2040 greenhouse gas reduction targets and energy transitions in line with the EU Green Deal

doi:10.21203/rs.3.rs-3192471/v1

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2040 greenhouse gas reduction targets and energy transitions in line with the EU Green Deal

https://doi.org/10.21203/rs.3.rs-3192471/v1

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The European Green Deal aims to guide the European Union towards achieving net-zero greenhouse gas emissions by implementing a comprehensive set of policy initiatives and legislation. While emission reduction targets and policies up to 2030 are mostly implemented, it is of high priority for EU legislation to spell out the further transformation to climate neutrality by defining interim policy targets for 2040. Here we explore, based on an integrated energy-economy-climate model with high sector detail, pathways to achieve climate neutrality in the EU under uncertainty about key energy system developments. Results suggest that emission reductions of 87–91% by 2040 relative to 1990 are consistent with a cost-efficient distribution of mitigation efforts over time, substantially exceeding the 78%-level implied by a linear interpolation between the 2030 and 2050 goals. Additionally, we identify a 5-7-fold upscaling of electricity generation from wind and solar, a 44–50% share of electricity in final energy supply and an upscaling of Carbon Capture and Storage to 120–330 Mt CO2/yr as crucial transformation milestones for 2040.

Earth and environmental sciences/Climate sciences/Climate change/Climate-change mitigation

Physical sciences/Energy science and technology/Energy modelling

Scientific community and society/Energy and society/Energy policy

With the presentation of the European Green Deal¹ in late 2019, the EU committed to making Europe the first climate-neutral economy at continent-scale by 2050. Since then, the EU has embarked on a legislative journey, spelling out intermediary targets and policy measures to reach its goal. Intermediate climate targets are considered essential as they ensure that mitigation action is taken in a timely manner across the different sectors, thereby preventing lock-ins, stranded assets, and delays that could endanger the achievement of climate neutrality by mid-century².

The first significant milestone focused on setting targets for 2030: The European Climate Law³ not only enshrined the overarching goal of climate neutrality by 2050 but also established the intermediate target of reducing net greenhouse gas emissions by at least 55% by 2030, compared to 1990 levels. Simultaneously, the Fit for 55 package⁴ presented a set of legislative proposals laying down concrete measures to align all sectors with the 2030 target. These include, among others, the strengthening of the EU Emissions Trading System, the increase of renewable energy sources in the overall energy mix, the increase of energy efficiency targets, as well as the introduction of emissions reduction targets for cars and vans. In 2022, following Russia’s invasion of Ukraine, the EU additionally launched the REPowerEU plan⁵, aiming at rapidly reducing Europe’s dependence on Russian fossil fuels. REPowerEU foresees even higher 2030 targets for renewables and energy efficiency than previously proposed by the Fit for 55 package.

As the next milestone, the EU climate law requires the EU to propose in 2024 an intermediary climate target for 2040^3,6. The 2040 target will likely be accompanied by sectoral transformation milestones underpinned by policies and measures, similar to those defined for 2030 as part of Fit-for-55. Policymakers require scientific evidence to set climate targets, but there is a lack of research literature exploring EU-wide transition pathways. There have been a few pioneering studies exploring deep mitigation pathways^7–9, but, to the best of our knowledge, no peer-reviewed study that analyses full GHG neutrality. Furthermore, no analysis has provided insights on 2040 targets, or accounted for lock-ins due to near-term trends and the implementation of 2030 policies.

Here, we use the energy-economy model REMIND-EU^7,10–13 to explore cost-efficient pathways to achieve climate neutrality in the EU under uncertainty regarding key energy system developments. The new pathways fill important knowledge gaps. First, they allow us to determine overarching emission reduction targets for 2040. Secondly, the in-depth analysis of sectoral transformations by 2040 identifies crucial transformation milestones on the path towards climate neutrality. These sector-and-technology-specific quantitative milestones are valuable reference points for the EU decarbonisation policy framework. Thirdly, a multidimensional sensitivity analysis allows us to identify robust features of the energy transition to climate neutrality as well as key uncertainties. This information is critical to enable policymakers to develop science-based policies to guide the EU’s transformation.

