EU climate policy

Denmark's climate efforts are closely aligned with targets set at the EU level. The target of the EU aims for a 40% reduction of greenhouse gas emissions by 2030.

The EU sets general targets for the reduction of greenhouse gas emissions.. The essential tools are the EU Emissions Trading System (EU ETS) that covers emissions from energy and industry as well as national reduction targets of sectors outside the emissions trading system, such as agriculture and transport. Furthermore, the EU has set targets on renewable energy and energy efficiency, in addition to pan-European regulations in several fields.

 

2020 target: EU reduction of greenhouse emission by 20 %

The EU has decided that total European greenhouse emission shall be reduced by 20 % by 2020 compared to 1990 base levels. Major reductions will occur through the EU Emissions Trading System (EU ETS), which includes the most energy-intensive businesses and covers 40 % of total EU emissions.. Further reductions can be obtained through reduction efforts in the non-ETS sectors.. These sectors include transport, agriculture, individual heating of buildings, waste incineration, handling of disposal sites, and wastewater.

 

EU 2030 target: 40 % reduction of greenhouse gas emissions

The European Council decided in 2014 that greenhouse gas emissions should be reduced by at least 40 % by 2030 compared to 1990 base levels. The target is divided into contribution shares by sector, with the EU ETS aiming for a total reduction of 43 % and the non-ETS sectors aiming for a 30 % reduction. In the years to come, the 2030 framework should result in specific EU legislation on the following:

  • A revision of the Emissions Trading System Directive (the ETS sector).
  • A new burden sharing agreement for the non-ETS sectors and integration of emissions and terrestrial sinks (LULUCF).
  • Revised policy regulation of the transport sector.

Read more about the EU 2030 framework of climate and energy policy, which details climate efforts from 2021-2030

 

EU’s CO2 Emission Trading System

The EU Emissions Trading System (EU ETS) covers emissions of energy in the production of electricity, district heating, large industrial plants, oil and gas production, in addition toaviation as part of a pan-European regulation. The EU Emissions Trading System caps the amount of permissible CO2 emissions through quota allocation and creates a system of trade for CO2 quotas. For example, a company that has utilized its allowance of quotas can buy from another company who uses less. The objective is to incentivize emission reduction activities as the polluter seeks to reduce the amount they have to pay.

The regulation became effective in 2005 and is officially called the” European Union Greenhouse Gas Emission Trading System”. It is now in its third period, running from 2013 to 2020. The arrangement is under constant development and in the third period further standardisation took place to ensure all Member States act in accordance with common EU rules.

The EU Council of Ministers and the EU parliaments are now in the process of negotiating a revision of the Directive on quota trading to cover the period 2021-2030.

Read more about the EU Commission's proposal for a revision of the Directive on quota trading

 

Reduction of greenhouse gas from non-ETS sectors

Greenhouse gas emissions from sectors that are not part of the Emissions Trading System are regulated by a burden sharing agreement among EU Member States. For Denmark, emissions attributed to transport, agriculture and buildings with individual heating are the largest non-ETS sources of emissions. The burden sharing agreement establishes a framework for reduction shares among Member States and is based on an allocation principle of GDP. Policy measures pursued to reach the reduction target are up to each Member State to decide. Denmark has accepted a reduction target of 20 % by 2020 as compared to 2005 base levels. For the years 2013-2019 there are annual sub-targets that form a reduction path leading up to the 2020 target.

On July 20th 2016, the EU Commission presented its proposal for a new burden sharing agreement to cover the period 2021-2030. The EU Council of Ministers and the European Parliament are now in the process of negotiating the agreement.

According to the Commission's proposal, national reduction targets of non-ETS emissions of 0-40 % compared to 2005 base levels will be set for each Member State. A reduction target of 39 % by 2030 compared to 2005 is set for Denmark.

The proposal will prepare the foundation for a continuation of the existing flexibility mechanisms:

  • Unlimited access to purchase of emission rights of other Member States.
  • Unlimited access to purchase of EU internal project credits.

Furthermore, two new flexibility mechanisms are introduced:

  • Use of quotas from the EU Emissions Trading System (EU ETS)
  • Including land use, land-use change, and forestry (LULUCF) credits from improved terrestrial carbon balance.

 

Emissions and terrestrial removals

Emissions from land use, land-use change and forestry (LULUCF) will not be included in EU climate regulation up to 2021. However, the EU Commission has, presented a proposal for integration of LULUCF in the EU climate regulation for the period 2021-2030. The objective is to establish a coherent policy which includes and accounts for the role of LULUCF a in the EU climate regulation.

The Commission proposes that Member Stateswork to ensure that the terrestrial carbon balance is not further reduced due to increased greenhouse gas emissions in the atmosphere. Member States that achieve a positive terrestrial carbon balance are better positioned to utilize their LULUCF credits as part of their reduction objective of in non-ETS sectors.

 

EU Climate regulation of the transport sector

The EU has adopted binding targets to ensure that car manufacturers reduce average CO2 emissions from cars to 95 g CO2/km by 2020 corresponding to about 28 km/L for a diesel car and about 25 km/l for a gasoline-powered car. The transport target equates to nearly 50% less CO2 emissions per km over a twenty-year period (2000 to 2020). EU requirements on reducing emissions in the transport sector will lead to the manufacture of cars which are more energy efficient in the future.

The Renewable Energy Directive (2009/28/EC) (RED) focuses on the production and promotion of renewable energy sources. The policy sets a 20% target for the EU’s total energy needs to be met by renewables by 2020 and a 27% target to be achieved by 2030. As part of the policy, all Member States are required to have 10% of transport fuels come from renewable sources by 2020. The target can be met by using biofuels, along with the use of electric and hybrid vehicles. National renewable energy targets are set for each Member State, taking into account the starting point and overall potential for renewables in the respective state. Denmark has a target of 30% renewables by 2020. A National Renewable Energy Actions Plans (NREAPs), is submitted by each Member State to detail actions being taken to deliver upon their renewable targets, with progress reviews taking place on a biannual basis.

RED includes sustainability criteria for biofuels, which are valid for biofuels produced in or outside the EU. The sustainability criteria stipulate that raw material for biofuel production cannot be derived from primary forest, nature protection areas or highly biodiverse areas, including grassland.

The RED requires a 35% GHG emissions saving from biofuel use. Beginning January 1st 2018, GHG emissions saving from biofuel use must be at least 50% for old biofuel production units and 60% for new units that started production after October 5th 2015.

 

European strategy for low carbon emission mobility

On 20 July 2016, the Commission issued an announcement about a European Strategy for Low- Emission Mobility, which is part of the Commission's package dealing with the reduction of CO2 emissions in economic sectors belonging to the non-ETS group, which includes transport. It is important to account for transport, as the sector is responsible for ¼ of the EU’s total greenhouse gas emissions and is the main cause of air pollution in cities. The strategy outlines the initiatives that the Commission intends to implement to assist the transport sector in reducing its greenhouse gas emissions.

In July 2016, the Commission presented a statement with a strategy for reduction of greenhouse gas emissions in the transport sector. Support was given for the continuation of initiatives and instruments that have already proven to be effective and efficient. The Fuel Quality Directive requires a 6 % reduction of the greenhouse gas intensity of the fuels used in vehicles by 2020 and will be prolonged as part of the strategy. Further, a revision of the requirements to limit vehicle energy consumption will occur.