Roadmap for moving to a low carbon economy in 2050 - guide

08 March 2011
by eub2 -- last modified 15 March 2011

The European Commission today adopted a Roadmap for transforming the European Union into a competitive low carbon economy by 2050. The Roadmap describes the cost-effective pathway to reach the EU's objective of cutting greenhouse gas emissions by 80-95% of 1990 levels by 2050. Based on the cost-effectiveness analysis undertaken, the Roadmap gives direction to sectoral policies, national and regional low-carbon strategies and long-term investments. The EU needs to start working now on long-term strategies, and the Roadmap provides guidance on how this transition can be achieved in the most cost-effective way. The European Commission has also taken the initiative because leading the global transition to a low carbon and resource-efficient economy will have multiple benefits for the EU.

Why has the Commission developed a Roadmap for moving to a low carbon economy in 2050?

There are several reasons for developing the Roadmap now.

Scientific evidence indicates that global warming needs to be limited to less than 2°C above the temperature in pre-industrial times (around 1.2°C above today's level) if the world is to have a fair chance of preventing severe climate change. This temperature ceiling has been endorsed by the international community.

Without firm global action to limit climate change, temperatures could increase by 2°C or more by 2050 and 4°C or more by 2100. To stay below 2°C every country will have to reduce its greenhouse gas emissions (GHGs), but developed countries will need to take the lead by targetting a cut of 80-95% below 1990 levels by 2050. The European Council and the European Parliament have endorsed this target range as an EU objective in the context of developed countries as a group making the reductions needed.

Achieving these deep emission cuts will require a transition to a climate-friendly, low carbon economy. With the 'climate and energy package' of legislation1 adopted in 2009 the EU already has a binding greenhouse gas reduction target for 2020 and a fully fledged set of policies to deliver this. The EU needs to start working now on long-term strategies to move beyond this up to 2050. The Roadmap provides guidance on how this transition can be achieved in the most cost-effective way. It gives insights into what type of technologies and actions need to be implemented and what types of policies the EU will need to develop over the next 10 years and beyond.

The European Commission has also taken the initiative because leading the global transition to a low carbon and resource-efficient economy will have multiple benefits for the EU. The Roadmap is a key building block of the 'resource efficient Europe' flagship initiative set up under the Europe 2020 strategy for smart, sustainable and inclusive growth. Maintaining its leading position in the development and implementation of innovative low carbon technologies will allow Europe to tap new sources of growth and to preserve jobs and create new ones. Building a low carbon economy will also reduce the EU's vulnerability to potential future oil shocks and other energy security concerns, substantially cut our energy import bill, and reduce air pollution and its associated costs.

At the UN climate conference in Cancún last December, it was agreed that low carbon development strategies are indispensable to fighting climate change. The Roadmap is the first step towards the development of such a strategy for the EU. By preparing the Roadmap the EU can help to stimulate the international climate negotiations in the run-up to the UN climate conference to be held in Durban, South Africa, at the end of this year.

What economic analysis was carried out to prepare the Roadmap?

The Roadmap is based on comprehensive economic modelling and scenario analysis, at both global and EU level, of how the EU can shift towards a low carbon economy by 2050. This objective is analysed against the backdrop of continued population growth, rising global wealth and varying global trends in terms of climate action, energy and technological development.

While there are always uncertainties relating to long term projections, the comprehensive nature of the modelling exercise undertaken, including integration of a wide range of potential future scenarios, makes the findings robust.

How much has the EU already reduced its emissions?

In 2009 greenhouse gas emissions from the 27 member states are estimated to have been around 16% below their 1990 levels2 Over the same period the EU economy grew by around 40%. The EU has thus succeeded in 'decoupling' the trend in its emissions (downward) from its economic development (upward).

What emission reductions will be needed in future?

      The Roadmap recommends that the EU meet its emissions reduction objective of 80% to 95% largely through internal measures. Emissions should be cut by 80% below 1990 levels by 2050 through domestic reduction measures alone. This focus on domestic reductions reflects an expectation that the supply of cheap international credits to offset emissions is likely to shrink by mid-century if all countries take more action on climate change.