We explore cost-efficient pathways to achieve climate neutrality in the EU that are consistent with the near-term climate and energy policy framework established by the EU Green Deal. In particular, we consider those policy targets of the Fit-for-55 package and the REPowerEU plans that are underpinned by concrete measures and firm governance to enforce them. Scenario assumptions explore four different dimensions of particular relevance for the EU's energy transition: (1) realised short-term emissions reductions, (2) evolution of final energy demand, (3) availability of sustainable bioenergy, and (4) availability of CCS. The 36 scenarios developed for this work cover all combinations of these dimensions as listed in Table 1.

Type	scenario assumption
Short-term policy	55%, 57% or 59%: level of 2030 emissions reductions relative to 1990 emissions including Land-use and Land-use change and Forestry (LULUCF) and intra-EU aviation
Efficiency	reference: final energy consumption based on current trends and policies in place. FitFor55 eff: 9% reduction by 2030 compared to the 2020 EU reference scenario projections¹⁴ as defined in the Energy Efficiency Directive. RePowerEU eff: 13% reduction by 2030 compared to the 2020 reference scenario projections as defined in the REPowerEU Plan.
Biomass availability	bioLim7.5: EU-27 biomass availability limited to 7.5 EJ/yr bioLim12: EU-27 biomass availability limited to 12 EJ/yr
Carbon capture and storage	CCS: default assumption on long-term maximal geological injection rate (556 Mt CO2/y as upper bound)¹⁵ limCCS: long-term maximal geological injection rate limited to 278 MtCO2/y

Table 1. List of sensitivity dimensions for EU-27 climate neutrality scenarios. As reference scenario we assume 57% reduction by 2030, reference final energy projections, biomass availability limited to 7.5 EJ/yr and default CCS assumption.

Our results show that cost-efficient reduction pathways reaching climate neutrality by mid-century are highly convex (Figure 1.a). That is, 2040 total GHG emission (including intra-EU aviation) reductions compared to 1990 would achieve 87-91% (Figure 1.b) by 2040, greatly exceeding the 78% reduction implied by a linear interpolation between the 2030 and 2050 reduction targets.

Emission reduction potentials vary substantially across sectors. While electricity and heat production achieve >95% reductions by 2040, remaining CO2 emissions from fossil energy use in the demand sectors amount to 19% (industry), 16% (buildings), and 21% (transportation excl. bunkers) of average 2018-2022 emissions. International aviation and maritime transport (bunkers in Figure 1.c) with residual emissions of 73% as well as industrial processes (46%) show the least decarbonisation.

Electricity generation is virtually carbon-free by 2040, with coal fully phased out and gas power reduced to 1% of generation by 2040 in the reference scenario (Figure 2.a) (range across scenarios: 0.5% to 6%). This corresponds to a reduction of unabated fossil electricity generation from around 42% in 2018-2022, to only 1% to 6% by 2040. Wind and solar technologies provide the majority of the additional electricity generation, following current observed trends (Figure 2.a). Nuclear power still remains an important contributor in member states with stronger public acceptance, contributing between 6% to 7% of the total electricity generation.

Solar Photovoltaics and wind power by far dominate electricity generation, providing 1.9 TW to 2.7 TW of decarbonised electricity supply capacity, and accounting for a combined 72% to 81% of electricity generation by 2040. Our estimates for solar photovoltaic deployment in the reference scenario (0.93TW by 2030 and 1.88TW by 2040, Figure 2.b), while in line with recent IEA projections¹⁶, go substantially beyond the REPowerEU plan and EU Solar Energy Strategy ambition.

