EU's Climate Policy:

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1 EU's Climate Policy: CEPS, end of the year address 6 December 2017 Jos DELBEKE Director-General for Climate Action European Commission

2 EU greenhouse gas emissions ~ ~ ~ ~ Source: EEA Trends and pojections in Europe

3 International Climate Issues

4 Implementing the Paris Agreement Transparency rule 5-yearly ambition cycle : 2018 / 2023 Multilateral climate regime : Mitigation Adaptation Markets Land use Compliance Global Climate Action Agenda : Finance, Markets

5 COP23 deliverables in a nutshell Agreement on the design of the 2018 Facilitative 'Talanoa' Dialogue Moderate progress on the Paris rulebook Pre2020 : strong evidence of solidarity & action Challenges on the bifurcation issue Solid progress on Action Agenda

6 Outlook for COP24 EU priority 1: Finalize Paris Rulebook Transparency: Develop robust rules and modalities for all Balance: balanced progress under all elements of the Paris Agreement mitigation, adaptation, finance Ambition: Agree on stocktake process EU Priority 2: Secure implementation Implementation: actively participate in Talanoa Dialogue proceed with the implementation of the EU NDC, support 3 rd country NDCs Solidarity: provide reassurance for early action and continued supports 6

7 Progress internationally on aviation, maritime transport and phase down of HFCs Phase down of HFCs: ratification of the Kigali Amendment to the Montreal Protocol The EU fluorinated greenhouse gas regulation already ensures European compliance through to 2030 International aviation emissions: work following the 2016 ICAO Resolution on CORSIA to stabilize emissions from 2020 Ongoing work on CORSIA's rulebook and governance to ensure environmental integrity (e.g. quality of units, MRV, avoidance of double counting, registries) EU to implement CORSIA through EU ETS legislation and consistent with 2030 target, when CORSIA operationalization is clear International work on reducing emissions from shipping Work ongoing on the IMO GHG strategy to be adopted in April 2018 The EU calls for an emission reduction objective for the sector in line with Paris 7

8 EU Action

9 1 - EU ETS revision EU ETS strengthening Free allocation and carbon leakage Low-carbon funds 9

10 EU ETS Emissions : -26% in Source: EEA Trends and pojections in the EU ETS

11 Strengthening of the EU ETS Increase of the Linear Reduction Factor (LRF) from 1,74% to 2,2% as of 2021 to reach 43% reduction in 2030 Measures related to the Market Stability Reserve (MSR) Temporary doubling of the feeding rate (24% until 2023) Limited validity of allowances within MSR as of 2023 NB: First MSR review in 2021 Review clause (context: global stocktake) 11

12 EU ETS Free allocation / carbon leakage Free allocation 'buffer' (3% of cap: some 450m allowances) Conversion of auction volume into free allocation Available for entire decade; if not needed top-up of Innovation Fund and Modernisation Fund; rest auctioned Benchmark update to preserve ambition level Improvement rates determined based on industry data; min. (0,2% p.a.) and max. (1,6% p.a.) rates More focused carbon leakage rules Indirect cost compensation continued with enhanced reporting and transparency Better alignment with production 12

13 EU ETS Low-carbon funding mechanisms Significant support for innovation and modernisation of energy systems available through the EU ETS Innovation Fund ~500m allowances to support carbon capture and storage (CCS) and renewables as well as breakthrough technologies in industry in all Member States Modernisation Fund At least 310m allowances to support modernisation of energy systems and just transition in 10 lower income Member States No support to energy generation from solid fossil fuels Article 10c derogation (optional) with enhanced transparency 10% solidarity provision for auction volumes continued 13

14 2018 : : implementation of the revised EU ETS Revising rules for free allocation Determining the carbon leakage list Updating rules on the Union Registry Operationalizing Low Carbon Funds 2020 : Updating benchmark values Establishing rules for adjustments to free allocation due to activity level changes 14

15 2 - EU ETS - other developments in 2017 Aviation: agreed between council and Parliament Intra-EEA scope extended (until 2023) Preparations for CORSIA Next review of EU ETS Aviation to address CORSIA implementation, and to decide on intra-eea regime, consistent with EU 2030 climate targets, once international developments are clear Linking with the Swiss ETS: First linking agreement for EU ETS; first between two parties in the Paris Agreement Agreement signed in November; entry into force not likely before

16 3 - Effort Sharing Regulation Covers non-ets emissions from buildings, transport, agriculture (non-co2), waste, F-gases and other sectors (nearly 60 % of EU GHG emissions), but not LULUCF EU 2030 non-ets targets by Member States from -40% to 0% below 2005 based on GDP/capita (EU-wide -30%) Objectives: Fair Costefficient Environ mental integrity

