Europe approaches 2020 target on cutting greenhouse gas emissions

The European Union is edging closer to its ambitious target of reducing greenhouse gas emissions by 20% by 2020, according to a new analysis report released today.

The latest annual Eurostat study of the European Commission’s 2020 strategy, found the Member States had collectively achieved an 18% reduction from 1990 baseline levels.

The Europe 2020 strategy, adopted by the European Council in June 2010, aims at establishing a smart, sustainable and inclusive economy with high levels of employment, productivity and social cohesion.

The key objectives of the strategy are expressed in the form of five ambitious targets in the areas of employment, research & development (R&D), climate change & energy, education and poverty reduction, to be reached by 2020. These have been translated into national targets in order to reflect the situation and possibilities of each Member State to contribute to the common goal.

Published today, Eurostat’s 2015 edition of ‘Smarter, greener, more inclusive? — Indicators to support the Europe 2020 strategy’ backs up the monitoring of its five headline targets.

As a central objective of the Europe 2020 strategy, the EU as a whole aims to reduce GHG emissions (including emissions from international aviation) by 20% compared with 1990 levels. The main policy instruments to achieve the target are the EU Emissions Trading System (EU ETS) and the Effort Sharing Decision (ESD).

Both instruments use 2005 — the year when the EU ETS started — as base year, thus the 20% target compared with 1990 is translated into 14% reductions below 2005 levels by 2020.

The EU ETS sets a single EU-wide cap for more than 11,000 power stations and industrial plants, as well as the aviation industry. It allows these economic actors to trade emission allowances among themselves. The cap shrinks each year to reach 21% emission reductions compared with 2005 by 2020.

The Effort Sharing Decision establishes binding annual GHG emissions targets for Member States for emissions from sectors not included in the EU ETS. Member States’ targets for the non-EU ETS sectors (such as transport, buildings, agriculture and waste) vary between a 20% reduction to a 20% increase in emissions by 2020, reflecting differences in starting points and wealth.

Less wealthy economies are allowed to increase their emissions to accommodate higher economic growth. Their targets still limit emissions compared with business-as-usual scenarios, hence all Member States are committed to reduction efforts.

By 2020, the national targets will collectively deliver a reduction of around 10% in total EU emissions from the non-EU ETS sectors compared with 2005 levels.

Together, the EU ETS and the Effort Sharing Decision will reduce overall emissions to 14% below 2005 levels by 2020. This will equal a 20% cut below 1990 levels. In addition to these overarching instruments, the EU has set an array of policy tools to address emissions from certain sectors and activities.

By 2012, the EU as a whole had cut man-made GHG emissions by 17.9% compared with their 1990 levels. If emissions from international aviation are excluded, the reduction is 19.2%, as reported by the European Environment Agency.

A large portion of this reduction occurred during the 1990s. Between 1990 and 1994 a large drop of 7.3% occurred, mostly due to structural changes (such as a shift from heavy manufacturing industries to more service-based economies), modernisation in industries and change from coal to gas.

Emissions began to rise again in 1995, but this trend reversed in 1997. Between 1998 and 2007 emissions stabilised at levels of 92% to 93%. This was mostly a result of an increase in primary energy consumption (PEC) being offset by a rise in the share of fuels with lower carbon content, in particular renewable energy sources. Significant cuts were also made in the waste sector through use of better treatment processes with a lower carbon footprint and in agriculture due to a decline in livestock numbers and nitrogenous fertiliser use.

The economic crisis, which started in 2008, led to an overall economic slowdown and resulted in a fall in GHG emissions. A sharp drop of 7.3% in 2009 was followed by a rebound in 2010. However, the downward trend continued in 2011. GHG emissions fell by 2.9% compared with 2010 levels, despite GDP growing by 1.6%. The reduction was caused by lower demand for heating due to a mild winter, lower electricity consumption, particularly in France and the UK, reduced road transport and lower cement production.

In 2012 GHG emissions fell further, by 1.3% compared with 2011, and GDP fell by 0.4%. The 2012 reduction was the result of falls in road passenger and freight transport in the countries affected by the recession, such as Italy, Greece and Spain, as well as lower industrial production, especially of iron, steel and cement. Moreover, lower emissions from energy production, especially in Germany, Italy and UK, contributed to the decrease.

