What is the EU policy on decarbonization?

Decarbonization is a European political and economic priority. It is the process of reducing carbon dioxide (CO2) emissions from human activities - the idea is to transition to low-carbon or carbon-free energy sources and implement sustainable practices. This is vital to mitigate climate change and can be achieved through strategies such as increasing energy efficiency, adopting renewable energy sources, implementing carbon capture and storage technologies, and promoting policies like the European Union Emissions Trading System. 

• What is decarbonization? 
• How does decarbonization work? 
• How much decarbonization has been done in Europe? 
• What is the EU decarbonization ambition? 
• What are the EU decarbonization policy tools? 

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What is decarbonization? 

What is the meaning of decarbonization? 

Decarbonization is the process of reducing carbon dioxide (CO2) emissions resulting from human activities, and especially those related to the burning of fossil fuels such as coal, oil, and natural gas. The idea is to transition energy systems, industries, and other sectors of the economy towards low-carbon or carbon-free (when possible) alternatives to mitigate climate change. Decarbonization can be achieved through many strategies, like

• increasing energy efficiency, 
• adopting renewable energy sources (such as wind, solar, and hydroelectric power), 
• implementing carbon capture and storage technologies, and 
• promoting sustainable practices and policies like the European Union Emissions trading scheme.

Why is decarbonization important?

Decarbonization is important to slow down global warming. The role of decarbonizing is to: 

• Protect Ecosystems: Prevents habitat loss and species extinction.
• Improve Health: Decreases air pollution, reducing respiratory and cardiovascular diseases.
• Being Economic Benefits: Creates jobs in renewable energy and sustainable industries.
• Enhance Energy Security: Reduces dependence on imported fossil fuels.
• Promote Sustainable Development: Supports economic growth without harming the environment.
• Ensure Regulatory Compliance: Helps meet international climate targets and avoid penalties.

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How does decarbonization work? 

What are the 10 pillars of decarbonization?

Here is what we mean when we talk about the “10 pillars of decarbonization”:

1. Renewable Energy: Transitioning from fossil fuels to renewable energy sources such as solar, wind, hydro, and geothermal power.
2. Energy Efficiency: Improving energy efficiency in buildings, appliances, and industrial processes to reduce overall energy consumption.
3. Electrification: Electrifying sectors traditionally reliant on fossil fuels, such as transportation (electric vehicles) and heating (electric heat pumps).
4. Carbon Capture and Storage (CCS): Capturing CO2 emissions from industrial processes and power plants and storing them underground or utilizing them in other processes.
5. Sustainable Transportation: Promoting public transport, cycling, walking, and the use of electric vehicles.
6. Green Building Practices: Implementing sustainable design and construction practices to reduce the carbon footprint of buildings.
7. Agricultural Practices: Adopting sustainable agricultural practices such as no-till farming, crop rotation, and agroforestry to reduce emissions and enhance carbon sequestration in soil.
8. Reforestation and Afforestation: Planting trees and restoring forests to absorb CO2 from the atmosphere.
9. Circular Economy: Reducing waste and promoting recycling and the reuse of materials to lower carbon emissions from production and disposal.
10. Behavioral Changes: Encouraging lifestyle changes such as reducing meat consumption, minimizing air travel, and adopting sustainable consumer habits.

Are there limits to decarbonization? 

On the one hand, decarbonizing can be straightforward - we “simply” need to reduce carbon emissions. For example, an industry can adopt new technologies to emit less CO2.But there are other decarbonization methods like carbon capture and storage. When defining and advocating for decarbonization, the IPCC mentions such strategies: for example,  it talks about capturing 90% or more of the CO2 emitted by power plants or reducing 50-80% of fugitive methane emissions from energy supply.

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How much decarbonization has been done in Europe? 

What were the total European carbon emissions in 2023? 

