Trends and projections in Europe 2018Tracking progress towards Europe’s climate and energy targetsFirst release, 26 October 2018 Introduction 1 1 Introduction 1.1 Objective This early release of the 2018 edition of the EEA report Trends and projections in Europe updates the annual progress assessment of the EU and European countries towards their climate mitigation targets. Ination in this report is based on the latest official data for the year 2016, as reported by Member States to the European Commission and the EEA. These are complemented with preliminary ‘proxy’ estimates for 2017 that have been prepared by the EEA based on Member States’ most recent ination. The full report to be published later this year addresses progress towards each of three energy and climate objectives greenhouse gas GHG emissions, renewable energy sources RES and energy efficiency, the ‘20-20-20’ targets  the EU’s unilateral commitment to reduce its GHG emissions by 20 compared with 1990 levels;  the binding targets to increase the share of energy from renewable sources in the EU’s gross final energy consumption to 20 , with a minimum of 10 share of renewables in the transport sector;  the target of a 20 reduction in energy consumption compared with baseline projections for 2020. To help Member States meet the 2020 GHG targets, the EU adopted a climate and energy package in 2009. The package defined a single EU target for GHG emissions covered under the Emission Trading Scheme ETS and a set of national target trajectories for 2013-2020 for emissions within the scope of the Effort Sharing Decision ESD. Regarding renewable energy, the Renewable Energy Directive RED set binding targets for each Member State and provided indicative trajectories for 2011-2020. For energy efficiency, Member States set their own non-binding targets according to the Energy Efficiency Directive EED. For 2030, the EU has subsequently endorsed targets for at least a 40 reduction in domestic GHG emissions compared with 1990 levels, a level of renewable energy consumption of minimum 32 and at least a 32.5 reduction of energy consumption across the EU compared with the 2007 EU Reference Scenario. 1.2 Data sources Ination in this report is based on the latest data reported by European countries under the Monitoring Mechanism Regulation MMR. The countries their ination to the EEA’s e-reporting environment, Reportnet 1, after which the EEA, supported by its European Topic Centre on Air Pollution and Climate Change Mitigation ETC/ACM, pers quality control procedures in consultation with individual countries. The EEA and ETC/ACM then compile the reported data and publish data sets, data viewers and related products on the EEA website. The following data sets are highlighted in this report  GHG emission inventory for the period 1990-2016, reported under the MMR in March 2018;  Effort Sharing emission data for the period 2013-2016 2016 data reviewed in 2018;  ETS emission data for the years 2005-2017, European Union Transaction Log EUTL, extracted in July 2018;  GHG emission projection data until 2035, mostly reported in March 2017 and updated by two countries Ireland and Cyprus in March 2018;  approximated ‘proxy’ GHG emission data, renewable energy shares and energy consumption for the year 2017, partly reported by Member States in August 2018 and gap-filled with estimates by the EEA. 1 https//www.eionet.europa.eu/reportnet Progress of the EU towards its greenhouse gas emission targets 2 2 Progress of the European Union towards its greenhouse gas emission targets  Although the 2020 reduction target is still expected to be met, the policies and measures currently accounted for in national projections will not be enough to deliver the savings needed to achieve the EU’s reduction target of at least 40 by 2030 compared with 1990 levels.  The latest official data show that the EU remains on track to exceed its 20 GHG reduction target set for 2020 compared with 1990 levels. In 2016, GHG emissions were 22 lower than 1990 levels, and the new approximated data indicate that this increased again in 2017, although only moderately. National projections available from Member States indicate that EU GHG emissions are expected to remain below the 2020 target.  The pace of GHG emission reductions is projected to slow after 2020. Continuing at this slower pace will not be sufficient to achieve the EU’s target of a 40 domestic reduction by 2030 compared with 1990 levels. Even assuming that the 2030 target is met, faster decreases in GHG emissions will be necessary to achieve an 80 , or even a 95 , decrease by 2050.  In 2017, emissions from stationary installations under the EU ETS remained 26 lower than 2005 levels about the same reduction level as in 2016. These reductions were mainly the result of lower emissions in the energy industrial sector.  