European Union
This profile assesses the European Union’s past, present and indications of future performance towards a low-carbon economy by evaluating emissions, decarbonisation, climate policy performance and climate finance. The profile summarises the respective findings from, amongst others, the Climate Change Performance Index (CCPI, operated by Germanwatch and Climate Action Network Europe), the Climate Action Tracker (CAT, operated by Climate Analytics, NewClimate Institute, Ecofys and the Potsdam Institute for Climate Impact Research), and analyses from the Overseas Development Institute (ODI).
BROWN TO GREEN:
G20 TRANSITION TO A LOW CARBON ECONOMY
Over the assessment period the European Union’s greenhouse gas (GHG) emissions have declined from about 5,600 MtCO2e to about 4,500 MtCO2e.
Future projections assume this reduction could continue until 2030. In 2012, carbon dioxide (CO2) accounted for approximately three quarters of the EU’s total GHG emissions. Energy-related CO2 per capita emission declined notably since 1996, but are still relatively high compared to other G20 countries.
Human Development Index
0
0.82
1G20 average
N/A
Share of global GHG emissions
8.9
%GHG emissions per capita
(tCO2e/cap)
9.3 8.7
G20 average
Share of global GDP
17%
$$
GDP per capita
$
28,809
$
$
15,071
$
G20 average
Source: UNDP, data for 2015 Source: World Bank Indicators, data for 2012 Source: IEA, data for 2013
CCPI evaluation of emissions level and trend
very poor poor medium good very good
Level Weak trend Strong trend
Sources: Past energy related emissions from the Climate Change Performance Index (CCPI); past non-energy and future emissions projections from the Climate Action Tracker (CAT).
CCPI calculations are primary based on the most recent IEA data; CAT calculations are based on national policies and country communications.
GREENHOUSE GAS (GHG) EMISSIONS
CO2 emissions from forestry
-7%
N2O
8%
CH4
10%
F-Gases
2%
CO2
80%
Composition of GHG emissions*
*CO2 emissions excl. LULUCF Source: Annex I countries: UNFCCC (2015);
Non-Annex I countries: IEA (2014) and CAT (2015) Historic emissions
(excluding forestry)
Current policy emissions projections (excluding forestry)
Energy-related CO2 emissions per capita Energy-related
CO2 emissions Historic forestry emissions/removals
G20 average of energy-related CO2 emissions per capita
CLIMATE ACTION TRACKER
Total emissions (MtCO2e/a) 2000 3000 4000 5000
0 1000 6000
Emissions per capita (tCO2/capita) 0 1 2 3 5 4 6 7 8 9
1990 1994 1998 2002 2006 2010 2014 2018 2022 2026 2030
DECARBONISATION
The energy intensity of the EU’s economy (TPES/GDP) has gradually fallen and is already far below the G20 average.
In the European Union there has been an observable trend towards fewer emissions per primary energy supply (CO2/TPES). It started just above the level of the G20 average and continuously dropped down to about 49 tCO2 per TJ, below the G20 average. While it is expected that the energy sector's carbon intensity will drop further by 2030, it would still exceed the minimum value for the 2°C compatible benchmark corridor.
Share of coal in Total Primary Energy Supply (TPES)
CCPI evaluation of energy intensity of GDP
very poor poor medium good very good
Level
Weak trend
Strong trend
CCPI evaluation of carbon intensity of energy sector
very poor poor medium good very good
Level
Weak trend
Strong trend
Evaluation of coal share in TPES
poor medium good
Source: own evaluation
In the European Union, the share of coal accounted for 27%
in 1990 but has since decreased.
In 2012 coal accounted for 18% of the total primary energy supply, which is nearly half of the G20 average share. Projections assume this development will continue and be on a 2°C-compatible pathway, even though it will still be above the minimum value of the benchmark corridor in 2030.
