What Does the EU’s First BTR Say About Its Climate Action?

• The EU’s first biennial transparency report shows an emission reduction of 31.8% relative to 1990.
• The EU is currently not on track to meet its Nationally Determined Contribution (NDC) target, although the impact of recently adopted policies has yet to be determined.
• The EU doubled its contribution to climate finance between 2014 and 202, but concerns about its reporting methodology could have potentially led to overestimations. 

By Debergh Reinout

This article focuses on the European Union’s (EU) first Biennial Transparency Report. It outlines the information contained with the report according to the four components of BTRs, introduced in our earlier article on BTRs. These reports are an essential tool for enhancing transparency under the Paris Agreement as they provide information on whether Parties are on track to meet their climate targets [2, 3]. 

EU’s National Inventory Report

Relative to 1990 levels, the EU’s emissions dropped 32.6% by 2022 (31.8% when including international aviation and shipping as in its NDC). Most reductions came from electricity and heat production [1]. 

Figure 1. EU emissions over time by sector [1].

In 2022, the energy sector (excluding fuels for international aviation and shipping, land use, land use change and forestry and indirect emissions) accounted for most of the EU’s emissions (77%), followed by agriculture (11%), industrial processes and product use (9%), and waste (3%). In terms of greenhouse gases (GHG), CO₂ was the main contributor (81%), followed by methane (12%), nitrous oxides (5%), and F-gases (2%) [1]. 

Information necessary to track progress

The EU’s NDC includes an economy-wide absolute emission reduction target of 55% by 2030 relative to 1990. It does not make use of cooperative approaches such as international carbon credits). The scope of the NDC is in line with IPCC’s 2006 guidelines, including international aviation (within the EU and departing from an EU airport to the UK, Switzerland, Norway, Iceland, and Liechtenstein) and international shipping (only between EU ports). As an indicator to track progress, the EU uses annual total net GHG emissions in CO2-equivalent and consistent with the scope of its NDC. Its progress was already described in the previous section [1]. 

What is the future outlook for EU emissions? Even with additional measures, such as planned policies, and excluding international bunkers, emissions will only be reduced by 51% [1, 4]. However, EU’s BTR states that the projections below do not yet include all recently adopted measures and that the full impact will become clearer at a later stage when there will be newly submitted projections by Member States [1]. 

Figure 2. Historical EU emissions along with projections under different scenarios [1].

Finally, the EU’s BTR also describes various climate and environmental policies and measures, making it also a useful resource for those looking for an overview of EU climate policy [1]. 

Climate change impacts and adaptation

Chapter 4 of the report highlights the increased severity of climate impacts such as floods, droughts, and heatwaves. Southern Europe and the Arctic are particularly vulnerable to these impacts [1]. The first European Climate Risk Assessment (EUCRA), published in 2024, identified 36 climate risks highlighting the need for stronger adaptation action [5]. Adopted in 2021, the EU Adaptation Strategy lists 49 actions across four objectives:

1. Smarter adaptation: improving knowledge and managing uncertainty;
2. More systemic adaptation: support policy development at all levels and sectors;
3. Faster adaptation: speeding up adaptation across the board;
4. Increasing support for international climate resilience and preparedness [1, 6].

The chapter also mentions several studies that all effectively conclude that while progress has been made, more efforts are needed to advance adaptation and build resilience in Europe. More information about EU climate risks and adaptation policies can be found in Chapter 4 of the BTR [1]. 

Support provided and mobilised

Climate finance tripled from 2013 to 2022, drawing on funds from a mix of the European Commission, the European Investment Bank, and EU Member States. Contributions from EU Member States constitute a larger share of climate finance than from the European Commission and the European Investment Bank combined. The figure below shows the total amount of climate finance raised by the EU, amounting to 28.5 billion euros in 2022 [1]. 

Figure 3. Climate finance provided by the EU to developing countries [1].

