Renewable energy sources
A 42.5% share of renewables in total energy consumption is a common European Union target to be met by 2030. This means that all 27 member states must make a sufficiently substantial contribution towards reaching it. Every government has to submit updated national energy and climate plans (NECPs) setting out precisely how the country will meet all of its 2030 targets, including the share of renewables. The plans were due to be submitted to the European Commission by 30 June 2024. The European Union's executive has already urged individual countries to raise their targets, which is a rather unachievable task given the current geopolitical situation and political changes generally.
Energy in Europe
The European Union's 2030 renewable energy target requires renewables to account for 42.5% of final energy consumption.
The energy sector accounts for roughly 25% of the European Union's greenhouse gas emissions, making it the most polluting sector of the EU economy. It must be acknowledged that the sector's emissions have fallen by more than 40% since 1990. In 2023 renewables reached a record high of 44% of the EU electricity mix. In overall electricity generation, first place still belongs to nuclear power at 22.9%, while wind overtook gas for the first time, reaching 17.6%. In 2022 wind and solar power together overtook fossil natural gas for the first time, the latter having until then been the main source of electricity in the European Union.
The initial target, set in 2018, was 32%, and in 2021 there were plans to raise it to 40%. In 2022, as part of a sector strategy to reduce the EU's dependence on Russian energy imports, a 45% target was proposed. Governments and Members of the European Parliament agreed on a compromise of 42.5% in March 2023. In 2023 renewable energy sources made up 24.5% of the European Union's final consumption, 1% more than in 2022.
The share of non-renewable energy sources fell by 3%, chiefly owing to a decline in the use of coal in energy supply, which increased the relative share of renewable sources in European Union consumption.
Following Russia's invasion of Ukraine in 2022, EU energy policy has changed, with the main focus on reducing dependence on Russian resources. This means refining existing policy under the REPowerEU strategy and introducing other measures, such as joint gas purchasing and mandatory gas storage targets. As a result, by early 2023 energy imports from countries outside the EU had fallen by almost 10% compared with 2021.
The share of renewables in the energy mix varies widely across European Union member states. Sweden and Finland are the leaders, while Belgium, Malta and Ireland lag far behind. Progress in this sector, particularly in electricity generation, will depend on modernising and building out the electricity grid.
The lack of modern infrastructure is already limiting the amount of clean energy that could be distributed. Renewable energy associations have called on governments and the EU to address the risk of curtailment, where clean energy generation is halted because of a shortage of grid capacity, by improving grid resilience, developing scenarios for achieving 100% use of renewables and speeding up permitting and construction. In November 2023 the European Commission published an action plan to improve the situation.
What is the situation in industry?
Industry generates around 20% of total emissions in the European Union, and this share is gradually falling. Manufacturers are introducing measures to cut pollution: electrification and a shift to new feedstocks, such as hydrogen produced using clean energy.
The European Union Emissions Trading System (ETS) has been updated to cover more industrial sectors and to keep the carbon price high. However, although pollution permits were trading at around 100 euros in 2023 and the reforms are expected to push that price gradually higher, in February 2024 it hit a low of about 50 euros and currently stands at about 70 euros. The free allowances previously granted to industries exposed to the impact of the carbon price will be phased out between 2026 and 2034.
To help industry and to prevent carbon leakage (where companies relocate outside the regulated area to avoid the costs), the European Union will apply a carbon border tax, known as the Carbon Border Adjustment Mechanism (CBAM), to products imported into Europe. Beginning with a transitional phase in October 2023, CBAM imposes charges on certain imported products that do not meet sustainable development criteria. The initial list covers aluminium, cement, fertilisers, hydrogen, iron, steel and electricity. In February 2025 the European Commission reduced the number of companies to which the tax will apply.
The Net-Zero Industry Act was published in 2023 as a response to the US Inflation Reduction Act (a US federal law providing tax breaks and other financial incentives for clean energy production across all sectors). The aim of the Net-Zero Industry Act is to support European industry's transition to a greener economy. It includes a target for the European Union to meet 40% of its energy needs from renewable sources by 2030. The Commission continued this work by adopting the Clean Industrial Deal, which sets out the guiding principles for competitiveness and decarbonisation.
Carbon capture, use and storage (CCUS) is regarded as a solution for hard-to-decarbonise industries such as cement production. In February 2024 the European Commission put forward an industrial carbon management plan examining how to develop this sector.
Under European Union law, member states must increase the share of renewables by 1.6% each year, and at least 42% of the hydrogen used in industrial processes such as steel smelting must come from clean energy sources. By 2035 that share must rise to 60%.
The new European climate policy framework
In February 2025 the European Commission introduced a new EU climate policy framework by adopting the Clean Industrial Deal. It is intended to boost the competitiveness of the European economy while continuing to decarbonise industry. The key question is whether it will repeal part of the Green Deal legislation adopted during von der Leyen's first term. The competitiveness of European industry has been a topical issue of late and will remain so, as Europe competes with large markets such as the US and China in the use of clean technologies. In connection with accelerating industrial decarbonisation, the European Commission plans to put forward a plan at the end of 2025 reviewing the legislation that would help strengthen industrial sectors.
Emissions from the housing sector
The European Union's leadership has set out to tackle emissions from buildings by creating a housing portfolio within the Commission, combining it with energy and including it in the responsibilities of Commissioner Dan Jørgensen. Some 40% of the European Union's energy demand "arises" in the buildings sector, which generates around 13% of emissions, mainly from heating, cooling and lighting.