The analysis shows that the cost-efficient pathway to an 80% 'domestic' reduction in 2050 calls for cuts, through domestic action alone, of 25% in 2020, 40% in 2030 and 60% in 2040 (compared to 1990). This pathway would require an annual reduction in emissions (compared to 1990) of approximately 1 percentage point in the decade up to 2020, 1.5 percentage points in the decade up to 2030 and 2 percentage points in the remaining two decades up to 2050.

Why set the emission reduction milestones on the basis of domestic measures alone?

The Roadmap focuses on how much of the 80-95% reduction objective should be met through domestic measures and how much through the acquisition of international credits to offset emissions in Europe.

From the analysis it was concluded that large-scale use of international credits will no longer be possible in 2050 as the global climate action needed to keep average warming below 2ºC will reduce the supply of credits and thus their availability at cheap cost. It is therefore economically logical to plan for reducing emissions almost entirely through domestic measures in the longer term.

Use of international credits in addition to the domestic measures taken would ensure the achievement of overall emission reductions beyond 80%.Why is a 25% domestic reduction by 2020 needed, and how can it be achieved?

The EU currently has a target to cut its emissions by 20% (compared to 1990 levels) by 2020. This target can be reached through a combination of domestic measures and use of international credits. But analysis by the Commission last year indicated that with current policies, including full implementation of the 20% renewable energy target by 2020, the EU should be able to reduce these emissions through internal measures alone.

The analysis on which the Roadmap is based shows that the most cost-efficient pathway to an 80% domestic reduction in 2050 requires a 25% cut in 2020 through domestic measures alone. The less that is done to reduce emissions in the early decades, the higher the reductions that will be needed later, with significantly higher carbon prices and costs as a result.

The analysis also shows that a 25% domestic reduction by 2020 can be achieved if the EU delivers on its existing commitment to improve energy efficiency 20% by 2020. With current policies the EU is on track to improve energy efficiency by only around 10%. The Energy Efficiency Plan proposed by the Commission today aims to help ensure the 20% improvement is fully achieved.

Why should some allowances be set aside in the EU Emissions Trading System during the 2013–2020 period? Won't this increase uncertainty in the carbon market?

The EU Emissions Trading System (ETS) sets a cap on the total emissions allowed from the sectors it covers by allocating a finite number of allowances that companies can trade. This ensures that reductions can be achieved cost efficiently across all sectors involved.

The implementation of additional energy efficiency measures, other than those motivated through the carbon price signal in the ETS, would actually reduce the scarcity of allowances in the system and thus lower carbon prices. This would counter the intended effect of these energy efficiency measures.

Hence, setting aside a number of allowances from the amount to be auctioned during the 2013-2020 trading period would be a necessary complement to achieve sustainable energy efficiency improvements that would contribute to the 20% energy savings objective. It would restore the reward for low carbon investments and prepare the ETS sectors for the innovations needed to reduce emissions further in the medium to long term.

Setting aside allowances is not a backdoor way to introduce a tighter ETS cap nor an intervention in the carbon market. Under the revised ETS Directive decisions are made on the timing of auctions to be held between 2013 and 2020. Given support by other European institutions and further consultations with stakeholders, a gradually increasing number of allowances in the auctioning budget could be set aside from 2013.

What about the EU's conditional offer to reduce emissions 30% by 2020?

In the context of the ongoing international negotiations on a future global framework for climate action, the EU has offered to scale up its emissions reduction target for 2020 to 30% if the conditions are right. This requires other major economies to take on their fair share of a global emissions reduction effort. This offer remains on the table and is not affected by the Roadmap.

Is an 80% reduction by 2050 technically feasible? Is it economically affordable?

The analysis underlying the Roadmap shows that an 80% domestic reduction is both technically feasible and economically affordable.

It is technically feasible with proven technologies that exist today if sufficiently strong incentives (such as a robust carbon price) are applied across all sectors. The analysis demonstrates that research and development of low carbon technologies and their early demonstration and deployment are very important to make the transition as cost-effective as possible. Hence, the Roadmap emphasises the importance of the EU's Strategic Energy Technology Plan as an essential component of Europe's low carbon development strategy.

Regarding its economic affordability, achieving an 80% emissions reduction by 2050 will require additional annual investment averaging 1.5% of EU GDP - or €270 billion - for the next 40 years on top of current overall investment of around 19% of GDP. This extra spending would simply return total investment to levels seen before the economic crisis. It is not a net cost for the economy or a reduction of GDP, but an additional investment in Europe's domestic economy.