Electricity as an energy carrier provides close to half of total final energy demand by 2040 (Figure 2.c). The buildings sector achieves the highest electrification, driven by a fast roll out of heat pumps and continued growth of demand from appliances. For transport, already-implemented policy frameworks such as CO2 emission performance standards for LDVs and HDVs result in a rapid increase of electrification.

The challenge of transitioning to a renewables-dominated energy system requires not only replacing existing conventional electricity supply, but also to supply additional electricity for the electrification of hitherto non-electric end uses. Total electricity demand increases by 39-59% until 2040, and requires a corresponding increase of grid infrastructure. Furthermore, the increasing share of variable renewable electricity requires the scale-up of electricity storage as well as flexibilisation of electricity demand. Especially the widespread deployment of electric vehicles, electricity-based heating as well as hydrogen electrolysers offers new flexibility potentials that can be tapped to balance the grid.

Fossil primary energy demand declines substantially. Coal is fully phased-out in all net-zero scenarios by 2040 (Figure 3.a). The demands for fossil natural gas and oil decline to one-fifth and one-third of today's levels respectively. These developments imply substantial co-benefits for the European energy security of supply as can be seen in the resulting trade balance (black lines in Figure 3.b). In all net-zero scenarios, the EU by 2040 no longer requires any net imports of coal, while gas imports and oil imports are reduced by factors of five and three respectively. As demands for green hydrogen and derived energy carriers such as ammonia and e-fuels are much smaller than the reductions of fossil energy, energy security co-benefits can be expected to strongly outweigh any new import dependencies even if all e-fuels would be imported.

The transition to climate neutrality results in a contraction of combined fossil and renewable gaseous final energy demand to less than half of today’s levels by 2040 (Figure 3.c). This is a consequence of the replacement of fossil gas heating systems in buildings and industry by more efficient heat pumps on the path towards climate neutrality. The phase-out of fossil gas imports from Russia and policy measures as part of the RePowerEU package further accelerate these transitions. Increasing demand for hydrogen will only slow the decline, but not reverse the trend of reduced capacity utilisation of the gas infrastructure.

Although not contributing as strongly as direct electrification, indirect electrification via hydrogen and e-fuels contributes 1.1-1.9 EJ/yr of final energy by 2040, mostly used in industry (0.9-1.5 EJ/yr). This development underscores the importance of an early and ambitious market introduction and scale-up of low-carbon hydrogen. The market ramp-up of green hydrogen in our scenarios, although less ambitious than currently suggested European targets, are in line with recent literature feasibility evaluations¹⁷ (Figure 3.d).

For the transport sector, the discussed sales ban on internal combustion engines in light duty vehicles (LDV) cars and light commercial vehicles by 2035 is an important step for getting on track for climate neutrality (Figure 4.b). The fast ramp-up of battery-electric vehicles sales means that by 2040, more than 80% of all LDV in the EU are powered by electricity. This development implies a more than 2-fold increase of the electricity demand for transportation during the 2030’s, with a corresponding need for upscaling charging infrastructure.

Beyond LDVs, three main challenges remain in the transport sector: road freight, aviation and shipping decarbonisation (Figure 4.a). Increased range of electric vehicles makes their adoption in road freight segments increasingly competitive, while fuel cell electric vehicles may play a role for longer-haul freight if hydrogen supply is sufficient. While our scenarios show a continued dominance of fossil fuels for international aviation and shipping through 2040, these get increasingly replaced by synthetic fuel in the following decade (Figure 4.a).

In the buildings sector, a rapid and persistent switch towards electricity-based heating, mostly heat pumps, is a robust feature of net-zero pathways. By 2040, this equipment switch has replaced almost all fossil fuels. Decentral electric heating (mainly electric heat pumps) and district heating account for the bulk of the heating demand in 2040 with 79% of useful energy demand in the reference scenario (71% to 80% for all scenarios). The share of useful energy demand for heating provided by liquid or gaseous fuels, currently at more than 50%, is reduced to 16% (14% to 24% if all scenarios are considered) by 2040. Coal heating is completely phased out, while modern biomass-based heating provides the remaining 5% (4% to 6%) of useful energy demand. Final heating energy demand decreases by 46% (40% to 54%) between 2020 and 2040, primarily as a result of the switch from combustion-based heating to more efficient heat pumps.

