Latest on Decarbonization from the Hungarian Presidency

EU Environment Ministers recently convened to deliberate on the European Commission’s proposal to reduce net greenhouse gas emissions by 90% of 1990 levels by 2040. While the ambitious target sparked differing opinions, a consensus emerged on the need for significant investments to ensure the EU’s competitiveness and preserve a level playing field. Ministers highlighted the necessity of reducing bureaucracy, cutting red tape, and fostering technological innovation, particularly in hard-to-decarbonize sectors.

The Hungarian Presidency emphasized the importance of cross-sectoral cooperation and enabling conditions for achieving the targets, aligning with their priorities of implementing the 2030 framework, ensuring competitiveness, and promoting a just transition.

Commissioner Wopke Hoekstra underscored the Commission’s commitment to integrating the 2040 climate target into EU law alongside the Clean Industrial Deal, which aims to decarbonize energy-intensive industries and advance cleantech while creating jobs and maintaining EU competitiveness. Hoekstra emphasized that citizens’ needs would be central to the transition, with efforts focused on reducing energy costs and ensuring fair competition. The Commissioner also linked the 2040 goals to international obligations, including new Nationally Determined Contributions (NDCs) for 2035, and stressed the importance of adhering to the 2030 framework.

Individual Member States contributed distinct perspectives to the discussions. France called for flexibility in achieving targets while ensuring the credibility of the EU Emissions Trading System (ETS) and addressing industrial competitiveness. Germany advocated for simplifying processes, fostering cross-border projects, and boosting renewable energy investment to maintain affordable energy prices and resilience. Italy emphasized the importance of supporting the automotive sector with a comprehensive, realistic long-term strategy that combines climate goals with industrial competitiveness, alongside timely and updated impact assessments for Member States.

Other countries echoed these priorities while raising additional concerns. Greece highlighted the urgent need to balance decarbonization with competitiveness in renewables and electric vehicles. Spain stressed the importance of aligning financial mechanisms with green goals and supporting decarbonization in transport and other high-cost sectors. Portugal emphasized the necessity of a socially just transition, accelerating the licensing of renewables, and combatting energy poverty. Across the board, Ministers reinforced the importance of uniting public and private investments and creating robust frameworks to achieve the EU’s ambitious climate targets while maintaining global leadership in sustainability.