Why EU countries are not on track to meet their 2030 climate target

Good morning. Lars Fruergaard Jørgensen, chief executive of Novo Nordisk, the Danish drugmaker that has become Europe’s most valuable company, is the FT’s Person of the Year for 2023. The thoughtful, low-key Jørgensen, who grew up on a pig farm and began his career as an economist, leads the company behind Ozempic and Wegovy, the world’s first drugs to effectively treat obesity.

Today, our climate correspondent explains why EU member states are behind on their emissions pledges. And our Athens correspondent reports on the cracks in Greece’s government over a plan to legalise tens of thousands of illegal migrants.

Not nearly enough

EU countries are not doing enough to meet their existing climate goals, making the setting of a new target for 2040 even more of a challenge, writes Alice Hancock. 

Context: To reach net zero greenhouse gas emissions by 2050, the EU agreed that it would reduce its carbon output by 55 per cent by the end of the decade, compared with 1990 levels. The European Commission has until spring to propose another reduction target for 2040 as a waymarker to reach its goal.

That 2040 target should be ambitious: the European Scientific Advisory Board on Climate Change said in June that the bloc should strive to cut emissions by 90-95 per cent by 2040.

The EU’s recently appointed climate commissioner Wopke Hoekstra also committed Brussels to introducing a target of “at least” 90 per cent when speaking to the European parliament in October.

Entering a meeting of the bloc’s environment ministers yesterday, Hoekstra said it was “of pivotal importance” that ambitious climate policy went “hand in hand” with making sure that both companies and citizens could “thrive”.

But it will be difficult to agree on more ambitious targets because member states are already falling short of the existing one, with some countries facing a backlash against green policies at home.

Just before the bloc’s environment ministers sat down to discuss the 2040 target, the European Commission published an assessment of whether governments are already doing enough to cut emissions — and the conclusion was no.

Plans sent by EU member states to Brussels “are not yet sufficient” to meet the initial 2030 target, the commission said. “Current measures would lead to a reduction of 51 per cent”.

It also said that persisting subsidies for fossil fuels, sluggish deployment of renewable energy and a lack of clear regulation for energy infrastructure were holding up emissions being cut.

Teresa Ribera, Spain’s deputy prime minister who chaired yesterday’s ministerial meeting, said the report had “important messages”, but that member states had raised “socio-economic concerns” regarding more ambitious climate targets. 

“We need to work much more,” Ribera said.

Chart du jour: Bad mood

German business morale fell more than expected this month, dragged down by the lowest confidence among construction companies for 18 years and threatening a second consecutive quarterly contraction for the EU’s largest economy.

Going legal

Greece plans to regularise the status of irregular migrants to cope with increasing labour market shortages, in a move that has provoked major backlash including from within the centre-right governing party, writes Eleni Varvitsioti.

Context: In September, migration minister Dimitris Kairidis pre-announced a government plan to legalise up to 300,000 irregular migrants to alleviate acute shortages in agriculture, tourism and construction. The mere announcement of the plan caused public uproar and prompted a hasty government backtrack.

A few months later, the plan returned as an amendment to a labour ministry bill, introduced this time with a different spin. It is expected to pass the Greek parliament today.

The new strategy is based on two pillars. The amendment will be an “important step for public safety” because the migrants will be registered, government spokesperson Pavlos Marinakis said yesterday.

Also, it will apply only to those who already have work and have been employed, albeit irregularly, for at least three years.

“These people will work with a specific residence permit that would allow them to work, and they will be registered, they will work legally and of course, the Greek state will collect all the prescribed contributions,” said Marinakis.

The government expects that the amendment will apply to 30,000 people a year.

But even with the changed rhetoric, the amendment has prompted criticism, including within the ruling New Democracy party. It highlights the dilemma facing governments across Europe in search of working hands while under pressure to curb irregular arrivals.

Antonis Samaras, former prime minister and former New Democracy president, said he would vote against it. He warned that Greece would become a “beacon for attracting illegal immigrants” with such legislation, and demanded the government withdraw the amendment.

“The need to solve the labour problem can be done through domestic potential, and of course with legal immigration and transnational fixed-term agreements where immigrants will return to their countries,” Samaras added.

What to watch today

1. Meeting of the EU Transport, Trade and Energy Council, begins 10am.

2. Annual ECB Supervisory Review and Evaluation Process press conference, at 10am.

Now read these

• Cash for Kyiv: The EBRD will double lending to Ukraine after agreeing a €4bn capital increase, its president told the FT.

• Iberian estrangement: Rubbing shoulders on Europe’s south-western peninsula, Spain and Portugal have sometimes prickly relations, notes Barney Jopson.

• Sustainable ratings: The EU has been urged to set “precise” guidelines for sustainable investments after an unprecedented number of recent upgrades.