European Climate Law

The European Climate Law enshrines the 2050 climate neutrality target into EU law and increases the 2030 greenhouse gas (GHG) reduction target from 40% to 55% compared with 1990 levels. The regulation has four aims. Firstly, it makes the transition to climate neutrality for the EU irreversible. Secondly, it provides the long-term direction for meeting the 2050 climate neutrality objectives in all EU policies, in a way that is socially fair and cost-efficient. Thirdly, it aims to provide clarity and predictability for all economic actors. Lastly, it creates a system for monitoring and further action in the coming years.

In order to achieve the targets in the regulation, the Commission has started a wide legislative review process in July 2021. This review includes the adoption of new legislation and revisions of significant parts of the existing legislation in the fields of energy, climate, and transport.  The most significant such legislative package is the Fit for 55 package, initiated by the Commission in July 2021, while a highly interlinking but separate Hydrogen and Decarbonised Gas package was launched in December 2021.These packages include the revisions of the following acts:

• EU Emissions Trading Scheme;
• Effort Sharing Regulation;
• LULUCF Regulation;
• Renewable Energy Directive;
• Energy Efficiency Directive;
• Regulation on Alternative Fuels Infrastructure (instead of the current directive);
• Regulation for CO2 emissions of new passenger cars and new light commercial vehicles;
• Energy Taxation Directive;
• Energy Performance of Buildings Directive
• Gas market Directive and Regulation;

New proposed legislation includes:

• Fuel EU Maritime Regulation;
• Regulation on Carbon Border Adjustment Mechanism;
• ReFuel EU Aviation Regulation;
• Social Climate Fund Regulation;
• Regulation on methane emissions reduction in the energy sector;

The vast majority of these files have since been adopted through the EU’s legislative processes, with the notable exception of the revision of the Energy Taxation Directive. To ensure that Member States are on track to progress towards the climate neutrality and adaptation objectives, the Commission is undertaking periodic assessments, starting in 2023 in its Climate Action Progress Report. Similarly, the Climate Law also put obligations on the Member States to elaborate on their approach to comply with the common ambition and objectives, by revising their National Energy and Climate Plans (NECP). 

 

---

What's in it for hydrogen?

The goal of climate neutrality represents a paradigm shift, as opposed to any other climate ambitions because it requires all sectors to consider the technological change required to minimise or even eliminate all emissions. The EU Climate Law sets the path for climate neutrality: it defines both the ambition and pace. It therefore provides additional predictability for clean technology investors. The upward revision of the target to 55% GHG emissions reduction by 2030 provides even more incentive to boost research, scale up and roll out clean breakthrough technologies that would help reach the EU's climate ambitions.

The revision of all relevant climate-related policy instruments and the introduction of new ones includes the reform of the EU ETS, connected with the establishment of the CBAM, and, more broadly, a coherent and effective carbon pricing policy that is climate-aligned. Concretely, the adoption of the more ambitious 2030 emission reduction target will lead to the alignment of the ETS to comply with the upward revision and, therefore, to a stronger reduction in allocated EU Allowances and increased carbon market prices.

In this context, hard-to-abate sectors and mobility areas will have to find solutions to decarbonise, in which clean hydrogen will play a substantial role. Clean hydrogen is featured as a clear high-potential solution to reach climate targets within the Climate Law. The Commission is planning on an accelerated deployment of clean hydrogen technologies in both ETS and non-ETS sectors, which provides for many opportunities for the industry across various applications.

The holistic policy framework provided by the Climate Law was key in establishing a regulatory basis that enables and incentivises the development and scale up of novel, clean technologies in the EU.  

---

 

Links to the original document and additional information:
EU Green Deal Communication COM (2019) 640 final

Climate Action Progress Report 2023EU-wide assessment of the draft updated National Energy and Climate Plans European Climate Law

Communication on European Green Deal Investment Plan COM(2020) 21 final