In 2010, the EU economy emitted 4.4 billion tons of CO2, and in 2023, this figure decreased to 3.4 billion tons (-22%). The overall European decarbonization is primarily observed in the "electricity, gas, steam and air conditioning supply" sector and the manufacturing sectors. In 2023, the EU reduced its emissions by 5.1% compared to the previous year. By comparison, the world is estimated to have emitted 37 billion tons of CO2 in 2023, with the EU accounting for approximately 9.2% of this total.

What were the EU ETS carbon emissions in 2023? 

The sectors covered by the EU ETS are more effective in their decarbonization. In 2023, the EU ETS reduced its emissions by 15.5% compared to the previous year. In that year, the installations covered by carbon pricing emitted 1.09 billion tons of CO2. Within the sectors covered by the scheme, power production has been the most effective in its decarbonization - it is responsible for 75% of the total EU ETS emissions reduction.

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What is the EU decarbonization ambition? 

What are the EU decarbonization targets? 

The EU has set climate targets with high levels of ambition, striving to be a leader in global decarbonization efforts. With the European Green Deal, the EU aims to achieve carbon neutrality by 2050, meaning no additional carbon emissions will be released by that time. Additionally, the Fit for 55 package sets decarbonization goals to reduce carbon emissions by 55% by 2030 from 1990 levels, and by 62% for EU ETS covered sectors from 2005 levels. The communication on EU decarbonization objectives for 2040, announced in 2024, revealed the goal of reducing carbon emissions by 90% by 2040.

Decarbonization in Europe and the world 

Europe aims to export its decarbonization ambition globally and to serve as a model for sustainable transition. It is advocating for stringent international commitments such as those made at COP, as well as the introduction of policies like carbon pricing and CBAM, which send strong signals for decarbonization worldwide. Indeed, many regions around the world like California and New Zealand, are already following the EU's example on decarbonization. Moreover, numerous countries, including Turkey and India, are currently in the process of setting carbon pricing measures for decarbonization.

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What are the EU decarbonization policy tools? 

What are some examples of decarbonization mechanisms in Europe? 

Europe has implemented various decarbonization policies to reduce carbon emissions and combat climate change. Some of these policies include

1. Wind 2030 capacity target:  Have a wind capacity coverage of 592 GW by 2030.
2. Solar 2030 capacity target:  Have a solar capacity coverage of 510 GWac by 2030.
3. Renewable Energy Targets for 2030: Have 42.5% of renewable energy production in the EU bloc by 2030.
4. Carbon Pricing: Incentivize businesses to reduce their carbon emissions through the EU Emissions trading scheme and achieve a 62% reduction of the covered installations by 2030.

What is the most effective decarbonization policy in Europe? 

The EU ETS is considered to be the most effective tool that European regulators have for decarbonization. It is a cap-and-trade system, providing installations with flexibility to reduce their carbon emissions - industries decide themselves on the operational changes that they undertake for decarbonization. It offers strong financial incentives for installations to invest in decarbonization technologies and use less emitting primary sources. The EU ETS has a wide scope, covering approximately 11,000 installations, and it continues to expand. For example, it included the maritime sector in 2024 and is expected to cover emissions from transportation and buildings in the future.

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Key Takeaways

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• Decarbonization Definition: Decarbonization refers to reducing CO2 emissions from human activities, particularly fossil fuel burning, by transitioning to low-carbon or carbon-free alternatives.
• Importance of Decarbonization: Crucial for slowing global warming, protecting ecosystems, improving health, creating economic opportunities, enhancing energy security, promoting sustainable development, and ensuring regulatory compliance.
• Strategies for Decarbonization: Includes increasing energy efficiency, adopting renewable energy sources (wind, solar, hydro), implementing carbon capture and storage (CCS), and promoting sustainable policies like the EU Emissions Trading Scheme.
• EU Decarbonization Targets: Aims for carbon neutrality by 2050, 55% reduction in emissions by 2030 (compared to 1990 levels), and 62% reduction for EU ETS sectors (compared to 2005 levels).
• Effectiveness of EU ETS: EU Emissions Trading System is a key tool, covering over 11,000 installations, incentivizing emissions reductions, and expanding to include new sectors like maritime.

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