Given the longevity of industrial installations, major transformation progress is already required by 2040 to put industry on track for climate neutrality. Mitigation strategies vary markedly across industrial sectors. Basic material industries like iron & steel, cement and chemicals account for the bulk of industrial emissions. Increased reliance on the recycling of scrap steel via electric arc furnaces substantially decreases overall energy demands and increases electrification rates. Remaining primary steel demands are increasingly produced in hydrogen-based routes. Carbon capture and storage is the dominant for cement production as substantial process emissions occur in addition to CO2 emissions from the combustion of fuels. There is only limited scope for electrification in the chemical industry, as it relies on hydrocarbons not only for their energy content but also as feedstocks. Biomass feedstocks as well as renewable hydrogen and hydrogen-based e-fuels account for around half of the sector’s fuel demands by 2040.

Most of the energy demand of industrial subsectors outside bulk material production is already electric or required for low-to-medium temperature heat or steam generation and can thus be readily electrified. Thus the share of hydrocarbon fuels in these subsectors drops to around 25% of final energy demand by 2040.

Due to physical, technical, societal, or political constraints, it is not possible to abate all greenhouse gas emissions. Therefore, carbon sinks are a necessary complement to the phase-out of fossil fuel use. Additionally to the carbon sink of the biosphere (accounted for in the LULUCF sector), further novel carbon dioxide removal (CDR) technologies are necessary to compensate for hard-to-abate emissions (Figure 4.e). Various BECCS technologies provide the majority of total CDR in the scenarios, while DACCS remains reserved as an option if higher carbon prices are reached. Combining bio-based or synthetic fuels’ combustion with CCS furthermore enables CDR in the industry sector.

Making the European Green Deal policy framework fit for 2040 will require rolling forward targets and expanding the scope of policies to cover more sectors and technologies. Figure 5 presents quantitative estimations derived directly from the scenarios analysed in this paper to inform future targets' decisions. Spreads across scenarios provide an indication of robustness of the results regarding the four uncertainty dimensions described at Table 1.

Our results show that a “linear trajectory linking the Union’s climate targets for 2030 and 2040… with the Union’s climate-neutrality objective”³ is not sufficient to derive cost-efficient reduction pathways to reach climate neutrality by mid-century. A more ambitious 2040 emission reduction target, in between 87 and 91% emission reduction in relation to 1990, is preferable to promote early deployment of mitigation options and development of necessary technologies to achieve climate neutrality by 2050.

Final energy demand is reduced strongly in all our scenarios until 2040, with highest reductions in the reference scenario occurring in transport, 41% vs 2018-2022, while buildings and industry demand decreases by 30% and 31% respectively. The main driver for final energy demand reduction is the switch of many combustion-based end-uses to more efficient electricity-based technologies that either minimise energy losses (electric vs combustion-based motors) or, like heat pumps, use ambient heat to increase heating output. Renovation of existing buildings and more efficient vehicles also contribute to reducing final energy demand, but historic experience with accelerating both has been mixed at best ^18–20.

Raising buildings' renovation rate is nonetheless important to facilitate the switch to heat-pump based heating systems. The strengthening of renovation ambition should be targeted at enabling the installation of heat pumps or the connection to green heating grids, i.e. focused on reducing the inlet temperature²¹.

