Emission reduction targets: carbon market rules and “clean” investments

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Since the European Green Deal was adopted at the end of 2019, the EU has committed to reaching climate neutrality by 2050. This objective became legally binding with the adoption and entry into force in 2021 of the European Climate Law. This EU-wide legislation sets an intermediate target of reducing net greenhouse gas emissions by at least 55 percent by 2030, compared to 1990 levels.

Background
Under the 2015 Paris Agreement, 194 countries agreed to keep average global temperature change well below 2°C and as close as possible to 1.5°C by the end of the century. To do this, they agreed to submit Nationally Determined Contributions, NDCs which represent their individual emissions reduction targets.
The EU-27 is committed to the Paris Agreement; being already a global leader in climate actions, the bloc has already cut its greenhouse gas emissions by 37 percent since 1990, while growing its economy by almost 70 percent.
The EU has already begun preparations for its new NDC; for example, by publishing the Commission’s Communication on Europe-2040 climate target. The Commission also intends to present a legislative proposal to enshrine a 90 percent emission reduction target into the 2040-climate law: this target will subsequently inform the submission of the new EU NDC.
On Commission’s Europe-2040 Communication (February 2024) in: https://ec.europa.eu/commission/presscorner/detail/en/ip_24_588

Financing the transition
The EU is currently the largest provider of international climate finance, contributing €28.6 billion in public climate finance in 2023 and mobilizing an additional amount of €7.2 billion of private finance to support developing countries to reduce their greenhouse gas emissions and adapt to the impacts of climate change.
With the European Green Deal presented in December 2019, the EU committed to reaching climate neutrality by 2050. This objective became legally binding with the adoption and entry into force in 2021 of the European Climate Law; it also sets an intermediate target of reducing net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels.
The EU-2030 target was communicated to the UNFCCC in December 2020 as the EU’s NDC under the Paris Agreement. It was, actually, in 2021 that the EU presented a package of legislative proposals to make its climate, energy, land use, transport and taxation policies fit for reducing net greenhouse gas emissions by at least 55% by 2030.
On European climate law (entered into force on 29 July 2021) in:
https://climate.ec.europa.eu/eu-action/european-climate-law_en

UN Climate Change Conference-COP29
At the COP29 UN Climate Change Conference in Baku, the European Commission and the EU member states took the lead in brokering a deal to align global financial flows with the objectives of the Paris Agreement.
Through the adoption of a New Collective Quantified Goal, NCQG for Climate Finance, the EU successfully broadened the global contributor base for climate finance. The NCQG provides for more countries to contribute finance, reflecting their growing emissions and economic weight. The agreement also gives a strengthened role to multilateral development banks in maximising the leverage and impact of public funds by drawing in and mobilizing significant private finance. Parties to the conference agreed that the combined funding from all these sources should reach at least $1.3 trillion per year by 2035.
On delivering the “green deal” in: https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal/delivering-european-green-deal_en

Within this broader target is a commitment by developed countries to take the lead on mobilizing $300 billion per year by 2035 for developing countries’ climate action. This core goal can be achieved through a wide range of sources, including finance mobilized by multilateral banks and, for the first time, contributions from other countries.
This was a critical EU demand to ensure that other countries do their “fair share of work” in providing and mobilizing funding, matching their financial capacity. There is no assigned share of this contribution for the EU or the member states; hence, the decisions about meeting these targets will lie with EU states’ governments and the EU (through national budgets and the MFF).

New reduction targets
The EU negotiating team also successfully finalised the rules that will bring greater environmental integrity, transparency and accountability to international carbon markets under Article 6 of the Paris Agreement. The crediting mechanism under Article 6.4 will set a new UN-backed standard for high-quality carbon offsets, and the new rules for recording and tracking of international transfers will bring transparency to bilateral carbon deals between Parties. This will enable a cost-effective reduction and removal of emissions.
During COP29 the EU joined a group of other ambitious countries in announcing its intention to present a 1.5C-aligned NDC in 2025 and setting the bar for other countries. To drive forward the clean energy transition, the Commission and the Beyond Oil and Gas Alliance announced a partnership on the transition away from fossil fuels.
The Commission also launched a new Methane Abatement Partnership Roadmap to further accelerate the reduction of methane emissions associated with fossil energy production and consumption, in collaboration with a number of partner countries, international organisations, NGOs and development banks.
On Methane Abatement partnership in: https://energy.ec.europa.eu/document/download/1978e73b-0158-4593-87a5-c051bc0ec714_en?filename=Methane%20Abatement%20Partnership%20Roadmap.pdf

At COP29, the EU published its first ever Biennial Transparency Report, BTR ahead of the end of year deadline. The submission of BTRs is a significant milestone in the implementation of the Paris Agreement, enhancing accountability and collaboration in the global fight against climate change, as outlined under the Enhanced Transparency Framework of the Paris Agreement.
On Biennial Report in: https://climate.ec.europa.eu/news-your-voice/news/cop29-european-union-unveils-its-first-biennial-transparency-report-2024-11-21_en

   More information in the following Commission’s web-links: = EU negotiating mandate for COP29; = EU at COP29 website; = Team Europe’s contribution to global climate finance 2013-2023; and = Remarks of Commissioner Hoekstra in the closing COP29 Plenary.

 

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