Only six of the 27 EU member states have submitted national climate plans that are up to scratch.
12 EU countries are set to miss their national climate targets under the Effort Sharing Regulation (ESR), according to a study analysing national climate plans. Another seven are at risk of not meeting their goals.
If they don’t meet their required emissions reductions, they may have to pay financial penalties.
The ESR is a policy framework – part of the EU’s climate and energy package – that sets binding national greenhouse gas targets for the 27 member states. It requires them to collectively cut emissions by 40 per cent (compared to 2005) by 2030.
Member states have to meet climate targets for five key sectors: road transport, buildings, small industry, waste and agriculture. Each goal is adjusted based on a country’s GDP with richer nations having stricter requirements.
Under current EU countries’ plans, emissions would only fall by 35.5 per cent by 2030 – 4.5 per cent less than the 40 per cent target. And some countries are performing much worse than others.
Which EU countries are on track to miss emissions targets?
The report from Transport & Environment (T&E) found that the two worst-performing countries are Germany and Italy. Germany is projected to miss its climate targets by 10 per cent and Italy by 7.7 per cent.
France is only projected to meet its targets by a very close margin and any backtracking on policies or even a cold winter pushing up energy consumption could spell failure.
Plans submitted by the Netherlands also put the country on track to only just meet its goals.
Under the ESR, countries that don’t meet their climate targets can purchase carbon credits from those that do meet them. The price of these credits is decided by the two countries doing the deal. Expert projections say that each one could be traded at an average cost of €129.
The member states likely to accumulate the highest amount of these surplus credits are Spain, Greece and Poland. Spain is predicted to overachieve by 7 per cent and could receive an estimated €10 billion from countries that are not on track.
Germany alone could eat up 70 per cent of those available credits, however, according to the study. It could leave the country facing a €16.2 billion bill. Italy could face costs equivalent to €15.5 billion.
But, the T&E report warns, with so many countries set to miss their goals, there’s likely to be a scarcity of credits. This would push prices up as it could lead to a bidding war in 2030.
The penalties countries could face are ‘mind blowing’
There is still time to rectify government policies to meet these 2030 targets, according to T&E.
“The sheer amount of penalties countries might need to pay in 2030 is mind blowing,” Sofie Defour, climate director at T&E said when the report was released in June.
“Countries face a clear choice: pay billions to their neighbours for their carbon debt, or implement new policies that improve the life of their own citizens, such as insulating houses.”
Germany and Italy, for example, could implement new measures to increase the uptake of electric vehicles, insulate buildings and more.
Countries were expected to submit new National Energy and Climate Plans (NECPs) on 30 June but just four met the deadline – Netherlands, Denmark, Finland and Sweden. The ESR is a key measure in these plans but just a few countries anticipated that they would meet their targets in their draft texts.
Only six – Croatia, Czechia, Hungary, Luxembourg, Slovenia and Spain – got a clear pass mark from the Commission which assesses the plans. Denmark made some tweaks to its draft documents including in areas related to the ESR which it says now put it on track to meet its targets.