On the path to complete climate neutrality by 2050, the European Commission has revised its expected recommendation to reduce net greenhouse gas emissions by 90% by 2040, compared to the emission levels of 1990. To achieve this, according to the European Commission, an additional 1.5% of GDP should be invested annually, compared to the levels from 2011 to 2020, with resources redirected from less sustainable uses such as fossil fuel subsidies.
The European Commission recommends that the private sector bears the majority of these investments, supported by policies encouraging low-carbon investments. The Commission’s assessment indicates the need for an average annual investment of around 660 billion euros from 2031 to 2050 in the energy system and 870 billion euros annually in the transportation sector. Key areas of investment would focus on the decarbonization of industrial processes, improving energy efficiency in energy-intensive industries, transitioning to electrification, and producing sustainable alternative fuels for the transportation sector.
Agricultural emissions, mainly caused by methane and nitrous oxide emissions, account for about 11% of the EU’s total greenhouse gas emissions. Therefore, one of the conditions of the proposed policy by the Commission is the establishment of a dialogue with key stakeholders, especially those in the industry and agriculture sectors. Additionally, the agricultural sector can play a significant role in the transition by ensuring sufficient food production in Europe while expanding the capacity of soil and forests to store more carbon.
The European Commission’s statement also envisions enhancing the Green Deal to become an “industrial decarbonization agreement,” built on industrial strengths, including renewable energy sources, to increase domestic production capacities in clean technology areas such as batteries, electric vehicles, heat pumps, solar panels, biogas, etc.
The recommendation of the new Commission goal will impact the proposal for the Law to be presented in June this year, focusing on the EU climate target by 2040.
