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News 08 July 2024

Top story of the week: European Green Deal - current political interplay marks implementation reluctance, future outlook still uncertain

The future of the Green Deal is closely watched following the 2024 European elections and in light of the political dynamics at member states’ level, pointing at present to a generally reduced sense of urgency when it comes to maintaining the pace towards achieving the 2030 and 2050 climate and energy goals.

Noteworthy developments include delays by most member states in implementing key legislations passed during the previous mandate, ranging from the submission of revised National Energy and Climate Plans (NECPs) to the 2019 power market reform and the Effort Sharing Regulation. On the Parliament’s side, the European People’s Party (EPP, Christian Democrats), its largest group, is finalising its draft priorities for the next European Commission, suggesting less ambitious proposals on climate action and biodiversity protection, including reconsidering the 2035 combustion engine ban and adjusting deforestation regulations.

Regarding the submission of revised NECPs—critical for assessing the Union’s decarbonisation progress—only five EU countries (the Netherlands, Sweden, Finland, Denmark, and Italy), representing a mere 20% of EU CO2 emissions, met the 30 June deadline in a context in which already back in December 2023 the European Commission warned that targets set in many draft NECPs were insufficient, urging increased efforts to phase out fossil fuel subsidies.

When it comes to the Effort Sharing Regulation (ESR), this legislation establishes precise 2030 greenhouse gas reduction targets for each member state to achieve an overall 40% reduction from 2005 levels, encompassing nearly 60% of EU domestic emissions. Despite provisions allowing flexibility, many countries are expected to fall short of their targets, prompting calls for rule revisions, including from Finland. With incomplete NECPs and unmet objectives, the European Commission is likely to request "corrective action plans" from member states this autumn.

In addition, the Commission has already acted to address the lack of implementation of other reforms, initiating infringement cases against 21 member states for failing to transpose provisions of the 2019 Electricity Market reform into national law by the 2020 deadline. The reform aimed to modernise the market, strengthen consumer protection, and enhance electricity flow flexibility, akin to the recent Electricity Market Design reform, building upon the 2019 text, requiring member states to implement both sets of amendments concurrently.

However, the reluctance to implement key policies from the European Green Deal may extend further, as major elections across Europe could lead to changes at the Council level, potentially negatively impacting climate agendas. The upcoming mandate is indeed crucial for advancing EU climate goals, requiring strong leadership to navigate challenges. Initial indications from the EPP, the European Parliament’s largest and influential group, suggest varying approaches that could influence climate policies. This evolving landscape may affect the leadership of European Commission President candidate Ursula Von der Leyen, a key architect of the Green Deal, who is expected to continue leading the Commission. Finally, discussions within the Parliament about potentially splitting the Environment and Health Committee (ENVI) have raised concerns among left-leaning groups favouring a holistic approach, fearing the split could hinder pollution-related legislation.