On Thursday 23 October, the European Council agreed on the European Union’s climate and energy policy framework. EU leaders endorsed, as a binding target, to reduce the EU’s greenhouse gas emissions by at least 40% from the 1990 level by 2030.
In the agreed framework the emission reduction target will play a key role, but at the same time the significance of increasing renewable energy and improving energy efficiency will be emphasised in achieving the target. At the EU level, a binding target of at least 27% was agreed for increasing the use of renewable energy, and an indicative target of at least 27% for the improvement of energy efficiency.
“Climate change is one of humanity’s greatest challenges. It poses serious risks to the well-being of nature and people all over the world. For this reason, the EU’s decision to reduce greenhouse gas emissions is important. We need to take responsibility for combating climate change. Finland has supported cost-effective, fair and balanced burden-sharing between Member States. The package encourages all Member States to make efforts to reduce emissions. For Europe’s economic growth and employment, it is important to achieve emission reductions as cost-effectively as possible,” says Prime Minister Alexander Stubb.
The EU’s main instrument for achieving the emissions reduction target is the Emissions Trading System (ETS). This will be reformed with a market stability reserve. In non-ETS sectors, burden-sharing between Member States will be implemented by taking into account Member States’ income level and also, with respect to affluent Member States, the cost-effectiveness of emission reduction measures.
“The decision delivers a strong and timely signal of the EU’s credibility and leadership in preparing a new climate agreement. The EU represents a diminishing fraction of the world’s emissions, but our actions are closely monitored, and they influence the height of the bar elsewhere. It is important for the EU to reduce its emissions by at least 40% by 2030. This will enable a raising of the target if other countries make significant emission reduction commitments in Paris in 2015,” says Minister of the Environment Sanni Grahn-Laasonen.
The agreed package will promote the clean tech sector and the bio-economy market. The European Council decided, on Finland’s initiative, on the use of renewable energy in the transport sector also after 2020. This will provide opportunities for development of the biofuels market. To prevent carbon leakage, free emission allowances will be awarded to energy-intensive industry if competitor countries do not commit to climate decisions corresponding to those of the EU.
“When deciding climate policy, we must ensure that decisions do not lead to the transfer of industrial production outside the EU, which would only increase global emissions. Finland has the world’s most efficient production plants, whose profitability is rightly addressed in the decisions now approved by the European Council,” says Minister of Economic AffairsJan Vapaavuori.
The European Council will return to climate and energy issues at the latest after the climate conference to be held in Paris in 2015. The members of the European Council also discussed energy security, in connection with which the isolation of Finland and the Baltic countries from the European gas market was particularly noted. The European Council reaffirmed Member States’ existing commitments to implement the internal energy market and to improve cooperation in electricity and gas.
In connection with the European Council, a Euro Area Summit will be held on 24 October.
Further information: Lauri Tierala, Special Adviser (EU Affairs), tel. +358 40 841 7141 and Kare Halonen, State Secretary for EU Affairs, tel. +358 295 160 315, Prime Minister’s Office
European Council conclusions