Missing deadline on fossil fuel subsidies mars otherwise promising EU Environment Action Programme

Posted on December, 02 2021

After months of negotiations, the European institutions last night agreed to strengthen the EU’s next Environment Framework Programme.
However, they missed a critical opportunity to set an end date for public finance for fossil fuels and environmentally harmful activities, despite EU leaders having repeatedly stated their intention to phase such finance out. Over €52 billion of taxpayers’ money goes annually to fossil fuels alone. 

The 8th Environment Action Programme (EAP) sets the objectives for EU environmental policy up to 2030, and lays down the conditions to achieve them.

“The EU has failed the first post-COP test on firmly committing to a deadline for phasing out fossil fuel and other environmentally harmful subsidies. This is even more shameful because this deal is otherwise ambitious and takes big strides on strengthening future environment policy making”, said Rebecca Humphries, Senior Public Affairs Officer at WWF European Policy Office. “Despite paying lip service to the need to phase out fossil fuel subsidies for more than two decades, national governments and the Commission refused to put a target date as called for by Parliament.”

The European Parliament nonetheless managed to secure the commitment that a deadline for phasing out fossil fuels will be proposed and that it should be in line with 1.5°C. WWF now urges the Commission to come forward with a proposal for a legally binding deadline for phasing out fossil fuel subsidies without delay.

More positively, the 8th EAP includes provisions for putting human and planetary wellbeing - rather than GDP growth - at the heart of EU policy making, and advancing towards a ‘wellbeing economy’.

“For the first time, the EU recognises the need to shift towards a wellbeing economy. EU institutions have committed to ensuring policy-making is guided by indicators which give a better picture of social and environmental progress than only GDP growth. This was almost prevented by a last ditch move by the European Commission to stick with the status quo to the detriment of our environment and our wellbeing,”  continued Rebecca Humphries.

As part of this shift, the 8th EAP also requires that the cost of inaction on the climate and biodiversity crisis needs to be considered by policy makers when making new proposals, and progress towards the 8th EAP’s objectives will now have to be debated annually by the EU institutions, offering the opportunity to step up actions when necessary.

Earlier this year, the European Parliament had delivered a forward looking position - significantly improving on the Commission’s weak proposal and the Council’s mandate.  “Many of these improvements can be attributed to the strong work by the Parliament and its negotiators, as well as the willingness of the Slovenian presidency to move the Council's position closer to the Parliament’s,” concluded Humphries. 

Further information: 

WWF was looking for these key elements to form part of the 8th EAP:
  • Phase out fossil fuel subsidies by 2025, and all other environmentally harmful subsidies by 2027 at the latest: According to Commission research, fossil fuel subsidies in the EU amounted to 52 billion euros in 2020 alone, with no significant reduction in sight. Despite the European Parliament’s strong plenary position to put in place legally binding deadlines for both fossil fuel subsidies as well as other environmentally harmful subsidies, national governments and European Commission refused to accept any deadlines set through the 8EAP. The Parliament salvaged a compromise which now requires the EU to - sometime in the future - set a deadline for phasing out fossil fuel subsidies at Union and national level, “consistent with the ambition of limiting global warming to 1.5 degrees”. The text remains vague on when and how this will happen, but urgency will be needed now that consistency with the 1.5 degrees limit is required. In addition, the Commission is tasked to set out by 2023 a methodology to identify all other environmentally harmful subsidies, on the basis of which member states shall report their progress made on phasing them out, offering a chance to for the first time ever uncover the scale of the problem of subsidies to harmful activities such as unsustainable hydropower and industrial farming.
  • Shift to a Wellbeing Economy by putting in place ‘Beyond GDP’ indicators, guided by public interests and not merely GDP growth: The deal calls on the Commission to identify how existing and often fragmented monitoring frameworks at EU level measuring social, economic and environmental progress can be streamlined into a single ‘Beyond GDP’ dashboard and indicator set, ultimately serving as a political summary to guide policy-making and provide for a clear and coherent overarching narrative. The agreement also calls for a shift towards a wellbeing economy within planetary boundaries and sets out the need for systemic change, “requiring major shifts and reorientation in systems goals, incentives, technologies, social practices and norms, as well as in knowledge systems, and governance approaches”.
  • Strengthen the 8th EAP’s enabling conditions: The agreement calls for the the swift and full implementation of environmental law, consistency of all EU policies and measures with the objectives of the 8th EAP, as well as improvements to the ‘Better Regulation’ guidelines and toolbox to help guarantee transparent, inclusive and informed decision making. In future, impact assessments should for instance take into account the full range of impacts on the environment, including their cumulative effects as well as the cost of inaction. For the first time ever, the EU also recognises in a legal text the ‘think sustainability first’ approach, which requires the EU to actively consider how all policies - also those beyond the field of climate and environment - can contribute towards sustainability. With these changes, the enabling conditions have all been significantly improved in comparison to the weak initial Commission proposal.
  • Political accountability and governance: Following the disappointing results of the 7th EAP, this iteration finally includes a governance system to ensure actions can be stepped up when results are lacking. Based on annual reporting on progress made towards the priority objectives and shift towards systemic change, the EU institutions will need to exchange views to take stock of progress and where needed identify and discuss further measures as part of the EU’s annual programming. Following on from a mid-term review due to take place in 2024, the incoming European Commission in 2025 will also be required to table a legislative proposal to present and agree with co-legislators the minimum of actions it will take to ensure the achievement by 2030 of the priority objectives of the 8EAP.
Angelika Pullen
Communications Director, WWF European Policy Office
Tel: +32 473 94 79 66
Niederaussem power plant , coal-fired (lignite), run by RWE. Near Cologne in North-Rhine Westphalia, Germany . Medow with cows, cooling towers, smoke stacks.According to a WWF study, this power plant is number ten of the worst climate polluters in Europe.
© Andrew Kerr / WWF