EU Green Deal’s policies in Climate sector

21/12/2023    8

The main and ultimate objective of the EU Green Deal is to transform the EU to be climate neutral by 2050. As such, climate can be considered to be a key sector of the EU Green Deal.

Below is the brief of remarkable policies in climate sector for European Green Deal’s implementation:

  1.  European Climate Law

European Climate Law, a core legal document about climate and emissions in European Green Deal, was passed on 09th July 2021 and entered into force on 29th July 2021[1].

The objective of this Law is to legislate/codify European Green Deal’s main basic policy goals of climate and greenhouse gas emissions to binding legal obligations of the EU and its Member States.

Main contents of the EU Climate Law include:

  • Identifing binding legal objectives and responsibilities of the EU and its Member States.

Binding objectives mentioned in this Law includes (i) the ultimate goal of reaching “net zero greenhouse gas emissions by 2050”[2]; and (ii) intermediary target of “reducing net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels.”.

  • Creating a system for monitoring progress of climate objectives of the EU and its Member States (using existing system and procedures of periodical review every 5 years).
  • Identifying next specific actions:

- Setting specific climate objectives for 2040;

- Building draft revisions, upgrading policies, legal documents for achieving new component objectives set out in the Climate Law (reducing net greenhouse gas emissions by at least 55% by 2030).

Following European Climate Law, at Union level, the EU authorities adopted a series of programs, specific actions to achieve relevant climate goals, especially intermediary target in 2030, featuring:

- Announcing new 2030 Climate Target Plan;

- Proposing and implementing “Fit for 55” Package (can be understood as a package of legal solutions in sectors, aspects to achieve the target of reducing gas emissions by 55%), including (i) revising and updating the EU’s existing documents, regulations, and legislation of climate; and (ii) setting new legal initiatives to reach new climate targets.

Many specific measures in the “Fit for 55” Package pose considerable impacts on some groups of import products (i.e.: Renewable Energy Directive, Carbon border adjustment mechanism – CBAM, etc.)


Some remarkable measures in “Fit for 55” Package

1. Group of measures to revise regulations in existing legal documents

- Emissions Trading System (ETS Directive) – the EU’s system of emissions trading based on cap-and-trade of emission allowances: revised in the direction of (i) faster reduction of the cap; (ii) extension of the scope of sectors to trade emissions allowances;

- Effort Sharing Regulation (ESR) – Targets of reducing greenhouse gas emissions by 2030 in sectors: domestic transportation, buildings, agriculture, small industries, and waste for each EU’s Member States: revised in the direction of increasing target of emission cut in these sectors from 29% to 40% by 2030 (compared to the level in 2005);

- Land use, land use change and forestry Regulation (LULUCF) – Objectives of removing carbon - greenhouse gas emission in land use and forestry sector: revised in the direction of (i) Setting an increased EU-wide target for carbon removals by 2030 (from 225 million tons of CO2 to 310 million tons of CO2; (ii) Supplementing specific targets for each individual EU’s Member State of emissions removal in the LULUCF sectors;

- Energy Efficiency Directive: revised in the direction of (i) Reducing energy consumption at the EU level; (ii) Increasing contribution and energy savings of each Member State;

- Renewable Energy Directive: revised in the direction of (i) increasing the target of energy production from renewable sources; (ii) increasing the use of renewable/low-carbon emissions energy in different sectors;

- CO2 emissions performance standards for cars and vans: Adjust criteria of reducing average emissions for new cars and vans (decrease by 50%-55% subject to each kind of vehicle for the period of 2030-2034; no new registrations for cars and vans with CO2 emissions from 2035);

- Energy Taxation Directive: revised in the direction of (i) revising tax rate and taxable scope of energy products to align with the EU’s policies on energy, environment, and climate; (ii) removing tax exemptions and low tax rates which inherently encourage the use of fossil fuels. 

2. Group of measures to supplement new legal regulations

- Carbon border adjustment mechanism (CBAM): This is the new mechanism to ensure that the EU’s ambitious climate actions will not lead to “carbon leakage” situation from EU to other countries. Accordingly, products imported from overseas to EU shall have to pay a fee (also called carbon tax) subject to the greenhouse gas emissions level in the manufacturing process in export countries.

- Regulation on deployment of the alternative fuels infrastructure - AFIR: This regulation sets out compulsory objectives of providing infrastructure for recharging points and hydrogen refueling stations for road, waterway, and air transportation to encourage transition to other zero-emission vehicles.

  1.  Some other policy groups

EU Green Deal in climate sector also includes other policy groups, however, most of which relate to the EU’s internal actors and slightly affect goods imported from outside to the EU (except for specific measures relating to substances with direct impacts on climate change). Specifically:

  • Some measures relating to substances with direct impacts on climate change

- For substances that deplete the ozone layer:

Push for serious implementation of EU Regulation on substances that deplete the ozone layer in 2009 which comprises (i) licensing process for all exports and imports of ozone-depleting substances; and (ii) extension of controlling scope of ozone-depleting substances (supplement of 05 new types of chemicals out of the list with more than 90 substances in Montreal Protocol).

- For gas causing greenhouse effects:

+ Revising the EU’s regulation on fluorinated greenhouse gases (F-gases) in 2014: Amended regulation was adopted on 5th April 2022, of which (i) cut the allocated quotas for HFCs; (ii) add new limitations on the use of F-gases in equipment; (iii) enable extensions to borders monitoring; (iv) supplement procedures of monitor, report and data evaluation of these substances.

+ Enhancing serious implementation of European Directive on Mobile air-conditioning systems (MACs) in 2006 in the roadmap of gradual ban on the use of F-gas mobile air conditioning systems in passenger cars. 

Specific regulations in this group have been affecting the standards of relevant products, including the EU’s products and imported products to the EU.

  • EU Adaptation Strategy: EU Adaptation Strategy was presented by the EU Commission on 24th Feb 2021 to set out the way for the EU to adapt to the unavoidable impacts of climate change and become climate resilient by 2050.  Also in the Strategy, a series of 14 specific actions along with necessary steps are identified to materialize the targets.
  • The European Climate Pact: European Climate Pact, a forum connecting the EU residents with a common goal to build EU’s sustainable climate, was launched by the European Commission on 9th December 2020 as a part of the European Green Deal.
  • Climate Diplomacy: Climate Diplomacy is a series of the EU’s unified policies of international cooperation in terms of climate change; of which noticeably are (i) Global actions (cooperation within the United Nations Framework Convention on Climate Change – COPs, Paris Convention, Kyoto Convention, Marrakesh Agreement, etc.) (ii) Bilateral Actions (currently with China, India, Indonesia, South Africa, Latin America and the Caribbean); (iii) Financial Aids (the EU’s expected financial contributions under strategies, funds, international financial programs for climate change).

Source: Report "EU Green Deal and Vietnam's Exports - The case of the agricultural, food and textile industries" – Center for WTO and International Trade

[1]This Law Draft was presented by European Commission on 04th March 2020, which means only 2 months after approval of EGD and is also the first and the most important step in the Agreement implementation process.

[2]This objective is mentioned in the EU Green Deal, however at Green Deal this is policy target which is not binding, Climate Law has changed this to binding legal regulation.