Questions and Answers on the assessment of the draft updated National Energy and Climate Plans

Why are Member States updating their National Energy and Climate Plans (NECPs) and how is the Commission assessing them?

The National Energy and Climate Plans (NECPs) are essential tools to show which concrete policies and measures Member States will implement to achieve the 2030 energy and climate targets, enable the clean energy transition and provide certainty on energy security and on investment to Europe's industry. The NECPs are transparent and participatory planning tools that Member States are required to prepare under the Regulation on the Governance of the Energy Union and Climate Action.

The first NECPs for the period 2021-2030 were submitted in 2019, followed by a detailed EU-wide assessment and individual assessments of each of the national plans. Now, Member States are required to update them to mirror progress, new challenges and the revised framework under the European Climate Law, the Fit for 55 package, and the REPowerEU plan, as well as the Recovery and Resilience Facility.

The Commission Communication presented today comprises an aggregated EU-wide assessment of whether the EU is collectively on track to achieve the Energy Union objectives and the 2030 climate and energy targets. It also establishes an important source of information on necessary reforms. This analysis has been done on the basis of the 21 draft updated National Energy and Climate Plans submitted before mid-November 2023.

Today's Communication on the EU-wide assessment of the draft NECPs is accompanied by 21 country-specific recommendations and individual assessments on the alignment with the energy and climate goals, the climate neutrality objective, and adaptation goals, for each of the Member States that submitted draft NECPs in time. At this stage, the 6 remaining Member States receive assessments and recommendations only on their adaptation policies and consistency with the Union's climate-neutrality objective, which are published (here and here). In addition, another Staff Working Document assesses progress on climate adaptation in all 27 Member States.

The NECPs must ensure comparability and policy consistency and reflect the five dimensions of the Energy Union: decarbonisation of the economy, energy efficiency , a fully integrated internal energy market, energy security, solidarity and trust; and research, innovation and competitiveness.

In their updated NECPs, Member States were required to include for each dimension their targets, objectives and/or contributions as well as domestic policies to reach them. They have also assessed physical risks from global heating that may impact their ability to reach the Energy Union-related objectives, and to take appropriate steps to minimise those risks. The NECPs should be grounded in a sound analysis, assessing the expected impact of the proposed policies and identifying gaps or investment needs. In addition, the plans should be based on wide consultations, within governments, with local and national stakeholders and neighbouring Member States.

Is the EU on track to reach its increased energy and climate goals for 2030?

The assessment reveals that Member States have taken steps in the right direction but based on the draft Plans, a significant gap still exists towards the revised energy and climate targets under Fit for 55 and REPowerEU. This means that existing and planned measures included in the draft NECPs are not yet sufficient to achieve the EU 2030 climate and energy targets.

Net greenhouse gas (GHG) emissions in 2030 would be -51% compared to 1990 based on the draft assessed Plans - lower than the -55% target set in the European Climate Law. Additional ambition and measures in transport, buildings, agriculture and waste and carbon removals are needed too. Current Plans would reach a -33.8% GHG emissions reduction by 2030 compared to 2005, compared to the -40% target under the Effort Sharing regulation and there is a shortfall of around -40 to -50 MtCO2eq compared to the -310 Mt CO2 eq target in the LULUCF regulation.

The draft NECPs currently fall short in terms of ambition for renewables and energy efficiency. For renewables, the share of renewable energy could reach between 38.6 and 39.3% by 2030 based on the draft assessed Plans. This is significantly higher than the 32% set in the 2018 Renewable Energy Directive, but still lower than the 42.5% minimum target in the revised 2023 Renewable Energy Directive.

For energy efficiency, at Union level it would improve by 5.8% based on current draft plans. This is below the target in the 2023 Energy Efficiency Directive of an 11.7% improvement in energy efficiency.

Is the EU on track to become climate-neutral by 2050?

In line with the European Climate Law, the Commission has assessed the EU and its Member States' progress towards climate neutrality. Overall, the EU's domestic net greenhouse gas emissions are falling steadily. Net emissions (including LULUCF) decreased by around 3% in 2022 compared to 2021, continuing the 30-year downward trend.

Although greenhouse gas emissions continue to fall and there are encouraging signs of action on the ground, the Commission's assessment is that current progress towards the EU's climate neutrality objective appears to be insufficient. Action is most needed in areas which still require significant reductions in emissions or where, in recent years, there has been a deteriorating trend, as is the case for the carbon sink (e.g land use, land-use change, and forestry). The proposed Nature Restoration Law, amongst others, will help Member States restore nature in the way that is most compatible with the increase of the natural carbon sink as required under the agreed LULUCF targets.

To get on a more certain path towards climate neutrality by 2050, the EU and its Member States need to significantly increase the pace of change, as underlined in the Climate Action Progress Report, and step up their efforts towards emissions reduction. The Commission has published today recommendations (here and here) to Member States in this regard, under the European Climate Law.

Are Member States making sufficient progress to adapt to climate change and strengthen climate resilience?