However, there are some important aspects to consider in the context of climate finance estimates:

1. Nearly all of climate finance is classified as official development assistance (ODA) raising questions of whether it is additional or not [1, 7]. 
2. The European Commission and the European Investment Bank use different methodologies, making direct comparisons challenging. 
3. The European Commission relies on the use of ‘Rio markers’ to classify and track climate finance [1]. These markers assign a score of 0, 1 or 2 to each project, indicating the relevance of specific environmental objectives (e.g. climate mitigation, adaptation, biodiversity, desertification) to that project. However, research has questioned their credibility and concluded that they can lead to an overestimation of climate finance figures [8]. The figure below represents this [9].

Figure 4. Different shares of funding are allocated to an environmental objective based on the Rio Marker score. 1 = significant (explicitly stated in the activity’s documentation, but it is not the main objective). 2 = principal (it is the main objective of the activity) [9].

Furthermore, there is only detailed reporting provided on funding from the Commission (only grants) and EIB (grants, loans, etc.). Most of that funding (Commission + EIB) goes to mitigation (56%), with only 16% going to pure adaptation projects. Most of the Commission’s funding goes to Africa (56%). These numbers are for 2022 [1].

The BTR further describes various programmes and initiatives to support technology development & transfer and capacity-building [1].

Conclusion

The EU’s BTR highlights significant progress in emissions reductions, but more efforts are needed to meet the EU’s target of a 55% reduction by 2030. Looking ahead, these emission projections may change as more policies and measures are included in the projections. Additionally, the report outlines various adaptation policies including the Adaptation Strategy. In terms of climate finance, while contributions from the EU have increased, it is mostly invested in mitigation. Challenges with its methodology raise doubts about its true size [1].

Overall, the EU demonstrates a commitment to addressing climate change through targeted actions and funding [1]. As we enter a politically turbulent and unpredictable period, the EU mustn’t backtrack on its climate commitments in favour of business interests and deregulation. Time is not on our side, and climate action cannot wait [10]. 

References:
[1] First Biennial Transparency Report from the European Union, European Commission, https://unfccc.int/documents/644477, Accessed on 25/12/2024. 
[2] Kosma, E., Time For Transparency: Five Key Questions About Biennial Transparency Reviews Ahead of the 2024 Deadline, Center for Climate and Energy Solutions, https://www.c2es.org/2024/07/time-for-transparency-five-key-questions-about-biennial-transparency-reviews-ahead-of-the-2024-deadline/, Accessed on 25/12/2024.
[3] Decision 18/CMA.1: Modalities, procedures and guidelines for the transparency framework for action and support referred to in Article 13 of the Paris Agreement, UNFCCC, https://unfccc.int/resource/tet/0/00mpg.pdf, Accessed on 25/12/2024. 
[4] DRAFT GHG Projection Guidelines, European Commission, https://climate.ec.europa.eu/system/files/2016-11/ghg_projection_guidelines_a_en.pdf, Accessed on 28/12/2024. 
[5] European Environmental Agency, (2024), European Climate Risk Assessment, ISBN: 978-92-9480-627-7. 
[6] Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee Of the Regions forging a climate-resilient Europe – the new EU Strategy on Adaptation to Climate Change, European Commission, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2021:82:FIN, Accessed on 29/12/2024. 
[7] Kenny, C., How Much Climate ODA Is New and Additional?, Center for Global Development, https://www.cgdev.org/blog/how-much-climate-oda-new-and-additional, Accessed on 30/12/2024 
[8] Romain Weikmans, J. Timmons Roberts, Jeffrey Baum, Maria Camila Bustos & Alexis Durand, 2017, Assessing the credibility of how climate adaptation aid projects are categorised, Development in Practice, 27:4, 458-471, DOI: 10.1080/09614524.2017.1307325.
[9] Short guide to the use of Rio markers, European Commission, https://capacity4dev.europa.eu/groups/public-environment-climate/info/short-guide-use-rio-markers_en, Accessed on 06/04/2025.
[10] Hodgson, R., Unions, green groups fear sweeping deregulation as EU pursues competitiveness agenda, Euronews, https://www.euronews.com/my-europe/2025/01/13/unions-green-groups-fear-sweeping-deregulation-as-eu-pursues-competitiveness-agenda, Accessed on 26/01/2025.