zero greenhouse gas emissions by 2050 through a socially-fair transition in a cost-efficient manner. It underlines the opportunities that this transformation offers to European citizens and its economy, whilst identifying challenges ahead. The proposed Strategy does not intend to launch new policies, nor does the European Commission intend to revise 2030 targets 2 . It is meant to set the direction of travel of EU climate and energy policy, and to frame what the EU considers as its long-term contribution to achieving the Paris Agreement temperature objectives in line with UN Sustainable Development Goals, which will further affect a wider set of EU policies. The Strategy opens a thorough debate involving European decision-makers and citizens at large as to how Europe should prepare itself towards a 2050 horizon and the subsequent submission of the European long-term Strategy to the UN Framework Convention on Climate Change by 2020.

The EU has been at the forefront of addressing the root causes of climate change and strengthening a concerted global response in the framework of the Paris Agreement. The Paris Agreement, ratified by 181 parties, requires strong and swift global action to reduce greenhouse gas emissions, with the objective to hold global temperature increase to well below 2°C and to pursue efforts to limit it to 1.5°C. It also has the goal to achieve a balance between emissions by sources and removals by sinks of greenhouse gases on a global scale in the second half of this century. All parties are to present long-term low greenhouse gas emission development strategies by 2020 that deliver on its objectives.

The European Council, in June 2017, strongly reaffirmed the commitment of the EU and its Member States to swiftly and fully implement the Paris Agreement, underlining that the Agreement "is a key element for the modernisation of the European industry and economy" and subsequently, in March 2018, invited the European Commission "to present by the first quarter of 2019 a proposal for a Strategy for long-term EU greenhouse gas emissions reduction in accordance with the Paris Agreement, taking into account the national plans".

In October 2017 the European Parliament also invited the European Commission "to prepare by COP24 a mid-century zero emissions strategy for the EU". Finally, the Regulation on Governance of the Energy Union agreed by the European Parliament and Council calls on the Commission to present an EU long-term strategy by April 2019. 3  

The EU, responsible for 10% of global greenhouse gas emissions, is a global leader in the transition towards a net-zero-greenhouse gas emissions economy. Already in 2009, the EU set its objective to reduce emissions by 80-95% in 2050. 4 Europeans have managed to successfully decouple greenhouse gas emissions from economic growth in Europe for the past decades. Following the peak in EU greenhouse gas emissions in 1979, energy efficiency, fuel switch policies and the penetration of renewables reduced emissions significantly. In consequence, between 1990 and 2016, energy use was reduced by almost 2%, greenhouse gas emissions by 22% while GDP grew by 54%.

The clean energy transition has spurred the modernisation of the European economy, driven sustainable economic growth and brought strong societal and environmental benefits for European citizens. The EU's pursuit to achieve its 2020 energy and climate targets already delivered new industries, European jobs and increased technological innovation, driving down technology costs. The renewable energy revolution is the best example of this. The share of renewable energy in final energy consumption increased from 9% in 2005 to 17% today. EU leadership demonstrates to other parts of the world that this transition is both possible and beneficial beyond the fight against climate change.

The EU is broadly on track to achieve its 2020 greenhouse gas, renewable energy and energy efficiency targets. However, continued focus is necessary in order to overcome the recent stagnation of energy efficiency improvements and greenhouse gas emission reduction trends.

The EU is advancing with its Energy Union Strategy and finalising a modern, advanced and cost-effective regulatory framework to achieve its 2030 greenhouse gas reduction targets and its clean energy transition delivering on the Juncker Commission's objective to put energy efficiency first and become a global leader in renewables. This is an investment in our prosperity and in the sustainability of the European economy. Regulatory stability is an important element for public authorities and private operators alike to achieve full implementation of this framework. Ambitious policies have been agreed at European level, including a reformed EU emissions trading system strengthening the price signal for CO2. For all other sectors, national greenhouse gas emission reduction targets have been set and legislation established to maintain the EU land and forests sink which absorbs more CO2 than it emits. On the side of energy, the targets to improve the EU's energy efficiency by at least 32.5% and to increase renewable energy to at least 32% of the EU's final energy consumption by 2030 are now approved and the proposed legislation to improve the CO2 efficiency of cars, vans and trucks will spur the transition in the transport sector.

Combined, these climate and energy policies will deliver on the EU's contribution under the Paris Agreement to reduce emissions by at least 40% by 2030 compared to 1990. In fact, when the agreed EU legislation is fully implemented, total greenhouse gas emission reductions are estimated to reach around 45% by 2030. The policies put in place today will have a continued impact after 2030 and will therefore already go a long way, with projected emissions reductions of around 60% by 2050. This is, however, not sufficient for the EU to contribute to the Paris Agreement's temperature goals.

