AleaSoft, December 13, 2019. The President of the European Commission presented the Green Agreement. This document is a great step for Europe to combat climate change. The official presentation was on Friday, December 13, 2019 at the COP25 Climate Summit that took place in Madrid.
In the morning of December 11, 2019, the president of the European Commission, Ursula von der Leyen presented the first draft of the European Green Deal. This document outlines the guidelines to meet objectives superior to those of the Paris Agreement and was officially presented at the COP25 Climate Summit in December 13 in Madrid.
Finally, most European countries supported the objectives set out in the agreement, with the exception of Poland, the only country that did not commit even after more than nine hours of negotiation. Thus, Poland does not join the pact, which is not binding. In any case, this is a great step forward and the rest of the European block support the initiative.
The document highlights the critical current state of the environment, where the climate change is increasingly evident every year. An eighth of the species is in extinction danger, forests and oceans are endangered by pollution and destruction. The measures are presented precisely as a response to this situation, under the motto of “converting an urgent challenge into a unique opportunity”.
The main objective of the document is to achieve zero net emissions of greenhouse gases in Europe by 2050. In addition, it is clarified that the environmental ambitions of the Green Agreement will not be achieved with Europe acting alone. The European Union will use its influence, knowledge and financial resources to encourage neighbouring and allied countries along the same path towards a sustainable future.
The Green Deal
The main points of this first version of the agreement are the following:
- Increasing the EU’s climate ambition for 2030 and 2050.
The Commission will propose a “Climate Law” in March 2020, which will serve as an instrument to legislate the purpose of zero emissions by 2050. With this law, it will also ensure that all other policies contribute to the same end and that each sector plays its role in this purpose.
Between 1990 and 2018, greenhouse emissions in Europe were reduced by 23%, while the economy grew by 61%. However, the current legislation would only achieve a 60% reduction in emissions by 2050. In the summer of 2020, the Commission will present a plan to reduce these emissions by 2030 up to between 50% and 55% compared to the figures from 1990.
In addition, by June 2021, the Commission will review all political instruments related to climate, among which is the European Union Emissions Trading System (EU ETS).
- Supplying clean, affordable and secure energy.
At this point, emphasis is placed on decarbonisation as a critical element to achieve the objectives for 2030 and 2050. Approximately 75% of greenhouse gas emissions in Europe are due to energy production and use, which is why the Efficiency must play a fundamental role. Therefore, a large-scale energy sector based on renewable energy sources is desired. At the same time, it is also necessary for energy to be safe and affordable for its consumers, which is why the document highlights the need for the European electricity market to be fully integrated, interconnected and digitalised.
The smart integration of renewable energy, energy efficiency and other sustainable solutions will help decarbonisation at the lowest possible cost. The Commission will present measures to favour this integration by mid-2020. In addition, the decarbonisation of the gas sector will be facilitated, among other ways, through support for the development of carbon-free gases.
- Mobilising industry for a clean and circular economy.
Transforming the industrial sector and the entire value chain can take about 25 years. To be ready in 2050, it is necessary that in the next five years decisions and actions are taken to guide that destination. From 1970 to 2017 the extraction of minerals globally tripled and continues to grow. Nearly half of the global greenhouse emissions and more than 90% of biodiversity loss come from mineral extraction. The European Union has begun to change this paradigm, but it still represents 20% of European emissions. Only 12% of the materials used in Europe come from recycling.
In March 2020 the Commission will adopt an industrial strategy for the European Union to meet the challenge of green and digital transformation. Together with the industrial strategy, an action plan for a new circular economy will be presented, which will help modernise the European economy. The electro‑intensive industries are indispensable for the European economy; therefore, the decarbonisation of this sector is essential.
- Building and renovating in an energy and resource efficient way.
The construction, use and renovation of buildings require significant amounts of energy and mineral resources. The Commission will make a rigorous adjustment of the legislation regarding the energy performance of buildings.
- Accelerating the shift to sustainable and smart mobility.
The transport sector is responsible for 25% of greenhouse gas emissions in Europe. To achieve European purposes, a 90% reduction in emissions in this sector is necessary by 2050. All means of land, sea and air transport must contribute to this cause. The Commission will adopt a strategy for sustainable and intelligent mobility in 2020 that will address this challenge and face all emission sources.
In this sense, the increase in the capacity of the rail and waterways within the territory of the member states will also be supported. The “Mobility as a service” solutions will be favoured, mainly in urban areas, through financing instruments. Obviously, the use of electric vehicles will be encouraged. A million public charging stations are declared necessary by 2025 to supply the 13 million electric vehicles planned for that date.
- “From farm to fork”: designing a fair, healthy and environmentally-friendly food system.