This will have multiple benefits in terms of stimulating innovation, new sources of growth and job creation, strengthening energy security and reducing air pollution and its associated costs. Moreover, the additional investments will lead to fuel cost savings averaging €175-320 billion3 every year, thus largely offsetting or, at the top end of the range, even over-compensating the extra investment cost. Fuel costs are paid largely to third countries while increased investments create added value in Europe's economy, creating jobs and improving productivity.

How can an 80% reduction by 2050 be achieved in practice? Which sectors must do what?

Reducing emissions by 80% by mid-century will require substantial further innovation in existing technologies but does not require new 'breakthrough' technologies, such as nuclear fusion. Technologies addressed in the Strategic Energy Technology Plan - solar, wind and bio-energy, smart grids, carbon capture and storage, low or zero energy homes, smart cities - will form the backbone of the low carbon economy in 2050.

The low carbon economy can also be achieved without major lifestyle changes, for example in diet or mobility patterns. However, such changes could help, and could improve the overall cost-effectiveness of the transition by helping to avoid more expensive reduction options.

Based on the cost-effectiveness analysis undertaken, the Roadmap gives ranges for emission reductions to be achieved in key sectors by 2030 and 2050 (see table).

The greatest emission reductions can be made in power generation, which will be almost completely 'decarbonised'4 by 2050. Above-average contributions in the medium and long term can also be achieved by the residential and services sector. Industry would decarbonise slightly less than the overall economy in the medium term, but would be able to achieve significant further reductions by 2050, in particular due to the mainstream application after 2030 of carbon capture and storage technology - CCS – to industrial process emissions that cannot be reduced in other ways.

Transport and agriculture are the main sectors where no full decarbonisation is achieved, even in the longer term. In transport, the increasing trend in emissions seen over the past 20 years is reversed but the overall reduction achieved by 2050 is only around 60% below 1990 levels. The analysis did not cover international maritime transport, whose emissions continue to grow rapidly and account for about 4% of global man-made CO2 emissions, but many cost-effective solutions exist to reduce these.

For agriculture the pattern is the inverse of transport. It achieves significant emission reductions between now and 2030, but after that reductions will be more limited. In contrast to the sectors already mentioned, agriculture's main emissions are not of carbon dioxide (CO2) but of methane and nitrous oxide (N20).

Non-CO2 emissions from other sources - such as methane from waste landfills and N20 emissions from industrial processes - will also be rapidly reduced until 2030, after which only limited further reductions take place.

The industrial and power sectors covered by the EU Emissions Trading System can achieve greater emission reductions, and more cost-effectively, than the sectors outside the system. By 2050 emissions from the ETS sectors would be reduced by around 90% compared to 2005 (the year the ETS was launched), whereas the sectors outside the ETS would reduce by nearly 70%.

70%.

GHG reductions compared to 1990	2005	2030	2050
Total	-7%	-40 to -44%	-79 to -82%
Sectors
Power (CO2)	-7%	-54 to -68%	-93 to -99%
Industry (CO2)	-20%	-34 to -40%	-83 to -87%
Transport (incl. CO2 aviation, excl. maritime)	+30%	+20 to -9%	-54 to -67%
Residential and services (CO2)	-12%	-37 to -53%	-88 to-91%
Agriculture (non-CO2)	-20%	-36 to -37%	-42 to -49%
Other non-CO2 emissions	-30%	-72 to -73%	-70 to -78%

What carbon prices are needed to achieve such reductions?

Carbon pricing is an effective instrument to reduce emissions across the whole economy. It ensures cost efficiency and raises revenues that can be recycled into other productive uses in the domestic economy. In the Commission's analysis, carbon pricing is used to simulate the level of incentives necessary to ensure further GHG emission reductions over time.

The analysis projects that carbon prices will need to increase gradually to reach €100-€3705 per ton of CO2 (or the equivalent amount of other greenhouse gases) by 2050.

Carbon prices would be highest if innovation in certain technologies stalled or climate action delayed. Carbon prices would be lowest if fossil fuel prices were high. But carbon pricing is a better tool for decarbonising the economy than high fossil fuel prices. Revenues from carbon pricing can be recycled in the local economy whereas the cost of high fossil fuel prices cannot, especially in the EU which is heavily reliant on fossil fuel imports.

