Trends and projections in Europe 2014


Courtesy of European Environment Agency (EEA)

Reporting the latest progress towards climate and energy targets in Europe

This 2014 edition of the annual European Environment Agency (EEA) 'Trends and projections' report provides an updated assessment of the progress of the European Union (EU) and European countries towards achieving their climate mitigation and energy targets.

The report also supports and complements the annual report from the European Commission to the European Parliament and the Council on progress towards meeting the Kyoto and EU 2020 objectives, as required under Article 21 of the EU Monitoring Mechanism Regulation (MMR) (EU, 2013d).

In June 2014, the EEA published final complete data on annual greenhouse gas (GHG) emissions during the Kyoto Protocol's first commitment period (2008 through 2012) in the EU (1). An updated assessment of progress achieved towards Kyoto targets based on these data are published alongside this report (2).

In July 2014, Member States reported approximated estimates of 2013 GHG emissions (3). These preliminary estimates — before final data on 2013 GHG emissions is officially published in June 2015 — provide the basis for a first assessment of progress of the EU Member States towards their annual targets for the period from 2013 to 2020, under the 2009 Effort Sharing Decision (ESD). The ESD caps those emissions not covered by the EU Emissions Trading System (ETS).

The assessments presented in this report are based on the latest year for which data are available. While data pertaining to GHG emissions are available up until the year 2013, in addition to GHG projections until 2030, energy-related data cover historic trends until 2012.

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The EU is on track to meet its '20-20-20' targets

The EU's '20-20-20' targets, endorsed by the European Council in 2007 and implemented through the 2009 climate and energy package and the 2012 Energy Efficiency Directive (EED) (EU, 2012), focus on:

  • a 20 % reduction of the EU's GHG emissions compared to 1990;
  • a 20 % share of renewable energy sources (RES) in the EU's gross final energy consumption;
  • a 20 % saving of the EU's primary energy consumption compared to projections.

These targets form part of the Europe 2020 growth strategy, alongside targets relating to employment, education, research and innovation, and social inclusion and poverty reduction.

The EU is making good progress towards these climate and energy targets: the EU's energy consumption decreased faster between 2005 and 2012 than required to achieve the 2020 energy efficiency target, the 2012 share of renewable energy sources (RES) was above interim target levels, and 2013 levels of GHG emissions were already very close to the 20 % reduction target, seven years ahead of the 2020 deadline.

2013 GHG emissions are already 19 % below 1990 levels and with further reductions projected, the EU will most likely over‑achieve its 20 % reduction target for 2020

According to preliminary estimates of 2013 GHG emissions, total EU GHG emissions decreased by 1.8 % between 2012 and 2013. GHG emission levels were therefore 19 % below 1990 levels in 2013 (4). Based on Member State projections taking into account policies and measures adopted by 2012 (the 'with existing measures' projection scenario), total EU GHG emissions are expected to decrease to a level of 21 % below 1990 emissions by 2020.

If the additional measures planned by Member States are fully implemented (the 'with additional measures' projection scenario), the overall reduction could reach 24 % compared to 1990 in 2020. In fact, GHG levels in the EU in 2013 were lower than anticipated in both these GHG projection scenarios between 2010 and 2020. Furthermore, several policy developments, expected to bring further GHG reductions, took place at EU level after the preparation by Member States of their GHG emission projections: adoption of the Energy Efficiency Directive (EED), binding emission targets for new car and van fleets, and a new regulation on fluorinated gases. If the projected level of effort is sustained by Member States until 2020, the EU could actually achieve an emissions reduction greater than the projected 24 %.

Large emission reductions took place in the sectors covered by the EU ETS; however, this system is undergoing necessary reforms to address its surplus of emission allowances

The EU ETS is a 'cap and trade' system covering about 12 000 industrial installations across the EU. It entered its third trading period in 2013. ETS emissions in 2013 remained below the cap set as in previous years. Compared to 2005 levels, the overall reduction of 19 % places the ETS sectors close to their 21 % overall reduction target for 2020. The effects of the economic recession since 2008, as well as large entitlements for the use of emission reduction credits coming from outside the ETS, have contributed to a low demand for allowances. This has led to the build-up of a substantial allowance surplus, with corresponding effects on the price of CO2.

According to Member State projections, verified emissions will continue decreasing considerably and therefore remain below the cap. In order to address the imbalance of supply and demand, an amendment of the EU ETS Auctioning Regulation was adopted to postpone ('backload') the auctioning of 900 million allowances from the years 2014 to 2016, to the years 2019 and 2020. The European Commission has proposed structural measures to address the surplus.

