Eurelectric welcomes the stakeholder consultation on an EU 2040 climate target and fully supports the efforts to meet the objectives of the European Climate Law, in line with the 1.5 °C ambition set by the Paris Agreement. The EU has not had any climate target for 2040 before, hence by politically establishing such a new target the investor community will get more clarity and confidence about the EU’s decarbonisation path ahead. Also, it should lay the foundation for the development of an ambitious, cost- effective, and highly supportive EU 2040 policy framework.
The electricity industry is engaged in a deep decarbonisation process and considers that the EU’s electricity supply can be fully climate-neutral well before 2050 if the right enablers are activated, including investment in generation capacities and distribution networks; streamlined permitting processes; access to raw materials and components for net-zero technologies; and a stable, predictable regulatory framework.
Electrification is the most direct, efficient, and effective way to achieve the society’s decarbonisation goal, as it reduces emissions in three ways: switching to carbon-neutral power generation, reducing total energy demand, and replacing fossil-based inputs to industrial processes.
If properly implemented, a forward-looking energy transition based on ambitious intermediary targets on the way to climate-neutrality by 2050, driven by a market-based climate policy, will lower energy bills and bring economic benefits to the society at large. The benefits of a decarbonised energy system will outweigh the associated costs, including the costs of imported fossil fuels and the effects of climate change.
Eurelectric believes that carbon removals will play an indispensable part in reaching the EU’s climate neutrality goal for 2050. Hence it is urgent that carbon removals are incorporated in the formulation of the EU 2040 climate target and fully supported by the policy framework that will be developed in the next step. At the same time, achieving negative CO2 emissions by carbon removals must not in any way replace or reduce the efforts to mitigate emissions by phasing out fossil fuels. The EU climate policy framework must continue to incentivise the pursuit of greenhouse gas emissions abatement through cost-effective and market-driven solutions, including electrification, phasing out of fossil fuels and deployment of clean and renewable generation capacities.
Climate policies can affect different sectors of the economy in different ways and consequently different societal groups bare an unequal share of the transition costs. To be successful and maintain public support, any policy designed to decarbonise the economy must ensure the cost of the transition is allocated fairly through balancing its environmental objectives against any regressive effects arising from the implementation of that policy. To pursue an affordable and inclusive energy transition, we must protect consumers, and empower them to play an active role, through greater differentiation in price signals, cost reflective network tariffs and an efficient use of both smart meters and grids. In addition, it is essential to enable financial support to facilitate customers’ access to advanced and innovative energy services by mitigating upfront costs and allowing for co-investment, especially to vulnerable customers.
Eurelectric encourages policymakers to remain technology open to enable cost-efficient emissions reduction in the energy sector leading to full economy-wide carbon-neutrality by 2050 while ensuring security of supply, competitive energy prices and social acceptance.
It is also essential that the European Commission is more actively involved in the governance of global normalisation and standards (including the GHG Protocol, the ISSB, etc.). This would ensure coherence of between these standards and EU policies and standards, avoiding unnecessary administrative burden and enabling compliance both at EU and international level.