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Half-baked EU climate proposals missing key ingredients

14 July 2021
by WWF -- last modified 14 July 2021

The European Commission's Fit for 55% package of climate and energy proposals for 2030 is stronger and wider ranging than anything that has come before. However, it still falls far short of what's needed for a science-based and socially fair shift to climate neutrality, and completely fails to fix the EU's appalling bioenergy policies.


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Bright spots include a requirement for all Emissions Trading System (ETS) revenues to be spent by Member States on climate action - up from the 50% spending recommendation in place today. This is crucial to ensure that the climate - and therefore, EU citizens - benefit from these revenues. Another positive point is the move to bring international shipping under the ETS, which would finally help tackle the sector's carbon pollution.

But these glimmers of progress are largely overshadowed by significant flaws and missing elements from the proposals.

Most notably, the overall targets remain far too low. WWF and many others have long pointed out that the 55% net emissions reductions target needs to be more like 65% gross reductions to contribute to keeping temperature rise to 1.5°C and avoid out of control climate change. The package does not tackle this gap, proposing for renewable energy just a 40% target, for example, while 50% by 2030 would do far more to protect the climate and build a sustainable future economy.

Imke Lübbeke, head of climate and energy at WWF European Policy Office said:

"The Commission's answer to the climate emergency is like trying to climb a mountain without a rope. The package will help the EU meet its goals, but it's far from what the science requires: all the targets - from the Emissions Trading System to the Land Use sector - must be increased.

"What's more, some key provisions are missing from the package, some are not right and some will actually do more bad than good. The EU must stop spending money on free pollution, we must ensure that poorer households do not lose out, we must stop the scandalous practice of subsidising the burning of trees and crops for energy", added Lübbeke.

A 61% cut of emissions under the ETS is not enough to fix the system, and its most glaring hole is not patched up. Free pollution - awarded to heavy industries in the form of emissions allowances - is only addressed through the proposal to make free allocation conditional on investments in techniques to increase energy efficiency. However, if a company does not comply, it will still receive as much as 75% of its previously allocated free allowances. WWF wants to see free allocation end as of 2023, and allocations to be auctioned instead. The Carbon Border Adjustment Mechanism, which will put a levy on imports of certain goods from regions with less strict rules on climate, must be designed only as a complement to the ending of free allocation of allowances under the ETS, not on top of free allocation. However the Commission proposes to introduce a simplified CBAM for three years (2023-2026) and fully phase out free allowances only in 2035. Revenues from the ETS should help finance the transition to climate neutrality.

The Commission also proposes measures, via the 'Social Facility' and the ETS, to ensure its package does not unfairly impact some people or regions more than others - and this is positive. However, to be effective these measures must be properly resourced, underpinned by comprehensive analysis and planned inclusively. The extension of the ETS to transport and buildings is concerning because it could penalise the least well off. Another alarming element is the loopholes which would allow Member States to avoid using revenues to support the most vulnerable, for example they can report generally on money spent on climate and social measures, without it having to be 'new' or additional revenues from the ETS. 

Perhaps the worst thing in the package is the Commission's disgraceful failure to tighten the rules on bioenergy in a meaningful way. Burning trees and crops for energy increases emissions compared to fossil fuels, either in general or over the timeframe we have available to stop climate change. Yet despite this, and with some trivial exceptions, these practices will still be considered 'renewable' and so eligible for public subsidies. This approach flies in the face of science, and risks undermining much of EU climate action.

What's more, with its changes to the LULUCF Regulation the Commission has failed to make the most of nature as a climate solution and bring in measures that would also benefit biodiversity. The target for net carbon dioxide removals is only half what it should be and the Commission is planning to encourage the use of offsetting in the land use sector to avoid emission cuts elsewhere.

WWF's mission is to stop the degradation of the planet’s natural environment and to build a future in which humans live in harmony with nature. The European Policy Office contributes to this by advocating for strong EU environmental policies on sustainable development, nature conservation, climate and energy, marine protection, sustainable finance and external action.

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