The Governance Regulation of the Energy Union and Climate Action and National Energy and Climate Plans (NECPs) have been at the heart of the planning, reporting and monitoring of climate and energy policy in the EU since 2018. Their scheduled revision for the period 2030–2040 provides an opportunity to complete the Energy Union by maintaining a coherent target architecture, delivering goal-oriented simplification to streamline implementation across government, and mobilising the investments that are needed for the transition.
Since its adoption in 2018, the Governance Regulation of the Energy Union and Climate Action has given member states the tools to plan for a clean transition that delivers on shared targets. The five dimensions of the Energy Union strategy – decarbonisation, energy efficiency, the internal energy market, energy security, and competitiveness and innovation – have provided the framing for the work that has been accomplished so far.
Looking ahead to the post-2030 period and the 2040 target of reducing net greenhouse gas (GHG) emissions by 90%, the process of planning, reporting and monitoring has never been more important. As EU policymaking shifts its focus from target setting to the deep, structural transformations required by those targets, it is essential to refine the functioning of the Governance Regulation.
This means ensuring that a consistent, predictable and coherent target architecture is enabled through streamlining that fosters a shared approach across policy areas and levels of government, and investable plans that mobilise private transition finance.
Goal-oriented simplification is desirable, but it must not try to avoid the inevitable complexity of the clean transition. Without clear and credible plans to guide investment in the transition, simplification for public administrations will create uncertainty and risk for corporate entities and investors. The Commission’s proposal will need to strike the right balance between these considerations.
Summary of recommendations
Recommendation 1: Maintain a predictable and coherent architecture
- Maintain a renewable energy target to provide long-term signals to investors and supply chains and bolstering energy independence.
- Maintain a clear energy savings trajectory and fully implement existing efficiency legislation, embedding the Energy Efficiency First principle across the system.
- Embed an electrification KPI underpinned by a comprehensive regulatory framework that enables demand-side uptake.
- Ensure implementation of the interconnection and cross-border capacity targets across MS and that NECPs are fit to optimise European network planning.
Recommendation 2: Streamline implementation through goal-oriented simplification
- Make NECPs the ‘keystone’ plans at the core of the planning framework, to avoid gaps and inconsistencies, and remove overlapping exercises.
- Harmonise indicators across the climate–energy–economic governance nexus to allow for simpler monitoring and reporting.
- Streamline the energy framework through simpler reporting, implementation support and smarter enforcement.
Recommendation 3: Improve investability to drive transition finance
- Ensure credible and consistent policy signals by fostering buy-in across departments and levels of government.
- Use a whole-of-economy approach by complementing the five dimensions of the Energy Union with relevant sectoral information.
- Integrate climate resilience and risk management data to help inform private capital allocation.
- Incorporate private sector insights by leveraging corporate transition data.
