The European Green Deal

The EU’s ‘Green Deal’ has an ambitious target of transforming the EU into a fair and prosperous society.

On 11 December 2019, the European Commission published its communication outlining what it calls the European Green Deal (COM (2019) 640 final) for the EU and its citizens. The ‘Green Deal’ is a response to ongoing climate and environmental-related challenges, resetting the commission’s commitment to tackling them.

As a new growth strategy, the Green Deal has an ambitious target of transforming the EU into a fair and prosperous society, with a modern, resource-efficient and competitive economy, having no net emissions of greenhouse gases (GHG) in 2050.

Economic growth is to be decoupled from resource use. In parallel, the Green Deal aims to protect, conserve, and enhance the EU’s natural capital, and protect the health and wellbeing of citizens from environment-related risks and impacts.

All the while, this transition is to be just and inclusive, putting people first, and each EU initiative is to live up to a green oath to ‘do no harm’. It is recognised that the Green Deal will not be achieved by Europe acting alone; the EU is to use its influence, expertise and financial resources to mobilise neighbours and partners to join it on a sustainable path.

At the same time, it is recognised that there is a need to maintain the EU’s security of supply and competitiveness when others are unwilling to act.

What is to be done?

All EU actions and policies are expected to contribute to the Green Deal objectives, with intense coordination across all policy areas. To transform the EU’s economy for a sustainable future, consistent use of all policy levers will prevail: regulation and standardisation, investment and innovation, national reforms, dialogue with social partners, and international cooperation.

The European Pillar of Social Rights will be used as a guide to ensure no one is left behind. In addition, current legislation and policies relevant to the Green Deal are to be enforced and effectively implemented. The actions and policies proposed are broad sweeping:

To enshrine the 2050 climate neutrality objective in legislation, the commission will propose the first European ‘climate law’ by March 2020. This law is to ensure that all EU policies contribute to the climate neutrality objective and that all sectors play their part.

Impact-assessed plan

For example, by summer 2020, the commission will issue an impact-assessed plan to increase the EU’s GHG reductions for 2030 to at least 50% and towards 55% compared with 1990 levels. An extension of the European emissions trading to new sectors is mooted.

Policy reforms are to help ensure effective carbon pricing across the economy, with the knock-on effect of encouraging change in consumer and business behaviour. An increase in sustainable public and private investment is also to be facilitated. Aligning taxation with climate objectives is crucial. Consequently, the commission is to propose a revision of the Energy Taxation Directive (2003/96/EC).

It is acknowledged that, if international partners do not share the EU’s ambition, carbon leakage is a risk. An example would be transfer of production from the EU to other countries with lower ambitions for emission reduction.

Should this pan out, the commission is expected to propose a carbon border-adjustment mechanism for selected sectors, so the price of imports more accurately reflect their carbon content. This will be designed to comply with WTO rules.

Clean and secure

To reach climate objectives in 2030 and 2050, increased decarbonisation of the energy system is a must. The production and use of energy across economic sectors accounts for more than 75% of EU GHG emissions. The power sector will have to be largely based on renewable sources, complemented by a rapid phase-out of coal and the decarbonisation of gas.

Offshore wind energy is to be increased. Smart integration of renewables, energy efficiency, and other sustainable solutions are a focus. Energy poverty will be addressed. Increased cross-border and regional cooperation are expected. The commission will ensure that all relevant legislation is rigorously enforced.

Full mobilisation of industry is critical to achieve a climate-neutral and circular economy. Transformation of an industrial sector takes 25 years so, to be ready for 2050, decisions and actions need to be made in the next five years.

Twin challenge

In March 2020, the commission will launch an EU industrial strategy to address the twin challenge of green and digital transformation. A key aim is to stimulate the development of lead markets for climate neutral and circular products. New business models centred on renting and sharing goods and services are expected to emerge.

The commission is also expected to increase regulatory and non-regulatory mechanisms to tackle false green claims. Further legislation and guidance on green public purchasing is to be proposed, with public authorities expected to take a lead role.

Measures to tackle over-packaging and waste generation are also on the cards. In addition, the need for the supply of sustainable raw materials is recognised, as well as ‘climate and resource frontrunners’ to develop the first commercial applications of breakthrough technologies in key industrial sectors by 2030.

Long-term renovation

The commission is set to rigorously enforce the legislation related to the energy performance of buildings. This starts with an assessment in 2020 of member states’ national long-term renovation strategies. The commission will also explore the possibility of including emissions from buildings in European emissions trading and will review the Construction Products Regulation (305/2011), as well as start a new initiative on renovation in 2020.

A 90% reduction in transport emissions is required by 2050 if climate neutrality is to be achieved. A strategy for sustainable and smart mobility is due to be launched by the commission in 2020.

Aspects expected to form part of this strategy include multimodal transport, automated and connected multimodal mobility, with price of transport to reflect its impact on the environment and health. A ramp-up of production and deployment of sustainable alternative transport fuels is anticipated.

Farm to fork

The new ‘farm to fork’ strategy to be presented by the commission in spring 2020 is aimed at establishing European food as the global standard for sustainability. New opportunities for all operators in the food value chain are foreseen. European farmers and fishermen will be key to managing this transition.

Member states’ national strategic plans for agriculture are predicted to fully reflect this strategy, expecting to lead to use of sustainable practices, such as precision agriculture, organic farming, agro-ecology, agro-forestry and stricter animal welfare standards.

Biodiversity strategy

Essential services such as food, fresh water, clear air, and shelter are provided by ecosystems. Helping to regulate the climate, they also mitigate natural disasters, pests and diseases. By March 2020, the commission will publish a biodiversity strategy.

All EU policies are expected to contribute to preserving and restoring Europe’s ‘natural’ capital. For example, ‘Farm to Fork’ will address pesticide and fertiliser use. With oceans increasingly recognised in mitigating and adapting to climate change, a sustainable ‘blue economy’ will play a central role in alleviating demands on land resources and tackling climate change.

In 2021, the commission will also adopt a zero-pollution action plan for air, water and soil. It is accepted that the EU needs to better monitor, report, prevent and remedy pollution from air, water, soil and consumer products.

Funding

To achieve the ambitions of the Green Deal, significant investment is needed. Various mechanisms are proposed to address this, including specific revenue streams from the EU budget, an allocation of at least 30% of the Invest EU Fund, and development of a Sustainable Europe Investment Plan.

National budgets and tax reforms will also play a key role, with State aid guidelines to be revised by 2021. Research and innovation will be supported by the Horizon Europe programme. Education and training is also on the funding schedule.

Green deal diplomacy

The EU aims to develop a stronger ‘green deal diplomacy’, focused on convincing and supporting others to promote more sustainable development, and it plans to mobilise all diplomatic channels to this end. At the same time, it recognises that game-changing policies only work if citizens are fully involved in designing them.

Consequently, EU citizens are seen to be and remain a driving force of the transition that is unfolding. By March 2020, the commission will launch a European climate pact to focus on ways to engage with the public on climate action.