Member States should use the NECPs to better plan adaptation action and enhance resilience, including in the energy system. The Plans should identify relevant climate vulnerabilities and risks, include adaptation goals, and match these with measures at national level.

Few countries addressed these requirements in their draft updated plans by proposing appropriate action. Most Member States did not lay out in sufficient detail their policies related to water management and to the impacts of seasonal water scarcity, heat, drought or weather events on energy production and disruptions. This is of high importance considering that droughts and extreme weather events are becoming more frequent and require appropriate investments.

In line with the European Climate Law, the Commission has also assessed Member State progress on adaptation to climate change more broadly, and concluded that progress is insufficient. The Commission has published recommendations (here and here) to Member States with regard to adaptation that reflect the findings of these assessments.

Is the EU driving forward the green transition with technology investments?

Reaching the energy and climate targets will require large investments in green and clean technologies for which demand will increase rapidly. According to our EU-wide assessment and Commission recommendations, greater efforts are necessary in the NECPs to stimulate the crucial investments required for the transition to climate-neutrality with robust investment estimates.

The Commission stressed the need to urgently boost the competitiveness of the European clean energy value chains, the support to decarbonise industries and efforts on research and innovation, including on preparing a skilled workforce, so that EU businesses can conceive, develop and expand production capacities for clean technologies, and secure the supply of components and materials across the entire value chain, in line with the Net Zero Industrial Act and the Critical Raw Materials Act.

Many plans describe planned investments in electrification, hydrogen, Carbon Capture, Utilisation and Storage (CCUS), and other technologies. They also describe a number of measures to support research and innovation in clean technologies and in their deployment. For example, several Member States provided projections on expected CO₂ capture, and others reflected the need to develop a CO₂ pipeline network for transport towards usage or storage sites. However, more detail and quantified targets are necessary for research and innovation spending and concrete measures that promote extending the manufacturing capacities for clean technologies in Europe.

The NECPs should also provide regulatory certainty, clarity and predictability for businesses and investors, as well as facilitate the planning for the use of public funds (both national and Union programmes) to help leverage the necessary private investments. Additional measures will be needed to attract private finance, as the bulk of investment necessary to reach the EU's climate and energy targets must come from private sources.

What are the other findings of the EU-wide assessment and recommendations to Member States?

The Commission's assessment also shows that energy security is addressed very differently across the draft plans. EU energy imports from Russia have decreased significantly as a result of the EU coordinated response through the REPowerEU plan. However, Member States need to provide more detailed plans on how to diversify their energy supply. The demand side of the electricity sector and energy storage are insufficiently covered despite the growing importance of flexibility. Most of the Member States identify in their Plans the uptake of flexibility and demand response as a key feature of the internal energy market to ensure a rapid penetration of renewable energy, and some Member States have put forward clear national objectives to support its uptake domestically. Nevertheless, clear objectives and a comprehensive regulatory framework are still missing in a number of plans.

Fossil fuel subsidies remain a major obstacle to the clean energy transition and a drag on the EU's climate objectives. Based on the draft updated NECPs, a collective effort by all Member States is necessary to set a clear and credible timeline for the phase-out of fossil fuel subsidies that do not address energy poverty or just transition as soon as possible, while adopting the necessary ancillary measures to protect vulnerable households and safeguard competitiveness.

To address energy poverty, a vast majority of Member States still need to set out clear objectives, a method for the definition and assessment of vulnerable households, and a stronger framework for consumer empowerment. Finally, to support the just transition, Member States need to provide a more complete assessment of the socio-economic impacts of the green transition on individuals, households and companies and put forward a more comprehensive set of measures to address these impacts. The Commission has therefore recommended to do more to protect individuals, vulnerable households and companies and to take a more strategic and forward-looking approach on just transition. With the right policies, Member States can accompany the clean transition, create new opportunities on the labour market and harness the potential of different regions across Europe.

What are the next steps towards the final updated NECPs?

All Member States must submit their final updated NECPs by June 2024, as defined by the EU Governance Regulation.

All Member States that have not yet done so (Austria, Bulgaria, Poland) need to submit their draft updated NECPs without further delay. The Commission has been in contact with those Member States and is exploring next steps. Under the recommendations in the European Climate Law, those Member States have received recommendations to submit their draft updated NECP.

It was not possible to assess the NECPs of Belgium, Latvia and Ireland as part of this EU-wide assessment, due to their late submission. The Commission intends to publish individual assessments and recommendations for these countries in early 2024.

When finalising the plans, all Member States must take into account the Commission's recommendations. Member States have six months to revise their draft plans and raise their national level of ambition. Our common goal is to ensure that the sum of the national contributions as presented in the final NECPs corresponds to at least the level of the agreed EU 2030 targets.

The Commission remains fully available to support Member States in finalising their updated NECPs. The Commission will intensify contacts with the Member States and use relevant fora to allow exchanges of best practices, in particular on cross-cutting issues such as investments, affordable clean energy prices and grid and other infrastructure planning. The Commission will also continue to promote an inclusive debate on the NECPs, support regional cooperation between Member States and provide technical assistance when requested. It recommends Member States to improve the public consultation process while finalising the NECPs.

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