What type of investments are needed to build the low carbon economy?

Additional investment is needed in sectors such as power generation, transport, the built environment (buildings and other infrastructure) and industry. However the largest investment in absolute terms would not be in power generation, electricity grid infrastructure or industry but rather in demand-side technologies in the transport sector (most notably vehicles) and the built environment (for instance energy-efficient building materials and components, heat pumps and appliances).

How can these investments be financed?

The majority of investments will have to be financed by the private sector and consumers. A combination of smart pricing policies and instruments that can unlock private investment will be required. Some Member States have already introduced policies such as preferential loan schemes, guarantee schemes and risk sharing facilities that pay back part of a low-energy investment, and tax rebates.

The EU will also need to address how in future a larger share of regional funding from the EU budget can be allocated to policy instruments that leverage private sector resources for low carbon investments.

The EU Emissions Trading System is an important instrument for steering investment in the sectors it covers - power generation, energy-intensive industry and, from next year, aviation - because it financially rewards low carbon investments.

In other sectors, such as transport and buildings, public policy will also be needed to steer consumer choices. To a certain extent this is possible through conventional regulatory measures such as the efficiency standards introduced through the EU Ecodesign Directive, EU legislation limiting CO2 emissions from cars, national building standards and national carbon taxes. Awareness raising and consumer information can also help.

What impact will moving to a low carbon economy have on employment?

Investing early in the low carbon economy will create new jobs in both the short and medium term.

Renewable energy has a strong track record in job creation. In just five years, Europe's renewable industry has increased its work force from 230,000 to 550,000. Low carbon investment also offers major job opportunities for the construction sector. With some 15 million employees in the EU, construction has been particularly hard hit by the economic crisis. Its recovery could get a significant boost through a major effort to accelerate the building of energy efficient houses and the renovation of existing ones to make them low carbon. The Energy Efficiency Plan confirms the large job creation potential of promoting investments in more efficient equipment.

The Commission has repeatedly emphasised the positive employment benefits that could result if governments used revenues from the auctioning of EU Emissions Trading System allowances and CO2 taxation to reduce labour costs. If this is done, stepping up the emissions reduction effort for 2020 from 20% to 25% has the potential to increase total employment in the EU by up to 1.5 million jobs by 2020.

In the longer term, the creation and preservation of jobs will depend on the EU's ability to lead the development of new low carbon technologies through increased research and development spending and innovation, as well as maintaining favourable economic framework conditions for investments.

As industry takes advantage of the economic opportunities provided by the low carbon economy, the need to ensure a skilled work force will become more pressing, especially in the construction sector, technical professions, engineering and research. This will require targeted vocational training of the existing work force towards these new 'green' job opportunities.

How can moving to a low carbon economy improve the EU's energy security?

Moving to a low carbon economy in 2050 would substantially improve the EU's energy security.

Today the EU imports some 55% of its primary energy - the transport sector remains more than 90% dependent on oil - and under a business as usual scenario this proportion is expected to increase slightly to 57% by 2030 due to reduced oil and gas output from the North Sea. The European economy would therefore remain exposed to serious potential risks from energy price fluctuations.

The Roadmap would reduce the EU's total primary energy consumption to 1650 million tons oil equivalent (Mtoe) in 2030 and around 1300-1350 Mtoe in 2050. This is a significant decrease compared to more than 1800 Mtoe in 2005.

More domestic energy resources would be used, in particular renewable energy, and by 2050 total oil and gas imports would be more than halved compared to 2005. Starting from 2025, this would lead to a reversal in the trend of increasing fuel import dependency, and by 2050 the EU would import less than 35% of its energy needs. By mid-century the oil and gas bill would be around 80% lower than if no additional climate measures were taken - a saving of € 400 billion or more.

These reductions would result mainly from technological changes and efficiency improvements on the demand side. Initially the biggest improvement in energy efficiency would come from more efficient buildings, heating systems and vehicles. This would be reinforced later by electrification in transport and heating, which would combine very efficient demand-side technologies (plug-in hybrids, electric vehicles, heat pumps) with a largely decarbonised power sector.

