Smarter and standardised reporting procedures proposed to reduce banks’ reporting costs
Banking industry involvement in improving procedures needed

The European Central Bank (ECB) today published the European System of Central Banks’ (ESCB) input into a European Banking Authority (EBA) feasibility report on reducing the reporting burden for the European banking industry. Under Article 430c of the Capital Requirements Regulation (CRR), the European Parliament and the Council of the European Union mandated the EBA to carry out a feasibility study and requested that input from the ESCB be taken into account.
The ESCB report proposes to reduce the reporting burden for banks in the fields of statistical, resolution and prudential reporting without losing the information content that is indispensable to monetary policy, resolution and supervisory tasks. This can be achieved through:

a common standard data dictionary and common data model for statistical, resolution and prudential information requirements;
smarter procedures, such as harmonised transmission reporting formats, the removal of duplications and improved data sharing between authorities;
increased cooperation between European authorities, and between authorities and the banking industry, to achieve a common standard data dictionary, a common data model and smarter procedures.

These efforts should help to reduce the reporting burden for banks and increase the quality of the data received by authorities. As a result, banks would be able to reduce costs, and authorities could better monitor developments in the banking industry.
Compliments of the ECB.
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Today, the European Commission is proposing an upgrade of the Single European Sky regulatory framework which comes on the heels of the European Green Deal. The objective is to modernise the management of European airspace and to establish more sustainable and efficient flightpaths. This can reduce up to 10% of air transport emissions.
The proposal comes as the sharp drop in air traffic caused by the coronavirus pandemic calls for greater resilience of our air traffic management, by making it  easier to adapt traffic capacities to demand.
Commissioner for Transport, Adina Vălean, declared: “Planes are sometimes zig-zagging between different blocks of airspace, increasing delays and fuel consumed. An efficient air traffic management system means more direct routes and less energy used, leading to less emissions and lower costs for our airlines. Today’s proposal to revise the Single European Sky will not only help cut aviation emissions by up to 10% from a better management of flight paths, but also stimulate digital innovation by opening up the market for data services in the sector. With the new proposed rules we help our aviation sector advancing on the dual green  and digital transitions.”
Not adapting air traffic control capacities would result in additional costs, delays and CO2 emissions. In 2019, delays alone cost the EU €6 billion, and led to 11.6 million tonnes (Mt) of excess CO2. Meanwhile, obliging pilots to fly in congested airspace rather than taking a direct flight path entails unnecessary CO2 emissions, and the same is the case when airlines are taking longer routes to avoid charging zones with higher rates.
The European Green Deal, but also new technological developments such as wider use of drones, have put digitalisation and decarbonisation of transport at the very heart of EU aviation policy. However, curbing emissions remains a major challenge for aviation. The Single European Sky therefore paves the way for a European airspace that is used optimally and embraces modern technologies. It ensures collaborative network management that allows airspace users to fly environmentally-optimal routes. And it will allow digital services which do not necessarily require the presence of local infrastructure.
To secure safe and cost-effective air traffic management services, the Commission proposes actions such as:

strengthening the European network and its management to avoid congestion and suboptimal flight routes;
promoting a European market for data services needed for a better air traffic management;
streamlining the economic regulation of air traffic services provided on behalf of Member States to stimulate greater sustainability and resilience;
boosting better coordination for the definition, development and deployment of innovative solutions.