Poorly insulated buildings are the main reason for this sector's enormous impact on energy and the climate. It should be stressed that the annual renovation rate in the European Union does not exceed 1%. The EU's main strategy, the "Renovation Wave", aims to at least double these figures by 2030. The buildings sector in the European Union is governed by two main pieces of legislation — the Energy Performance of Buildings Directive (EPBD) and the Energy Efficiency Directive (EED), both of which were revised in connection with the Green Deal.
Under the new EED, total energy savings must reach 11.7% by 2030 and, unlike in previous versions, this target is mandatory rather than voluntary. EU member states must achieve savings of at least 1.5% each year.
REPowerEU stipulates that a further 10 million heat pumps must be installed by 2027 in order to reduce the energy used for heating and cooling buildings. The European Commission acknowledges that, with the gradual phase-out by 2029 of "stand-alone" boilers that have no hybrid elements, this figure could reach 30 million. Europe's heat pump manufacturing industry is, however, currently going through difficulties.
Buildings will be brought into emissions trading for the first time as part of a separate carbon market — ETS II. A Social Climate Fund has been set up to help households cover the additional financial burden created by carbon pricing. Between 2026 and 2032 the fund is due to receive more than 60 billion euros.
Transport and personal mobility
Domestic transport emissions are forecast to fall below 1990 levels by 2029 if current policy is fully implemented. The rise in emissions is driven mainly by growth in the volume of passenger and domestic freight transport.
The transport sector (excluding international aviation and shipping) generates 23% of the European Union's greenhouse gas emissions. Significantly, and unlike in other sectors, emissions here are not falling.
European Union legislation governing engine standards, CO₂ reduction targets, the roll-out of charging infrastructure and the use of CO₂ -free fuels is aimed at sharply cutting the sector's carbon dioxide emissions. The largest share of transport emissions (77%) comes from road transport, and within that segment passenger cars and motorcycles produce the most emissions (64%). Since 1990 the biggest increase has been in the light commercial vehicle segment.
The share of renewable energy in transport has risen from less than 2% in 2005 to more than 10% in 2021. EU member states will be able to choose either to meet a 29% target by 2030 or to cut the greenhouse gas intensity of the sector by at least 14.5%. In 2027 a separate carbon market will be created for road transport and buildings in order to put a price on pollution in these sectors.
For the first time, shipping will be included in the European Union Emissions Trading System (ETS), and a separate piece of legislation on promoting the use of low-carbon fuels will apply solely to the maritime transport sector.
If high energy prices prove to be a decisive factor within a year of the date the decision is taken, European Union member states will be able to postpone implementation until 2028. Free emissions monitoring will begin this year. It is intended to cover all motor vehicles, but a number of exemptions will need to be clarified in the years ahead.
The car industry and its action plan
On 30 January 2025 the European Union's leadership launched a strategic dialogue on the future of the car industry; it is modelled on the initiative for the agricultural sector and is intended to address the industry's problems, particularly in relation to growing competition from Chinese electric vehicle manufacturers and a possible trade conflict with the US. Work is also continuing on reducing vehicle emission limits.
In early March 2025 the Commission published the Automotive Industry Action Plan, setting out measures to strengthen the competitiveness of the European car industry and to speed up the uptake of electric vehicles. It followed February's "strategic dialogue" between European Union officials and carmakers. However, the proposed revision has met with resistance from Members of the European Parliament, because it would give carmakers extra time, allowing them longer to meet the CO₂ limits.
The land use sector
Agriculture is also covered by the Land Use, Land Use Change and Forestry (LULUCF) Regulation, which determines how land use in the European Union affects the achievement of climate targets. By 2030 net carbon dioxide removals in land ecosystems must reach 310 million tonnes – 15% more than at present. Governments must therefore also take account of agriculture's crucial role in climate terms when planning under the Common Agricultural Policy (CAP).
Agricultural emissions make up around 11% of Europe's total greenhouse gases...
...consisting mainly of methane and nitrogen, while the share of CO₂ and other polluting gases in the total is comparatively small. Under current policy, emissions from the agricultural sector have remained relatively stable in recent years and only a 2% reduction is projected by 2030 compared with 2005 levels. If governments' plans are implemented across the European Union, that figure could rise to 6%.
Agricultural emissions are governed by the Effort Sharing Regulation (ESR), which aims to cut emissions by 30% by 2030 compared with 2005 in the sectors it covers. Since little progress is expected in agriculture, larger reductions will have to be made in other sectors, such as waste management, building energy efficiency and road transport.
In the most recent ETS revision, policymakers decided not to bring this sector into the carbon market, which means that CO₂ emissions from agricultural machinery — mainly from diesel — will not be subject to a pollution charge.
Agriculture and food policy
On 19 February the European Commissioner for Agriculture, Christophe Hansen, presented the Commission's vision for agriculture and food, which can be regarded as a blueprint setting the direction of European agriculture and food policy for the next five years and beyond. The vision will play a significant part in determining how the Common Agricultural Policy, the European Union's farm subsidy programme, will continue after 2027, when its current cycle ends. The CAP, which accounts for a third of the European Union budget, is reviewed every seven years. Negotiations begin several years before the end of a cycle. The European Commission plans to put forward proposals on the future of the CAP this summer.