What is the European Green Deal
When it was unveiled in December 2019 by Ursula von der Leyen, who had become president of the European Commission only days earlier, the European Green Deal appeared to be the largest and most ambitious integrated program of reform, investment and research ever conceived by the European Union.
The name contains a clear reference to the New Deal, the program of public works and economic and social reforms introduced between 1933 and 1939 by U.S. President Franklin Delano Roosevelt to lift the U.S. economy out of the Great Depression of 1929.
In the case of 21st century Europe, the impetus for action and the conception of the Green Deal is not a crisis that has already occurred and needs to be overcome, but rather a present and future one that needs to be averted: global warming caused by human activities. United Europe wants not only to help combat climate change, but to lead the fight and turn it into an opportunity for economic growth and a new geopolitical centrality.
With these goals in mind, it has developed a 30-year action plan focused on the energy transition, circular economy, protecting biodiversity, and stopping pollution.
The goal of the European Union
Prior to the Green Deal, EU climate plans were ambitious but broadly in line with those of the international community, and called for a 60% reduction in emissions from 1990 levels by 2050.
With the Green Deal, the target to be reached by 2050 became net zero, or a balanced budget for emissions: the European economy must no longer add a single metric ton of greenhouse gases to the atmosphere, and thus will have to offset each amount emitted with an equal amount absorbed by biomass or other systems.
Climate science has explained, and the Paris Agreement of 2015 put it in black and white, that this is the only way to contain global warming to within 1.5 degrees above pre-industrial average temperatures, which in turn is essential in order to avoid irreversible consequences on ecosystems.
Although this is the ultimate goal, there is an intermediate goal for 2030, the date by which the EU wants to reduce emissions by 55% compared to 1990 levels. The Fit for 55 legislative package precisely defines the actions required to achieve the 2030 target.
The investment plan
The Commission's first analysis in 2019 estimated that €260 billion of new investment per year was needed, about 1.8% of 2018 European GDP.
In subsequent years, the estimate has been revised upward several times, especially after the COVID-19 pandemic and the war in Ukraine changed the game.
To facilitate these investments, in January 2020 the European Commission unveiled the European Green Deal Investment Plan, the "financial" arm of the Green Deal, which provides at least €1 trillion in sustainability investments over the next decade, partly from the EU's regular budget, partly from other financial instruments such as InvestEU, and partly from private sources.
The program also includes a fund called the €100 billion Just Transition Mechanism to support European regions where the impact will be greatest during the energy transition, such as coal mining and processing areas in Germany, Poland, Slovakia and other Eastern European countries.
The benefits of the European Green Deal
As much as the main purpose of the Green Deal is to meet climate goals and stop global warming, its implementation promises many benefits to the European territory, its economies, and its citizens:
- cleaner air, water and soil due to reduced environmental pollution;
- increased food security, both in terms of quality and wholesomeness of food and the availability of sufficient food resources for all (the plan also includes a portion of support for European agricultural producers);
- more livable cities due to the development of public transportation and non-polluting forms of mobility;
- an end to dependence on fossil fuels and the resulting geopolitical tensions.
- Finally, and this is a decisive point, economic growth, jobs and better prospects for the next generation if Europe manages to lead the way in "green" technologies.
The strategy and areas involved
To get to our Net Zero goal, the Green Deal calls for a number of parallel and complementary lines of action: clean energy, circular economy, building efficiency, agriculture, biodiversity protection, pollution control, and social justice.
Each of these areas is outlined in the 2019 document and all are intended to be translated into more detailed plans in the years to come.
This is why some measures (such as energy efficiency in buildings and the use of combustion engines for cars) have been at the center of political debate in recent months: the time is coming when the broad commitments outlined in the Green Plan must be translated into legislative choices.
The first chapter can only be about clean energy, since energy production and use in all sectors account for 75% of Europe's greenhouse gas emissions.
The cornerstone principles of the Green Deal concern: the rapid abandonment of coal, the massive development of renewable sources, the promotion of energy efficiency, and the digitalization and interconnection of the European energy market, to ensure equal access to energy for all.
In particular, the Fit for 55 package sets a target of producing 40% of Europe's energy from renewable sources by 2030.
The second pillar of the plan is sustainable industrialization, and in particular, the promotion of a circular economy.
