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ECNO DEMO

State of EU progress to climate neutrality

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Eike Karola Velten • Clara Calipel • Matthias Duwe • Nick Evans • Charlotte Felthöfer • Markus Hagemann • Judit Hecke • Lukas Kahlen • Simon Lalieu • Hugh McDonald • Natalie Pelekh • Thomas Pellerin-Carlin • Julien Pestiaux • Konstanty Ramotowski • Paula Schöberlein • Hannes Schritt • Aleksander Śniegocki • Aneta Stefańczyk • John Tarpey

The assessment of progress towards climate neutrality shows that the EU is moving in the right direction, but the pace is too slow

The transition to climate neutrality is essential for ensuring a liveable future. 

It requires the modernisation of many existing structures and practices – from the way we move, to how our food is produced, and how we warm and cool; from what our buildings are made of, to how our cities are organised. All these building blocks must transform so that we fulfil our needs while releasing net zero or net negative greenhouse gas (GHG) emissions into the atmosphere.

Action is most needed where objectives and key underlying enablers have been progressing far too slowly or not at all

The progress assessment shows that the EU has, over the period analysed, moved in the right direction, but needs to significantly pick up the pace of change to be on an effective path towards climate neutrality by 2050. This cautiously promising outlook was the case for all building blocks except finance and carbon dioxide removals, which were both found to be headed in the wrong direction. A look at the additional policies adopted under the European Green Deal in the past two years indicates that the EU is taking steps to accelerate progress in most areas. This already shows in EU progress establishing a governance system for climate policy, which is assessed as being ‘on track’.

ECNO observes 13 building blocks for climate neutrality.

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The Commission’s first climate neutrality progress report is due on...

30 September 2023

Achieving climate neutrality by 2050 at the latest is the cornerstone of the EU's strategic vision and of its commitment under the Paris Agreement. 

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€360bn/year

are needed to close the climate investment gap. 

To reach its climate objectives by 2030, the EU economy needs to multiply its annual public and private climate investments by 1.5x compared to those made today, according to the European Investment Bank.

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Key takeaways for policy-makers from the first ECNO report

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Watch the live recording of ECNO's launch in June

On 26 June 2023, ECNO was officially launched in Brussels, accompanied by a presentation of first flagship report on EU progress towards climate neutrality and panel discussion.

The panel was composed of the following stakeholders:

  • Yvon Slingenberg, Director, DG CLIMA, European Commission
  • Joško Klisović, Committee of the Regions
  • Florie Gonsolin, Director Industrial Transformation Projects, European Chemical Industry Council - Cefic
  • Robert Jeszke, CEO, Centre for Climate and Energy Analysis (CAKE) at the National Centre for Emissions Management (KOBiZE)
  • Moderated by Erica Hope, European Climate Foundation

ECNO results overview

An in-depth, indicator-based understanding of real-world change

At the outset of European Green Deal implementation, only one of the building blocks showed developments at a pace that puts it ‘on track’. The observed trend for three of 13 building blocks was ‘too slow’ and in seven ‘far too slow’ when compared to what EU documents set out as is required to be on a path to climate neutrality by 2050 at the latest. In two areas, developments were moving in the ‘wrong direction’.

Explore all Building Blocks in Detail

Sectoral perspective

Concerns over pace of change in most sectors and additional boost needed for clean electricity

Progress within the sectors was varied. Electricity was almost ‘on track’, but the share of renewable energy and level of system integration has been building up too slowly to cater for future needs in a timely manner, particularly as electrification progresses in other sectors. In Mobility, Industry, Buildings, and Agrifood, progress was found to be ‘far too slow’ over the assessed period, requiring a clear acceleration of change under Green Deal policies. Carbon Dioxide Removal was found to be moving in the ‘wrong direction’ primarily due to shrinking natural sinks.

Targets computer
Bikes riding

Cross-cutting perspective

Cross-cutting building blocks unlock sectoral transitions, but many areas are not given the attention they warrant


The cross-cutting building blocks also varied in their progress. Governance was assessed as being ‘on track’. Just and Inclusive Transition, Clean Technologies, Lifestyles, and External Action were found to be heading in the right direction but still 'too slow'. Adaptation was on the tip of going in the 'wrong direction' and Finance was clearly 'off track'. The results for Finance are especially concerning. A lack of adequate green investments and increases in fossil fuel subsidies undermine the transition in all sectors, and threaten to slow down progress if this building block remains unaddressed. The result for Governance is, however, a promising signal. It indicates that an increasingly robust policy framework is being put in place to facilitate actions in sectors and cross-cutting building blocks alike.

