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Document 52023SC0646

COMMISSION STAFF WORKING DOCUMENT Assessment of progress towards the objectives of the Energy Union and Climate Action Accompanying the document Report from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Commitee of the Regions State of the Energy Union 2023 Report (pursuant to Regulation (EU) 2018/1999 on the Governance of the Energy Union and Climate Action)

SWD/2023/646 final

Brussels, 24.10.2023

SWD(2023) 646 final

COMMISSION STAFF WORKING DOCUMENT

Assessment of progress towards the objectives of the Energy Union and Climate Action





Accompanying the document

Report from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Commitee of the Regions

State of the Energy Union 2023 Report



(pursuant to Regulation (EU) 2018/1999 on the Governance of the Energy Union and Climate Action)

{COM(2023) 650 final}


Table of Contents

1. Introduction    

1.1 Submission, review and assessment of the National Energy and Climate Progress Reports (NECPRs)    

2. Progress towards meeting the objectives    

2.1 Decarbonisation    

2.1.1 Greenhouse gas emission and removals    

2.1.2 Climate adaptation    

2.1.3 Renewable energy    

2.2    Energy efficiency    

2.2.1 Progress towards indicative trajectory and 2030 savings contribution    

2.2.2 Exemplary role of public bodies’ buildings – Article 5 of the EED    

2.2.3 Energy savings obligation – Article 7 of the EED    

2.2.4 Progress towards the long-term strategy for renovation    

2.3 Ensuring energy security    

2.3.2. Reduction of demand    

2.3.3. Ability to cope with constrained or interrupted supply of an energy source    

2.3.4. Other targets and non-quantifiable objectives related to energy security    

2.4 Achieving an interconnected internal energy market    

2.4.1 Electricity interconnectivity    

2.4.2 Infrastructure projects    

2.4.3 Energy system flexibility    

2.4.4 Non-discriminatory participation in energy markets    

2.4.5 Consumer participation in the energy system and benefits from self-generation and new technologies, including smart meters    

2.4.6 Electricity system adequacy    

2.5 Research & innovation and competitiveness    

2.5.1 Translating the SET Plan objectives and policies    

2.5.2 Public and, where available, private spending in research and innovation relating to clean energy technologies    

2.5.3 Long term decarbonisation targets    

2.5.4 Competitiveness    

2.6 Energy subsidies    

2.7 Energy poverty    

2.8 Just transition    

2.9 Links with the European Semester    

3 Policy and measures to achieve the objectives    

3.1 Progress in implementing policies and measures    

3.1.2 Progress towards financing    

3.2 Reported effects and costs of policies and measures    

3.2.1 Indicators used to monitor progress on PaMs    

3.2.2 GHG emission savings    

3.2.3 Impacts on air quality and emissions to air    

4 Regional cooperation    

5 Multilevel climate and energy dialogues    

6 Conclusion and lessons learnt    



1. Introduction

1.1 Submission, review and assessment of the National Energy and Climate Progress Reports (NECPRs)

The Governance Regulation requires 1 Member States to report every two years on the progress achieved towards the implementation of their integrated national energy and climate plans (NECPs) through National Energy and Climate Progress Reports (NECPRs). By 15 March 2023, Member States were due to report for the first time on their progress towards implementing their NECPs for the period 2021-2030, and notably towards their objectives, targets and contributions set out therein, across the five dimensions of the energy Union including on greenhouse gas emissions and removals as well as the implementation or amendment of Member States policies and measures and their financing. Moreover, Member States had to report on progress towards their adaptation goals, as well as on the impact of their policies and measures on air quality and emissions of air pollutants.

Importantly, Member States were also due to report on the steps taken to establish a multilevel energy and climate dialogue 2  to engage with local authorities, civil society organisations, business community, investors and other relevant stakeholders and the public on energy and climate policies. The integrated nature of the reporting represents a significant reduction of administrative burden on the side of both the Commission and the Member States as compared to the multiple reporting and assessment obligations spread through the energy acquis prior to the entering into force of the Governance Regulation. This integrated reporting has also allowed for a more holistic assessment of progress with strong synergies.

The Commission’s assessment of progress in this Staff Working Document is based on the Member States’ objectives, targets and contributions as included within their NECPs, and framed by the content and timing of the submitted NECPRs. Eight Member States submitted a prima facie full progress report by the 15 March deadline, and 10 more submitted their progress report relatively close to the deadline. As of 1 October, twenty-six Member States submitted their prima facie full progress report.