Next Steps
The current proposal will be submitted to the Council and the Parliament for deliberations, which  the Commission hopes will be concluded without delay.
Subsequently, after final adoption of the proposal, implementing and delegated acts will need to be prepared with experts to address more detailed and technical matters.
Background
The Single European Sky initiative was launched in 2004 to reduce fragmentation of the airspace over Europe, and to improve the performance of air traffic management in terms of safety, capacity, cost-efficiency and the environment. A proposal for a revision of the Single European Sky (SES 2+) was put forward by the Commission in 2013, but negotiations have been stalled in Council since 2015. In 2019, a Wise Person’s Group, composed of 15 experts in the field, was set up to assess the current situation and future needs for air traffic management in the EU, which resulted in several recommendations. The Commission then amended its 2013 text, introducing new measures, and drafted a separate proposal to amend the EASA Basic Regulation. The new proposals are accompanied by a Staff Working Document, presented today.
Compliments of the European Commission.
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Bonds with coupons linked to sustainability performance targets to become eligible as central bank collateral
Potential eligibility also for asset purchases under the APP and the PEPP subject to compliance with programme-specific eligibility criteria
Decision applicable from 1 January 2021

The European Central Bank (ECB) has decided that bonds with coupon structures linked to certain sustainability performance targets will become eligible as collateral for Eurosystem credit operations and also for Eurosystem outright purchases for monetary policy purposes, provided they comply with all other eligibility criteria.
The coupons must be linked to a performance target referring to one or more of the environmental objectives set out in the EU Taxonomy Regulation and/or to one or more of the United Nations Sustainable Development Goals relating to climate change or environmental degradation. This further broadens the universe of Eurosystem-eligible marketable assets and signals the Eurosystem’s support for innovation in the area of sustainable finance.
Non-marketable assets with comparable coupon structures are already eligible. The decision aligns the treatment of marketable and non-marketable collateral assets with such coupon structures.
The decision applies from 1 January 2021.
Compliments of the ECB.
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The European Commission has today adopted a time-limited decision to give financial market participants 18 months to reduce their exposure to UK central counterparties (CCPs).
A CCP is an entity that reduces systemic risk and enhances financial stability by standing between the two counterparties in a derivatives contract (i.e. acting as buyer to the seller and seller to the buyer of risk). A CCP’s main purpose is to manage the risk that could arise if one of the counterparties defaults on the deal. Central clearing is key for financial stability by mitigating credit risk for financial firms, reducing contagion risks in the financial sector, and increasing market transparency.
The heavy reliance of the EU financial system on services provided by UK-based CCPs raises important issues related to financial stability and requires the scaling down of EU exposures to these infrastructures. Accordingly, industry is strongly encouraged to work together in developing strategies that will reduce their reliance on UK CCPs that are systemically important for the Union. On 1 January 2021, the UK will leave the Single Market. Today’s temporary equivalence decision aims to protect financial stability in the EU and give market participants the time needed to reduce their exposure to UK CCPs.
Valdis Dombrovskis, Executive Vice President for an Economy that Works for People said: “Clearing houses, or CCPs, play a systemic role in our financial system. We are adopting this decision to protect our financial stability, which is one of our key priorities. This time-limited decision has a very practical rationale, because it gives EU market participants the time they need to reduce their excessive exposures to UK-based CCPs, and EU CCPs the time to build up their clearing capability. Exposures will be more balanced as a result. It is a matter of financial stability.”
Background
On the basis of an analysis conducted with the European Central Bank, the Single Resolution Board and the European Supervisory Authorities, the Commission identified that financial stability risks could arise in the area of central clearing of derivatives through CCPs established in the United Kingdom (“UK CCPs”) should there be a sudden disruption in the services they offer to EU market participants. This was addressed in the Commission Communication of 9 July 2020, where market participants were recommended to prepare for all scenarios, including where there will be no further equivalence decision in this area.
Compliments of the European Commission.
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The European Economic and Social Committee (EESC) has adopted the opinion Decent minimum wages across Europe following the European Parliament’s request for an exploratory opinion. The request was made after the Commission announced that it was considering proposing a legal instrument to ensure that every EU worker is entitled to a minimum wage allowing a decent standard of living.
