EU emissions reduction targets still too low

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30 January 2014, Electricity, Nuclear, Solar, Wind

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A new target has been announced by the European Commission for a 40% reduction in greenhouse gas emissions across the EU by 2030 compared to 1990 levels. A binding target for 27% of electricity generation to be sourced from renewables by 2030 has also been set, with this being voluntary for member states.

There had been pressure from industry to reduce the emissions reduction target to 35% instead of 40% but the higher target was maintained by the European Commission, which also stated that unlike the 20-20-20 goal, the 2030 target cannot be met by carbon offsets and will require real emissions reductions.

However, the targets may still be too low for climate change goals to be met and climate scientists argue that the global target of keeping global warming under two degrees will be impossible by 2030 unless more ambitious targets are set. There is a danger that, with the relatively low emissions reduction target, high-emission infrastructure may become locked into the system for many years.

Furthermore, the EU's Fuel Quality Directive, which requires a 6% reduction in transport fuel emissions, will come to an end in 2030. This will be a set-back for the biofuels industry, unless further regulation is put in place. However, a glimmer of hope lies in the high quality of biofuels that may be produced compared to fuels from tar sands. This is especially relevant to the aviation industry, where research has turned up potentially game-changing sources of quality biofuels.

While the EU is running behind target in terms of energy efficiency, the new emissions policies are a compromise between what is feasible and what is popular. While the 40% target is higher than the industry had hoped, the simplicity of the new regulations has been welcomed; minimal micromanagement will allow for more efficient reduction of emissions across various industry sectors and EU member states.

Yet the real goal of managing climate change has been over-looked, and compromising on costs now will result in dramatically higher costs in future decades. If climate goals are to be achieved, it is imperative that the EU ETS is managed effectively in order to give sufficient support to lower emissions infrastructure - a challenge yet to be met. / / @DatamonitorEN

Source: MarketLine

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