What would the impact on world fossil fuel prices be if climate action were taken globally?

The analysis underlying the Roadmap shows the interaction between action at global level to address climate change and the future evolution of fossil fuel prices.

Without additional action on climate change, oil prices are projected to almost double over the next four decades as global consumption would remain high. If climate action were taken globally, oil prices would remain stable compared to today. But if international action were only fragmented, and emission reductions did not go beyond those pledged to date, this price reduction would not materialise and oil prices would be only 15% lower than if no additional action were taken.

All these results are consistent with the analysis of the International Energy Agency's World Energy Outlook 2010 which also assessed these impacts.

Will a low carbon economy reduce air pollution?

Yes, considerably. With an 80% reduction in domestic emissions below 1990 levels by 2050, average air pollution levels would be more than 65% lower than in 2005 with annual cost savings totalling up to €88 billion. In 2050 the costs of controlling traditional air pollutants could be close to €50 billion lower per year. In addition the improvement in air quality would improve public health and reduce mortality, with annual benefits estimated at up to €38 billion in 2050. There would also be reduced damage to ecosystems, crops, materials and buildings, but these benefits have not been quantified.

What would a low carbon economy mean for the power sector?

The Roadmap suggests CO2 emission reductions in the power generation sector of 54-68% by 2030 and 93-99% by 2050 (compared to 1990 levels).

The efficiency of electricity use by end users would increase dramatically. Nevertheless in absolute terms electricity consumption would keep on increasing up to 2050 at a similar pace as the last 20 years. This would result from increasing demand for electricity from the heating and transport sectors, triggered by the wide-scale application of efficient demand-side technologies, such as plug-in hybrid vehicles, electric vehicles and heat pumps.

On the supply side, the share of low carbon technologies in the electricity mix – renewable energy sources, electricity from fossil fuel-generation plants fitted with carbon capture and storage technology, nuclear power – would rapidly increase from 45% today to around 60% in 2020, 75-80% in 2030 and nearly 100% in 2050.

The Commission will develop a specific 2050 Roadmap for energy by the end of this year.

What would a low carbon economy mean for the transport sector?

The Roadmap suggests that, compared to 1990 levels, overall CO2 emissions from transport will be between 20% higher and 9% lower by 2030 and 54-67% lower by 2050.

Improved fuel efficiency of conventional petrol and diesel engines would be the major contributor to the decarbonisation of transport up to 2025. For passenger cars these efficiency improvements are driven by a gradual hybridisation. After 2025 a real fuel switch takes place for passenger cars towards electro-mobility with the more wide-scale introduction of, for instance, plug-in hybrids and electric vehicles.

For aviation, and to a lesser extent heavy duty road vehicles, biofuels would play a more important role, mostly after 2030. Aviation would see a significant increase in biofuel use.

Electro-mobility limits the use of biofuels in transport. Without electrification the use of biofuels would be twice as high.

The analysis does not include specific transport policies to reduce different kinds of 'external' costs, such as congestion and air pollution. Such policies can lead to additional benefits.

The analysis demonstrates that there is a clear correlation between reductions in the transport sector and in the power sector. If the transport sector reduces emissions more through electro-mobility, electricity use increases, putting upward pressure on emissions from electricity production. Thus even if most of the transport sector is not covered by the EU Emissions Trading System (with the exception, from next year on, of aviation), over time transport would increasingly influence developments in the ETS.

While the analysis did not include international maritime transport which causes about 4% of global man-made CO2 emissions and whose emissions continue to grow rapidly, all sectors should contribute to emission reductions and many cost-effective solutions exist to reduce greenhouse gases from this sector. The climate and energy package of legislation adopted in 2009 envisages that the international maritime sector should contribute to the EU's emission reduction commitments. In the event that no international agreement which includes international maritime emissions in its reduction targets is approved by the EU by the end of this year, the Commission will need to address this issue and include international maritime emissions in the EU reduction commitment. The forthcoming White Paper on transport will address maritime transport.

What would a low carbon economy mean for industry?

The Roadmap envisages CO2 reductions from industry of 34-40% by 2030 and 83-87% by 2050 (compared to 1990).