Emissions covered by the ESD decreased by 11 in 2016 compared with 2005. Preliminary estimates suggest that emissions increased in 2017, with a net decrease in emissions to 10 below 2005 levels. This change is mainly attributed to increasing emissions from transport and energy industries and industrial processes not covered under the EU ETS. 2.1 Progress in reducing total greenhouse gas emissions in the European Union In 2016, the EU’s total GHG emissions were 4 441 megatonnes Mt carbon dioxide equivalent CO2 eq., which is 22 less than 1990 levels 2. According to preliminary estimates, emissions increased by 0.6 from 2016 to 2017. Despite this increase, the EU remains on track to achieve its GHG emission reduction target of a 20 decrease by 2020, compared with 1990 levels. Figure 2.1 illustrates the variability in emission reductions in recent years, and the expected increase between 2016 and 2017, which was preceded by a similar increase between 2014 and 2015. In 2018, only two Member States reported updates of their national GHG projections Cyprus and Ireland. Therefore, the aggregated EU emissions did not change significantly compared with the aggregation conducted in 2017. According to these national projections, the EU’s GHG emissions are expected to decrease until at least 2035 see Figure 2.1.  According to the scenario ‘with existing measures’ WEM, which reflects the effects of all adopted and implemented measures at the time the projections were prepared, GHG emissions will be reduced by 26 by 2020 and by 30 by 2030 compared with 1990 levels. 2 The EU’s total GHG emissions excludes emissions from land use, land-use change and forestry LULUCF and includes all emissions from aviation including international flights, covered under the EU target. Progress of the EU towards its greenhouse gas emission targets 3  According to the scenario ‘with additional measures’ WAM, which also takes into account the measures that were at planning stage at the time the projections were prepared 3, GHG emissions will decrease by 27 by 2020 and by 32 by 2030 compared with 1990 levels. Although it is expected that the 2020 reduction target will still be met, the policies and measures currently accounted for in national projections alone will not be sufficient to deliver the savings needed to achieve the EU’s reduction target of at least 40 by 2030 compared with 1990 levels. The pace of GHG emission reductions is currently projected to slow after 2020, and achieving the mid- and long-term targets/goals will require much faster reductions. Assuming that 2020 emission targets will be met and 2020 emissions will be as projected by the current WEM scenario, then, between 2020 and 2030, emissions need to decrease by 786 Mt CO2 eq. to reach the 2030 target. This means an average emission reduction of -79 Mt CO2 eq. in every year between 2020 and 2030, an amount comparable to the total emissions of Austria in 2015. The average annual reduction expected to be achieved with currently adopted climate mitigation measures accounts for about one third of the emission savings needed -23 Mt CO2 eq. per year. If savings from policies and measures still at the planning stage were included, the average annual reduction would amount to -32 Mt CO2 eq. per year. This is less than half of the reduction needed to achieve the 2030 target see Figure 2.1. The European Commission has developed several policy proposals to achieve the EU’s 2030 targets on climate and energy. Some of these already have been adopted  a re of the EU ETS to include a more stringent cap reduction after 2020 EU, 2018a;  new annual binding GHG emission targets for Member States for the period 2021-2030, specifically covering emissions that are not covered by the EU ETS a new ‘Effort Sharing’ between Member States, as well as new flexibilities to achieve these targets EU, 2018b;  the integration of the land use, land use change and forestry LULUCF sector into the EU 2030 climate and energy framework EU, 2018c;  a revision of the Energy Perance of Buildings Directive EPBD. Some proposals were provisionally agreed in June 2018 and their adoption is expected in the coming months  a proposal for the governance of the Energy Union that, in particular, requires Member States to draft National Energy and Climate Plans NECPs by 31 December 2018 EC, 2016a;  a revision and extension of the RED in June 2018, with a binding EU-level target to increase the share of renewable energy in the energy mix to 32 , including an upwards revision clause by 2023 Council of the European Union, 2018;  an update of the EED, with an indicative target at EU level of at least 32.5 by 2030, also with a clause for an upwards revision by 2023 Council of the European Union, 2018. In addition, based on the European strategy to cut emissions from the transport sector EC, 2016b, several transport-related policies have been proposed, including CO2 emission standards for