Figures show that about one in ten workers in the EU earn around or below the national statutory minimum wage. In some countries, the existing minimum wage floors are currently not sufficient for workers to be lifted out of poverty by employment alone. The EESC said in the opinion that it remained concerned that poverty in general and in-work poverty were still significant problems in many Member States. At the same time, it emphasised that high-quality employment continues to be the best route out of poverty.
In its view, fair minimum wages could help reduce poverty among working poor people, combined with person-centred, integrated and active inclusion policies. They could also help meet a number of EU objectives, such as achieving upward wage convergence, improving social and economic cohesion and eliminating the gender pay gap. Women currently account for the majority of low-wage earners, together with other vulnerable groups, such as older workers, young people, migrants and workers with disabilities. Wages represent payment for work done, and are one of the factors that ensure mutual benefits for companies and workers. They are linked to the economic situation in a country, region or sector. Changes may have an impact on employment, competitiveness and macro-economic demand.
The EESC said that it recognises concerns regarding possible EU action in this area and does not underestimate the complexities of the issues involved. It acknowledges that the Commission will have to adopt a balanced and cautious approach.
It therefore stresses that any such EU initiative must be shaped on the basis of an accurate analysis of the situation in the Member States, and must fully respect the social partners’ role and autonomy, as well as the different industrial relations models. It is also essential that any EU initiative safeguards the models in those Member States where the social partners do not consider statutory minimum wages to be necessary, notably those where wage floors are set through collective bargaining.
When setting statutory minimum wages, timely and appropriate consultation with social partners is important to ensure that the needs of both sides of industry are taken into account. The EESC regrets that, in some Member States, the social partners are not adequately involved or consulted in statutory minimum wage setting systems or adjustment mechanisms.
However, the three groups within the EESC, representing the EU’s employers, trade unions and civil society organisations, have divergent views on the way ahead.
Rapporteur of the opinion, Stefano Mallia (Employers’ Group), said: The COVID-19 crisis has caused and continues to cause huge economic losses, which will inevitably take a huge toll on businesses. Minimum wages is a sensitive subject that must be approached in a manner that fully takes into account economic consequences and the division of competences between the EU and the Member States, and that respects the specific features of national minimum wage setting and collective bargaining systems. The Employers’ Group believes that the EU has no competence over pay, and pay levels in particular, and that setting minimum wages is a national matter, done in accordance with the specific features of respective national systems. Any misguided action on the part of the EU must be avoided, especially at this particular point in time. Where social partners need support, we should look into addressing specific needs by promoting exchanges of best practices and capacity-building and not fall into the trap of coming up with a one-size-fits all approach that could have serious negative consequences.
Rapporteur of the opinion, Oliver Röpke (Workers’ Group), said:  This opinion comes at an opportune moment for the European Union and I’m very pleased that the EESC can contribute to the discussion on minimum wages in Europe. The COVID-19 crisis has again thrown a spotlight on the dramatic inequalities in our labour markets and in society, not least the severe income and job insecurity felt by far too many working people. Ensuring that workers across the EU benefit from decent minimum wages must be an essential part of the EU’s recovery strategy. For the Workers’ Group, it is undisputable that all workers should be protected by fair minimum wages allowing a decent standard of living wherever they work. Collective bargaining remains the most effective way of guaranteeing fair wages and must also be strengthened and promoted in all the Member States. We therefore welcome the Commission’s recognition that there is scope for EU action to promote the role of collective bargaining in supporting minimum wage adequacy and coverage.
President of the study group which drafted the opinion, Séamus Boland (Diversity Europe Group), said: I believe this opinion will provide a high level of value to the many discussions across all EU Member States on the subject of minimum wages. It asserts the value of social partnerships as well as ensuring that all relevant stakeholders are included. The opinion emphasises the need to guarantee proper dignity and respect for all workers, especially those employed in lower paid jobs in our economy. I believe that the EESC can be proud of the work done in completing this opinion and I encourage all stakeholders to read it.
Background
The Commission launched the first phase of the social partner consultations in January 2020, setting out a number of ways in which EU action could prove beneficial in enabling all EU workers to earn a living wage.