The share of renewables in final energy scales up even faster in the next decade, achieving a yearly increase of 6 to 7 %-points in 2030-2040, compared to the 5 to 6%-points yearly increase in the current decade. This upscaling will be mainly promoted by the conjunction of carbon-free electricity generation and direct electrification of final energy use. While most of the electricity supply is already decarbonized by 2030, much of the electrification of end-uses is achieved in the 2030-40 period. The share of electricity in final energy increases from 28-30% in 2030 to 44-50% in 2040, a substantial increase compared to the flat 19-20% level throughout the 2010-2020 period. Transport electrification takes the lead on direct electrification due to the fast take-up of battery-electric LDVs.

Recent literature¹⁷ points to the high ambition of the EU’s RePowerEU target of 10 million tonnes of domestic renewable hydrogen production by 2030, and a high risk of this target being missed. Our results confirm this finding: despite high uncertainty regarding the long-term hydrogen deployment, all scenarios fall short of meeting the RePowerEU target by 2030. It is only achieved over the course of the 2030s (Figure 5), with yearly growth rates between 8% and 14% in 2030-2040.

Electricity demand will rise substantially until 2040. Solar photovoltaics and wind power will drive the decarbonisation of the sector, increasing seven-to-nine-fold and three-fold, respectively, between 2022 and 2040 to provide 72-81% of total electricity generation by 2040. The increasingly dominant share of variable renewable electricity from wind and solar power requires deployment of short- and long-term electricity storage as well as flexibilization of demand. Also, electricity transmission and distribution infrastructure investment and regulation will need to evolve accordingly to avoid hindering the decarbonisation process.

In all scenarios, some residual fossil emissions (645-921 MtCO2 by 2040 and 216-417 MtCO2 by 2050) and similarly remaining non-CO2 emissions (e.g. from agriculture) will need to be offset by negative CO2 emissions. Upscaling of carbon sink technologies and processes will need to be well underway by 2040 to allow reaching net zero emissions in the following decade. For novel CDR technologies as well as for the abatement of fossil emissions in the industry sector, permanent geological storage of CO2 will be needed. In our net-zero scenarios, the CCS deployment in 2030 ranges between 10-101 MtCO2/y. While the Net-Zero Industry Act²² proposes a Union-level objective of a yearly injection rate of 50 MtCO2 to be achieved by 2030, it is unclear if this target will be achieved: an overview of all current EU27-level storage projects in development or under construction by the Global CCS institute amounts to approximately 14.5 MtCO2/y by 2030¹⁵, while a 2022 summary of all announced projects by CATF²³ yields a maximum of 43 MtCO2/yr storage capacity in 2030. Considering the long planning periods for site-exploration and project development, these can be considered already ambitious targets to be achieved. The CCS capacity in our scenarios scales up to 129-327 MtCO2/y in 2040. For that, high upscaling rates of 10-29% per year in the period between 2030 and 2040 have to be maintained. As a comparison, offshore wind capacities had annual upscaling rates of 21% in EU27 in the period 2013-2022²⁴. These challenges in fast scale-up and large-scale deployment not only apply to the geological storage but also to capture facilities, especially novel CDR technologies like BECCS and DACCS. The scenarios show upscaling rates of 15-25% per year in the period of 2030 and 2040 to reach removal quantities of 93-221 MtCO2/y in 2040.

This study explores, based on an integrated energy-economy-climate model with high sector detail, pathways to achieve climate neutrality in the EU under uncertainty regarding key energy system developments. Results provide comprehensive insights into the transformation milestones that need to be achieved by 2040 to follow a cost-efficient path towards climate neutrality in 2050, suggesting that emission reductions of 87–91% by 2040 relative to 1990, including LULUCF and intra-EU aviation, are consistent with the EU's GHG neutrality goal.

It is important to note that the nominal 2040 reduction is contingent upon the scope in which the target is defined. The EU will only be truly climate neutral if also its share of international aviation and shipping emissions are accounted for. If these sectors are included in the GHG emissions scope, the nominal emission reductions achieved in the net-zero scenarios of this study are only 85–89% of 1990, around 2%-points less than under the emissions scope without all international bunkers.