Up to 2030 and just beyond, CO2 reductions would happen gradually through further decreases in energy intensity. After 2035 the application of carbon capture and storage (CCS) technology for CO2 emissions from industrial processes that cannot be reduced in other ways (e.g. steel and cement production) becomes mainstream, allowing much deeper cuts by 2050.

Non-CO2 emissions from industry are already forecast to fall to very low levels without additional climate action due to their inclusion in the EU Emission Trading System.

Will moving to a low carbon economy reduce the competitiveness of European industry?

The analysis underlying the Roadmap confirms that the impact on the production levels of energy-intensive industries would be limited. Continued free allocation of EU Emissions Trading System emission allowances would protect exposed energy-intensive industry in Europe even if the EU stepped up its action but other countries did not.

As mentioned in the previous answer, to realise the emission reduction potentials foreseen after 2035 requires the large-scale introduction of CCS technology. This would increase costs in the energy-intensive industrial sectors by more than €10 billion annually in the decade up to 2050. If climate action were taken worldwide this would not raise competitiveness concerns. But if the EU's main competitors did not engage in a similar manner, the EU would need to consider how to address the added risk of 'carbon leakage' (industrial relocation out of Europe, leading to higher overall emissions).

What would a low carbon economy mean for the residential and services sector?

The Roadmap envisages a reduction in CO2 emissions from the residential and services sector of 37-53% by 2030 and 88-91% by 2050 (compared to 1990 levels).

Space heating and cooling, water heating and cooking are the major energy consumers in this sector, with lighting and electrical appliances accounting for much of the remaining energy use.

The key trends foreseen are similar to those in the transport sector. First, overall energy demand would be reduced: energy efficiency, in particular the energy performance of buildings, would be improved, with passive house technology becoming mainstream and the energy performance of existing buildings greatly improved through refurbishments.

Second, as in the transport sector, there would be a gradual but major shift in fuel use away from oil, gas and coal towards electricity and renewable fuels. Efficient heat pumps would play an important role and in addition, biogas, biomass and solar heating would replace fossil fuels.

What will happen to non-CO2 emissions, in particular from agriculture, in a low carbon economy?

Between 1990 and 2005, EU emissions of greenhouse gases other than CO2 - 'non-CO2 emissions' - were reduced by a quarter, considerably faster than CO2 emissions. Today emissions of nitrous oxide (N20) and methane from agriculture make up more than half of non-CO2 emissions from all sources.

Non-CO2 emissions from sources other than agriculture are projected to decrease significantly, especially before 2030. This is due to the relatively cheap reduction options available to address these emissions, and the inclusion of a large part of them in the ETS from 2013 onwards. The Roadmap anticipates that non-CO2 emissions from sectors other than agriculture would be 72-73% lower in 2030 and 70-78% lower in 2050 (compared to 1990).

Agricultural non-CO2 emissions already fell by 20% from 1990 to 2005. They are projected to continue decreasing, reaching a reduction of 36-37% in 2030 (compared to 1990) but after that the downward trend would slow, resulting in a 42-49% cut by 2050.

With emissions of just over 300 million tonnes per year in 2050, agriculture would account for around one-third of total EU emissions by then, tripling its share from 2005. This points to the important role of agriculture in achieving decarbonisation of the European economy. If agricultural emissions did not continue to decrease, other sectors would need to reduce theirs by even more.

At the same time, as global food demand grows and eating habits change towards more carbon-intensive diets, the analysis clearly shows there are limits to the reduction of agricultural emissions in the EU. A potentially important element that is not included in the quantitative assessment is the possible impact of behavioural changes that would reverse the current trends towards more carbon-intensive diets. In the long term, a transition to a more healthy diet could reduce methane and nitrous oxide emissions substantially.

What will happen to emissions if more bio-energy is produced in a low carbon economy?

Energy from biomass is a significant component of the increase in renewable energy projected over the coming decades. Production of bio-energy would more than triple in the period 2010 to 2050 as Europe moved to a low carbon economy. Increased demand for bio-energy would be met mainly from increased biofuel production from agricultural crops and increased use of agricultural residues, woody biomass and waste materials.