In June 2020, the second-phase consultations were launched, with the Commission spelling out the policy objectives of a possible initiative: ensuring that all workers in the EU are protected by a fair minimum wage which provides them with a decent standard of living wherever they work. At the same time, the Commission said that access to employment would be safeguarded and the effects on job creation and competitiveness taken into account.
While preparing the opinion, the EESC held virtual consultations with stakeholders from five countries, chosen on the basis of their minimum wage setting mechanisms, which are included as annexes to the opinion. The stakeholders were sent a survey, the results of which were also included in the opinion. The EESC also held a virtual public hearing which included contributions from Commissioner for Jobs and Social Rights Nicolas Schmit, several MEPs and members of some of Europe’s top network organisations representing employers, workers and other civil society organisations, such as BusinessEurope, the European Trade Union Confederation (ETUC) and Social Platform.
Compliments of the European Economic and Social Committee.
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The European Union Intellectual Property Office (EUIPO) and EBAN, the Europe leading early-stage investors network, have signed a collaboration agreement to promote and encourage activities and services that support small and medium enterprises (SMEs).
Both organisations play an essential and complementary role in their shared vision to empower EU SMEs within the EU and beyond. Business angels are a significant driver of the innovation process in the EU start-up ecosystem and IP rights have long been recognised in the success of start-ups and innovative SMEs, giving its holder a competitive advantage in a global market.
EBAN, with over 150-member organisations in more than 50 countries today, represents a sector estimated to invest 11.4 billion Euro a year, comprising 260.000 angel investors, and playing a vital role in Europe’s future, notably in the funding of SMEs.
The EUIPO is the European agency responsible for managing registrations of the EU trade mark and the registered Community design valid in all EU member states. The EUIPO has recently launched its ‘Ideas Powered for business’ hub with made to measure information for SMEs as well as the possibility to sign up for free personalised legal advice on their intellectual property questions.
This collaboration allows the EUIPO, in line with its SME Programme and Strategic plan 2025, to reach out to SMEs in particular start-ups and entrepreneurs, with the help of EBAN who are in an ideal position to promote the importance of protecting innovation via Intellectual Property rights (trade marks, patents, designs, etc.) at the right moment in the SME business lifecycle. Furthermore, business angels and start-ups will benefit from the knowledge, tools and resources on IP for supporting sound decision making.
This agreement covers activities such as promoting the protection of innovation and creativity among SMEs and start-ups, training on Intellectual Property, participation in events, as well as sharing content on IP and the business angel financial sector on the respective websites.
Compliments of the European Union Intellectual Property Office.
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In line with the European Green Deal and the EU’s objective to become the first climate neutral economy by 2050, the Commission adopted today revised EU Emission Trading System State aid Guidelines in the context of the system for greenhouse gas emission allowance trading post-2021 (the “ETS Guidelines”). They will enter into force on 1 January 2021 with the start of the new ETS trading period, and replace the previous Guidelines adopted in 2012.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “To sustainably tackle climate change and achieve our Green Deal objectives, we have to put a price tag on carbon emissions while avoiding carbon leakage. The revised EU Emission Trading System State aid Guidelines adopted today are an important element of this project. They enable Member States to support those sectors that, because of indirect emission costs, are most at risk of carbon leakage. At the same time, they help deliver on a cost-effective decarbonisation of the economy by avoiding overcompensation and undue distortions of competition in the Single Market”.
EU State aid control has an important role to play in enabling Europe to fulfil its Green Deal objectives. In order to reap the full benefits of limited public funds, it is crucial that State aid rules continue to do their part. This means ensuring that public money does not crowd out private spending and maintaining a level playing field in the Single Market, while minimising costs for taxpayers.
The ETS Guidelines aim at reducing the risk of “carbon leakage”, where companies move production to countries outside the EU with less ambitious climate policies, leading to less economic activity in the EU and no reduction in greenhouse gas emissions globally. In particular, they enable Member States to compensate companies in at-risk sectors for part of the higher electricity prices resulting from the carbon price signals created by the EU ETS (so-called “indirect emission costs”). At the same time, overcompensation of companies would risk running counter to the price signals created by the EU ETS to promote a cost-effective decarbonisation of the economy and create undue distortions of competition in the Single Market.
Against this background, the revised ETS Guidelines will:

