COP26 and the EU Green Deal: a closer look

As the COP26 came to an end this week, it was either welcomed for delivering a set of concrete (and yet not the most ambitious) actions by supporters, or it was labelled as a watered-down compromise by its critics. Regardless of the world audience’s expectations, global leaders in Glasgow put on paper a number of targets and initiatives that will have an impact on European and global policies for the decades to come.

Climate change, coal, and methane

Among the key decisions of the COP26, the parties strengthened the wording around limiting global warming to 1.5°C above preindustrial level. With this regard, the EU adopted in 2021 the European Climate Law, enshrining the objective of climate neutrality by 2050 – and the 55% GHG emission reduction target by 2030, followed up through the Fit for 55 package.

A scramble around coal emissions made the headlines over the last days, as the initial “phase out” proposal concerning coal emissions led to a political stalemate until the parties eventually agreed on a “phasedown of unabated coal power”.

The EU and US led a global methane pledge gathering over 100 signatories (although not including Australia, China, India, and Russia) agreeing to adopt national measures aiming to reducing methane emissions by 30% by 2030, compared to 2020 levels. In parallel to the pledge, China agreed a bilateral agreement with the US to produce an ambitious national action plan on methane. The pledge is well in line with recent EU efforts to address methane emissions through the “EU strategy to reduce methane emissions”. The EU strategy includes provisions to better measure and report energy-related methane emissions and improved mitigation measures directed at agriculture, fossil gas, and landfills.

Deforestation

Another product of the COP26 is the Glasgow Leaders’ Declaration on Forests and Land Use, through which the 141 signatories aim to conserve forests and accelerate their restoration by promoting sustainable commodity production and consumption, innovating agricultural policies, increasing dedicated finance, and at the same time reducing the vulnerability of rural livelihoods. The European Commission signed the Declaration on behalf of the EU just two weeks before the publication of its own draft rules on curbing EU-driven deforestation and forest degradation. The regulation sets mandatory due diligence rules and traceability requirements – depending on the country of production – for operators placing in the Internal Market commodities and derived products associated with deforestation and forest degradation (soy, beef, palm oil, wood, cocoa, coffee, leather, chocolate and furniture). Forestry will be a hot potato in Brussels in the coming weeks, as the proposal comes days after the Council adopted conclusions criticizing the Commissions’ Forest Strategy as it “was not developed together with the Member States and stakeholders”.

Sustainable transport

The COP26 Declaration on Accelerating the transition to 100% zero emission cars and vans targets sustainable transport by setting 2035 and 2040 as the deadlines for the sales of new cars not producing exhaust fumes. While sustainable and smart mobility is highlighted as a key sector in the EU Green Deal, this dossier promises tough battles in Brussels, as major producing countries like Czechia, France, Germany, Italy, Slovakia, Spain did not sign the Declaration, alongside other major producers like the US, China and Japan.

Sustainable Finance

Finance is not exempt from sustainability considerations either and in this perspective the Glasgow Financial Alliance for Net Zero was launched. It is an initiative aiming to incentivise private sector investments in net zero transition measures with the support of governments and private financial institutions. Currently, the EU is working hard and relentlessly on the development of the screening criteria of its own EU Taxonomy for Sustainable Finance. The EU Taxonomy is the result of a regulation adopted in 2020, establishing a classification system for environmentally sustainable economic activities. The taxonomy is a tool to drive investments in sustainable activities and thus contribute to the EU climate and energy targets for 2030.

Fashion

From the fashion side, on the fringe of the COP26, the 130 signatories of the United Nations Fashion Industry Charter for Climate Action upgraded their commitment to reduce emissions and reach a net-zero target by 2050 and halve their emissions by 2030, compared to the previous 30% cut by 2030 target. Again, the EU is trying to be a frontrunner in the sector with the adoption of the EU Strategy for Sustainable Textiles in the pipeline. The sector will also be impacted by other policy initiatives such as the Sustainable Product Initiative and the upcoming Green Claims legislative proposal.

What to expect now?

The COP27 will gather in Egypt in 2022 and we can expect that the funding commitment of developing countries will be a key topic. Already during COP26, a divide emerged between developed economies calling for their Southern peers to step up their green investment and development strategies on the one hand; and developing countries calling out the hypocrisy of strong economies for not agreeing to provide sufficient funding for that purpose on the other. another point of friction between these two sides that could emerge during the next COP27 will be about adaptation and loss and damage caused by climate and change.

In parallel, the EU will continue push forward its ambitious Green Deal agenda through a number of initiatives. Besides the legislative initiatives mentioned above, the European Commission Work Programme for 2022 announces a number of initiatives such as the Zero Pollution package, measures to address plastic pollution, climate measures related to the Fit for 55 package, and legislative initiatives aimed to boost the transition to a circular economy.

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