To ensure comparability and limit the administrative burden on Member States, the progress reporting makes use of comparable energy statistics where available. As a result, the latest consolidated data in certain areas relates to 2021 or 2022.

The assessment is based primarily on the progress reports. It is complemented with other information and indicators where appropriate, with data quality and availability varying between topics. This is particularly important to consider developments since the start of Russia’s war of aggression against Ukraine, which is not reflected in data with cut-off in 2021.

Member States are in the process of updating the NECPs in view of the increased energy and climate ambition and much-changed geopolitical situation since the submission of the original plans. The Union’s response to the Russian invasion of Ukraine through the Commission’s REPowerEU Plan has resulted, amongst others, in increased Union’s energy ambitions. The final updated NECPs are due by 30 June 2024.

Following the submission of the progress reports, a quality assurance and control process was started, in which Member States resubmitted parts of the progress reporting to add or clarify information. This process has yielded good results in improving the completeness and consistency of the reported information, although it is not yet fully completed (56% complete by 1 October) in view of late submissions by the Member States.

2. Progress towards meeting the objectives

2.1 Decarbonisation

2.1.1 Greenhouse gas emission and removals

The “Fit for 55” package” sets the EU on a path to reach its climate targets in a fair, cost-effective and competitive way. With most of its key proposals adopted by co-legislators, 3 Union policies are now aligned with the updated 2030 target as set in the European Climate Law. The implementation of the new legislation under the Fit for 55 package will enable the EU and its Member States to achieve a net domestic reduction of greenhouse gas emissions by least 55% compared to 1990 by 2030 (see also Chapter 1 of the Climate Action Progress Report 2023 – Emission trends and progress in climate action). 4

Figure 1: Total EU GHG emissions (excluding international aviation) and removals (1990-2022), linear trajectories to EU targets, and Member States’ latest GHG emissions projections (2022–2050). 5  

The preliminary data for 2022 show that EU GHG net emissions decreased by around 3% in 2022 continuing the overall downward trend of the past 30 years. After the strong rebound in greenhouse gas (GHG) emissions in 2021 following the unprecedented fall in 2020 due to the COVID-19 pandemic, EU emissions in 2022 are expected to be back in line with the 30-year descending trend achieved before the pandemic. According to provisional data, total EU domestic GHG emissions (i.e. excluding LULUCF and international aviation) decreased by 2.4% in 2022 compared to 2021, whilst EU GDP grew by 3.5%. This translates into a reduction in GHG emissions of 30.4% compared to the 1990 base year (or 29% when international aviation is included). Reported GHG net removals from land use, land use change, and forestry (LULUCF) are also expected to increase by 14 million tonnes of CO2 equivalent compared to 2021. 6 As a result, net GHG emissions for 2022 (i.e. including LULUCF) are expected to be 32.5% below the 1990 level (or 31.1% when international aviation is included).

For a more detailed assessment on the EU and Member States’ progress towards climate mitigation targets, refer to the Climate Action Progress Report 2023 and its accompanying technical annex.

Progress towards national objectives, targets and contributions for GHG emissions reduction

All Member States reported on progress towards national objectives, targets and contributions (Annex I). However, reports varied across Member States and information were largely insufficient to provide a collective EU assessment.

Climate neutrality

More than half of Member States defined the objective to achieve climate neutrality by 2050 or earlier, in line with their national long-term strategies (Table 1). Austria indicated a later year for achieving climate neutrality (i.e. 2050) compared to what Austria had previously reported in an updated of its long-term strategy (i.e. 2040), while Estonia, Germany and Greece have formally indicated, for the first time, a target year to achieve climate neutrality.

Table 1: Target years for climate neutrality and scopes reported in the NECP progress reports and national long-term strategies.

