This article is part of our COP28 series. Learn more about CATF at COP28.
As European leaders head to COP28, the first Global Stocktake’s reprimand of the slow progress toward climate goals rings through the halls. But how is Europe faring when it comes to clean energy deployment and what could be done to increase its chances of climate success?
Over the past year, as part of CATF’s options-based strategy for driving climate action in Europe, our team has consulted with policy influencers, conducted public polling, commissioned modelling, and investigated current climate progress against 2030 and 2050 targets.
Here are our main findings and key recommendations, which we hope European leaders heed as they head to Dubai:
1. Shifting geoeconomics and geopolitics put energy security and economic security on top of the agenda, and climate policy must adapt.
Europe has long been a climate leader. So far, the EU has collectively reduced its emissions by 32.5% since 1990. The UK has slashed them by 48.7% since 1990, a larger share than any other advanced economy. Over the same timeframe, the two economies together have successfully delivered the commercialisation of solar and offshore wind, resulting in unprecedented deployment levels over the past decade. Some of the most innovative climate policy concepts such as carbon markets, carbon border adjustments, and sustainable finance have also been hammered out in Europe. Just recently, the EU courageously pioneered a methane imports standard, laying the pathway to cutting 30% of global oil and gas methane emissions.
This success, however, does not guarantee sustained emissions reductions at this pace and scale. In fact, while climate action requires long-term, planning-focused policy approaches, in the recent past, policy has been driven by short-term crises and arbitrary 2030 goals. Europe’s dash for liquefied natural gas (LNG) and the comeback of coal, for instance in Germany, in response to the war in Ukraine underscore the world’s biggest energy importer’s energy security realities. At the same time, high and volatile energy prices have burdened consumers and companies alike, centring electricity market design, energy and climate in the public debate – and undermining climate action in some places altogether. Coupled with other global headwinds, lagging deployment of clean technologies and a choppy macroeconomic outlook, these conditions create urgency for a pivot to a pragmatic and proactive approach that merges energy security, climate action, and economic growth over the long term.
2. With Europe already off-track vis-à-vis its 2030 goals, a “planning gap” to 2050, and unanswered questions about risks in the current approach, there is increased urgency for a new approach.
The data show that Europe is likely to miss its 2030 climate targets. While solar has been on track so far, most other major technology deployment components of a climate-neutral Europe are lagging, including clean firm power, onshore and offshore wind, hydrogen, and carbon capture and storage.
The lack of an actionable plan for 24/7/365 clean electricity in Europe, which would be the backbone of a decarbonised grid expected to be around four times as large in 2050 as it is today, is a major shortcoming. There are myriad unknowns and risks in current plans that focus mostly on renewables and energy efficiency. Indeed, offshore wind deployment has slumped, and Europe is unlikely to add more than three times as much offshore wind over the next six years, as the 32GW already deployed over the past decade, amounting to about 100GW. In comparison to clean firm technologies, solar, wind, and batteries have higher land-use footprints and require higher amounts of critical minerals and other materials per energy unit generated. Changing weather patterns, and their implications for power system reliability with high penetration of variable renewable generators in weather-dependent energy systems, are also just beginning to be understood. If some of these risks came to pass, an optimal power system would look dramatically different.
Moreover, the feasibility of hydrogen targets is in question. The EU seeks to produce 10 million tons by 2030, and import another 10 million tons annually, but technical realities and high import costs, coupled with a lack of 24/7/365 clean electricity, are holding back progress. Green hydrogen production is very energy and land-intensive, and despite having a seemingly sufficient pipeline of domestic hydrogen production projects, about 90% of currently announced green hydrogen production projects are in very early stages of development, and are therefore facing a number of execution risks. These could result in 14Mtpa worth of projects not coming online or being delayed past 2030, leaving a ~50% shortfall from required 2030 production capacity. Further, Europe must recognise that hydrogen is already produced and consumed in large quantities today, predominantly from fossil-based source, so it must look to incentivise any early project developments towards decarbonizing the existing hydrogen as a first priority.
Progress on carbon capture is also lagging. To be on track to reach its goal of climate neutrality by 2050, the EU needs CO2 storage capacities of approximately 100 million tons per year already in 2030, according to the European Scientific Advisory Board on Climate Change. Currently, there are no operational CO2 storage sites in the EU. While policymakers are drawing up much needed and welcome policy frameworks for CCS in particular, timeframes might clash with infrastructure delivery realities.
