The UK’s approach to climate change has long been intertwined with EU law and policy.  

The UK left the EU on 31 January 2020 but continues to be subject to EU climate change requirements until the end of the transition period.  

The extent to which the future UK approach remains linked to that of the EU depends on the outcome of ongoing negotiations.  

This Insight gives an overview of the EU’s approach to climate change, including its global commitments, major policies and possible future direction. It also notes the status of the UK-EU future relationship negotiations in these areas. 

The EU’s global commitments on climate change 

The EU has made global commitments to reduce its greenhouse gas emissions. It has pursued climate change objectives through EU-wide policy and with individual Member States.  

The EU ratified the United Nations Framework Convention on Climate Change (UNFCCC) and the international climate change Paris Agreement on behalf of all its member states (including the UK).  

The UK is a party to the UNFCCC and has ratified the Paris Agreement separately from the EU. In March 2015, on behalf of its member states, the EU committed to reduce its greenhouse gas emissions by at least 40% by 2030, compared to 1990 levels. This is known as its Nationally Determined Contribution (NDC).  

Refreshed NDCs are required in 2020. The EU has committed to a more ambitious reduction target for 2030 ahead of the UN climate change conference in Glasgow (COP26) in 2021. The UK has committed to submitting its own increased NDC ahead of COP26. 

The EU Emissions Trading System 

The EU has sought to reduce its greenhouse gas emissions through various policies. The cornerstone of which is the EU Emissions Trading System (EU ETS).  

The EU ETS encourages emissions reductions by putting a price on certain greenhouse gas emissions for energy intensive industries and airlines in the EU (and other participating states).  

It is a mandatory ‘cap and trade’ system whereby an EU-wide cap is set on the total amount of emissions permitted. The cap is reduced each year. Participants in the scheme can receive free emission allowances, purchase them in an auction or trade their allowances on the carbon market.   

The UK is currently part of the EU ETS but will leave at the end of the transition period. In the UK-EU future relationship negotiations, both parties have expressed interest in linking a future UK emissions trading system with the EU ETS, provided that certain conditions are met.  

Effort sharing, energy efficiency and product standards 

For sectors outside of the EU ETS, such as transport, building, agriculture and waste, the EU ‘effort sharing’ legislation sets targets for emissions reductions at Member State level.  

Targets are also required by the EU at Member State level to drive improvements in energy efficiency and increase the proportion of renewable energy within the total energy consumed.  

Member States set their own targets in these areas within a National Energy and Climate Plan (2021-30) (NECP), which should also present the proposed policies for achieving those targets. The UK submitted a draft NECP in 2019. 

As well as emissions reductions, the EU also encourages activities to store or remove carbon from the atmosphere. The Insights on Climate change solutions: the role of nature and the role of technology provide further discussion of this topic.  

In the UK-EU future relationship negotiations, commitments and targets in these areas are covered by the level playing field arrangements that the EU has proposed.  These arrangements are a significant point of contention between the UK and EU. 

The EU also has ecodesign standards for many household goods, such as washing machines and vacuum cleaners, which require those products to operate at a certain level of energy efficiency. Many products must also carry an energy label showing how energy efficient they are compared to other products on the market. There are also emissions targets and labelling requirements for vehicle manufacturers.  

When exporting to the EU, UK manufacturers will need to comply with the EU’s mandatory product standards, such as those required under the ecodesign framework, regardless of the shape of the UK-EU future relationship. 

Recent developments 

The European Commission proposed refreshing EU climate change policy as part of the European Green Deal, a flagship policy package announced in December 2019. This includes introducing a European Climate Law, with a commitment for net zero emissions by 2050.  

The UK has already legislated for net zero by 2050. The European Green Deal also includes proposals for a carbon border adjustment mechanism.  This would apply a price to the carbon content of goods imported into the EU market, although this is still in development stages and would need to be compliant with World Trade Organization requirements.  

It is unclear how Covid-19 will affect EU or UK climate change policy direction. Some Members of the European Parliament have argued that policies like the Green Deal are central to a green economic recovery from the pandemic. In the UK, Boris Johnson has called for a “fairer, greener and more resilient global economy,” after Covid-19.  

Further reading 

About the authors: Oli Rix is a policy analyst for the House of Lords EU Environment sub-committee and Sara Priestley is a environment and climate change specialist at the House of Commons Library.