EU Low-Carbon Strategy for 2050

Member States should reduce emissions by 80% by 2050 and invest additional 1,5% of the annual GDP, according to a Commission Communication published on 8 March 2011.
 
The Commission presented a “Roadmap” for moving to a competitive low carbon economy in 2050 which it says provides Member States with a long-term framework and cost-effective pathway to enable the EU to deliver greenhouse gas reductions by 80 to 95%.
 
This objective was endorsed by the European Council – in other words, the Member States – in February 2011 in order to be in line with the Copenhagen and the Cancun Agreements to keep climate change below 2ºC.
 
Together with the Energy Efficiency Plan and the expected White Paper on Transport, this Roadmap is part of the  “Flagship Initiative for a resource-efficient Europe” (which in turn is part of the 2020 Strategy) which sets out a framework to help ensure that long-term policy plans in areas such as energy, climate change, and transport produce results on resource efficiency.
 
The results of the Roadmap are based on the Commission's modelling approach which considered global projections for population growth, rising global GDP and global trends in climate action. The Roadmap is accompanied by an impact assessment document which provides more details behind the approach taken. 

Domestic reductions for 2050

The Commission has carried out an extensive modelling analysis with several possible scenarios showing how the EU should prepare for reductions in its domestic emissions by 80% by 2050 compared to 1990, in order to reach a competitive low carbon economy.
 
The Commission analysis shows that domestic emission reductions can be achieved of the order of 40% by 2030 and 60% by 2040. Such a pathway would result in annual reductions compared to 1990 of roughly 1% until 2020, 1,5% and 2 % until 2050. All Member States should soon develop national low carbon Roadmaps if not already done.
 
If the EU manages to implement its current policies and to achieve the 20% energy efficiency 20 % renewable energy targets by 2020, this would enable the EU to outperform the current 20% emission reduction target and achieve a 25% reduction by 2020. For this purpose, the revised Energy Efficiency Plan should be fully implemented.
 
R&D and early deployment of technologies, such as various forms of low carbon energy sources, carbon capture and storage, smart grids and hybrid and electric vehicle technology, are necessary. Therefore, to realise these milestones as cost-effectively as possible the full implementation of the Strategic Energy Technology Plan, requiring an additional investment in R&D and demonstration of € 50 billion over the next 10 years, is required.

Sectoral reductions

The Roadmap explores the pathways for emission reductions for 2030 and 2050 for some key sectors:

 Power

The Commission analysis shows that the increased use of electricity could almost totally eliminate CO2 emissions by 2050, mainly by partially replacing fossil fuels in transport and heating.

The use of low carbon technologies in the electricity mix is estimated to increase from around 45% today to around 60% in 2020, including through meeting the renewable energy target, to 75 to 80% in 2030, and nearly 100% in 2050. Investment in smart grids is a key enabler for a low carbon electricity system, as well as in new technologies, such as photovoltaics.
 
The EU ETS will be critical in driving a wide range of low carbon technologies into the market, so that the power sector itself can adapt its investment and operational strategies. This would need a sufficient carbon price signal and a long-term predictability. The Commission envisages different measures, like revisiting the agreed linear reduction of the ETS cap, or energy taxation and technological support.

Transport

The European transport system has to become more efficient and sustainable, mainly through technological innovations allowing to achieve a  
• vehicle efficiency through new engines, materials and design 
• cleaner energy use through new fuels and propulsion systems
• better use of networks and safer and more secure operation through information and communication systems
The upcoming White Paper on Transport will provide a set of measures to increase the sustainability of the transport system.
 
Emissions from road, rail and inland waterways could be brought back to below 1990 levels in 2030, in combination with measures such as pricing schemes to tackle congestion and air pollution, infrastructure charging and alternative fuels and propulsion methods. The development of hybrid engine technologies should be better advanced, as well as large scale electrification. The greater use of sustainable biofuels is also encouraged.

Construction

Improvement of the energy performance of buildings would allow low-cost and short-term opportunities to reduce emissions. The Commission's analysis shows that emissions in this area could be reduced by around 90% by 2050. The Directive on energy performance of buildings already states that new buildings built from 2021 onwards will have to be nearly zero-energy buildings.

In February 2011 the European Council, decided that from 2012 onwards all Member States should include energy efficiency standards in public procurement for relevant public buildings and services. By the end of 2011, the Commission will present a Communication on "Sustainable Construction".

The analysis projects that in the next ten years, investments in energy-saving building components and equipment will need to be increased by up to € 200 billion.

