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EU scales back climate ambitions as economy bites

Wednesday, 22 Jan 2014 | 7:40 AM ET

The European Union set out new climate and energy goals for 2030 on Wednesday, proposing less stringent targets than in the past in a reflection of tougher economic circumstances and a desire to limit rising energy costs.

The bloc's executive - the European Commission - said EU governments should face a single binding target to cut their carbon emissions by 40 percent compared with 1990 levels.

Philippe Huguen | AFP/Getty Images

That represents a doubling of ambition compared with an existing 2020 target to reduce emissions by a fifth, but is below what some scientists and environmentalists say is needed to prevent the worst effects of climate change.

Current national targets designed to raise the share of renewable energy to 20 percent would not be renewed after 2020. Instead, the Commission is recommending a modest EU-wide goal of 27 percent renewables without hard and fast national targets.

(Read more: EU considers scrapping 2030 binding renewables targets)

That would allow Britain and others to meet their emissions targets for example by building more nuclear power plants, which are carbon-free but not renewable.

"What we are presenting today is both ambitious and affordable," Commission President Jose Manuel Barroso said.

Renewable energy is cheaper for Germany: JUWI CEO
Matthias Will, founder of JUWI, tells CNBC that he wants the German government to accelerate the installing of wind, solar and biomass.

Government subsidies designed to promote renewables have been blamed for pushing up energy costs. Current national targets had not proved the most cost effective option and ditching them would give governments more flexibility over how to meet main emission cutting goal, Barroso said.

The policy outline is not expected to be followed by formal legislative proposals until early next year, and would still require lengthy debate by EU governments and the European Parliament to become law.

(Read more: Energy leaders warn of blackouts across Europe)

The one firm legislative proposal included in Wednesday's announcement was a scheme to prop up Europe's faltering carbon emissions trading market, with the aim of removing carbon permits from circulation to support prices.

Under the proposal, the Commission would set aside up to 12 percent of carbon permits from 2021, as long as certain conditions are met. Among the conditions is that the number of allowances to be set aside must exceed 100 million.

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