Here are last-minute fixes all Member States need to urgently address
National energy and climate plans (NECPs) are critical planning documents meant to set out the EU Member States’ targets, policies, and measures that will enable them to reach the 2030 EU climate targets. Countries have been updating these plans to reflect more ambitious targets and had to submit draft NECPs to the Commission by the end of June 2023, and present their final plans exactly one year later, reflecting the Commission’s feedback on the initial drafts.
As an observer to this process at both national and European levels, CATF has actively advocating for the importance of addressing gaps in planning before jumping straight into implementation. In the report “Bridging the Planning Gap: Transforming European NECPs to Deliver on Climate Targets,” and the NECP Playbooks, CATF showcased concrete guidance to plan for unprecedented clean energy deployment over the coming decade and be prepared for the new geopolitical reality facing the continent.
The climate, energy, and industrial policies proposed and enacted over the past several years alone will not guarantee a fully decarbonised, energy secure, and economically prosperous Europe in 2050. Reaching net-zero by 2050 will require strategic, dedicated, and robust NECPs for the deployment of a broad suite of decarbonising technologies and infrastructure, funding for emerging technologies, workforce development, regional and international collaboration, and progress tracking and accountability. Yet, as demonstrated by the Commission assessment and reinforced by CATF’s analysis , the current draft NECPs are unfit for achieving the 2030 climate and energy targets.1
Greater efforts in the final NECPs are urgently needed to fill the ambition gap with more concrete measures and policies in a range of sectors like heavy industry, transport, agriculture, and carbon removals. With less than one month to go, CATF explores key overarching and technology specific areas that require immediate attention by governments if they want to present plans that ensure deep decarbonisation of the bloc by midcentury.
Overarching issues EU Members States should address in NECPs
Hedge technology bets
While wind and solar power are critical to the energy transition, zero-carbon fuels, carbon capture and storage, and clean firm energy technologies like advanced nuclear and superhot rock geothermal broaden the option set for decarbonisation. A diverse portfolio of options promises to ensure both the most reliable and cost-efficient path to deep decarbonisation, but many of the submitted draft NECPs reflect a much too narrow pathway to reduce emissions. Member States should adopt an options-based and technology-neutral climate strategy in their NECPs that identifies high-value end uses for clean fuels and advances a wide range of clean technologies, especially those in early stages of development, to increase the likelihood of successfully decarbonising within their unique national contexts.
Industrial decarbonisation and competitiveness
The Net Zero Industry Act sets a target for the EU to produce 40% of its annual deployment needs in net-zero technologies by 2030 and to capture 15% of the global market value for these technologies. Despite this, only some draft NECPs provide detailed plans and policies to promote the development of net-zero projects including those relevant for the energy intensive industries. There is still plenty of room to provide more planning details to build resilient and sustainable supply chains of key net-zero components and equipment within and across Member States. Additionally, clear additional focus is needed on the competitiveness dimensions of these plans including measures to simplify the regulatory and business environment.
Research and innovation in advanced clean tech
Many of the clean energy technologies that will help the EU reach its decarbonisation targets by 2050 are not yet on the market. Research and innovation will play a critical role for funding early-stage technologies like superhot rock geothermal or fusion energy in the next decade. Most draft NECPs, however, miss the opportunity to further clarify national objectives and funding targets in research, innovation and competitiveness, specifically related to the Energy Union, to be achieved between now and 2030 and 2050.
Facilitation of cross-border collaboration
Reaching Europe’s climate and energy security goals will require building cross-border infrastructure and further developing the internal energy market. However, the draft NECPs fail to put forth a structured vision of how they can leverage grid planning cooperation to achieve the clean energy transition. Countries should address this by jointly planning the required energy system changes needed to accommodate higher shares of intermittent renewables while enhancing system flexibility and reliability. Clear objectives and a comprehensive regulatory framework to reinforce electricity grids are still missing in a number of plans.
Providing certainty to investors and direct funds where it is most needed
NECPs should promote investor confidence and drive capital to where it is most needed by articulating clear, transparent, and unambiguous Member State priorities. Unfortunately, many of the current drafts do not provide enough financial transparency, nor information on the levels of investment needed, to reach energy and climate objectives. It is not too late for countries to provide a general assessment of investment needs and channels, including appropriate financing at national, regional and Union levels through 2030. Such an assessment should be backed by concrete measures to attract private finance.
