Climate Action Progress Report for 2023 shows the largest annual drop in emissions for decades

According to the latest Climate Action Progress Report, the EU achieved a net 8% reduction in greenhouse gas emissions in 2023 compared to the previous year. This marks the largest annual drop in decades, aside from the anomalous year 2020, when emissions fell due to restrictions enforced during the Covid-19 pandemic. Emissions are now 37% below 1990 levels. The EU’s GDP has grown by 68% over the same period. The report published today by the European Commission also outlines key achievements in the fight against climate change, while stressing the need for continued action to meet future goals. 
 

The very encouraging reduction in greenhouse gas emissions is reinforcing confidence in the EU's ability to meet its 2030 climate target of at least 55% reduction compared to 1990 level and has been largely driven by the growth in renewable energy generation. Going forward, an emission reduction of 134 million tonnes of CO2 equivalent per year (about 2.8 percentage points of 1990 emissions, or half of the emission reduction shown in 2023) needs to be achieved on average from now until 2030.

Today’s report also highlights progress made on adapting and building resilience to the intensifying impacts of the climate crisis, while acknowledging the significant obstacles to making the EU climate resilient by 2050. The report recalls that the first-ever European Climate Risk Assessment was published this year, identifying major risks that require urgent action. On this basis, the report calls for climate risk exposure to be considered at all levels of governance when setting policy priorities and deploying scarce resources. This requires action across all sectoral policies, such as the built environment, energy, health, water, food systems, the economy and finance. While the report finds that adaptive capacity is slowly improving in Member States, more needs to be done to promote whole-of-the-government approaches and cooperation with the private sector and citizens.

Some of the key achievements set out in the report include:

• Emissions Trading System (ETS): Emissions from installations in the EU ETS are now around 47.6% below 2005 levels and well on track to reach the 2030 target of -62%. In 2023, emissions from power and industrial installations saw a record 16.5% decrease, while the ETS generated revenues of €43.6 billion for climate action investments.
   
• Renewable energy surge: The power sector contributed significantly to emissions reductions. Emissions from electricity production and heating decreased by 24% compared to 2022, driven by growth in wind and solar energy and the transition away from coal.
   
• Transport, buildings, agriculture, small industry and waste: Emissions from the effort sharing sectors continued to fall in 2023, down by 2% compared to 2022. These reductions were driven by the buildings sector, decreasing by around 5.5% in 2023 compared with 2022, followed by agricultural emissions which decreased by 2% in 2023. Emissions from the transport sector, which account for over one third of total effort sharing emissions, reduced by less than 1% over the same period.
   
• Carbon sinks: Data suggests that carbon removals from the Land Use, Land Use Change and Forestry (LULUCF) sector increased in 2023, bucking the declining trend since 2014. Carbon removals in 2023 were at the same level as in 2018. Still, the EU currently faces a gap of around 45-60 MtCO₂-eq to meet its 2030 target to increase land-based net removals in the EU by an additional -42 million tonnes of CO₂ equivalent by 2030, as compared to the yearly average of net removals over the reference period 2016-2018.  
   
• Climate finance: The EU has allocated €658 billion for green investments between 2021-27, over 34% of total budget commitments.  Internationally, the EU, including its Member States and the European Investment Bank, remains the biggest contributor of public climate finance for developing countries worldwide.
   
• International leadership: At COP28, the EU played a leading role in pushing for ambitious global action, including phasing out fossil fuels and expanding renewable energy. The EU will continue to collaborate with partners worldwide for enhanced global action. 

However, the EU must sustain its investments to achieve the proposed 2040 target of a net 90% greenhouse gas emissions reduction and to ensure a smooth transition to a competitive, net zero economy. Flows of public and private finance need to increase to around 3.2% of GDP per year for energy systems in 2031-2050. This implies an additional investment of 1.5% of GDP per year compared to the relatively low investments in the decade 2011-2020.