Energy Market, EU – Baltic States, Modern EU

In October 2014, the EU Heads of State or Government set a binding economy-wide domestic emissions reduction target of at least 40% by 2030 compared to 1990 emission levels. All sectors of the economy should contribute to achieving these emission reductions. To do so in a cost-effective manner, the industrial and power sectors covered by the EU Emissions Trading System (ETS) will need to reduce emissions by 43% by 2030 compared to 2005. Other sectors of the economy as transport, buildings, agriculture, waste, land-use and forestry would need to reduce emissions by 30% by 2030 compared to 2005.

Together with the 2015 proposal for the revision of the EU Emission Trading System (ETS), the new climate-related legislative proposal will steer Europe's low-carbon transition and respond to the EU commitment under the 2015 Paris Agreement on climate change. The Commission will start working on the Action Plan on low-emission mobility to present the remaining initiatives. By the end of 2016, the Commission intends to present further initiatives on renewables, energy efficiency and internal energy market which form part of the Energy Union Strategy.

Present proposal presents binding annual greenhouse gas emissions targets for EU states from 2021-30 for the transport, buildings, agriculture, waste, land-use and forestry sectors as contributors to EU climate action (see Fact sheet MEMO/16/2499 and Fact sheet MEMO/16/2496). The new framework is based on the principles of fairness, solidarity, cost-effectiveness and environmental integrity. All EU states will decide how to implement the measures to meet the agreed 2030 target. The Commission is also presenting a strategy on low-emission mobility setting the course for the development of EU-wide measures on low and zero-emission vehicles and alternative low-emissions fuels (see Fact sheet MEMO/16/2497).

Commission’s opinion

Vice-President in charge of the Energy Union Maroš Šefčovič underlined that both the 2015 reform of the Emissions Trading System and the present proposal on greenhouse gas emissions targets for EU states form the 2030 Energy and Climate legislative framework. Besides, the EU is also setting European transport system firmly on the zero-emission-path. The new package shows that the EU is mobilising all its policies towards the competitive, circular and low-carbon economy which is embodied in the Energy Union Strategy.

Vice President for Jobs, Growth, Investment and Competitiveness Jyrki Katainen said that the strategy was more than about transport and emissions: it should be seen as another element in EU efforts to modernise states’ economy and strengthen Internal Market. It defines key priorities on the way to low-emission mobility and gives clear guidance for future investors. It contributes to the EU goals to create conditions for more competitive economy with quality jobs.

EU Commissioner for Climate Action and Energy Miguel Arias Cañete stressed that the EU’s ambitious emissions reduction targets could be achieved only through collective member states’ efforts. The proposed national binding targets are fair, flexible and realistic: they set the right incentives to unleash investments in transport, agriculture, buildings and waste management.

EU Commissioner for Transport Violeta Bulc underlined that transport accounted for a quarter of EU’s greenhouse gas emissions and is a main cause of air pollution. The transition to low-emission mobility is therefore essential to reach the EU's ambitious climate objectives and to improve the quality of life in cities. It is also an opportunity to modernise the EU's economy and keep Europe's industry competitive. The new strategy presents a roadmap towards low-emission mobility and will give an impetus to that shift, she stressed.  

Efforts have already started in the EU to align private investments with climate and resource-efficiency objectives. The EU financial instruments are significant contributors to climate funding. Over 50% of the investments approved so far are climate relevant. As part of the Investment Plan for Europe, the European Fund for Strategic Investments is on track to deliver on mobilising at least € 315 bn in additional investment in the real economy by mid-2018. In addition, the Commission actively works to ensure that the EU budget spending is aligned with climate objectives; at least 20% of the current EU budget is explicitly climate related.

Table: Proposed targets and access to new flexibilities: Baltic States picture

2030 target compared to 2005 & Maximum annual flexibility, as % of 2005 emissions:

More information in: = DG CLIMA news - website (including legal documents); = Text of the European Strategy for low-emission mobility: press release 20 July 2016 in:

http://europa.eu/rapid/press-release_IP-16-2545_en.htm; = Fact sheet: Questions and answers on the Commission's proposal on binding greenhouse gas emissions reduction for Member States (2021-2030); = Fact sheet: Questions and answers on the proposal to integrate the land use sector into the EU 2030 Climate and Energy Framework; = Fact sheet: Questions and answers on the European Strategy for low-emission mobility.

EU strategy for low carbon mobility

The global shift towards low-carbon and circular economy has started and its pace is accelerating. Thus, the Commission's low-emission mobility strategy sets clear and fair guiding principles to EU states to prepare for the future.

The low-emission mobility strategy frames the initiatives the Commission is planning in the coming years, and is showing how initiatives in related fields are linked and how synergies can be achieved. The following are main elements of the Strategy:

-   Increasing the efficiency of the transport system by making the most of digital technologies, smart pricing and further encouraging the shift to lower emission transport modes;

-   Speeding up the deployment of low-emission alternative energy for transport, such as advanced biofuels, renewable electricity and renewable synthetic fuels and removing obstacles to the electrification of transport modes;

-   Moving towards zero-emission vehicles. While further improvements to the internal combustion engines, the states need to accelerate transition towards low- and zero-emission vehicles. EU legislation currently refers to low-emission vehicles as vehicles having tailpipe emissions below 50g/km. This would include some plug-in hybrids, full electric cars and fuel cell (i.e. hydrogen-powered) vehicles; the latter two represent zero-emission vehicles too.

Cities and local authorities are crucial for the delivery of this strategy. They are already implementing incentives for low-emission alternative energies and vehicles, encouraging modal shift to active travel (cycling and walking), public transport and/or shared mobility schemes, such as bike, car-sharing and car-pooling, to reduce congestion and pollution.