Industrial sector

The Commission's analysis shows that GHG emissions in the industrial sector could be reduced by 83 to 87% in 2050.

Energy intensive sectors to reduce emissions by half, by the application of more advanced resource and energy efficient industrial processes and equipment and increased recycling. Carbon capture and storage would also need to be deployed on a broad scale after 2035 in order to capture industrial process emissions.

The Commission intends to develop specific Roadmaps in cooperation with the sectors concerned.

Sustainable land use

The Commission's analysis shows that by 2050 the agriculture sector can reduce non-CO2 emissions by between 42 and 49% compared to 1990.

Agricultural policies should focus on promoting sustainable efficiency gains, efficient fertiliser use, bio-gasification of organic manure and improved livestock productivity.

Improved agricultural and forestry practices can increase the capacity of the sector to preserve and sequester carbon in soils and forests. This can be achieved through maintaining grasslands, restoring wetlands and peat lands, reducing erosion and allowing for the development of forests.

These options will be further addressed in the Common Agriculture Policy legislative proposals for 2013, as well as the forthcoming Bio-economy Communication. The Commission is also preparing an initiative on land use later this year.
 
By 2050, agriculture is projected to represent a third of total EU emissions, tripling its share compared to today. The farming sector is also potentially at some risk of carbon leakage, so changes in production and trade patterns should take into account global reduction of emissions. The Commission will continue to update the list of sectors at risk of carbon leakage as foreseen in the EU ETS Directive. Other options for addressing carbon leakage are out in the Communication of May 2010, like the inclusion of imports into the ETS. The best protection against the risk of carbon leakage would be effective global action. 

Increase in capital investments

Low carbon energy sources and their infrastructure would require an increase in public and private investment to around € 270 billion annually. This represents an additional investment of around 1,5% of the annual EU GDP on top of the overall current investment representing 19% of GDP in 2009.
 
In the implementation of the 20% energy efficiency target, the Commission will have to monitor the impact of new measures on the ETS in order to maintain the incentives in investments.

Additional public private financing mechanisms are also necessary. Public finance through innovative financing instruments, such as revolving funds, preferential interest rates, guarantee schemes, risk-sharing facilities and blending mechanisms can mobilise private finance, including for SMEs and consumers.
 
As part of the development of the next Multi-Annual Financial Framework, the Commission will examine how EU funding can support instruments and investments that are necessary to promote the transition to a low carbon economy, taking into account the specificities of sectors, countries and regions.

Reducing energy costs and fossil fuel imports

Energy efficiency and the switch to domestically produced low carbon energy sources will reduce the EU's average fuel costs by between € 175 billion and € 320 billion per year.

If a global climate action is undertaken, less fossils fuel would need to be imported into the EU and the cost of imports would decline. However, fossil fuel prices are projected to be significantly higher in case of limited global action.

In 2050, the EU's total primary energy consumption could be about 30% below 2005 levels.

More domestic energy resources would be used, in particular renewables. Imports of oil and gas would decline by half compared to today, reducing the negative impacts of potential oil and gas price shocks significantly. Without action the oil and gas import bill could instead double compared to today, a difference of € 400 billion or more per annum by 2050, the equivalent of 3% of today's GDP.

Improving air quality and health

Reducing of GHG emissions would contribute to air quality measures and help reduce air pollution. The combined effect of the two measures would bring about more than 65% lower levels of air pollution in 2030 compared to 2005. In 2030, annual costs of controlling traditional air pollutants could be more than € 10 billion lower. Public health would also be improved, with a reduction in health care costs and damage to ecosystems, crops, materials and buildings.

In 2013 there will be a review of the EU Air Quality Policy, with aim to maximise co-benefits with climate policy and minimise negative tradeoffs. 

International level

The EU is responsible for 10% of global emissions and therefore will not be able to tackle climate change on its own if no strong measures at international level are taken. A recent report by UNEP estimated that the full implementation of the pledges made since Copenhagen would reach 60% of the required emission reductions until 2020. If no firm global action is taken against climate change, temperatures might increase by more than 2°C already by 2050, and more than 4ºC by 2100. To avoid this, global greenhouse gas emissions need to be reduced by at least 50% compared to 1990.

Next steps

The Commission will hold a stakeholder conference on the Roadmap on 17 March 2011. The aim of the conference will be to explain the key points of the Roadmap to interested parties.

The Commission Communication is addressed to the Council and the European Parliament which may respond to it.

The Commission intends to use the Roadmap as a basis for developing sector specific policy initiatives and Roadmaps, such as the upcoming White Paper on Transport.