There is little indication that EU’s actions to achieve its ambitious climate and energy targets and reduce greenhouse gas emissions by 55 % by 2030 will be sufficient, according to an audit report published by the European Court of Auditors (ECA) on Monday.
The only good news in its new report is that EU achieved its 2020 climate and energy targets but this success was not due to EU climate action alone. The EU member states would most likely not have reached its 2020 energy efficiency target without the lower energy consumption resulting from the 2009 financial crisis and the COVID-19 pandemic.
“We need more transparency on the performance of the EU and its member states on their climate and energy actions” said Joëlle Elvinger, the Luxembourgian ECA member who led the audit, at a virtual press conference ((26 June).
“We also believe that all greenhouse gas emissions caused by the EU should be accounted for, including those stemming from trade and international aviation and shipping. This is important as the EU has committed itself to being a global leader in the transition towards climate neutrality”.
The report includes a wealth of information about EU’s climate and energy targets, including specific data by country. They are expected to feed into the European Commission’s assessment of the National Energy and Climate Plans (NECP) for 2021 – 2030 that the members should submit by the end of June 2023.
This process will last for one year and member states should submit their final version of updated NECPs by June 2024.
“We also expect our recommendations to be useful in the broader context of the EU’s objective of achieving climate neutrality by 2050,” ECA member Elvinger told The Brussels Times. She was referring to “blind spots” in EU’s climate policy, among others that some of the targets are not binding but indicative.
The auditors found a lack of transparency regarding the way EU member states reached their national binding targets through flexible arrangements. Some EU countries did not contribute as expected and used other means to achieve their targets, such as buying emissions allocations or renewable energy shares from other member states that had exceeded their targets.
The auditors also found little information on the actual costs to the EU budget, national budgets and the private sector of achieving the targets and on the actions that proved successful. This makes it difficult for citizens and stakeholders to determine whether the EU is pursuing its overall targets cost-effectively and to learn lessons for the upcoming 2030 targets.
A particular concern is that there is no sign of sufficient financing being made available to reach the more ambitious 2030 targets, particularly from the private sector. The EU has committed to spending at least 30 % of its 2021-2027 EU budget on climate action – about €87 billion per year. This is less than 10 % of the total investment needed to reach the 2030 targets,
While the EU is performing well compared to other industrialized countries in reducing greenhouse gas emissions, it does not account for all its emissions. These would be around one tenth higher if those caused by trade on imported goods (carbon leakage), international aviation and shipping were included. Trade alone accounts for more than 8 % of the emissions.
The 2030 national targets for energy efficiency and renewable energy share are indicative for member states. Should not all 2030 targets be binding?
“Experience from the 2020 targets shows that the energy efficiency target, which was not broken down into binding national targets, was the hardest one to achieve,” the auditors replied. “This difficulty seems to persist looking forward to the 2030 energy efficiency target.”
But there are arguments both for and against binding targets and ultimately the choice is political. Binding national targets tend to increase member states´ commitment, provide certainty for investors, and encourage the continuous development of technologies, according to ECA. If binding targets are not achieved, the Commission can start infringement procedures, if necessary.
Indicative targets, by contrast, cannot be enforced. But they can encourage progress, serve as a benchmark between member states and make it easier to agree on more ambitious targets.
Did member states misuse the “flexibilities” in the system when they traded emissions allocations?
“The rationale for having flexibilities when a target is nationally-binding was to create opportunities for reducing the cost of achieving the targets, making it possible for member states lagging behind to buy emissions allocations or renewable energy shares from member states over-achieving their targets. The introduction of ‘flexibilities’ was also political choice.
The problem that we found is that member states made bilateral transactions without publishing the price at which these transactions happen. This lack of transparency makes it difficult for citizens and stakeholders to assess whether flexibilities served their intended purpose. We recommend that flexibilities should be used more transparently.”
The GHG emissions reduction targets are determined without any link to national GDPs. Should intensity indicators (reduction related to GDP or per capita) be weighed in?
“Indeed, we consider that using intensity indicators would help better assessing performance, especially when GDP does not grow as forecast, which was the case in the 2005-2020 period because of the financial crisis and COVID pandemic. That’s why we recommend the Commission to make more use of such intensity indicators.”
It would make a big difference if "carbon leakage " on imported goods (e.g., from China which accounts for ca half of global GHG emissions) would be included. What does the report say about this?
“Sweden has proposed a national law to take account carbon leakage when reporting on its national greenhouse gas emission target We consider it a good practice and have recommended the Commission to report on emissions associated with imported goods to the EU. This would also be in line with the EU’s desire to be a global leader in the transition towards climate neutrality.”
Does the Commission underestimate the emission of methane in agriculture?
“This was not the focus of this audit. Our Special Report 16/2021 deals generally with that, concluding that despite the Common Agricultural Policy (CAP) invested over € 100 billion to tackle climate change, the emissions from agriculture remain stable.”
In 2019, the Commission assessed GHG emissions by 2030. Is there a later assessment? Did you assess the GHG reductions in the NECPs?
“No, the original NECPs were submitted in 2019-2020 and the Commission concluded that the cumulative ambition of the member states was sufficient to reach the 40% greenhouse gas emission target set in 2018. Now, by end of June 2023, member states should submit updated NECPs reflecting the 55% greenhouse gas emission target, approved in 2021.
“In our audit we could not assess the first reporting by member states, which was due by 15 March 2023.” In its report the auditors referred to the Commission’s website which states the “The quality assurance and control process is expected to be completed by 30 June of the year of submission.
“The Commission should publish more information on this soon. This first reporting should be based on Commission’s guidance issued in November 2022. However, the problem is that parts of this reporting remain voluntary, so in practice there is still the risk of member states providing sparse information on the cost-effectiveness of their policies, according to ECA.”
The audit recommendations leave the Commission some freedom to decide on what action to take. ECA described the recommendation as both concrete and robust but admitted that the recommendation on including emissions associated with imported goods to the EU and international aviation and shipping have been “prudently” formulated.
Commission takes note of the audit
“The next decade will be decisive for climate mitigation and the urgency to act accordingly has only grown since the adoption of the European Green Deal in December 2019,” a Commission spokesperson commented. “For this reason, the Commission has made climate action a key priority and set ambitious targets we are now on a path to implement and meet.”
The EU Climate Law, proposed in 2020, and the subsequent ‘Fit for 55’ package of sectoral legislation proposed in 2021, provide a concrete plan to put the EU on track to reduce our emissions by at least 55% this decade, and become the first climate-neutral continent by 2050.
With Russia’s illegal invasion of Ukraine in 2022, the Commission proposed higher targets for energy efficiency and renewable energy to pursue these targets, under the REPowerEU Plan. The ECA audit took place prior to much of this work being completed.
Our focus right now is on implementing our climate legislation and ensuring that we indeed meet the ambitious targets we have set by 2030. The full adoption and swift implementation of the Fit for 55 package is crucial. Member States will need to make the green transition a reality on the ground, and the imminent updates of their national energy and climate plans for the period 2021-2030 will show how this is planned at national level.”
M. Apelblat
The Brussels Times