Dividing emissions figures by population provides a way of comparing countries’ GHG emissions on a per capita basis. Overall, Luxembourg emitted the most GHG per capita in the EU in 2012. This can partly be attributed to a considerable number of commuters from neighbouring countries, fuelling their cars on Luxembourgish territory, as well as road freight transit and fuel tourism.

Luxembourg was followed by Estonia, Ireland, the Czech Republic and the Netherlands. In contrast, Latvian per capita emissions were lowest within the EU.

Between 2005 and 2012, Luxembourg showed the highest reduction in per capita emissions. Ireland, Belgium and Cyprus too showed a considerable decrease in emissions. On the contrary, per capita GHG emissions rose in some eastern European Member States between 2005 and 2012, with the largest increases taking place in the Baltic countries Latvia, Estonia and Lithuania.

Except transport, all sectors helped to reduce the EU’s overall emissions between 1990 and 2012. In absolute terms, manufacturing industries and construction achieved the largest reduction of almost 327 million tonnes of CO2 equivalent during that period. The second largest reduction of 267 million tonnes of CO2 equivalent was achieved in the energy industries, which was the sector responsible for the largest share of total emissions.

By contrast, transport emissions were 14% above 1990 levels in 2012. The sector accounted for about 19% of total EU emissions in 2012, making it the second largest source after the energy industries.

However, the continual upward trend in transport emissions appears to have been broken. After peaking in 2007, emissions fell by 10% over the following five years. Both the increase between 1990 and 2007 as well as the recent decline might be linked to corresponding changes in the volume of passenger and freight transport.

Causes for reduced transport volumes since 2007 may include the economic downturn and a hike in fuel prices. Notwithstanding this positive trend, promoting energy efficiency and increasing the share of renewable energy remain crucial to limiting the transport sector’s GHG emissions, particularly when economic growth picks up again.

Emissions from international aviation and maritime transport peaked in 2007, at 321 million tonnes of CO2 equivalent, equalling a 78% increase since 1990. Emission levels have fallen since then, to 280 million tonnes of CO2 equivalent in 2012. This figure is nevertheless 56% above 1990 levels; with emissions from international aviation alone having increased by 93% between 1990 and 2012, and emissions from maritime transport by 32%. Together these two categories made up 6% of total GHG emissions in 2012.

Twelve countries reduced their emissions and have already fulfilled their national targets. Five Member States increased emissions, but the rise was below their national targets for 2020. Eleven Member States are still above their national reduction targets, although all of them reduced emissions until 2012. Luxemburg is the furthest from its target, followed by Denmark, Germany and Ireland.

The overall positive trend for non-ETS emissions in the EU can be linked to lower primary energy consumption in the transport and building sectors since 2005. These sectors are the two most important sources of non-ETS emissions. However, the continued economic depression and mild winter temperatures are also, at least in part, responsible for the decrease in energy demand.

Despite reductions in the EU, global CO2 emissions from fuel combustion rose by 49% between 1990 and 2011. Most of the increase took place in emerging economies. Emissions growth was strongest in China, both in relative and absolute terms. Between 1990 and 2011, China’s annual CO2 emissions more than tripled and the country overtook the United States as the world’s biggest emitter. At the same time, its per-capita emissions represented only 84% of EU-27 levels in 2011.

Although less important in absolute terms, emissions in the rest of Asia and the rest of the world also grew significantly in relative terms between 1990 and 2011 (172% and 79% respectively). As a result of these trends, the EU’s share of global CO2 emissions has been shrinking, from almost a fifth in 1990 to 11.4% in 2011.

Rising emissions have dramatically increased CO2 concentrations in the atmosphere. Although there is a time lag between CO2 being emitted and the corresponding increase in average global surface temperature, recordings already show a clear upward trend. Between 2001 and 2010, global surface temperature was 0.88°C higher than during the first decade of the 20th century.

The year 2013 tied with 2007 as the sixth warmest year since records began in 1850. Current projections estimate that global mean temperatures could continue to rise by as much as 1.1°C to 6.4°C by 2100 if CO2 emissions remain at current levels.

In Europe and globally, the rise in temperature has already led to observable changes in the natural systems and society. Damage costs from natural disasters have increased and are likely to rise substantially in the future. A recent European Environment Agency (EEA) assessment shows that the negative impacts of climate change will not affect European regions equally. Climate change can increase existing vulnerabilities such as exposure to flood risk in coastal areas or drought in the Mediterranean region.