cars, vans and lorries. Even if the 2030 GHG target is achieved, a faster pace of reductions in emissions would still be required if the EU is to reach its long-term decarbonisation objective a reduction of EU GHG emissions by 80-95 by 2050, compared with 1990 levels. Achieving a reduction of 80 in 2050 would require a reduction of 2 288 Mt CO2 eq. in total emissions between 2030 and 2050. This is equivalent to an average annual reduction of 114 Mt CO2 eq. An emission reduction of 95 in 2050 would require a total of 3 146 Mt CO2 eq. to be reduced between 2030 and 2050. This translates to an average annual emission saving between 114 and 157 Mt CO2 eq. per year between 2030 and 2050 required for the EU’s long-term decarbonisation objective. 3 Not all Member States reported a WAM scenario. For further ination on reporting of projections, please refer to Annex 1, A1.2.8. Progress of the EU towards its greenhouse gas emission targets 4 Such a reduction can take place only in the context of a major transation of the EU’s socio-technical systems, such as the energy, food, mobility and urban systems. As the effects of policies and measures often take time to materialise e.g. increases in energy efficiency in buildings, long-term action should not be delayed, and lock-in effects of investments should be considered. Far-reaching measures with long-term effects are often postponed because of high initial costs or political controversies related to their implementation. However, investing in such measures can make sense in the short term if benefits of avoiding damages are taken into account in mitigation costs see suggested damage cost rates, e.g. in UBA, 2014. Figure 2.1 Greenhouse gas emission trends, projections and targets in the EU, 1990-2050 Notes The GHG emission trends, projections and target calculations include emissions from international aviation, and exclude emissions and removals from the LULUCF sector. The WEM scenario reflects existing policies and measures, whereas the WAM scenario considers the additional effects of planned measures reported by Member States. Sources EEA, 2018a, 2018b, 2018c, 2018d 2.2 Reducing greenhouse gas emissions in key sectors To achieve short-term GHG emission targets, the emissions covered by the EU ETS are subject to an EU-wide cap, whereas non-ETS emissions are subject to national targets as stated in the Effort Sharing legislation. From 2021 they will be accompanied by national ‘no-debit’ commitments with respect to LULUCF.  Emissions from large point sources, mostly from power and heat production and industrial installations, are covered by the EU ETS EU, 2003a. These currently represent about 40 of EU GHG emissions, of which a large proportion stems from the power generation sector. Other activities covered by the EU ETS include cement production, iron and steel production and oil refining. Since 2012, the EU ETS covers GHG emissions from aviation EU, 2009b. The mitigation of all ETS emissions is being Progress of the EU towards its greenhouse gas emission targets 5 addressed at EU level through a single ETS-wide emission cap 4 and a ‘carbon market’ through which emission allowances can be traded.  GHG emissions not covered by the EU ETS are mainly addressed by the ESD EU, 2009c. These emissions are produced by a more diverse range of sectors and activities, including road transport, energy consumption in buildings, agriculture cattle and soils, industrial installations and waste management. Since 2013, the ESD has set annual targets for each Member State from 2013 until 2020 that should not be exceeded. Mitigation actions therefore take place at national level through a combination of EU-driven policies and measures, and national initiatives. Member States are responsible for meeting their emission reduction commitments under the ESD.  GHG emissions and removals from the LULUCF sector are not covered under the EU ETS or the ESD. LULUCF emissions and removals as reported under the GHG inventories for the United Nations Framework Convention on Climate Change UNFCCC represent a net carbon sink. These removals can contribute to a certain extent to achieve the Kyoto Protocol commitments but are not included in the EU’s target under the 2020 climate and energy package. With the rules set in the new LULUCF Regulation EU, 2018c and the new Effort Sharing Regulation ESR EU, 2018b, this sector will be integrated into the EU 2030 climate and energy framework from 2021 onwards. The ESR establishes a limited flexibility with net removals from the LULUCF sector that can be used to meet Member States’ targets under this regulation. The LULUCF Regulation sets a ‘no-debit’ commitment for each Member State and defines harmonised EU-wide accounting rules to measure anthropogenic influence on emissions and removals in the sector. Higher emission reductions under the ESR can be used to cover LULUCF emissi