The IPCC report confirms that the world needs to limit climate change to 1.5°C to reduce the likelihood of extreme weather events. It also emphasises that emissions need to be reduced with far more urgency than previously anticipated. In order to limit temperature increase to 1.5°C, net-zero CO2 emissions at global level needs to be achieved around 2050 and neutrality for all other greenhouse gases somewhat later in the century. At this point, any remaining greenhouse gas emissions in certain sectors need to be compensated for by absorption in other sectors, with a specific role for the land use sector, agriculture and forests. This provides an opportunity for the EU to step up its action to show leadership and reap the benefits of first mover advantage. This would require the EU to achieve greenhouse gas emissions neutrality by 2050.

The status quo is not an option. Countries should act together to protect their citizens against climate change. Delivering on the transformation towards a net-zero greenhouse gas emissions economy thus requires early long-term planning, improving knowledge of the opportunities for transforming our entire economy and building trust within our society and all economic actors that this change is possible and opportune.

The IPCC report provides us with this encouraging message: limiting global temperature increase to 1.5°C is doable, provided we act now and coherently use every tool at our disposal. The strong scientific basis of the IPCC report to decision makers across the globe for tackling climate change, modernising the economy, promoting sustainable development and eradicating poverty has been duly taken into account by the European Commission when preparing this EU Strategy for long-term greenhouse gas emission reduction.

The Strategy therefore outlines a vision of the economic and societal transformations required, engaging all sectors of the economy and society, to achieve the transition to net-zero greenhouse gas emissions by 2050. It seeks to ensure that this transition is socially fair – not leaving any EU citizens or regions behind – and enhances the competitiveness of EU economy and industry on global markets, securing high quality jobs and sustainable growth in Europe, while providing synergies with other environmental challenges, such as air quality or biodiversity loss.

To do so, the Strategy looks into the portfolio of options available for Member States, business and citizens, as well as into how these can contribute to the modernisation of our economy and improve the quality of life of Europeans, protect the environment, and provide for jobs and growth.

3. Pathways for the Transition to a Net-Zero Greenhouse Gas Emissions economy and Strategic Priorities

The threats and risks of climate change are known, and so are many ways to prevent them. This Strategy provides a number of solutions that could be pursued for the transition to a net-zero greenhouse gas emissions economy by mid-century. These options will radically transform our energy system, land and agriculture sector, modernise our industrial fabric and our transport systems and cities, further affecting all activities of our society. In this context, citizens play a central role. Climate change can only be tackled if people actively engage, as consumers and as citizens. The success of the transformation will also depend on how our society takes care of those who are more vulnerable during this transition.

The transition towards a net-zero greenhouse gas economy gives energy a central role as it is today responsible for more than 75% of the EU's greenhouse gas emissions. In all options analysed, the energy system moves towards net-zero greenhouse gas emissions. It relies on a secure and sustainable energy supply underpinned by a market-based and pan-European approach. The future energy system will integrate electricity, gas, heating/cooling and mobility systems and markets, with smart networks placing citizens at the centre.

The transition also requires further scaling-up of technological innovations in energy, buildings, transport, industry and agriculture sectors. It can be accelerated by breakthroughs in digitalisation, information and communications, artificial intelligence and biotechnology. The expansion of new systems and processes, with cooperation across sectors, is also required. A good example of such system-oriented approaches is the circular economy, which will harness a range of advanced solutions and foster new business models. It will also require cooperation at different levels among regions and among Member States to maximise synergies by pooling resources and knowledge together. European manufacturing is still competitive today, but is also under pressure from both developed and emerging economies. Yet, Europe is at the top of the league when it comes to new high-value patents for low-carbon energy technologies, is seen as a global leader in these sectors and has to transform this scientific advantage in commercial success. Delayed and uncoordinated action would increase the risks of lock-in to carbon intensive infrastructure and stranded assets and make this inevitable transformation costlier.

The portfolio of options is based on existing, though in some cases emerging, solutions and is large enough to offer alternatives to assure policymakers and our citizens that a net-zero greenhouse gas emissions economy can be reached by mid-century. The assessment builds upon scientific literature and inputs from a wide range of stakeholders – business, non-governmental organisations, think tanks and the research community – as well as integrated modelling allowing to better understand the transformation of and complex interactions between the energy, industry, buildings, transport, agriculture, forestry and waste sectors.