Member State

Target year for climate neutrality

Total GHG emissions, excluding LULUCF, excluding international aviation

Total GHG emissions, including LULUCF, excluding international aviation

NECPR

LTS

NECPR

LTS

NECPR

LTS

Austria

2050

2040

Yes

yes

 

Yes

Belgium

 

 

 

 

 

Bulgaria

 

 

yes

 

yes

Croatia

 

 

yes

 

 

Cyprus

 

2050

 

 

 

yes

Czechia

 

Yes

yes

 

 

Denmark

2050

2050

 

yes

Yes

yes

Estonia

2050

 

yes

 

yes

Finland

2035

2035

Yes

yes

 

yes

France

2050

2050

Yes

yes

Yes

yes

Germany

2045 

 

yes

 

 

Greece

2050

Yes

 

Yes

yes

Hungary

2050

2050

Yes

 

 

yes

Ireland

 

 

 

 

 

Italy

2050

2050

Yes

yes

 

 

Latvia

2050

2050

Yes

yes

Yes

yes

Lithuania

2050

2050

 

 

Yes

yes

Luxembourg

2050 

2050

 

 

 

yes

Malta

 

 

 

 

yes

Netherlands

 

Yes

 

 

yes

Poland

 

 

 

 

 

Portugal

2050

2050

Yes

 

 

yes

Romania

 

Yes

 

 

 

Slovakia

2050

2050

Yes

yes

 

yes

Slovenia

2050

2050

Yes

 

Yes

yes

Spain

2050

2050

Yes

yes

Yes

yes

Sweden

 

2045

 

yes

 

 

Sources: reportnet 3, LTS (compiled by LTS project, includes updated information)

National GHG targets

Most of the Member States have also indicated quantitative national GHG targets up to 2050, but not for all required years (2030, 2040, 2050) and with different scope. Therefore, assessing progress against previously indicated national targets, such as those reported in their national long-term strategies submitted under Article 15 of the Governance Regulation (Table 2) is not straightforward. For the few cases where a comparison is possible, Member States have in general increased their climate ambitions.



Table 2: National GHG emission milestones     from NECPR and national long-term strategies (LTS). Excluding LULUCF, excluding international aviation                            

NECPR (AR5 GWP)

LTS (and LTS updates) (AR4 GWP)

Member State

 

2030

2040

2050

 

Mt CO2e

Austria

 

36

 

 

Belgium

 

 

 

 

Bulgaria

 

 

 

 

Croatia

 

 

 

 

Cyprus

 

 

 

 

Czechia

 

118

70

39

Denmark

 

 

 

 

Estonia

 

 

 

 

Finland

 

29

14

7

France

 

312

197

81

Germany

 

439 

150 

 

Greece

 

61

56

 

Hungary

 

57

 

 

Ireland

 

 

 

 

Italy 7

 

329

 

 

Latvia 8

 

6.5

8.5

 

Lithuania

 

 

 

 

Luxembourg

 

5.5 

2.2 

1.7 

Malta

 

 

 

 

Netherlands

 

113

 

11

Poland

 

 

 

 

Portugal

 

48

30

13

Romania

 

118

 

 

Slovakia

 

33

 

 

Slovenia

 

13

7

2

Spain

 

221

101

29

Sweden

Member State

 

2030

2040

2050

 

Mt CO2e

Austria

 

-

-

16

Belgium

 

-

-

-

Bulgaria

 

56

21

16

Croatia

 

20

15

8

Cyprus

 

-

-

-

Czechia

 

105

70

39

Denmark

 

38

-

-

Estonia

 

12

11

8

Finland

 

36

8.5

-1.5

France

 

311

187

65

Germany

 

438

149

-

Greece

 

57

-

5

Hungary

 

45

29

5

Ireland

 

-

-

-

Italy

 

-

-

65

Latvia

 

9

4

-

Lithuania

 

-

14

10

Luxembourg

 

-

-

-

Malta

 

11

0.8

0.4

Netherlands

 

-

-

-

Poland

 

-

-

-

Portugal

 

39

21

9

Romania

 

-

-

-

Slovakia

 

34

28

14

Slovenia

 

-

-

-

Spain

 

222

102

29

Sweden

 

26

9

-

Source: reportnet 3, LTS (compiled by LTS project, includes updated information)



Table 3: National GHG emission milestones     from NECPR and national long-term strategies (LTS). Including LULUCF, excluding international aviation                            

NECPR (AR 5 GWP)

LTS (and LTS updates) (AR 4 GWP)

Member State

 

2030

2040

2050

 

Mt CO2e

Austria

 

 

 

 

Belgium

 

 

 

 

Bulgaria

 

 

 

 

Croatia

 

 

 

 

Cyprus

 

 

 

 

Czechia

 

 