17 Effort Sharing Regulation: State of Play Commission proposal made July European Parliament position adopted June Council general approach agreed October 2017 Broad agreement on 2030 MS targets, enhancement of existing flexibilities and size and distribution of new flexibilities. Key outstanding issues on starting point, compliance cycle and size of safety reserve Agreement by the end of the year possible 17

18 4 - The LULUCF Proposal The Commission proposal on LULUCF (June 2016) brings the CO2 commitment for forestry and land use into the EU climate and energy framework - for the first time As a stand-alone policy pillar, complementing ESR and ETS Ensures that accounted emissions from land use are entirely compensated by an equivalent removal of CO₂ from the atmosphere (no debit rule) European Parliament and Council adopted positions (in Sept/Oct 2017) Agreement to maintain robust accounting rules. Key outstanding issue concerns managed forest land; Agreement by the end of the year possible 18

19 5 - Proposal on Energy Union Governance Allow meeting the Energy Union objectives (notably the 2030 targets) Promote Better Regulation and reduce administrative burden Enhance investor certainty and predictability Integrate policy areas, enhance coherence Ensure compliance with the EU's international climate commitments Ensure inclusiveness, participation, enhanced regional cooperation State of Play: Council: working towards a General Approach in December Parliament: vote in early 2018 Member States already preparing their Integrated National Energy and Climate Plans 19

20 6 - Clean Energy for All Europeans Package Remaining pieces for the completion of EU's 2030 climate and energy framework. Proposals leading to: Creation of a more stable investment framework Gradual reduction of fossil fuel consumption Facilitating and incentivizing further RES integration Improvement of energy efficiency Reduction of Europe s energy dependence State of Play: Parliament and Council to prepare their positions to start the interinstitutional negotiations

21 7 - Transport: Light-Duty Vehicles (cars and vans) new test cycle (WLTP) since 1 September 2017 phase in, full application from 2019 on Commission Proposal for a Regulation setting CO 2 emission performance standards for new cars and new vans post-2020 (8 November 2017) Part of integrated "Mobility Package - II": public procurement, charging infrastructure, batteries 15% reduction by 2025 and 30% by 2030 (ref = 2021 CO 2 target) ZEV/LEV incentive: technology neutral crediting system rewarding front-runners (scope: cars and vans 0-50 gco 2 /km) enhanced governance to ensure test cycle emissions are representative of real-world emissions 21

22 8 - Transport: Heavy-Duty Vehicles (lorries, buses, coaches) Commission Proposal for the monitoring and reporting of CO 2 emissions and fuel consumption (31 May 2017) Part of integrated "Mobility Package - I": Eurovignette Directive,.. Annual publication of information on the performance of new large lorries certified based on VECTO simulation tool Adoption of legislation foreseen during first half st half 2018: Commission Proposal setting CO 2 standards as part of 3rd mobility package HDVs CO 2 emissions to be regulated for the first time Represent about 20% of all transport emissions; projected to increase if no further action taken 22

23 9 - Evaluation of the 2013 Adaptation Strategy EU Adaptation Strategy adopted Today 25 MS have national adaptation strategies in place Ongoing evaluation of the EU adaptation strategy Public consultation in December with stakeholder meeting in January Final report to Council and Parliament expected by the end of 2018 Preliminary results: Adaptation framework at EU level still crucial But not in sync with international developments (Paris, Sendai, SDGs) 23

24 10 - Analysis for Mid-Century Strategy The Paris Agreement invites Parties to prepare and publish midcentury, long-term low greenhouse gas emission development strategies by The Commission is putting in place the necessary scientific and modelling base for an in-depth analysis. Revisit the findings of the existing 2050 Low Carbon Roadmap in light of potential pathways towards Climate Neutrality in the second half of the century Key elements: technology & innovation, jobs and growth, land use sector 24

25 Looking forward to 2018 EU level : implementation actions Implementation regulations, e.g. ETS HDV standards Post-2020 MFF Mid-century strategy Adaptation International action at all levels COP24 Strengthened alliances, in particular with G20 partners Increased cooperation on modelling, carbon markets (Florence process) 25

26 Thank you! Visit DG Climate Action online: ec.europa.eu/ clima/ facebook.com/ EUClimateAction twitter.com/ EUClimateAction pinterest.com/ EUClimateAction youtube.com/ EUClimateAction Read our book "EU Climate Policy Explained" (published by Routledge, 2015) English, French, Spanish, Chinese and Korean versions online : Climate Action

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