KEY INSIGHT

A likely speed boost from recent policy changes

The findings, largely derived from data for 2015–2021 and up-to-date qualitative information, need to be understood in the context of a rapidly developing landscape of EU climate policy. The European Green Deal and the subsequent ‘Fit for 55’ package of measures include expanded and additional policies that are and will continue to provide further guidance and levers to steer the building blocks in the right direction. This wealth of new policy initiatives at EU level for climate neutrality and for greater energy independence are signs that EU institutions are engaging with several of the necessary sectoral transitions. Going forward, the indicator values themselves will show a changing reality if the policies have been designed effectively and if their implementation is sound and timely. Future reiterations of the assessment will be able to analyse such effects or the lack thereof.

Now the task is for policy-makers to focus on areas of inadequate progress that are not already addressed by recent policy changes, and implement additional targeted actions.

wind mills on the sea

Looking forward: Recommendations for policy makers

The assessment underscores that to navigate this decisive decade for climate action, EU policymakers urgently need a tracking system that is capable of indicating clearly and comprehensively where progress is sufficient, where it is not fast enough, or where it is even going in the wrong direction. Such insights will be key to formulating corrective policies or revising existing policies to align better with a path to climate neutrality – as well as identifying and removing of policies that set the wrong incentives.

 

The assessment found that, in principle, the EU already has a governance system in place that is correctly designed for the transition to climate neutrality. Yet, it needs to continue evolving and above all, must be implemented adequately. Article 6.1 of the EU Climate Law obliges the European Commission to assess progress towards climate neutrality, but the lack of a sufficiently granular monitoring framework is an obvious weakness. ECNO can step in to help this gap in the absence of a comprehensive official solution; ultimately however, it is decision-makers who need to own this process.

The assessment has also revealed that presently, data to measure progress on important objectives and enablers are missing and that existing targets and benchmarks are often out-of-date. Such data gaps lower the accuracy of any progress assessment and leave policy-makers with blind spots that undermine their ability to make the right decisions.

RECOMMENDATION 1 

Take action

on the areas found to be going in the 'wrong direction'. This concerns Finance and Carbon Dioxide Removals overall, but also specific enablers within other building blocks, such as shifting livestock production towards a more sustainable model, a modal shift in passenger and freight transport, or adaptation to climate impacts in agriculture and forestry.

RECOMMENDATION 2

Set up an official monitoring system

with a broad set of indicators to analyse structural changes and conditions under the emissions curve. This system is crucial for pinpointing critical action areas and potential future obstacles to support policy-making. ECNO currently fulfills this function due to the lack of official bodies, striving to enhance formal EU processes, although ideally, official EU entities should take over this role.

RECOMMENDATION 3

Integrate and align the monitoring system with other EU tracking systems


to enhance planning and reporting for the EU and all Member States. Mutual referencing of the same parameters will allow for greater comparability, increased transparency and facilitated evaluations. Such a tracking system can also be integrated with other EU monitoring systems such as the 8th Environmental Action Programme and the European Semester creating a unified fact base for decision-making and reducing administrative burdens.

RECOMMENDATION 4


Regularly update


both the underlying pathways and the progress assessment – at least every two years. Annual evaluations, aligned with national energy and climate progress reports (NECPRs), are essential for informed policy actions. This necessitates amending Article 6 of the EU Climate Law. Regular updates are also needed for the underlying pathways providing benchmark values. A formal update of the EU long-term strategy (EU LTS) is already overdue.

RECOMMENDATION 5

Close data gaps

through new reporting obligations, adjusted data collection routines and mechanisms to address existing data deficiencies. 
The European Commission must establish a common EU-wide progress tracking system based on a comprehensive set of indicators, linked to key enablers of the transition as well as to headline objectives, designed to inform policy-making in a way that enhances the capacity to achieve climate neutrality.

RECOMMENDATION 6

Involve expert stakeholders

from Member States, civil society, business, academia and diverse policy areas in the development of the monitoring system. The monitoring framework should be constructed in a transparent and open fashion to enhance support and facilitate its application. Anchoring the framework in legislation, like the Governance Regulation and EU Climate Law, is crucial for ensuring that its adoption and implementation are being adhered to.

RECOMMENDATION 7


Design an action trigger mechanism


within the EU Climate Law to assess progress lapses and prompt specific policy actions. This mechanism, inspired by EU models like the European Semester’s Alert Mechanism Report, would enable thorough evaluations and necessary interventions based on assessment results. Linking progress and policy consistency assessments in the EU Climate Law would maximize information use, aligning actions with climate neutrality goals.

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Transition

Window of opportunity for implementation

There is an opportunity to pursue these recommendations for a better official EU monitoring system during the upcoming reviews of the Governance Regulation and the EU Climate Law in 2024. But there is no need to wait. Under the existing obligation for a progress assessment, the European Commission can already kickstart the process.

Download and read more

The first in-depth assessment report aims to
inform a broader dialogue on how the EU can best track progress
and highlight areas for priority action.

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