Economy-wide targets alone are insufficient to guide the complex energy transition effort. Sectoral transformation milestones for 2040 play a vital role in aligning the expectations and investments by the various actors needed to achieve mid-century climate neutrality. Our study quantifies important sectoral and technological objectives necessary for the pursuit of the European climate goals. Focus areas include deployment of wind and solar, final energy electrification, potential fossil carrier bans, renewable technology deployment, heat pump installation, decarbonisation of specific industrial sectors, and energy savings targets.

The fundamental systems transformations in our climate neutrality pathways will only be achieved with substantial changes in design and regulation of energy markets. Electricity grids and distribution networks must undergo unprecedented scale-up between 2030 and 2040. Traditional regulation based on quality-of-service should incorporate additional incentives for grid development. Gas network usage will face a strong contraction, and the phase-in of hydrogen as an alternative carrier only manages to slow down the decline, but not stop it. The 2030s decade will be decisive for bringing novel technologies to market maturity, such as hydrogen and synthetic fuels, carbon capture and management, or new non-fossil industrial processes. These technologies will be essential in the 2040s for overcoming the last and most challenging roadblocks on the way to climate neutrality.

Further integrated analyses will be needed to guide the transition. Specifically, these should assess EU’s decarbonisation in the context of global efforts to achieve the Paris stabilisation targets, in particular with regards to fairness considerations and the interaction of low-carbon transformations in different world regions; provide a sector-specific in-depth analysis of opportunities, barriers and achievable pace of the transformation; study infrastructure requirements and policies for the transition; further the understanding of crucial uncertainties and adaptive planning to cope with them. Also, a deeper analysis of the economic and social impacts of this transition is required.

Our results are valuable in making sound long-term plans for decarbonisation until 2040, offering relevant insights for policy-making. Creating a shared vision of the road to climate neutrality among stakeholders on all levels and from all sectors will be paramount for achieving the ground-breaking transformation set out by the EU Green Deal. While many details are still uncertain, the results presented in this study create a consistent basis for critical and constructive discussion to further develop this vision and make it more concrete.

REMIND model

The REMIND-EU⁷ model was used to create the 36 scenarios evaluated in this paper. REMIND-EU preserves the global coverage of the REMIND^10,25 model - an open source integrated assessment model widely used in climate assessment literature^11–13 -, and extends its spatial representation by introducing eleven additional European regions to better represent national policies and energy systems.

REMIND is an energy–economy–climate multi-regional intertemporal welfare-optimisation model. It solves for an intertemporal Pareto optimum in economic and energy investments by hard-coupling a Ramsey-type macroeconomic growth model with a technology-detailed energy model, combining the strengths of bottom-up and top-down approaches. It covers all relevant greenhouse gas emitting sectors, as well as options for carbon dioxide removal²⁶, thus allowing for an integrated assessment of pathways towards climate neutrality. Land-use, agricultural emissions, bioenergy supply and other land-based mitigation options are represented through reduced-form emulators derived from the detailed land-use and agricultural model MAgPIE (Model of Agricultural Production and its Impact on the Environment)^27,28.

REMIND features a substantially high level of detail in the representation of energy-system technologies, trade, and global capital markets. For the scenarios presented here, the model optimises regions individually and uses an iterative adjustment mechanism to clear international markets for (primary) energy carriers and non-energy goods²⁹.

A short overview of the key components of the model is given in the following paragraphs. The model code is available open source at https://github.com/remindmodel and further documented at https://rse.pik-potsdam.de/doc/remind/3.2.0/.

