On 23 January 2008 the European Commission put forward a far-reaching package of proposals aimed at deliver on the European Union's ambitious commitments to fight climate change and promote renewable energy up to 2020 and beyond. In December 2008 the European Parliament and Council reached an agreement on the package that will help transform Europe into a low-carbon economy and increase its energy security.
The EU is committed to reducing its overall emissions to at least 20% below 1990 levels by 2020, and is ready to scale up this reduction to as much as 30% under a new global climate change agreement when other developed countries make comparable efforts. It has also set itself the target of increasing the share of renewables in energy use to 20% by 2020.
The "Climate action and renewable energy package" sets out the contribution expected from each Member State to meeting these targets and proposes a series of measures to help achieve them.
Central to the strategy is a strengthening and expansion of the Emissions Trading System (EU ETS), the EU's key tool for cutting emissions cost-effectively. Emissions from the sectors covered by the system will be cut by 21% by 2020 compared with levels in 2005. A single EU-wide cap on ETS emissions will be set, and free allocation of emission allowances will be progressively replaced by auctioning of allowances by 2020.
Emissions from sectors not included in the EU ETS – such as transport, housing, agriculture and waste – will be cut by 10% from 2005 levels by 2020. Each Member State will contribute to this effort according to its relative wealth, with national emission targets ranging from -20% for richer Member States to +20% for poorer ones.
The national renewable energy targets proposed for each Member State will contribute to achieving emissions reductions and will also decrease the European Union's dependence on foreign sources of energy. These include a minimum 10% share for biofuels in petrol and diesel by 2020. The package also sets out sustainability criteria that biofuels will have to meet to ensure they deliver real environmental benefits.