European food is famous for being healthy, nutritious and of high quality. Now it must also be recognised worldwide for being sustainable. The Commission will present the “From farm to fork” strategy in spring 2020. This will be a time for debate with the agents involved in the process that covers all stages of the food chain.
The Commission’s proposals for the common agricultural policy for 2021 to 2027 stipulate that at least 40% of the general budget of the common agricultural policy and at least 30% of the Maritime Fisheries Fund would contribute to climate action. There will also be strict regulation that prohibits the entry into European markets of foreign products that do not meet the fundamental requirements of European standards.
- Preserving and restoring ecosystems and biodiversity.
The European Union is not meeting some of its most important environmental objectives by 2020, such as the Aichi objectives under the Convention on Biological Diversity. To ensure that the EU plays a key role, the Commission will present a biodiversity strategy in March 2020, followed by a specific action in 2021. The strategy will describe the EU’s position for the Conference of the Parties to the Convention on Biological Diversity, which will take place in Kunming, China, in October 2020.
On the basis of the biodiversity strategy by 2030, the Commission will prepare a new EU forestry strategy that covers the entire forest cycle and promotes the many services provided by forests. The Commission will also adopt a zero tolerance approach to illegal, unreported and unregulated fishing. The 2020 United Nations Ocean Conference in Portugal will be an opportunity for the EU to highlight the importance of action on ocean issues.
- A zero pollution ambition for a toxic-free environment.
The creation of a toxic-free environment requires more action to prevent pollution from being generated, as well as measures to clean and remedy it. To address these challenges, the Commission will adopt a zero pollution action plan for air, water and soil in 2021. In addition, lessons learned from the evaluation of current air quality legislation will be used.
The Commission will review EU measures to address pollution from large industrial facilities. To ensure a toxic-free environment, a chemical strategy for sustainability will be presented. This will help to better protect citizens and the environment against hazardous chemical products and will foster innovation for the development of safe and sustainable alternatives.
- Pursuing green finance and investment and ensuring a just transition.
To achieve all the Green Deal approaches, significant investments are required. It has been estimated that 260 billion euro of additional annual investment will be required to achieve the objectives by 2030. This represents 1.5% of 2018 GDP.
The Commission proposed new sources of income (“Own resources”), one of which is based on waste from non-recycled plastic containers. A second source of revenue could involve allocating 20% of the revenue from the auction of the European Union Emissions Trading System to the budget.
It will also work with the European Investment Bank Group (EIB), banks and national promotion institutions, as well as with other international financial institutions. The EIB set itself the objective of doubling its climate objective from 25% to 50% by 2025, thus becoming the climate bank of Europe.
- Greening national budgets and sending the right price signals.
National budgets play a key role in the transition. Increased use of green budget tools will help redirect public investment, consumption and taxes to ecological priorities and away from subsidies. Well designed tax reforms can boost economic growth and resistance to climate crises and help contribute to a fairer society and transition.
- Mobilising research and fostering innovation.
New technologies, sustainable solutions and disruptive innovation are essential to achieve the objectives of the European Green Agreement. At least 35% of the “Horizon Europe” European research and innovation program budget will finance new climate solutions, which are relevant to the Implementation of this agreement.
Accessible and interoperable data is the core of data-based innovation. These data, combined with digital infrastructure and artificial intelligence solutions, facilitate evidence-based decisions and expand the ability to understand and address environmental challenges.
- A green oath: “do no harm”.
All EU actions and policies should come together to help the EU achieve a successful and just transition towards a sustainable future. Systematic evaluations will be carried out to analyse the coherence between current legislation and new priorities.
In addition, based on the results of its recent inventory of a better regulatory policy, the Commission will improve the way of addressing sustainability and innovation issues with better regulatory guidelines and support tools.
At AleaSoft this initiative is seen as a necessary and timely step. We will have to wait for the legislative materialisation of the agreement to be able to have the final conclusions, but without doubt these are measures that need to be implemented if the goal of 2030 and 2050 is to be met.
The document repeatedly recognises the benefit of the digitalisation of the sector, and the use of technological tools to improve its performance. At AleaSoft we are proud to have been working in this direction for more than 20 years. Our market forecasting models, based on artificial intelligence, have been operational practically since the liberalisation of the Spanish market.
In several occasions the company referred to the importance and the opportunity that the new renewable energy sources represent, mainly in recent years, the photovoltaic. We also advocated the decarbonisation of the sector, in which, in addition to renewable sources, hydrogen will play an important role, as a carbon-free gas. In general, this agreement is a positive measure, which confirms the commitment to renewable energy sources and the proper functioning of the electricity market.
Source: AleaSoft Energy Forecasting