 

 

Denmark

 

23

 

 

Estonia

 

 

 

0

Finland

 

 

0

0

France

 

272

143

14

Germany

 

 

 

 

Greece

 

56

50

 

Hungary

 

 

 

 

Ireland

 

 

 

 

Italy

 

 

 

 

Latvia 9

 

4

8

 

Lithuania

 

16

7

0

Luxembourg

 

50

17

10

Malta

 

 

 

 

Netherlands

 

 

 

 

Poland

 

 

 

 

Portugal

 

 

 

 

Romania

 

 

 

 

Slovakia

 

 

 

 

Slovenia

 

11

5

0

Spain

 

186

67

-8

Sweden

 

 

 

 

Member State

 

2030

2040

2050

 

Mt CO2e

Austria

 

-0.5

Belgium

 

Bulgaria

 

47

13

9

Croatia

 

Cyprus

 

6

2

Czechia

 

Denmark

 

-8

Estonia

 

17

11

5

Finland

 

17

3

-18

France

 

271

133

-2

Germany

 

Greece

 

5

Hungary

 

41

25

Ireland

 

Italy

 

Latvia

 

10

Lithuania

 

13

6

Luxembourg

 

7

Malta

 

1.1

0.8

0.4

Netherlands

 

49

11

Poland

 

Portugal

 

39

22

9

Romania

 

Slovakia

 

7

Slovenia

 

7

3

Spain

 

185

65

-8

Sweden

 

Source: reportnet 3, LTS (compiled by LTS project, includes updated information)                

The GHG emission projections supporting the NECP progress reports show that for the economy-wide greenhouse gas emissions reductions, emissions by 2030 reduce under existing and planned measures by 45 % and 50 % respectively below 1990 levels. This is an improvement compared to the 41% below 1990 levels under existing and planned measures estimated in the 2020 EU-wide assessment of National Energy and Climate Plans 10 , but it falls short of the EU 55% reduction target, showing clearly that additional implementation efforts are needed.



Progress towards ESR targets

The Effort Sharing Regulation (ESR) covers greenhouse gas emissions accounting for around 60% of total domestic EU emissions. It covers emissions from domestic transport (excluding CO2 emissions from aviation), buildings, agriculture, small industry, and waste. The legislation sets binding national targets to reduce emissions in these sectors by 2030 compared to 2005 levels, which are translated into binding national emission limits for the period 2021-2030.

Based on the GHG inventories, EU-wide emissions in the ESR sectors in 2021 remained 3.3% below the aggregated emissions limit. The emissions exceeded national emission limits in five Member States: Austria, Cyprus, Denmark, Ireland and Italy. 11 Forward-looking GHG projections show that EU-wide ESR emissions would reduce by 32% in 2030 compared to 2005 levels. This is below the EU-wide ESR target to reduce ESR emissions in 2030 by 40% compared to 2005 levels. For a more detailed assessment on the EU and Member States progress towards the ESR national limits, refer to the Climate Action Progress Report 2023 and its accompanying technical annex.

Progress towards LULUCF targets

The land use, land-use change, and forestry (LULUCF) sector plays a crucial role in achieving the EU’s climate neutrality goal. The sector includes emissions and removals from the use of soils, trees, plants, biomass and timber, and is responsible for both emitting and absorbing CO2 from the atmosphere. For the EU, the LULUCF sector absorbs more greenhouse gases than it emits, achieving significant net carbon removals. The sector also provides biomaterials that substitute fossil or carbon intensive materials, an equally important role in the transition to a climate-neutral economy. However, carbon removals from the sector have declined at a worrying speed in the last years. The revised LULUCF Regulation 12  sets out how the land use sector contributes to the EU’s climate goals, namely through a land-based net carbon removals target of 310 million tonnes of CO2 equivalent by 2030. To reach this objective, targets are allocated to Member States, based on the total managed land area within their territory.

In 2021, the EU's carbon sinks were a net removal of -230 Mt CO2-eq. Moreover, the trend of recent years persisted, and the size of the carbon sink is continuing to decrease. With current LULUCF accounting rules applicable to the period 2021- 2025, the ‘accounted’ balance for 2021, produced a slight accounted credit of -14 Mt CO2 -eq. Nine Member States showed potential net accounting debits and sixteen Member States showed potential net accounting credits.

