After eleven months of legislative work, the European Parliament gave its backing to the EU's climate change package in mid-December, which aims to ensure that the EU will achieve its climate targets by 2020: a 20 per cent reduction in greenhouse gas emissions, a 20 per cent improvement in energy efficiency, and a 20 per cent share for renewables in the EU energy mix.

Although some concessions were made regarding greenhouse gas emissions, legislators were confident that, overall, their goals can be reached. The details, as outlined by the Parliament, follow below.

Revising the EU's Emission Trading System
The revised EU Emission Trading System (ETS) cap and trade system is a key tool for achieving the EU's aim of reducing its greenhouse gas emissions. It will apply from 2013 to 2020 and should lead to a reduction in greenhouse gas emissions of 21 per cent compared to reported 2005 levels. The system caps the overall level of emissions allowed but, within that limit, allows participants buy and sell allowances as they require, so as to cut emissions cost effectively. The quantity of allowances issued each year will decrease in a linear fashion, so as gradually to reduce the overall level of emissions each year.
 
The ETS currently covers over 10,000 installations in the energy and industrial sectors, which are collectively responsible for close to half of the EU's emissions of CO2 and 40 per cent of its total greenhouse gas (GHG) emissions (the remaining 60 per cent will be covered by the 'non-ETS' Effort Sharing decision).
 
In the first and second ETS trading periods (2005 -2012) the great majority of allowances were allocated free of charge to installations. The revised directive establishes auctioning from 2013 in principle (as proposed by the Commission and backed by the Environment Committee) but it includes several exceptions, as advocated by the European Council on December 12, 2008. This was a concession to coal-heavy Eastern European countries. Representatives from several of these countries stated that the impact on power prices would be too hard to bear.
 
Effort sharing: Member States targets for CO2 reduction
The "effort sharing" decision sets binding national targets for each EU Member State to reduce greenhouse gas emissions from non-ETS sources (e.g. road and sea transport, buildings, services, agriculture and smaller industrial installations), between 2013 and 2020. These sources currently account for about 60 per cent of all EU GHG emissions. The decision aims to reduce these emissions by 10 per cent overall between 2013 and 2020, so as to contribute towards the EU's overall aim of a 20 per cent reduction in total GHG emissions by 2020. The effort sharing program means that each country has a different target — for instance, 10 per cent for Malta, and 49 per cent for Sweden.
 
Carbon capture and storage
Parliament also approved a proposed directive providing for the legal framework for carbon dioxide capture and storage technology (CCS). To cut their CO2 emissions, industrial installations and power plants could, in future, use this technology to capture CO2 and store it in geological formations. Funding was secured for demonstration projects by ensuring that 300 million ETS allowances will be awarded to large-scale CCS projects.
 
20 per cent by 2020
There will be mandatory national targets for Member States to ensure that by 2020 renewable energy makes up at least 20 per cent of the EU's total energy consumption. The agreement foresees that by 2020 renewable energy - biofuels, electricity and hydrogen produced from renewable sources - account for at least 10 per cent of the EU's total fuel consumption in all forms of transport. 
 
Reducing CO2 emissions from new cars
A new regulation will set emission performance standards for new passenger cars registered in the EU. The compromise backs the Commission's proposed target of an average of 120g of CO2/km for the whole car industry by 2012, compared to the current levels of 160g/km. The regulation sets an average target of 130g CO2/km for new passenger cars to be reached by improvements in motor technology.  It will be supplemented by additional measures to achieve a further 10g/km reduction, so as to reach the 120g/km target, through other improvements. The long-term target for 2020 for new car fleet average emissions is 95 g CO2/km.
 
For more details from the European Parliament website, click here.

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