Energy intensity Average energy intensity in G20
Source: CCPI, 2016
Energy intensity of the economy
Sources: Past: CCPI; future projections: CAT
Carbon intensity of the energy sector
% of coal (past trend) Average % of coal in G20
% of coal (current policy projections)
Global benchmark for a 2°C pathway (min & max)
Total coal consumption (TJ)
Source: CAT
Carbon intensity (past trend) Carbon intensity
(current policy projection) Global benchmark for a 2°C pathway Average carbon intensity in G20
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Total Primary Energy Supply per GDP PPP (MJ per 2005 US dollar) 0 2 4 6 8
1 3 5 7 9 10
Tonnes of CO2 per TPES (tCO2/TJ) 0 20 40 60
10 30 50 70
1990 1994 1998 2002 2006 2010 2014 2018 2022 2026 2030
1990 1994 1998 2002 2006 2010 2014 2018 2022 2026 2030
0 10%
20%
30%
5%
15%
25%
35%
40%
0 6000000 10000000
2000000 8000000 4000000 12000000 14000000 16000000 18000000 20000000
Total coal in TPES [TJ]
Source: CAT, 2015 Source: CAT, 2015
Electricity demand per capita
The EU’s electricity demand per capita has been rising since 1990 showing the same upward trend as the G20 average.
However, at around 5500 kWh per capita in 2012, the EU’s electricity demand is far above the G20 average, and is expected to continue rising until 2030.
Emissions intensity of the electricity sector
The emissions intensity of the EU’s electricity has dropped by a third since 1990. Compared to other G20 member countries, current levels are relatively good and can be expected to drop further.The share of renewable energy in electricity remained relatively constant around 12% -14%
between 1990 and 2005. Since then, it has nearly doubled to 24% in 2012. Further growth can be expected in the next decade. The share of renewables in the EU’s total primary energy supply has slightly increased over the past years and, since 2010, has been above the G20 average.
Evaluation of the electricity emission intensity
poor medium good
Source: own evaluation Electricity demand per capita
(past trend)
Average electricity demand per capita in G20
Electricity demand per capita
(current policy projections) Emissions intensity (past trend)
Average emissions intensity in G20 Emissions intensity
(current policy projections)
Good practice benchmark:
with large hydro potential (Norway) Good practice benchmark:
without nuclear or large hydro potential (Denmark) Sources: CCPI and CAT
Renewable energy in TPES and electricity sector
% of renewable energy in electricity (past trend)
% of renewable energy in electricity
(current policy projections)
% of renewable energy in TPES (past trend) G20 average % of renewable energy in TPES
Total renewable energy
consumption (TJ) CCPI evaluation of renewable share in TPES
very poor poor medium good very good
Level Weak trend Strong trend
1990 1994 1998 2002 2006 2010 2014 2018 2022 2026 2030
0 2000 4000 6000
1000 3000 5000 7000
Electricity demand per capita [kWh/cap]
1990 1994 1998 2002 2006 2010 2014 2018 2022 2026 2030
0 200 400 600
100 300 500 700
Emissions intensity of electricity [gCO2/kWh]
1990 1994 1998 2002 2006 2010 2014 2018 2022 2026 2030
0 5%
10%
15%
30%
20%
25%
35%
40%
45%
50%
0 2000000 4000000
1000000 3000000 5000000 6000000 7000000 8000000 9000000 10000000
Total renewable energy in TPES [TJ]
Source: CAT, 2015
Under its INDC, on 6 March 2015 the EU proposed a binding, economy-wide target to cut domestic greenhouse gas emissions by at least 40% below 1990 levels in 2030. No individual EU member state has its own INDC.
The Climate Action Tracker (CAT) rates the EU emissions target as “medium”, meaning the INDC is inconsistent with limiting warming below 2°C. It would require other countries to make a comparably greater effort, and much deeper emissions reductions.
The overall level of GHG emissions reductions proposed in the EU28 INDC does not fall within the range of approaches for fair and equitable emission reductions. Current policies are projected to reduce domestic emissions by 23–35% below 1990 levels in 2030, and do not put the EU on a trajectory towards meeting either its 2030 or 2050 targets. The EU’s Emissions Trading Scheme is an important instrument to achieve its 2020 and 2030 targets.