Finally, this Strategy reiterates Europe's commitment in pursuing global efforts to control emissions from international aviation and maritime transport.

A strategy to support jobs, growth, investment and innovation

Efforts to strengthen Europe's competitiveness and stimulate the economy would go through the following directions:

-   The strategy will integrate a broader set of measures to support Europe's transition to low-carbon economy. It identifies key priorities, for example in research and innovation in low-emission mobility solutions, providing clarity for future investment decisions.

-   Manufacturing and service industries will be able to plan their investments and make business choices with a mid-century goal in mind. Europe's transition towards low- and zero-emission vehicles will be accelerated, fuel efficiency of lorries and coaches will need to step up. Barriers for innovative mobility services need to be removed.

-   The energy sector and fuel suppliers will be able to plan investments into advanced energy for transport, such as advanced biofuels.

-   Transport sector is an important employer; hence workers will receive help in acquiring the necessary skills to match the technological transition towards low-emission mobility, in the framework of the New Skills Agenda for Europe.

EU funding to support actions

The Strategy draws on existing mechanisms and funds. Commission’s Investment Plan for Europe plays a very important role, with significant progress already made with projects that are in the pipeline for funding under the European Fund for Strategic Investment. In addition, €70 bn is available for transport under the European Structural and Investment Fund, including €39 bn for supporting transition to low-emission mobility, of which €12 bn is for low-carbon and sustainable urban mobility alone. Under the research programme Horizon2020, € 6.4 bn is available for low-carbon mobility projects.

Benefits for the citizens and consumers

Once fully implemented in the states, it will lead to improvements in air quality, to reduction in noise levels, lower congestion levels and improved safety.

Consumers will benefit from more efficient, less-energy consuming cars. Consumers will also benefit from better infrastructure for alternative fuels, better links between modes of transport and better safety and fewer delays thanks to roll-out of digital technologies.

Better information will allow them to make informed choices for their daily mobility needs. For example, car labelling will be reviewed, and the respective benefits of alternative fuels will be made clearer.

Making transport system more efficient

Digital technologies, especially Cooperative Intelligent Transport Systems (C-ITS), have a huge potential to improve road safety as well as the efficiency and attractiveness of transport. The Commission is preparing a Plan to stimulate the use of such technologies, in particular communication links between vehicles and between vehicles and infrastructure. The Commission is also working on improving road charging, to make it fairer and more efficient and better reflect the polluter-pays and user-pays principles. This includes common standards for a distance-based charging system in the EU. The Commission will also take further measures to promote links between different modes of transport, helping to create seamless logistics chains.

Promoting the use of low-emission energy in transport

Transport in the EU still depends on oil for about 94% of its energy needs. Through the Strategy, the Commission is looking into how to accelerate the use of low-emission alternative energy, such as advanced biofuels, electricity, hydrogen and renewable synthetic fuels by providing strong incentives to innovate. With such policy measures the share of low-emission energy could increase, providing about 15-17% of transport energy demand in 2030 and replacing oil products.

The Commission is also looking into better synergies between the energy and transport systems, for example addressing distribution challenges of electricity at peak times. This would make charging of electric vehicles easier.

Create market for zero-emission vehicles

The Commission has proposed and already implemented some important improvements on how vehicle emissions are measured and verified. This is a necessary precondition to ensure that standards have an impact and that consumers can trust them. The Commission is working on post-2020 standards for cars and vans. Emissions from conventional combustion engines will need to be further reduced after 2020. Zero- and low-emission vehicles will need to be deployed and gain significant market share. Their deployment will significantly improve air quality in particular in cities. Together with this Strategy, the Commission is launching a public consultation to revise the current legislative framework for post-2020 standards for cars and vans.

To support demand by users, the Commission is working on improving customer information, for example by reviewing the Car Labelling Directive, and on incentives in public procurement rules, in the context of a revision of the Clean Vehicles Directive. This can be very powerful tool to support deployment for example of zero-emission city buses.

Stepping up action on lorries, coaches and buses

The Commission will accelerate work to curb carbon dioxide emissions from lorries, buses and coaches. They currently represent around a quarter of road transport carbon dioxide emissions and their share is set to grow.

While lorries, buses and coaches have been subject to similar air pollution standards as cars and vans, and are now required to meet them under real driving conditions, the EU has neither fuel efficiency standards for them, nor system to monitor their carbon dioxide emissions. Other countries, e.g. US, China, Japan and Canada, have already introduced standards, and some European manufacturers participate in these schemes.

Together with this Strategy, the Commission is launching a public consultation which primarily focuses on monitoring and reporting of emissions, but also seeks first feedback on standards.

Action at global level

The EU is committed to reaching an agreement to address international aviation emissions through a global market-based mechanism. This and other measures, such as the recently agreed international carbon dioxide standard for new aircraft, are intended to ensure the carbon neutral growth of international aviation from 2020. The EU will review its own domestic measure (the aviation element of the EU Emission Trading System) in the light of the outcome of the International Civil Aviation Organization's General Assembly meeting this autumn.

The EU is also committed to securing a mandatory global agreement for the collection and reporting of greenhouse gas emissions from international shipping. This needs to be complemented by an international agreement on an emissions reduction objective for the shipping sector. The EU already has legislation in place that requires ships using EU ports to monitor, report and verify their emissions from 2018. In the event of an international agreement, the EU may align this legislation to a global system.

Source: http://europa.eu/rapid/press-release_MEMO-16-2497_en.htm?locale=en.