Renewables are growing as planned, but further progress depends upon appropriate investment and a transformation of the energy market to facilitate more penetration by renewables

The EU is on track to achieve its 20 % target for renewables for 2020. In 2012, the 14.1 % share of RES in gross final energy consumption in the EU was higher than the 13.0 % target for 2012, which results from Member State National Renewable Energy Action Plans (NREAPs). However, the indicative renewable energy trajectory outlined in the RED becomes increasingly steeper towards 2020. Most Member States need to increase their support to renewable energy by 2020 in order to reach their legally binding national targets.

Energy consumption has been decreasing since 2005; full implementation and enforcement of national energy efficiency policies is necessary to keep the EU on track to meet its 2020 energy efficiency target

The EU is on track to meet its energy efficiency target. Between 2005 and 2012, its primary energy consumption and its final energy consumption (5) decreased faster than would be necessary to meet its 2020 target. In conjunction with the implementation of energy efficiency policies, the economic crisis played an important part in this outcome (6). As economic growth gradually picks up again across Europe, further efforts will be required to implement fully and enforce energy efficiency policies at the national level, in order to ensure that the 2020 target is met.

Achievements at national level remain mixed, but the overall situation improved compared to the last year of reporting, in particular for renewables

Nine Member States (Croatia, Cyprus, Czech Republic, Denmark, Greece, Hungary, Romania, Slovakia and the United Kingdom) are on track to meet targets for all three climate and energy policy objectives. Last year's 'Trends and projections' report showed that no Member State underperformed with respect to all three policy objectives. This year's report draws a similar conclusion.

Noticeable progress has been achieved compared to last year, particularly in the deployment of renewable energy, where six more Member States are now on track to achieve their RES targets. Three Member States (Estonia, France and Germany) saw their performance deteriorate in progress towards energy efficiency targets, as well as ESD targets (in the case of Germany). Belgium and Germany are the two Member States considered not to be on track with respect to two policy objectives (GHG emission reductions and energy efficiency improvement).

Three Member States could miss their 2013 target under the ESD

Under the ESD, Member States must meet annual individual GHG targets during the period 2013 to 2020 for emissions not covered by the EU ETS ('ESD emissions'). The first annual ESD compliance cycle will begin in 2015, when Member States report official GHG emission data for the year 2013.

Provisional 2013 emission estimates indicate that ESD emissions in Germany, Luxembourg and Poland were above their respective ESD targets. Besides these three Member States, Austria, Belgium, Finland, Ireland and Spain are not considered either to be on track to meet their targets, because their projected GHG emissions do not indicate that they will achieve their 2020 targets through domestic policies and measures (either existing or additional). These Member States will therefore have to design and implement new measures or use flexibility mechanisms to achieve their ESD targets (7).

Projected GHG emissions for 2020 indicate that half of the Member States are considered to be on track towards their ESD targets. In these countries, ESD emissions were below the respective 2013 ESD targets, and the 2020 ESD target are expected to be met under the current policies and measures already in place. Six other Member States (Bulgaria, Italy, Latvia, Lithuania, the Netherlands and Slovenia) are partly on track towards their targets, because they will not achieve their 2020 ESD targets through domestic reductions alone without implementing the measures that were still at the planning stage in 2012.

Among all the additional measures reported by Member States, those aimed at improving energy efficiency in the residential and services sectors are expected to deliver key contributions towards further emission reductions by 2020. By contrast, the expected emission reductions in the transport sector — the main source of emissions not covered by the EU ETS — remain limited. Likewise, the agriculture sector is not currently expected to contribute to significant emission reductions in the future.

Three further Member States show insufficient progress on renewables

In 2012, 22 Member States (all except France, Ireland, Malta, the Netherlands, Portugal and Spain) plus Iceland and Norway were considered to be on track towards meeting their RES targets. The RES share of these countries met or exceeded both their indicative RED target for 2011 to 2012, and their expected 2012 NREAP target. The share of renewables was actually higher than the 2020 targets in Bulgaria, Estonia, Iceland and Sweden. Austria, the Czech Republic, Latvia, Luxembourg and the United Kingdom made good progress towards their RES targets in 2012, compared to 2011.

In Ireland, Portugal and Spain, the RES shares had reached or exceeded their indicative RED target for 2011 to 2012, but not their expected 2012 NREAP target for 2012. In France, Malta and the Netherlands, the shares of RES in 2012 remained below both the indicative RED targets for 2011 to 2012 and below the expected 2012 NREAP targets.