target aid only at sectors at risk of carbon leakage due to high indirect emission costs and their strong exposure to international trade. Based on an objective methodology, 10 sectors and 20 sub-sectors are eligible (compared to 13 * sectors and 7 sub-sectors under the previous Guidelines);

set a stable compensation rate of 75% in the new period (reduced from 85% at the beginning of the previous ETS trading period), and exclude compensation for non-efficient technologies, to maintain the companies’ incentives for energy efficiency; and
make compensation conditional upon additional decarbonisation efforts by the companies concerned, such as complying with the recommendations of their energy efficiency audit.

The Guidelines also take into account the specificities of small and medium-sized enterprises (SMEs), in line with the SME Strategy for a sustainable and digital Europe, by exempting them from the new conditionality requirement in order to limit their administrative burden.
The Commission has completed an extensive evaluation and Impact Assessment, in line with the Better Regulation Guidelines, with the support of an external consultant. In this context, the Commission has conducted numerous consultations, including a public consultation based on a questionnaire and a targeted consultation to gather the input of interested sectors. The Commission also sought the views of relevant stakeholders on a proposal of revised Guidelines in a public consultation open from 14 January to 10 March 2020. All details about the public consultation are available online.
The new Guidelines, the Impact Assessment Report and all supporting documents are available here.
The Commission is also in the process of evaluating and reviewing other State aid guidelines, including the Energy and Environmental Aid Guidelines, to make sure they are fully aligned with the Commission’s green and digital objectives.
Background
In December 2019, the European Commission presented the European Green Deal,  a roadmap for making the EU’s economy sustainable and achieve climate neutrality by 2050 by turning climate and environmental challenges into opportunities across all policy areas and making the transition just and inclusive for all.
The EU ETS is a cornerstone of the EU’s policy to combat climate change and a key tool for curbing greenhouse gas emissions cost-effectively. Set up in 2005, the ETS is the world’s first major carbon market and remains the biggest one. It operates in all 27 EU countries plus Iceland, Liechtenstein and Norway. The United Kingdom is part of the EU ETS until the end of the transition period. Pursuant to the Ireland/Northern Protocol, the EU ETS will apply to and in the United Kingdom in respect of Northern Ireland insofar as it applies to the generation, transmission, distribution, and supply of electricity, trading in wholesale electricity or cross-border exchanges in electricity. By putting a price on carbon, it delivers concrete results for the environment: the European Union is already on track to meet its greenhouse gas emissions reduction target for 2020.
Last week, the Commission put forward a plan to further cut emissions by at least 55% by 2030. By June 2021, the Commission will also review and, where necessary, propose to revise all relevant policy instruments, including the EU ETS Directive, to deliver additional greenhouse gas emissions reductions.
Following the review of climate-related policy instruments, including the initiative for the creation of a Carbon Border Adjustment Mechanism, the Commission will check whether any revision or adaptation of the ETS Guidelines is necessary to ensure consistency with, and contribute to, the fulfilment of the climate neutrality objective while respecting a level playing field.
Compliments of the European Commission.
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ECB’s Governing Council confirms exceptional circumstances
Opinion instrumental in ECB Banking Supervision’s decision to allow banks to exclude central bank exposures from leverage ratio
See also ECB Banking Supervision announcement on leverage ratio

