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The EU must invest about €1.5tn a year between 2031 and 2050 to cut greenhouse gas emissions by 90 per cent by 2040 and meet its mid-century net zero target, Brussels has said.
The figures are part of a draft document from the European Commission, seen by the Financial Times, that sets out Brussels’ plan for slashing emissions and reaching “economy-wide climate neutrality” by 2050.
The high level of investment would far outweigh the vast cost of inaction as the effects of global warming become increasingly apparent, the document said. Keeping temperature rises to within 1.5C above pre-industrial levels could save the EU €2.4tn in economic losses between 2031 and 2050 and cut net costs of fossil fuel imports by €2.8tn over the same period, it added.
The new 90 per cent target, at the lower end of a range recommended by the EU’s scientific advisory board, is seen as a way to accelerate climate action as the economic damage from extreme weather events increases. Under the bloc’s climate law EU governments are committed to reducing emissions by 55 per cent by 2030 from 1990 levels, and reaching net zero by 2050.
Some areas of industry and agriculture argue that the requirements are too onerous amid high inflation and the after-effects of an energy crisis caused by Russia’s invasion of Ukraine.
Farmers in particular have attacked environmental regulation, with protests spreading from the Netherlands to Belgium, Germany, France and Romania in recent weeks.
Leaders including French president Emmanuel Macron and Belgian premier Alexander De Croo called for a “pause” in climate legislation last year as the political implications of forcing consumers and businesses to change long embedded habits fuelled fears of a backlash.
“The ongoing transformation gives us the opportunity to build on new business opportunities, to be a leading force in the clean technology sectors, stabilise energy bills, create the good jobs of the future, improve our quality of life, and protect ourselves against the worst effects of climate-related hazards,” the draft said.
The commission declined to comment.
To reach the goal, the document says the EU will require an almost completely decarbonised electricity sector by about 2040, a shift of the bloc’s workforce into green industries and an overall reduction in fossil fuel consumption of 85 per cent compared with 1990 levels.
Oil for ships, aircraft and other transport would make up the majority of the remaining fossil fuel use, it said.
Excluding transportation and the cost of purchasing new vehicles, investment needed to reach the 90 per cent goal would be “close to” €660bn a year between 2031 and 2050. The commission has previously estimated the additional investment required to reach the bloc’s 2030 goal at €360bn annually.
A significant portion will have to be spent on a rapid scaling up of carbon capture technology, which is still at an embryonic stage, to capture residual emissions. A separate draft outlining a strategy for carbon management suggests that the EU must capture 450mn tonnes of carbon dioxide a year by 2050 to hit its net zero goal, up from negligible levels today.
The 2040 document also notes that agricultural activities including the breeding of livestock and use of fertilisers are projected to become the biggest contributor to the EU’s greenhouse gas emissions.
One method to reduce this “could be to better reflect the price of agricultural emissions into the food value chain”, the document adds, hinting at the potential to bring the sector into the bloc’s emissions trading system, which places a levy on polluters.
The document — an early draft that could be rewritten — is due to be published by the EU’s executive arm on February 6. It will form the starting point for a debate over the 2040 target that will feed into a formal legislative proposal once a new commission takes office after EU elections in June.
It will also help to establish the EU’s 2035 Nationally Determined Contribution — an emissions reduction target that all countries must present in the lead-up to the UN’s COP30 climate summit next year which must be unanimously agreed by the bloc’s 27 governments.
The bloc has presented itself as a leader on climate change policies, with policymakers hoping that the bloc will gain a competitive advantage as more countries pivot to adopt renewable power, carbon pricing and circular economies.
Climate-related weather events have caused 220,000 deaths in the EU and cost the bloc €650bn since 1980, according to the European Environment Agency.
