European Council Adopts Climate Law
European Council adopted its position at first reading on the European climate law, thus setting into legislation the objective of a climate-neutral EU by 2050. This follows a political agreement reached with the European Parliament on April 21, 2021 and the Parliament’s adoption of its position at first reading on June 24, 2021. Now that the European climate law has been adopted by both the European Parliament and the Council, it will be signed and published in the Official Journal of the European Union, before it enters into force. The law shall enter into force on the twentieth day following that of its publication in the Official Journal.
In addition to the goal of climate-neutrality and an aspirational goal for EU to strive to achieve negative emissions after 2050, the European climate law sets a binding EU climate target of a reduction of net greenhouse gas emissions (emissions after deduction of removals) of at least 55% by 2030 compared to 1990. To ensure that sufficient efforts to reduce and prevent emissions are deployed until 2030, the climate law introduces a limit of 225 million tons of CO2 equivalent to the contribution of removals to that target. EU will also aim to achieve a higher volume of carbon net sink by 2030. The European climate law establishes a European Scientific Advisory Board on Climate Change. The Board will provide independent scientific advice and produce reports on EU measures, climate targets, and indicative greenhouse gas budgets and their coherence with the European climate law and the EU's international commitments under the Paris Agreement.
EC will also propose an intermediate climate target for 2040, if appropriate, at the latest within six months after the first global stocktake under the Paris Agreement. It will also publish a projected indicative EU greenhouse gas budget for 2030-2050, along with its underlying methodology. The budget is defined as the indicative total volume of net greenhouse gas emissions (expressed as CO2 equivalent and providing separate information on emissions and removals) that are expected to be emitted in that period without putting at risk EU commitments under the Paris Agreement. EC will engage with sectors of the economy that choose to prepare indicative voluntary roadmaps toward achieving the EU climate-neutrality objective by 2050. In additlon to monitoring the development of such roadmaps, EC will facilitate dialog at the EU-level, along with the sharing of best practices among relevant stakeholders.
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Keywords: Europe, EU, Banking, Insurance, Securities, Climate Change Risk, ESG, Paris Agreement, European Green Deal, European Climate Law, EC, European Parliament, European Council
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