However, an accumulated surplus of emissions allowances could dilute the 40% GHG target by 7%
in 2030. It is therefore important that the EU creates a robust market reserve for eliminating that surplus, to keep in line with the 40% GHG target.
CLIMATE POLICY PERFORMANCE
Building codes, standards and incentives for low-emissions options Support scheme for renewables in the power sector
Emissions performance standards for cars Low emissions development plan for 2050*
2050 GHG emissions target
Emissions Trading Scheme (ETS) Carbon tax
Source: Climate Policy Database, 2016
* Understood as decarbonisation plans and not specifically as the plans called for in the Paris Agreement
Checklist of the climate policy framework
CCPI evaluation of climate policy
very poor poor medium good very good
Climate policy evaluation by experts
The CCPI evaluates a country‘s performance in national and international climate policy through feedback from national energy and climate experts.
The EU as a whole is not part of the CCPI policy evaluations.
CAT evaluation of the EU’s Intended National Determinded Contributions (INDC)
inadequate medium sufficient role model
Compatibility of national climate targets (INDCs) with a 2°C scenario
Historic emissions (excluding forestry)
Emissions in INDC scenario (min & max) Current policy emissions
projections (excluding forestry)
Fair emissions reduction range in a 2°C pathway
Min Total emissions (MtCOe/a)2 Max
-1000 1000 2000 3000 4000
-2000 0 5000 6000
Min Max
FINANCING THE TRANSITION
The European Union as a whole is not covered by the investment attractiveness indices.
Investment attractiveness
*Adapted from RECAI and re-classified in 3 categories
(low, medium, high) for comparison purposes with Allianz Monitor.
**Taken from RECAI issue of May 2016 Allianz Energy and
Climate Monitor RECAI* (E&Y index) Category (own assessment)
Trend**
Carbon pricing mechanisms
The EU-ETS, which covers 2 GtCO2e of emissions and 45% of the EU’s emissions, remains the world’s single largest regional carbon pricing instrument. In 2014, the EU approved a reform to strengthen and revitalise its carbon market. As a means of controlling the supply of allowances and enhancing the price stability within the EU-ETS, the EU will launch its Market Stability Reserve in 2019. The European Commission has also proposed implementing a series of post-2020 reforms to enhance the overall ambition of the scheme.
A Carbon tax directly sets a price on carbon by defining a tax rate on GHG emissions or – more commonly – on the carbon content of fossil fuels. Unlike an ETS, a carbon tax is a price-based instrument that pre-defines the carbon price, but not the emissions reduction outcome of a carbon tax.
An ETS caps the total level of GHG emissions and allows industries to trade allowances based on their marginal abatement cost. By creating a supply and demand for allowances, an ETS establishes a market price for GHG emissions.
Emissions Trading Schemes (ETS)
Carbon Tax
Sources: World Bank and Ecofys, 2016; other national sources
Historical investments in renewable energy and investment gap
Not assessed
The Allianz Energy & Climate Monitor ranks G20 member states on their relative fitness as potential investment destinations for building low-carbon electricity infrastructure.
The investment attractiveness of a country is assessed through four categories: Policy adequacy, Policy reliability of sustained support, Market absorption capacity and the National investment conditions. The Renewable Energy Country Attractiveness Index (RECAI) produces score and rankings for countries’ attractiveness based on Macro drivers, Energy market drivers and Technology-specific drivers which together compress a set of 5 drivers, 16 parameters and over 50 datasets.
Sources: Allianz Energy and Climate Monitor and RECAI reports not covered
not covered
no data
Not assessed
Fossil fuel subsidies
Public climate finance
EU is not listed in Annex II of the UNFCCC, and it is therefore not formally obliged to provide climate finance. While climate-related spending by multilateral development banks may exist, it has not been included in this report.