The increases in demand for bio-energy will have effects on the way land is used in the EU as bio-energy competes to a certain extent with other end uses such as production of food, animal feed, paper and timber. Furthermore, production of bio-energy could itself have an impact on the EU's GHG emissions by:

* Causing changes in agricultural inputs, such as increased fertiliser use, that could increase emissions;
* Causing changes in land use, such as changes in deforestation or afforestation rates or conversion of grassland into cropland, that lead to higher emissions;
* Causing changes in forest management practices which alter the extent to which managed forests emit or absorb emissions.

In Europe, land use, land use change and forestry (collectively known by the acronym LULUCF) at present absorbs more carbon than it emits. In net terms, it is a carbon 'sink'. Over time, this net sink is projected to decrease significantly, due to the ageing of forests (older trees absorb less carbon) but also because of increased harvesting of trees for production of bio-energy, paper and timber.

Reducing the increase in demand for virgin wood, for instance by recycling more organic waste, paper and wood, would limit the extent to which the net sink function would diminish over time. EU demand for bio-energy could also be met through imports, which would reduce environmental impacts in the EU but potentially increase them in third countries.

The inter-relationships between the energy, forestry and agricultural sectors are complex, and uncertainties are large. This issue will require continued follow-up. The Commission is preparing an initiative on this issue for later this year.

What about food prices in a low carbon economy?

Improvements in agricultural productivity will be very important to ensure that increases in bio-energy can be delivered without having overly negative impacts on other end uses of forestry or agriculture, including food production.

The analysis underlying the Roadmap concluded that agriculture and forestry can achieve all of the following competing goals in 2050 if continued productivity improvements can be achieved on a global scale:

* the need to feed an increasing global population (projected to reach just over 9 billion in 2050) that becomes more affluent in general;
* the EU's objective of stopping net global deforestation, in particular in developing countries;
* a reduction in greenhouse gas emissions from agriculture;
* increased biomass use for energy in the context of global action on climate change.

However, the analysis found that if productivity improvements cannot be achieved, the above goals will either not be met, or will be met but only with significant food price increases. This demonstrates that the resource-efficient Europe flagship initiative will also need to address the impact of land use constraints further.

What happens with the Roadmap now? What are the next steps?

The Roadmap takes the form of a Communication that is addressed to the Council, European Parliament, European Economic and Social Committee and Committee of the Regions, as well as to national parliaments for their information.

The EU institutions and bodies are expected to give their responses, in the form of conclusions or resolutions, in the coming months. The Commission invites them, member states and stakeholders to take the Roadmap into account in the further development of EU and national policies for achieving a low carbon economy by 2050.

At sectoral level the Commission sees a need to develop specific Roadmaps in cooperation with the sectors concerned. How to leverage finance for low carbon technologies will be part of discussions on the EU's next budget framework for 2014-2020. Incentives to reduce emissions from agriculture and forestry will be part of the further development of the Common Agricultural Policy.

The Roadmap and Energy Efficiency Plan adopted today will be followed by a White Paper on Transport later this month. Together with this Roadmap, all three are key components of the resource-efficient Europe flagship initiative set up under the Europe 2020 strategy. In this context the Commission is also preparing a Communication on resource efficiency and a 2050 Energy Roadmap for adoption later this year.

Commission Communication: Roadmap for moving to a competitive low carbon economy in 2050

Notes

1: The package comprises a revised Emissions Trading Directive; a Decision setting national greenhouse gas emission targets for sectors outside the Emissions Trading System; a Directive setting national renewable energy targets; and a Directive creating a regulatory framework for the safe use of carbon capture and storage technologies. The package is complemented by a Regulation setting limits on CO2 emissions from new cars and a Directive on fuel quality which reduces the CO2 content of fuels

2: The European Environment Agency has estimated that in 2009 emissions were 17.3% lower compared to 1990 but this does not cover emissions from international aviation, which are included in the EU's reduction target for 2020. If emissions from international aviation are counted, overall 2009 emissions are estimated at around 16% below 1990 levels. The official figures for 2009 will be released this spring. Estimates for 2010 will be available later this year.

3: The high figure is possible in the case of global action on climate change that also lowers fossil fuel prices on the global market.

4: Since carbon dioxide (CO2) is by far the largest source of greenhouse gas emissions in the EU (around 80% in 2005), making deep emission reductions over the coming decades is often referred to as 'decarbonising' the economy.

5: In 2008 constant prices

Source: European Commission