All three of these pillars– clean firm electricity, hydrogen, and carbon capture and storage – together are necessary for successful industrial decarbonisation. If any one of them does not materialise at scale, it will drive up the need for the others. We’ll also need specific plans to develop the infrastructure that can connect these climate pillars, including electricity transmission lines and CO2 and hydrogen pipelines.
It is clear that Europe’s plans for 2030 are thus out of step with geopolitical and geoeconomic realities, not to mention real-world emissions reductions. Even worse, the path from those 2030 targets to EU-wide climate neutrality in 2050 is barely sketched out – an issue at the heart of what CATF calls Europe’s “planning gap.”
3. Policy influencers, public opinion and backlash underscore the need for a changed approach.
Experts are increasingly sceptical of Europe’s current approach to climate action. In a recent, CATF-led expert survey and interviews with high-level European stakeholders, many experts and policy influencers agree that Europe already faces risks in delivering on its current plans and are sceptical of Europe’s ability to achieve both 2030 and 2050 climate goals. They lack confidence that the current path will deliver on required 2030 emission abatement and believe that some key technologies have been overlooked, for instance the role of nuclear energy. Experts identified social acceptance, political will, permitting, and financing as key obstacles potentially preventing Europe from achieving required emissions reductions, but which could be mitigated through clear communications, incentives and holistic long-term planning.
Therefore, the survey participants emphasised the need for a clear vision that considers a broad range of technologies, along with providing a recognition that each country should be left to have its own specific technology mix suited to their natural resources and political economy.
Public opinion also indicates widespread support for emerging clean technologies across European countries. In a recent CATF public perception study, survey results present a promising landscape of public willingness to embrace a diverse range of clean energy solutions to reach emission reduction targets in Europe, including advanced nuclear energy, carbon capture and storage, low-carbon hydrogen, and superhot rock geothermal energy. In fact, climate-engaged individuals are more technology-agnostic than disengaged individuals; and polling challenges long-held narratives about technology popularity.
For example, despite the complicated history of nuclear energy in Europe, support for its rollout (51%) ranks higher than rejection (18%) across all countries. Carbon capture and storage enjoys widespread support across all surveyed countries, underscoring that carbon capture and storage is not an unpopular climate technology among the general population.
4. An options-based approach can increase energy security by managing risks.
An options-based approach to climate advances economic security through focusing on energy security – the uninterrupted availability of energy sources at an affordable price. The approach is fundamentally about managing inherent risk in the face of uncertainty around technology development and deployment realities, cost, speed, geopolitics and geoeconomics.
Modelling continues to show that a more robust system can be created through technology optionality, one that delivers more robustness at similar costs. Such a system would be less exposed to extreme weather risks due to a smaller share of renewables, would use less land, and require less critical minerals.
For example, modelling commissioned by CATF shows that Europe’s decarbonised power system may require significantly more clean firm generation1 capacity than hitherto commonly assumed, if risks like dunkelflaute, land-use, and long-term supply constraints materialised. The modelling takes a fresh view by removing national policy targets and restrictions (e.g. nuclear exclusion in Germany) and reflecting more measured technology cost projections that is more measured than often-used projections, reflecting concerns about the levelling off of cost reductions. The results, optimised for total system cost, demonstrate that the need for clean firm capacity increases by 250% relative to current widely shared scenarios. Across Europe, according to this modelling, a cost-effective, decarbonised power system includes at least 180 GW of total nuclear capacity (versus 97 GW today) and 34 GW of gas with CCS capacity by 2050.
Such modelling shows the sensitivity of optimal power generation portfolios to changing risks and expectations, with a general trend towards increased need for clean firm options to manage risks without increasing total cost.
Creating these options starts with understanding how technologies move through development stages, starting with R&D and ending with market saturation. Innovation policies should go beyond R&D to address demonstration, early commercialisation, and expansion so that a technology reaches a “take-off” point. If the technology reaches the take-off point, its costs have been sufficiently reduced and it can scale globally to market saturation and contributeto climate neutrality ambitions. Arguably, European incentives for solar and offshore wind have helped these technologies reach this “take-off” point. Climate policy should support option creation for other technologies as well.
5. To realise the options-based approach, there are key steps policymakers can take today.
We need to accept that we need a risk-aware approach to decarbonisation and to reflect it in the what and how of climate policy design. This includes better understanding and evaluating the potential impacts of risks and proactively planning for them. Used to their full potential, the National Energy and Climate plans could address this as interim plans that ensure Member States achieve 2030 targets while also preparing for full decarbonisation by 2050.