The Governing Council of the European Central Bank (ECB) has decided that it concurs with ECB Banking supervision that there are ‘exceptional circumstances’ allowing the temporary exclusion of certain central bank exposures from the leverage ratio.
The Governing Council said in an opinion: “The situation brought about by the coronavirus (COVID-19) pandemic has affected all euro area economies in an unprecedented and profound way. This situation has resulted in an ongoing need for a high degree of monetary policy accommodation, which in turn requires the undeterred functioning of the bank-based transmission channel of monetary policy. In the view of the Governing Council, therefore, the condition of exceptional circumstances warranting the temporary exclusion of certain exposures to central banks from the calculation of banks’ total exposure measures is met for the euro area as a whole. Euro area national competent authorities which intend to exercise the discretion provided for under Article 500b(2) of the CRR in relation to less significant institutions may rely upon this opinion issued by the ECB as monetary authority of the euro area.”
This opinion of the Governing Council is a precondition for ECB Banking Supervision to allow significant banks that it directly supervises to exclude certain central bank exposures from the leverage ratio. Such assets include coins and banknotes as well as deposits held at the central bank.
Compliments of the European Central Bank.
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The European Commission has set out strategic guidance for the implementation of the Recovery and Resilience Facility in its 2021 Annual Sustainable Growth Strategy (ASGS). The Facility is the key recovery instrument at the heart of NextGenerationEU which will help the EU emerge stronger and more resilient from the current crisis. The Facility will provide an unprecedented €672.5 billion of loans and grants in frontloaded financial support for the crucial first years of the recovery.
The publication of the ASGS launches this year’s European Semester cycle. In last year’s ASGS the Commission launched a new growth strategy based on the European Green Deal and the concept of competitive sustainability. This year’s ASGS is in full continuity with the previous one. The four dimensions of environmental sustainability, productivity, fairness and macroeconomic stability identified in last year’s ASGS remain the guiding principles underpinning Member States’ recovery and resilience plans and their national reforms and investments. These dimensions lie at the heart of the European Semester and ensure that the new growth agenda helps to build foundations for a green, digital and sustainable recovery.
In order to benefit from the Recovery and Resilience Facility, Member States should submit their draft recovery and resilience plans outlining national investment and reform agendas in line with the aforementioned EU policy criteria. Member States’ recovery and resilience plans should address the economic policy challenges set out in the country-specific recommendations of recent years and in particular in the 2019 and 2020 cycles. The plans should also enable Member States to enhance their economic growth potential, job creation and economic and social resilience, and to meet the green and digital transitions.
The Commission also presents today additional guidance to Member States on how best to present their recovery and resilience plans together with a standard template for their plans.
Flagship projects
Based on their relevance across Member States, the very large investments required, and their potential to create jobs and growth and reap the benefits from the green and digital transitions, the Commission strongly encourages Member States to include in their plans investment and reforms in the following flagship areas:

Power up – The frontloading of future-proof clean technologies and acceleration of the development and use of renewables.

Renovate – The improvement of energy efficiency of public and private buildings.

Recharge and Refuel – The promotion of future-proof clean technologies to accelerate the use of sustainable, accessible and smart transport, charging and refuelling stations and extension of public transport.

Connect – The fast rollout of rapid broadband services to all regions and households, including fiber and 5G networks.

Modernise – The digitalisation of public administration and services, including judicial and healthcare systems.

Scale-up – The increase in European industrial data cloud capacities and the development of the most powerful, cutting edge, and sustainable processors..

Reskill and upskill – The adaptation of education systems to support digital skills and educational and vocational training for all ages.

