The European Commission has presented its legal proposal for the 2040 Climate Target. We welcome the Commission’s intention to enable more flexible and cost-effective pathways to reaching the target. While acknowledging that further measures will be needed is an important step, the current proposal falls short of identifying and quantifying those measures in concrete terms.
Our sector is committed to climate neutrality. Already today, without the new 2040 target, industrial sectors are expected to be climate neutral or even negative already by 2040, when the EU Emission Trading System (ETS) runs out of credits.
The 2040 Climate Target must be more than a statement of intent. To be investable, it must be backed by a clear and coherent framework which mobilises both the supply and demand sides of Europe’s industrial transformation ” says Marco Mensink, Cefic Director General.
Alongside the lack of concrete measures that would stimulate market demand and deliver critical infrastructure, the proposed flexibilities under the EU ETS are insufficient to address residual emissions, especially when looking at investment cycles in industry and in energy and carbon infrastructure.
We call for a comprehensive set of legislative proposals, with clear milestones and KPIs, to address these critical priorities, specifically:
- Establish a market for net zero, low-carbon footprint and circular products to provide a credible and sustained demand signal to drive market transformation.
- Ensure the timely deployment of essential infrastructure capable of delivering cost-competitive renewable and low-carbon energy to our industry, without this, industry cannot reduce emissions while remaining operational.
- Develop a robust and effective anti-carbon leakage framework alongside a realistic post-2030 ETS framework. This must provide adequate visibility and market liquidity to sufficiently address residual industrial emissions, thus ensuring the continuation of companies’ operations beyond 2040. This requires going beyond the currently envisaged flexibility mechanisms.