First, Europe needs ample, land-efficient and cost-effective 24/7/365 clean electricity as a backbone for electrification, industrial decarbonisation and hydrogen production.
In addition to continued renewable deployment, clean-firm power such as carbon capture and storage on power generation and nuclear fission need to be deployed at scale. To be able to unlock the full potential of nuclear fission, and help commercialise the next generation of climate technology, the EU needs to put in place conducive policies that will facilitate access to funding, modernise licensing and permitting for nuclear projects, harmonise licensing across the Union, and incentivise the development of advanced reactors. Visionary technologies such as nuclear fusion, and advanced geothermal such as superhot rock energy, need to move further through the development stages. Policymakers should create speedy innovation, development and deployment pathways, along with coherent and streamlined policy frameworks.
Second, industrial decarbonisation needs to be enabled through additional levers.
One is carbon capture and storage commercialisation via an effective combination of regulatory measures and financial incentives. Among other measures, CCS needs clear deployment targets, a strategic plan for locating storage sites in optimal locations across the continent, and a dedicated regulatory framework and network standards for CO2 transport. European policymakers must optimise source-sink matching via dedicated regional platforms and address the funding gap for capture plants in key sectors by coordinating existing funding and establishing a dedicated tender for capture projects. Furthermore, decisions on where CCS should be deployed should be made on a facility-level basis, as CCS is among various tools which can be used to cut emissions, although its suitability is very much location-dependent.
Another lever is clean hydrogen, as some hard-to-abate industrial sectors (including steel production, oil refining and petrochemicals) are unlikely to eliminate all emissions without using clean hydrogen as a feedstock and/or a fuel. Thus, policy must support all clean hydrogen production pathways, allocating funding and other benefits on the basis of rigorous lifecycle emission reduction, cost and scalability merits, not arbitrary colour denominations, and backed by appropriate certification. However, as clean hydrogen requires large amounts of energy to be produced, therefore it should be considered a precious molecule, only to be used in sectors with no other viable decarbonisation pathways, particularly those sectors already producing and consuming carbon-intensive hydrogen today. All policy initiatives should therefore prioritise clean hydrogen deployment in these ‘no-regrets’ end use sectors.
Third, as the only sector in the EU where greenhouse gas emissions are still growing, policymakers must pay particular attention to decarbonising transportation.
While legislative and other initiatives set up this term under the banner of the European Green Deal are expected to make a dent in these emissions, further push is required to decarbonise transportation by mid-century, both on European roads as well as in global sectors like shipping and aviation. The shift to more climate-neutral modes of propulsion will also lead to improved air quality and so reduced health risks for Europeans. To decarbonise transportation, policy must incentivise a massive increase in the production and uptake of electricity and zero-carbon fuels like hydrogen and ammonia. Policy must then provide compelling incentives that will entice both producers and buyers to switch from conventional to climate-aligned modes of transport and bring down the cost of doing so.
In parallel, the shift to new modes of propulsion will only be enabled if a fit-for-purpose and comprehensive Europe-wide infrastructure network is available. Policymakers have a role to play in bringing about a robust cross-border infrastructure network that will serve the needs of a decarbonised transportation system. While legally binding minimums for refuelling stations required by the EU’s Alternative Fuels Infrastructure Regulation are a positive step forward, a comprehensive infrastructure network is needed to realise a rapid and effective transition.
Europe must urgently renew its approach to meet and develop a robust plan for today’s and tomorrow’s challenges. Rather than doubling down on yet more climate targets at COP28, policymakers and governments should embrace the lessons learned to date and systematically and flexibly adapt their approach to accelerate climate action – something many European leaders have proven to be skilled in doing during recent crisis responses.
Alex Carr, Sara Albares, Armond Cohen, Tamara Lagurashvili, Toby Lockwood, Alejandra Munoz, Eadbhard Pernot, Maja Pozvek, Malwina Qvist, Markus Rosenthal, Kasparas Spokas, Sonia Stoyanova, Rebecca Tremain, Alessia Virone, Ghassan Wakim, and David Yellen, contributed to this blog, which is part of CATF’s options-based Strategy for Europe, and precedes a larger report on this topic. The author would also like to thank CATF’s Communications team for their extensive support.