Eleven Member States need to step up efforts on energy consumption

Concerning energy efficiency, Member States defined their own non-binding targets for energy consumption for 2020 under the Energy Efficiency Directive (EED). Seventeen Member States (the Czech Republic, Croatia, Cyprus, Denmark, Finland, Greece, Hungary, Ireland, Italy, Latvia, Luxembourg, Portugal, Romania, Slovakia, Slovenia, Spain and the United Kingdom) are considered to be on track towards their 2020 energy efficiency targets. These countries have so far succeeded in reducing or limiting their primary energy consumption and final energy consumption below a linear target path between 2005 levels and the 2020 targets.

Austria, Bulgaria, France, Lithuania, Malta, the Netherlands and Poland are only partly on track to meet their energy consumption targets, because they are only on track towards either their primary or their final energy consumption target. Belgium, Estonia, Germany and Sweden are not considered to be on track towards either of these targets. All these Member States need to enhance the reduction or limitation of their energy consumption through better implementation and enforcement of their energy efficiency policies in order to achieve their 2020 targets. Compared to the situation observed in 2011, the assessment results based on 2012 energy consumption levels show an improvement in the situation of Finland, Malta, Poland and Slovenia, while the situation deteriorated in Estonia, France and Germany.

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Policies and measures have had a key role in the progress achieved so far; while the economic recession partly contributed to this outcome, it may well impede future progress

Policies and measures implemented to reduce GHG emissions, improve energy efficiency and stimulate the growth of renewable energy are having an impact. Clearly, however, the economic recession has played an important role by affecting economic activity and thereby energy demand. This, in turn, drove GHG emissions down and boosted (statistically) the share of renewables in final energy consumption. At the same time, the recession risks inhibiting future progress: it resulted in a surplus in the EU ETS that needs to be adequately addressed; it reduced investment in renewables; and, overall, it risks sending the misleading signal that climate and energy targets might be achieved with a reduced level of policy effort.

Targets for 2030 keep the EU on track towards its long term objectives on climate change and energy sustainability

EU leaders have endorsed the objective of reducing Europe's GHG emissions by between 80 % and 95 % by 2050, compared to 1990 levels. This objective corresponds to the necessary reductions that, according to the Intergovernmental Panel on Climate Change (IPCC), developed countries should collectively achieve.

In October 2014, the European Council adopted a new set of climate and energy targets for 2030:

  • a binding target of an at least 40 % domestic reduction in GHG emissions, compared to 1990, to be met collectively by a 43 % reduction in the ETS sectors and a 30 % reduction in the non-ETS sectors, compared to 2005, respectively;
  • a target, binding at EU level, of at least 27 % for the share of renewable energy consumption;
  • an indicative target at EU level of at least 27 % for improving energy efficiency compared to projections of future energy consumption, based on the current criteria.

Projections from Member States indicate a limited decrease in emissions until 2030. These anticipated reductions between 2020 and 2030 are still largely insufficient when compared to the 40 % reduction target and the even steeper reduction needed beyond 2030, if the EU is to remain on a trajectory towards a low-carbon and resource-efficient economy. Further policies need to be planned to ensure the 40 % target is reached. In its 2030 framework for climate and energy policies published in January 2014, the European Commission proposed changes to strengthen the EU ETS. Member States will have to pay particular attention to their emissions under the ESD, especially in sectors that have showed no, or limited, projected reductions such as the transport and agriculture sectors.

The EU's energy sector will also need to undergo a rapid decarbonisation, with the share of renewables reaching between 55 % and 75 % by 2050 (up to 73 % in transport and 86 % in power generation), according to the European Commission. Overhauling the energy system will also require the modernisation of power grids, the development of cost-effective load balancing and energy storage options, implementation of demand response and energy efficiency improvements across all sectors, along with the deployment of carbon capture and storage (CCS) at the majority of the remaining fossil fuel plants.

Synergies clearly exist in pursuing climate and energy objectives together; improved information on policies and measures, and further analysis would help optimise the policy mix needed to achieve further cost-effective emissions reductions

Progressing towards several climate and energy targets at the same time presents a number of co‑benefits. For example, the significant deployment of renewable energy between 2005 and 2012 resulted in GHG emission savings and, to a certain extent, a reduction in primary energy consumption through the replacement of less efficient fossil fuel plants. At the same time, the detail of policy interactions, in particular with the EU ETS, and the estimated effects of policies and measures could benefit from further empirical analysis in order to optimise the policy mix. In this respect, the new reporting requirements on policies and measures and GHG-related data, adopted in the EU in 2013, could help expanding the knowledge base to support such analysis.

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