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Climate action: putting Europe's new energy policy into practice
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The EU climate and energy package

In March 2007 the EU’s leaders endorsed an integrated approach to climate and energy policy that aims to combat climate change and increase the EU’s energy security while strengthening its competitiveness. They committed Europe to transforming itself into a highly energy-efficient, low carbon economy.

To kick-start this process, the EU Heads of State and Government set a series of demanding climate and energy targets to be met by 2020. These are:

A reduction in EU greenhouse gas emissions of at least 20% below 1990 levels
20% of EU energy consumption to come from renewable resources
A 20% reduction in primary energy use compared with projected levels, to be achieved by improving energy efficiency.

Collectively they are known as the 20-20-20 targets.

The EU leaders also offered to increase the EU’s emissions reduction to 30%, on condition that other major emitting countries in the developed and developing worlds commit to do their fair share under a global climate agreement. United Nations negotiations on such an agreement are ongoing.

In January 2008 the European Commission proposed binding legislation to implement the 20-20-20 targets. This ‘climate and energy package’ was agreed by the European Parliament and Council in December 2008 and became law in June 2009.

The core of the package comprises four pieces of complementary legislation:

A revision and strengthening of the Emissions Trading System (EU ETS), the EU's key tool for cutting emissions cost-effectively.
A single EU-wide cap on emission allowances will apply from 2013 and will be cut annually, reducing the number of allowances available to businesses to 21% below the 2005 level in 2020. The free allocation of allowances will be progressively replaced by auctioning, and the sectors and gases covered by the system will be somewhat expanded.
An 'Effort Sharing Decision’ governing emissions from sectors not covered by the EU ETS, such as transport, housing, agriculture and waste.
Under the Decision each Member State has agreed to a binding national emissions limitation target for 2020 which reflects its relative wealth. The targets range from an emissions reduction of 20% by the richest Member States to an increase in emissions of 20% by the poorest. These national targets will cut the EU’s overall emissions from the non-ETS sectors by 10% by 2020 compared with 2005 levels.
Binding national targets for renewable energy which collectively will lift the average renewable share across the EU to 20% by 2020 (more than double the 2006 level of 9.2%).
The national targets range from a renewables share of 10% in Malta to 49% in Sweden. The targets will contribute to decreasing the EU’s dependence on imported energy and to reducing greenhouse gas emissions.
A legal framework to promote the development and safe use of carbon capture and storage (CCS).
CCS is a promising family of technologies that capture the carbon dioxide emitted by industrial processes and store it in underground geological formations where it cannot contribute to global warming.
Although the different components of CCS are already deployed at commercial scale, the technical and economic viability of its use as an integrated system has yet to be shown. The EU therefore plans to set up a network of CCS demonstration plants by 2015 to test its viability, with the aim of commercial update of CCS by around 2020.
Revised EU guidelines on state aid for environmental protection, issued at the same time as the legislative package was proposed, enable governments to provide financial support for CCS pilot plants.

The climate and energy package creates pressure to improve energy efficiency but does not address it directly. This is being done through the EU’s energy efficiency action plan.