Modelling assessments indicate that the deployment of no-regret options such as renewables including sustainable advanced biofuels, energy efficiency, impetus towards circular economy alongside individual options such as electrification, hydrogen and alternative fuels or new approaches to mobility, are not sufficient for a net-zero greenhouse gas emissions economy by 2050. Under such technology scenarios, emissions reduce only by 80% by 2050 compared to 1990. While combining all these options can reduce net emissions by around 90% (including the land use and forestry sink), some greenhouse gas emissions will always remain notably in the agriculture sector. Reaching net-zero greenhouse gas emissions will require maximising the potential of technological and circular economy options, the large scale deployment of natural land based carbon sinks including in the agricultural and forestry sectors as well as shifts in mobility patterns.

The road to a net-zero greenhouse gas economy could be based on joint action along a set of seven main strategic building blocks:

1. Maximise the benefits from Energy Efficiency including zero emission buildings

Energy efficiency measures should play a central role in reaching net-zero greenhouse emissions by 2050 reducing energy consumption by as much as half compared to 2005. Energy efficiency digitalisation and home automation, labelling and setting standards have effects that go far beyond the EU as appliances and electronics are imported into the EU or exported to foreign markets, making producers abroad use the EU standards.

Energy efficiency will play a central role in decarbonising industrial processes but much of the reduced energy demand will occur in buildings, in both the residential and services sectors, which today are responsible for 40% of energy consumption. Given that most of the housing stock of 2050 exists already today, this will require higher renovation rates, fuel switching with a large majority of homes that will be using renewable heating (electricity, district heating, renewable gas or solar thermal), diffusion of the most efficient products and appliances, smart building/appliances management systems, and improved materials for insulation. Sustainable renewable heating will continue to play a major role and gas, including liquefied natural gas, mixed with hydrogen, or e-methane produced from renewable electricity and biogas mixtures could all play a key role in existing buildings as well as in many industrial applications. To achieve and sustain higher renovation rates, adequate financial instruments to overcome existing market failures, sufficient workforce with the right skills and affordability for all citizens are of central importance. An integrated approach and consistency across all relevant policies will be necessary for the modernisation of the built environment and mobilisation of all actors. Consumer engagement, including through consumer associations, will be a key element in this process.

2. Maximise the deployment of renewables and the use of electricity to fully decarbonise Europe’s energy supply

Today the major part of the energy system is based on fossil fuels. All scenarios assessed imply that by mid-century this will change radically with the large-scale electrification of the energy system driven by the deployment of renewables, be it at the level of end-users or to produce carbon-free fuels and feedstock for the industry.

The clean energy transition would result in an energy system where primary energy supply would largely come from renewable energy sources, thereby significantly improving security of supply and fostering domestic jobs. Europe’s energy import dependence, notably as regards imports of oil and gas, standing today at ca. 55% will fall in 2050 to 20%. This would positively impact EU's trade and geopolitical position as it would result in a sharp reduction of fossil fuel import expenditures (currently € 266 billion), with imports falling by over 70% in some scenarios. The cumulative savings from a reduced import bill will amount to € 2-3 trillion over the period 2031-2050, freeing resources for further potential investments into the modernisation of the EU economy.

The large-scale deployment of renewables will lead to the electrification of our economy and to a high degree of decentralisation. By 2050, the share of electricity in final energy demand will at least double, bringing it up to 53%, and electricity production will increase substantially to achieve net-zero greenhouse gas emissions, up to 2.5 times of today's levels depending on the options selected for the energy transition.

Fundamental progress has already been made in transforming Europe’s electricity production. The global expansion of renewable energy, instigated by EU leadership, led to massive cost decreases in the last 10 years, in particular in solar and on- and off-shore wind. Today, more than half of Europe's electricity supply is free from greenhouse gas emissions. By 2050, more than 80% of electricity will be coming from renewable energy sources (increasingly located off-shore). Together with a nuclear power share of ca. 15%, this will be the backbone of a carbon-free European power system. These transitions are similar to global pathways analysed in the IPCC report. Electrification will open up new horizons for European companies in the global clean energy market worth today ca. € 1.3 trillion. Several sources of renewable energy are still to be harnessed, notably ocean energy. For the EU, which currently hosts 6 of the 25 largest renewable energy businesses and employs almost 1.5 million people (out of 10 million worldwide), this will be a unique business opportunity. It will also give an important role to consumers that produce energy themselves (prosumers), and local communities to encourage residential take-up of renewables.