The implementation of the Facility will be coordinated by the Commission’s Recovery and Resilience Task Force in close cooperation with the Directorate-General for Economic and Financial Affairs. A Steering Board chaired by President Ursula von der Leyen will provide a political steer to the Task Force to help ensure the Facility is implemented in a coherent and effective manner.
Members of the College said:
President Ursula von der Leyen said: “The Recovery and Resilience Facility is at the very heart of NextGenerationEU. It is our key tool to turn the immediate challenges presented by the coronavirus pandemic into a long-term opportunity. Member States need clear guidance to ensure the Facility’s €672 billion is invested both for Europe’s immediate economic recovery, but also for long-term sustainable and inclusive growth. Today, we are presenting this guidance and stand ready to support Member States in developing their national strategies.”
Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People, said: “Today we are publishing our strategy of economic and social policies for the year-ahead, kick-starting the European Semester process. We should continue to support workers and companies during this crisis, while being mindful of preserving fiscal sustainability in the medium-term. Today we are also providing additional guidance to Member States prepare their Recovery and Resilience Plans, and we are proposing seven flagship initiatives to take the green and digital recovery forward and invest in human capital. We now call on the European Parliament and the Council to quickly reach the final agreement on the Recovery and Resilience Facility, so money can start flowing early next year. In a crisis, time is of the essence.”
Paolo Gentiloni Commissioner for Economy, said: “From the tragedy of the coronavirus pandemic, Europe has chosen to seize a unique opportunity: to restart our economies on a new, more sustainable basis. And the recovery and resilience facility will be the primary tool to make that happen. The guidance we are providing today aims to help Member States to prepare high quality national plans in line with our commonly agreed objectives. Not only so that funding can start flowing as swiftly as possible to support the recovery, but so that it can be a driver of truly transformational change.”
Next steps
The Commission calls on the European Parliament and the Council to agree as quickly as possible on the legislative proposal so that the Facility becomes operational as of 1 January 2021.
The deadline for submission of the Recovery and Resilience plans is 30 April 2021. However, Member States are encouraged to submit their preliminary draft plans from 15 October 2020. Member States should engage as soon as possible in a broad policy dialogue including all relevant stakeholders to prepare their recovery and resilience plans and are encouraged to interact with the Recovery Task Force and DG ECFIN to discuss their draft plans.
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The European Commission presented today its plan to reduce EU greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels. This level of ambition for the next decade will put the EU on a balanced pathway to reaching climate neutrality by 2050. The new target is based on a comprehensive Impact Assessment of the social, economic and environmental impacts. The Assessment demonstrates that this course of action is realistic and feasible. This raised ambition also underlines the EU’s continued global leadership, ahead of the next UN climate conference (COP26).
The Commission has today:

tabled an amendment to the proposed European Climate Law, to include the 2030 emissions reduction target of at least 55% as a stepping stone to the 2050 climate neutrality goal;
invited the Parliament and Council to confirm this 55% target as the EU’s new Nationally Determined Contribution (NDC) under the Paris Agreement, and to submit this to the UNFCCC by the end of this year;
set out the legislative proposals to be presented by June 2021 to implement the new target, including: revising and expanding the EU Emissions Trading System; adapting the Effort Sharing Regulation and the framework for land use emissions; reinforcing energy efficiency and renewable energy policies; and strengthening CO2 standards for road vehicles.