Citizen involvement and public consultation
Given the great impact of climate policies on industry and society as a whole, final NECPs should be written in close consultation with the public and interested stakeholders. Furthermore, the Aarhus Convention requires early and effective consultation on the draft and final NECPs, and the Governance Regulation asks Member States to establish a Multilevel Climate and Energy Dialogue to discuss NECPs. Despite this, not all countries have involved a broad range of stakeholders in the preparation of either the draft or the final updated plans, nor have they included information on the timing and duration of the consultations or how the views expressed have been considered. Given the NECP update period is coming to a close, Member States need to at least ensure that the NECPs are popularised with stakeholders and the public upon NECP finalisation and give citizens further opportunities to engage with the country’s climate agenda.
Addressing technology-specific areas of NECPs
Carbon Capture and Storage (CCS)
In all scenarios highlighted by the European Scientific Advisory Board on Climate Change, carbon capture and storage plays a large role in reducing emissions from industrial processes and fossil fuel use and contributes to the carbon removal required to achieve climate neutrality by 2050. Efforts to accelerate deployment have increased in the EU over the past year, but the submitted draft NECP updates offer substantial room for improvement, particularly with regards to identifying the amount of CO2 emissions that could be captured annually by 2030 and from which sources. Final NECPs should provide a clear carbon capture and storage roadmap and details on how the captured CO2 will be transported and identify overall CO2 storage capacity and injection volumes available by 2030.
Methane mitigation
Methane has contributed approximately 0.5 degrees Celsius of the net global warming we are experiencing today, making methane mitigation a crucial part of a comprehensive climate strategy. Cutting methane can also enhance energy security and economic benefits, particularly in the context of reducing emissions in the oil and gas sector, where flaring, venting and leaking represent $47 billion in lost revenue every year. Unfortunately, draft NECPs are still missing a comprehensive vision for how to address all methane emitting sectors, and capitalise on key opportunities created by the EU’s new Methane Regulation. Final NECPs can be improved by setting clear methane mitigation targets by sector, detailing which measures will be taken to meet these targets, and defining a strategy to both allocate necessary public financing and mobilise additional private financing. NEPCs should also include plans to reduce imported methane emissions from fossil fuels, and consider how to proactively work with trading partners to incentivise uptake of the EU’s forthcoming obligations on oil, gas and coal imports.
Nuclear energy
As zero-emission source of energy that provides near constant dispatchable power, nuclear energy is increasingly viewed as crucial component of ensuring energy security and reliability to support intermittent renewables. However, cost-efficient and timely deployment as well as sufficient investments into innovative nuclear technologies such as small modular reactors (SMRs) are in question if the NECPs fail to detail how projects should be financed, where and when they should be built, and how a workforce will be trained to construct, operate and maintain the reactors. The final NECPs should encompass this level of granularity to attract investments, drive development of necessary supply chains and ensure the timely deployment of zero-emission nuclear power.
Carbon sink
The EU is currently not on track to meet its 2030 net removal target. With existing measures, total net removals are projected to reach -239 Mt CO2-eq by 2030, and with additional measures, -260 Mt CO2-eq, falling short of the target by approximately 50-70 Mt CO2-eq.2 Unfortunately, draft NECPs are insufficient regarding carbon sinks with only a handful of countries providing a concrete pathway to reach their national removal targets.
Hydrogen
Clean hydrogen will be an important tool for decarbonising hard-to-abate sectors like heavy industry and transport. However, as a precious molecule that is energy-intensive to produce and difficult to move around, it should be deployed cautiously in sectors and processes where few or no other viable decarbonisation options exist. In their revised NECPs, Member States should steer away from the hydrogen ‘hype’ and identify energy- and cost-effective clean hydrogen deployment that will have the highest emissions reduction potential. Focus should first be placed on replacing existing carbon-intensive hydrogen consumption in heavy industry applications (e.g., crude oil refining, steel manufacturing, and ammonia and methanol production), followed by hard-to-electrify transportation segments like aviation and shipping.
Bridging the planning gap
The EU has the ambitious goal to fully decarbonise by midcentury, but the Member States now need detailed strategies on how to achieve emission reductions for 2030 to set them on the right track to 2050. NECPs are crucial documents to bridge the planning gap and translate high-level ambitions into concrete actions. While making the last tweaks before the deadline on 30 June 2024, countries should remember to incorporate the above elements to drive capital toward needed investments, deploy a range of technology options, and align their decarbonisation trajectories with broader EU goals.
Fit for purpose NECPs will bring the planning, implementation and coordination pieces of climate and energy policies together and set the stage for a carbon-free present and future.
1 As noted by the Commission, the projected net greenhouse gas emissions in 2030 are estimated to be 51% lower than in 1990, leaving a 4% percentage points gap to reach the 55% target set in the Climate Law.
2 European Commission report on the operation of the LULUCF Regulation. Available at: https://climate.ec.europa.eu/document/download/d4e254cf-ae7f-4d78-bfbb-979ae34a23dd_en?filename=COM_2024_195_1_EN_ACT_part1_v3.pdf