Energy System Modelling

The energy supply system in REMIND represents the conversion of primary energy carriers into secondary energy carriers and their transport and distribution to end-use sectors. The energy system further accounts for system inertias and path dependencies induced by ageing capital stocks, e.g. in power-plant infrastructure and endogenous learning-by-doing. Additionally, REMIND accounts for challenges related to rapid upscaling of new technologies via cost-markups that are assumed to increase with the square of year-to-year capacity additions³⁰. The REMIND model represents the endowments of exhaustible primary energy resources³¹ as well as renewable energy potentials based on bottom-up estimates^32,33. REMIND accounts for cost reductions in solar photovoltaics, concentrating solar power, wind energy and battery storage endogenously via learning-by-doing. Technological progress for all other technologies is parameterized via exogenous assumptions.

The REMIND model captures the challenges and options related to the temporal and spatial variability of wind and solar power³². In addition to flexible demand response, also inter-regional pooling as well as short-term storage (diurnal time-scales, mostly via batteries) and long-term storage (up to seasonal time-scales) play a key role for facilitating VRE integration. REMIND parameterizes corresponding technology and region-specific VRE storage and grid expansion requirements³⁴ as well as curtailment rates (i.e., unused surplus share of VRE electricity generation), which are derived with the help of two detailed electricity production cost models^34,35.

Energy End Uses

An important feature of this study is the representation of demand sectors and cross-sectoral mitigation strategies. In the industry sector, REMIND represents four subsectors: steel, cement, chemicals and other manufacturing. Both primary (virgin) steel production from iron ore and secondary steel production from scrap are represented via a simplified stock-flow-model based on Pauliuk et al.³⁶. Energy demand in these subsectors is broken down into heat demands, mechanical work and feedstocks. Mechanical work is already electrified, or can be readily electrified in the future. We further consider indirect electrification of the high-temperature heat inputs for primary steel, cement production and chemical industry via hydrogen. The substitution of heat supply carriers in other manufacturing is represented via a constant elasticity of substitution production function. Feedstocks in the chemical industry must be supplied as hydrocarbon fuels.

Concerning the transport sector, for this study we adopt the coupled system REMIND/EDGE-T³⁷ to analyse the carriers and transport modes transition towards climate neutrality. Mobility is divided into passenger and freight demands, each broken down by trip length into long-distance and short-medium distance components. The market for each transport demand category is split across different transport modes and vehicle types. Multiple technology options are available for each vehicle type: electricity can be consumed directly in battery electric cars, buses and trucks, and electric trains. Indirect electrification via hydrogen is available for all road transport options. For passenger cars, mode choice accounts for the value of time of alternative modes. In addition, the technology choice module accounts for dispreferences, e.g., due to range anxiety or low model availability.

Transformation pathways for buildings energy demand are derived from the EDGE-Buildings model. The EDGE-Buildings model projects energy service demands for the subsectors (i) space heating, (ii) water heating, (iii) cooking, (iv) space cooling, and (v) appliances and lighting, based on exogenous socio-economic and climate pathways. The REMIND buildings module is then calibrated to meet these energy service trajectories, and represents technology choice to meet these service demands.

Beyond energy-related CO₂, REMIND further represents a wide spectrum of greenhouse gas emissions. CH₄ emissions from fossil resource extraction are represented by source. REMIND is coupled to the MAgPIE land use model²⁷ to derive CO₂ emissions from land use, land use change and forestry, as well as CH₄ and N₂O emissions from agricultural activities. Abatement options for CH₄ and N₂O emissions from energy supply, agriculture, waste and wastewater are based on marginal abatement cost curves from Harmsen et al.³⁸. Emissions from fluorinated gases are represented exogenously from Van Vuuren et al.³⁹. Emissions from aerosols and short-lived trace gases are based on the GAINS model⁴⁰. Our modelling framework employs the MAGICC⁴¹ reduced complexity climate model to evaluate the resulting changes in global climate variables from the emerging emission scenarios. The impacts of climate change on energy systems and the economy are not considered in the modelling.