Ursula von der Leyen, President of the European Commission said: ““We are doing everything in our power to keep the promise that we made to Europeans: make Europe the first climate neutral continent in the world, by 2050. Today marks a major milestone in this journey. With the new target to cut EU greenhouse gas emissions by at least 55% by 2030, we will lead the way to a cleaner planet and a green recovery. Europe will emerge stronger from the coronavirus pandemic by investing in a resource-efficient circular economy, promoting innovation in clean technology and creating green jobs.”
Frans Timmermans, Executive Vice-President for the European Green Deal, said: “In this crucial moment for our health, our economy and for global climate action, it is essential that Europe leads the way to a green recovery. We owe it to our children and grandchildren to take action now. Today, Europe is showing the world how we will enhance the wellbeing and prosperity of our citizens in the next decade as we work towards our goal of climate neutrality by 2050.” 
Kadri Simson, Commissioner for Energy, said: “Based on existing policies and the plans of Member States, we are on course to surpass our current 40% target for 2030. This shows that being more ambitious is not only necessary, but also realistic. The energy system will be at the heart of this effort. We will build on the success story of the European renewables sector, look at all the tools at our disposal to increase our energy efficiency and lay a firm foundation for a greener Europe.”
Alongside the 2030 Climate Target Plan and its Impact Assessment, the Commission has also adopted today an assessment of Member States’ National Energy and Climate Plans for 2021-2030. The Commission’s Assessment shows that the EU is on track to surpass its current 2030 emissions reduction target of at least 40%, in particular thanks to ongoing progress in deploying renewable energy across Europe. To reach the new goal of 55%, the EU will have to further increase energy efficiency and the share of renewable energy. This will now be subject to further consultation and analysis before legislative proposals are presented by the Commission in June 2021.
The new 2030 climate target will help to focus Europe’s economic recovery from the coronavirus pandemic. It will stimulate investments in a resource-efficient economy, promoting innovation in clean technology, fostering competitiveness and creating green jobs. Member States can draw on the €750 billion NextGenerationEU recovery fund and the EU’s next long-term budget to make these investments in the green transition. To support the necessary investments, the Commission has also adopted today the rules for a new EU Renewable Energy Financing Mechanism, to make it easier for Member States to work together to finance and deploy renewable energy projects.
Background
An increase of the 2030 EU target for greenhouse gas emission reductions was first announced in President von der Leyen’s political guidelines in July 2019, in line with the Paris Agreement objective to keep the global temperature increase to well below 2°C and pursue efforts to keep it to 1.5°C.
In the Impact Assessment published today, and based on a broad consultation process conducted over the past year, the Commission has thoroughly examined the effects on our economy, society and environment of reducing emissions by 50% to 55% by 2030, compared to 1990 levels. The Impact Assessment has carefully considered the mix of policy instruments available and how each sector of the economy can contribute to these targets. The conclusion is that a balanced, realistic, and prudent pathway to climate neutrality by 2050 requires an emissions reduction target of at least 55% by 2030.
Achieving 55% greenhouse gas emissions reductions will require action in all sectors of the economy. A climate-neutral transition can only be accomplished with contributions from everyone. CO2 emissions from the burning of fossil fuels are the largest source of greenhouse gas emissions in the EU. Together with fugitive non-CO2 emissions in the energy system, they are responsible for just over 75% of EU greenhouse gas emissions. This underlines the energy system’s central role in the transition to a climate neutral economy. Buildings and transport are, alongside industry, the main energy users and source of emissions. Decarbonising both energy supply and demand is key to achieving climate neutrality.
The assessment of Member States’ National Energy and Climate Plans shows that they are accelerating their energy and climate transition. It indicates that the share of renewable energy in the EU could reach 33.7% by 2030, going beyond the current target of at least 32%. Regarding energy efficiency, an ambition gap remains: at 2.8% for primary energy consumption and 3.1% for final energy consumption, compared to the target of at least 32.5%. To address this, the Commission will take action, in particular through the upcoming Renovation Wave initiative and the review and possible revision of the Energy Efficiency Directive, and guidance for the Energy Efficiency First Principle. The EU-level NECP assessment published today will be complemented in October by individual Member State assessments, as part of the State of the Energy Union report.
The Climate Law Regulation, proposed by the Commission in March 2020, aims to enshrine into EU law the 2050 climate-neutrality target agreed by EU leaders in December 2019 and set the direction of travel for all EU policy. The Commission now proposes to include the revised 2030 target in the Regulation, which is currently being discussed by the European Parliament and Council. The new 2030 target will also form the basis of discussions on revising the EU’s Nationally Determined Contribution to reducing emissions under the Paris Agreement.
As set out in the European Green Deal and in today’s Communication, the Commission will now start preparing detailed legislative proposals on how to achieve this new target. The Commission will review all relevant climate and energy policy instruments to achieve the emission reductions with a view to making appropriate proposals by June 2021.
Compliments of the European Commission.
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