Hogan Lovells Publications | 22 April 2021

European Climate Law

The European Commission, the Council and the European Parliament have agreed on a so-called "European Climate Law." After the European Commission had already proposed the draft for the "Regulation establishing the framework for achieving climate neutrality and amending Regulation (EU) 2018/1999" in March 2020, it has now been possible to reach an agreement with the Council and the Parliament on this core component of the European Green Deal in a formal trilogue meeting. The Green Deal's goal of becoming the world's first industrialized region to achieve climate neutrality by 2050 will thus become a binding obligation.

Probably the biggest problem was the question of which climate target should be set by 2030. While the Parliament was in favor of a 60% reduction in net emissions compared with 1990, the negotiators have now agreed on a 55% reduction in net emissions by 2030.

The European Climate Law also sets out a process for determining the next climate target for 2040, taking into account the indicative greenhouse gas budget for 2030-2050 yet to be published by the Commission. The greenhouse gas budget can be used to determine how much CO2 the EU can still emit by 2050 without violating the Paris Agreement. The 2040 climate target and the indicative greenhouse gas budget are to be submitted no later than six months after the first global stocktake of the Paris Agreement in 2023. In addition, the European Climate Law provides for the establishment of a European Scientific Advisory Board on Climate Change as an independent scientific advisory body.

In June 2021, the EU Commission will present concrete proposals for implementing the climate targets. A number of legislative proposals are expected as part of the "Fit for 55" legislative train schedule. Among them is an adaptation of the Regulation on the inclusion of greenhouse gas emissions and removals from land use, land use change and forestry (LULUCF) to improve CO2 levels.

European Commission President Ursula von der Leyen is positive about a climate-neutral future for the European Union: "The climate law puts the EU on a green path for the next generation. It is our binding promise to our children and grandchildren."

A consolidated version of the legislation is not yet known. Once the Council and Parliament have agreed on details at the technical level, the agreement can be formally approved and the European Climate Law published in the Official Journal of the European Union.

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