countries and regions if it can come close to achieving its commitments.
The European Union accounts for about 8 percent of global energy-related emissions. 3 While it obviously cannot solve the global climate-change problem on its own, it could position itself as a global leader and serve as an example for other
Still, fulfilling those commitments would require an unprecedented effort, and the current
3 BP energy outlook: 2022 edition , BP, 2022.
Five interlocking proposals
The European Union has introduced five interlocking sets of proposals intended to help meet its net-zero commitments: 1. The European Green Deal, approved in 2020, sets a binding target to reach climate neutrality by 2050. The interim target is to reduce emissions by 55 percent from 1990 levels by 2030. 2. The Fit for 55 package, approved in 2021, includes proposals aimed at revising and updating legislation to put it in line with the intermediary target of reducing emissions by at least 55 percent by 2030. 3. In 2022, the European Commission adopted the REPowerEU plan, which is intended to bolster energy security and further accelerate the transition. The plan sets out measures that aim to reduce the European Union’s dependence on Russian fossil fuels. In addition to the replacement of coal, oil, and natural gas, the commission estimates that energy savings, efficiency, substitution, electrification, and the uptake of green hydrogen, biogas, and biomethane by industry can save 35 billion cubic meters of natural gas, beyond the reductions already foreseen in the Fit for 55 proposals. REPowerEU
raised Europe’s target for the share of renewables in the energy mix to 45 percent by 2030. To reach that target, the plan aims for installed solar-photovoltaic capacity of more than 320 GW by 2025—double today’s level—and almost 600 GW by 2030. 4. In 2023, the European Commission presented the EU Green Deal Industrial Plan, which is distinct from the European Green Deal described above. It aims to help the European Union’s net-zero industry become more competitive and to “provide a more supportive environment for the scaling up of the EU’s manufacturing capacity for the technologies and products required to meet the EU’s ambitious climate targets.” 1 Furthermore, the Critical Raw Materials Act, which is part of the plan, proposes targets for the amount of 16 strategic raw materials to be extracted, processed, and recycled within the European Union. It also proposes limiting the single-country dependency for imports of each of
enhancing skills, ensuring a simpler and more predictable regulatory process, and opening trade for resilient supply chains. 5. In March 2023, the European Commission proposed a set of reforms for the design of the power market. The plan introduces interventions and policies aimed at protecting customers from volatility, making the cost of energy more stable and predictable, and boosting renewable- energy investments. The measures include programs for clean-energy solutions, such as demand response and storage, and the strengthening of power-purchase-agreement markets. In addition, the plan calls for the adoption of two-way contracts for difference (CfDs) as the only revenue model applicable to all public support for new RES developments and for the introduction of a wider choice of retail contracts for final users (including the option to lock in stable long-term prices). The proposal will have to be discussed and adopted in the European Parliament and the European Council before taking effect.
these strategic raw materials. The Green Deal Industrial Plan
supplements the European Green Deal and REPowerEU by improving access to funding, making permitting easier,
1 “The Green Deal Industrial Plan: putting Europe net-zero industry in the lead,” European Commission, February 1, 2023.
Accelerating the journey to net zero
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