Projections on reported emissions and removals, delivered by Member States in March 2023, have been assessed for progress LULUCF towards the 2030 targets. Projections with existing measures show EU total net removals of -239 MtCO2eq for 2030 and -260 MtCO2eq with additional measures, leaving a gap of between around 50-70 MtCO2e to meet the 2030 target. This means that the EU is not, according to projections, on track to meet the 2030 net removal target of -310 MtCO2eq. For a more detailed assessment see Chapter 4 of the Climate Action Progress Report).

2.1.2 Climate adaptation

In face of climate change increasingly affecting the energy sector and climate mitigation efforts, Article 4 of the Governance Regulation required Member States to include climate adaptation goals into their National Energy and Climate Plans, as appropriate, in support to the achievement of the Energy Union objectives, at least in the “Decarbonisation” dimension.

The Regulation’s requirements for adaptation goals are formulated partly in a conditional way. Outside the Decarbonisation dimension’s greenhouse gas emissions part, such goals were mandatory only if applicable. The relationship of these adaptation goals to those set out in the national adaptation policies (on which reporting was required under Article 19 of the same Regulation 13 ) has also been a source of confusion. This has led to diverging interpretations among Member States of how adaptation is to be tackled in the National Energy and Climate plans, which makes it challenging to horizontally assess the progress achieved. 14

Hazards considered relevant by the Member States for the Energy Union included changes in frequency and intensity of extreme weather events like heatwaves, droughts, stronger storms as well as an increased amount of precipitation. Several Member States (France, Czech Republic, Finland, Greece) related vulnerabilities to the following Energy Union dimensions: Decarbonisation: GHG emissions and removals, Decarbonisation: renewable energy, and Energy Security. For most of the other Member States, only the Decarbonisation dimension was targeted. In some cases, all Energy Union dimensions were addressed (e.g., Austria and Croatia). It was sometimes the case that specific links between vulnerabilities/risks and dimensions were not sufficiently detailed, or the language was quite general (e.g., Romania, Netherlands, and Latvia).

Examples of vulnerabilities and risks cited include:

·Spain identifying the vulnerability of the energy system to water scarcity under the Research, innovation and competitiveness dimension.

·Finland identifying a reduction in the availability and quality of biomass as a risk across Decarbonisation (GHG emissions and removals and renewable energy).

·Portugal identifying concerns around water availability, droughts, and fire risks, impacting renewable energy production (especially hydropower) as part of the Decarbonisation: renewable energy dimension.

To deal with these risks, Member States introduced both overarching national adaptation goals and sector specific adaptation goals in linked sectors such as agriculture, buildings, forestry, energy, infrastructure, and transport. Twenty Member States mentioned adaptation goals, the majority fully addressing the identified risks (14 fully, 8 partially). In most cases, the adaptation goals are not organised along the Energy Union dimensions, the NECP only refers to adaptation policies in general. fourteen Member States detailed the adaptation goals in the NECP itself, 4 only partially, while some of the NECPs only included adaptation action in policies and measures chapters, with adaptation goals not explicitly included.

Examples of adaptation goals include:

·Slovakia substantially strengthening research and the production of technical bases, to prepare by 2021 an action plan for adaptation with clear measures to accelerate the integration of climate change adaptation in all areas.

·Spain’s adaptation goals focusing on plans to avert, minimize and address the climate risks of reduced hydroelectricity production, reduced cooling water resources for power plants, impacts of coastal floods on energy infrastructure and impacts on ports interfering with the trading of energy products.

·Romania presenting policies and measures in agriculture, rural development, and forestry, with specific aim at addressing climate adaptation.

Monitoring and evaluation frameworks for adaptation goals are either recent or under development in the Member States, and operate under national adaptation strategies or plans, rarely considering synergies with the Energy Union dimensions. Thirteen Member States reported clear progress with the implementation of adaptation actions for each adaptation goal. Examples include:

·Austria reported the mainstreaming of adaptation into local energy strategies and the optimization of network infrastructure.

·Finland stated climate change is already being considered in energy policy scenarios, whereby renewable energy sources other than bioenergy are being subsidized, and new measures are taken to adapt the energy infrastructure.

·Malta reported progress among others, in creating incentives to incorporate green features and measures in buildings.

Figure 2: Overview of the assessment of progress on climate adaptation action supporting the objectives of the Energy Union