The goal in this case is to reduce energy used to extract and process resources; to extend the useful life of products and facilitate their repair; to promote sharing platforms that allow multiple users to use the same product; and to recycle and reuse materials, components and products at the end of their life – all to reduce pollution. Particular attention is paid to industries that are difficult to decarbonize, such as steel or cement, textiles, electronics and chemicals.
More details on the industrial strategy can be found in the Green Deal Industrial Plan, unveiled in February 2023 by the Commission, where, among other things, actions are called for to create a more favorable environment for increasing EU production capacity for zero-emissions technologies and products and to sustainably ensure market access to raw materials that will be critical to the energy transition.
This will be made possible by resolving a debate that has been contentious since 2019 that proposes easing constraints on state aid, allowing member countries to directly support the industry of technologies aimed at producing sustainable energy such as batteries for storage, solar panels, wind turbines, heat pumps, green hydrogen and biofuels.
Public and residential construction
The building sector makes heavy use of nonrenewable resources and has plenty of room for improvement in energy efficiency. European buildings consume 40% of the continent's total energy, and the Commission, at the time of writing the Green Deal, estimated that compared to 2018 figures, the number of buildings renovated each year should rise from 0.4% up to at least 1.2%. The recent Energy Performance of Buildings Directive (EPBD) measure on home efficiency, which plans to bring residential buildings up to energy class E by 2030 and class D by 2033, is an application of the principles set by the Green Deal.
Here the Green Deal introduces the so-called From Farm to Fork strategy to combine sustainability and economic support for European producers and fishermen. The program includes targets such as achieving 25% organic farming by 2030, reducing pesticide use by 50% and fertilizer use by 20% by 2030, and introducing labels that highlight products’ degree of sustainability.
The Green Deal starts with the observation that the transportation sector contributes a quarter of Europe's emissions and continues to grow. To limit these emissions, it proposes to shift the 75% of goods that are transported by road in Europe to rail and water. For private transportation, the Green Deal calls for strong action to support zero-emission forms of propulsion, primarily electric, with increased charging points, light transport and shared forms of mobility. As early as 2019, the Plan called for ensuring "a clear pathway from 2025 onward to zero-emissions mobility."
Finally, the Green Deal also includes the Zero Pollution Action Plan, which aims to eliminate all sources of air, water and soil pollution by 2050, and the Biodiversity Strategy for 2030 with the goal of protecting at least 30% of the seas and land, protecting pollinating insects, and restoring the free flow of 25,000 kilometers of rivers.
The Green Deal also includes a new European Forest Conservation Strategy under which Europe plans to plant 3 billion new trees by 2030 and introduce forest management systems to help them adapt to climate change. Forests are a key resource not only as a reservoir of biodiversity, but because they absorb CO2, thus making a crucial contribution to our goal of zero emissions.
The 2019 document developed by the Commission is the first step, providing the policy framework and macro-objectives for subsequent actions. Moving forward requires a roadmap with intermediate targets and the adoption of concrete legislative measures, some already fully approved, others still at the proposal stage by the Commission, which the Council of the European Union and the European Parliament will have to formally approve.
Additional strategies to support the Green Deal
Since its presentation, the path of the Green Deal has intersected with other European action plans, particularly those that intervened to respond to the crises caused first by the COVID-19 pandemic, and then by the Russian invasion of Ukraine.
In 2020, the European Commission, the European Parliament and EU leaders agreed on a recovery plan to revive the European economy in the short term after the slowdown caused by COVID: NextGenerationEU, an €806.9 billion financial instrument to be spent by 2025 designed to stimulate a "sustainable, even, inclusive and fair recovery." In that plan, a substantial share of investment goes to clean energy, industrial sustainability, new mobility, and building redevelopment. The Next Generation funds become a tool for many countries to start the Green Deal, and the program is also designed by the European Commission to avoid the risk of the economic crisis resulting in a postponement of climate goals.
In 2022, the European Union responded to the energy market crisis caused by the war in Ukraine with the REPowerEU plan, which partly recalibrates the Green Deal. On the one hand, the EU took action to find alternative supplies of gas, oil and coal in the short term. On the other, however, targets on renewables were revised upward. REPowerEU – on which the European Parliament and the Council reached a substantive political agreement in December 2022 – sets the bar for the share of energy to be generated from renewables by 2030 at 45%, rather than 40% as under Fit for 55.
The road to 2050 is still long, and will likely still see complex negotiations and course corrections. But the European Green Deal is now underway, with binding targets put in black and white, and it remains the most ambitious and detailed plan of action toward a sustainable economy so far adopted by an advanced economy.