Despite the economic difficulties caused by the pandemic, all is not gloom and doom on the European continent: the year 2021 indeed marks very progressive and important advances in terms of environmental protection within the European Union (‘EU’), which we can all be glad about.

On 21st April 2021, a day ahead of Earth Day and in the spirit of the European Green Deal, the European Council and the European Parliament reached a deal setting into law the objective of a climate-neutral EU by 2050, and a collective, net greenhouse gas emissions reduction target of at least 55% by 2030. The EU has put in place a comprehensive framework of policies to reduce greenhouse gas (‘GHG’) emissions. It has already started to modernise and transform the economy with the aim of climate neutrality. Between 1990 and 2018, it reduced greenhouse gas emissions by 23%, while the economy grew by 61%.

The European Parliament initially proposed a 60% reduction but agreed to “at least 55%” in exchange for a number of concessions, which include the following:

  1. An agreement to cap the contribution of carbon removals from land use, agriculture, and forestry; and
  2. An agreement by the European Commission (the ‘Commission’) to consider increasing the contribution of carbon sinks to increase the EU’s climate ambition to 57% (although the latter will apparently not be reflected in the law).

To put the numbers into context, GHG emissions from resource and energy-intensive industries, such as steel, cement and chemicals, currently represent 19% of total European GHG emissions.

If the target shows an aim towards significant progress, it is because it is binding and ambitious: it will now be compulsory for Member States to adopt measures to reduce their CO2 emissions in order to achieve the collective targets. More precisely, the EU plans a net reduction in GHG emissions, of at least 55% by 2030 compared to 1990, and Member States will have to increase the number of “carbon sinks” such as forests and grasslands, while also enhancing the protection of our oceans and seas. Furthermore, among other elements of the agreement, is the creation of a European Scientific Advisory Committee on Climate Change.

‘It is crucial that every sector follows these developments closely to ensure their views are represented. Because no sector should be left behind or have to bear a larger burden than another sector.’

The law is the result of a compromise that did not satisfy the NGOs or the environmental parties, but it was able to obtain a majority of votes: NGO’s indeed criticize the adopted threshold of a 55% reduction in emissions, because it is lower than what scientists recommend to comply with the Paris Agreement (preferring a 65% reduction). They also wanted to extend the EU’s climate neutrality target to all member states: by rejecting this proposal, the Parliament allows countries to make progress at different speeds. Moreover, the NGOs consider that relying on carbon sinks is not as effective as reducing emissions at source, and that the voluntary roadmaps for industry sectors should be improved. In all cases, if the law needs to be ratified by all Member States, we can already say that no other economic alliance hopes to do better: Europe still demonstrates leadership in the fight against climate change.

The Commission will lay down detailed rules for implementing this framework in the coming months. While much remains to be done in practice, since all of this means reducing CO2 emissions by 30% over the next nine years, recent events bear witness to a solid dynamic for the transformation of societies.

In the words of the Commission’s Director General for Climate Action, Mauro Petriccione, reaching such an agreement was no mean feat, but the hard-won deal will now guide the way for the next thirty years, starting with the Fit for 55 package, a comprehensive set of legislative proposals which the Commission will present in June.

How does this translate to Malta… 

… given our islands do not benefit from a favorable renewable energy configuration as of yet?

National representatives in the EU Council of Ministers did not agree to make the 2050 goal a legal obligation for every country individually. Instead, the 2050 climate goal will remain an objective for the EU to attain as a group, meaning some countries will be allowed to reach the objective later if others manage to decarbonise their economies sooner.

In 2019, the share of renewable energy generated in relation to gross final consumption amounted to only 8.49%. Malta has no national fossil fuel resource, nor a gas distribution network and depends massively on imports of fossil fuels and electricity. Moreover, the Maltese energy sector is mainly in the hands of the public sector, with little participation from the private sector, which encourages little to no innovation. With the new Climate Law, however, such obstacles can translate into opportunity, in terms of the promotion of renewable energies: endorsing ambitious binding European climate objectives in national law and promoting more private investments in wind, solar or thermal energy would be an opportunity for Malta’s future. Malta should remain ambitious in this regard and should not let it’s size or geographical limitations hinder it from being amongst the leading member states in this revolutionary movement.

We have already spoken about some of the ways Malta could go about this, such as amending our laws to remove the current ambiguity that is stifling innovation and creating an obstacle for emerging markets in alternative green technologies for Malta. Global innovators are already looking at Malta’s size as a positive rather than a negative – it’s demographics and capacity as a very attractive testing base for small-scale pilot projects which can be demonstrated here and then scaled out to the rest of Europe. We encourage the Maltese government to address this and further incentivize this as it will undoubtedly benefit our economy by creating niche sectors of expertise and making Malta the leading green tech hub in Europe.

In short, in Malta, but especially on a European scale, it seems that ecological awareness is translating into significant progress, even if it may seem limited for now. At Ewropa, we expect that, in order to meet the ambitions of the new European Climate law, the Maltese government will need to strengthen the financial and legal resources in order to incentivise local and European wide investments which have a direct impact on making our economy more sustainable. The EU Commission wants to see European investments increase by €350 billion per year and to pull our weight Malta will need to adopt regulatory, legislative and financial incentives to secure such investments locally.

A tremendous structural change is needed to reach the 2030 climate targets and this change has now been endorsed by the Council and the Parliament. This Climate law will constitute the basis for the next fifty or so legislative reforms planned by summer 2022 in various sectors (transport, energy and so on). It is crucial that every sector follows these developments closely to ensure their views are represented. Because no sector should be left behind or have to bear a larger burden than another sector. After all the Commission has said that this has to be a Just Transition where no one is to be left behind.

Feel free to reach out to us as the team will be able assist you in the preparation of a position paper for your sector, which would then be presented to the relevant governmental authorities to ensure your views and concerns are taken into account in the drafting of future legislation both locally and at European level.