By hitting marginalised regions and poor people the hardest, climate change might deepen socioeconomic imbalances in Europe. This could undermine the Europe 2020 strategy’s objective of inclusive growth.

The report states: “Despite the EU’s shrinking share in global CO2 emissions, recent findings on the potentially catastrophic impacts of climate change confirm the ongoing importance of its climate and energy goals.

“EU emission cuts alone cannot halt climate change, but if it can show that a low-carbon economy is feasible, and can even increase innovation and employment, it will serve as a role model to other regions. Continuous investment in advanced low-carbon technologies can also help the EU uphold technological leadership and secure export markets. A successful transformation of the energy sector is pivotal in this respect.”

The report concludes: “At first glance, the EU has made substantial progress towards its energy and climate objectives. In 2012, GHG emissions (including international aviation) were down by 18% compared with 1990 levels, approaching the headline target to reduce emissions by 20% by 2020. Primary energy consumption (PEC) fell to 1 584 Mtoe in 2012, after growing almost continuously between 1990 and 2007.

“In 2012, the EU consumed 7.5% less primary energy than in 2005 – the base year of the energy efficiency target. To achieve the target of improving energy efficiency by 20% by 2020, the EU has to reduce PEC by a further 6.3% over a period of eight years.

“By far the strongest decline in energy consumption and GHG emissions within one year since the early 1990s occurred from 2008 to 2009 (–7.3%). During this time the economic crisis led to reduced industrial production, transport volumes and energy demand. The following years only saw slow recovery in many parts of Europe.”

The decline of CO2 emissions observed during the 2009 to 2012 period can be attributed to three main factors: The improvement of the primary energy intensity of the EU economy, the development of renewables and the economic slowdown.

The economic slowdown, however, accounts for less than a half of the total emission reductions achieved during this period.

The conclusion added: “With respect to renewable energies, progress towards a restructured low-carbon economy is clearly noticeable. Between 2004 and 2012, the share of final energy from renewable source increased by 70%, reaching 14.1% in gross final energy consumption in 2012.

“Thanks to effective support schemes and dramatic cost reductions, the share of wind and solar energy has increased particularly quickly. The renewable energy industry has become a key sector for research and innovation in Europe, generating a rapidly increasing number of patents between 2000 and 2009.

“In regions with favourable weather conditions and high electricity prices, solar and wind projects are becoming increasingly competitive with fossil fuel based power generation, even without subsidies.

“On the global level, reductions in EU GHG emissions and energy consumption have been offset by significant increases in other parts of the world. Global CO2 emissions from fuel combustion rose by 49% between 1990 and 2011. The increase was particularly strong in China, which more than tripled its annual CO2 emissions in these two decades.

“According to the latest Member State projections, the EU-28 will overachieve its 2020 emission reduction target for the sectors not covered by the EU ETS by 1%. However, only 15 Member States are expected to reach their commitments with the existing policies and measures, while 13 are unlikely to be able to meet their commitments unless additional measures are implemented.

“A major policy challenge is to improve consistency in the Member States’ domestic climate policy frameworks. Additional measures could focus on ensuring investment security for innovative green technologies and changing the tax system to give greater incentives for energy efficiency.

“With respect to the renewable energy target, the European Commission’s 2013 Progress Report warns that more effort will be needed to sustain high levels of investment in renewable energy projects. Compared with the National Renewable Energy Action Plans prepared by Member States, projections indicate that only 50% of total wind generation planned in 2020 might actually be produced.

“By contrast, projections for electricity generation from photovoltaics are above planned levels. In its progress report, the European Commission also states that fundamental changes to the support schemes in some Member States have raised the regulatory risk for investors. This has added to an already difficult financing environment.

“The Commission also concludes that the removal of planning and licensing administrative barriers is not occurring fast enough. As foreseen by the Europe 2020 strategy, tapping the remaining greenhouse gas reduction potential can have significant socioeconomic and environmental benefits.

“This has been demonstrated in the ‘Roadmap for moving to a competitive low carbon economy in 2050’. The EU can create jobs in high-technology industries; it can become a lead market in fields with high global demand and reduce energy dependence.

“More renewables and improved energy efficiency could save the EU between EUR 175 and 320 billion of energy import costs per year over the next 40 years. As recognised in the flagship initiative ‘Innovation Union’, a push for technological and policy innovation will be crucial to accomplishing this transformation.”

Source: Click Green.