Scenario design

To derive cost-efficient transition pathways, climate policy is represented by assuming an economy-wide CO2-price increasing linearly from today's levels firstly to the levels required to reach the EU green deal 2030 emissions target and later to reach greenhouse gas neutrality in 2050. We further assume that the CO2 price is equal across sectors. European green deal 2030 policies underpinned by concrete measures and firm governance are embedded in the scenarios definition, and additional measures are assumed to overcome key market failures, such as a phase-out of internal combustion engine vehicle sales in the transport sector as implemented in the Regulation (EU) 2023/851⁴².

Four different dimensions are considered for the sensitivity analysis used to identify robust features of the energy transition to climate neutrality as well as key uncertainties: (1) realised short-term emissions reductions, (2) evolution of final energy demand, (3) availability of sustainable bioenergy, and (4) availability of CCS.

There is some ambiguity in the interpretation of EU 2030 emissions targets, and corresponding uncertainty about GHG emission reduction levels that will be achieved. According to the weakest interpretation, under the Green Deal climate law the EU reduces GHG emissions including LULUCF and intra-EU aviation by at least 55% by 2030. However, EU policymakers have provisionally agreed to increase the 2030 nominal reduction target to 57% as part of an agreement to boost natural carbon sinks. The 59% reduction case is motivated by the possibility that 2030 emissions are further reduced in anticipation of increasingly stringent post-2030 emission constraints, e.g. via banking of permits in the EU-ETS, and/or additional efforts promoted by countries with more stringent 2030 targets, e.g. Germany 65% reduction target.

Energy efficiency improvements greatly reduce the transformation requirements on the supply side. However, its effectiveness is highly dependent on implementation and success of energy efficiency programs, increased demand side action and cross-sectoral decision making - much of which is under the regulatory authority of the member states. We examine three final energy evolution scenarios to represent the uncertainty realisation of potential efficiency measures in the demand sectors (see Table 1).

The amount of sustainable bioenergy available for the EU is highly uncertain. We consider a scenario with bioenergy potential limited to 7.5 EJ/yr, corresponding to a scenario with strongest sustainability constraints¹¹, as well as a bioenergy limit of 12 EJ, corresponding to sustainable domestic bioenergy potentials for the EU under more optimistic assumptions, also based on Ref. ¹¹.

Finally, the capacity for geological carbon storage is highly dependable on the creation of a robust regulatory framework that covers permits, monitoring, cross-border collaboration, local storage acceptance, remuneration and long-term liability, across different European countries of varying legal systems. These regulatory challenges, public acceptance issues as well as technology and cost development give rise to substantial uncertainty. We therefore consider an optimistic reference case with long-term geological injection rates capped at 556 MtCO2/yr, and a limCCS case with long-term yearly geological injection rates capped at 278 MtCO2/yr.

The reference policy scenario assumes a continuation of energy and climate policies currently implemented with 57% emissions reduction by 2030, final energy projections following current observed trends (reference option), biomass availability limited to 7.5 EJ/yr, and long-term maximal geological injection rate limited to 556 Mt CO2/y (default CCS option).

Acknowledgements

This work was supported by the European Union's Horizon 2020 research and innovation programme under grant agreement No 101022622 (ECEMF).

Data and code availability

The code to reproduce the experiments used in this paper is available on GitHub: https://github.com/remindmodel/remind and is archived on Zenodo: https://doi.org/10.5281/zenodo.8144227.

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Total GHG emissions with LULUCF and international transport.
Emission reductions relative to 1990 emissions including LULUCF and intra-EU aviation only (4713 Mt CO2e), except for 2045 and 2050 emission reductions which are calculated relative to 1990 emissions including LULUCF and international transport (4814 Mt CO2e).

There is NO Competing Interest.

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2040 greenhouse gas reduction targets and energy transitions in line with the EU Green Deal

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Abstract

Figures

Introduction

EU’s emissions on the path to climate neutrality

Sectoral transformations

Milestones for 2040

Discussion and Conclusion

Methods

Declarations

Acknowledgements

Data and code availability

References

Footnotes

Additional Declarations

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