COP26: Bigger commitments by EU trading partners expected by businesses

During the first two weeks of November, the COP26 UN Climate Conference took place in Glasgow with the aim of discussing and agreeing on the next steps in the implementation of the 2015 Paris Agreement. The COP26 conference was a highly anticipated meeting by governments, business and the general public overall, as its aim was to review the commitments by the parties.

While the Paris agreement, signed by 195 countries, set a target to keep average global temperature change below 2°C and as close as possible to 1.5°C, the projections presented during COP26 showed that the planet is on a path to between 1.8°C and 2.4°C of warming.

One of the main outcomes of the COP26 was that parties have agreed to revisit their commitments, as necessary, by the end of 2022 to put the planet on track for 1.5°C of warming. In order to meet this goal, COP26 parties also agreed for the first time to accelerate efforts towards the phase-down of coal power and inefficient fossil fuel subsidies, and recognised the need for support towards a just transition.

Apart from that, during the technical negotiations, parties agreed on a so-called Paris Agreement Rulebook that sets the transparency and reporting requirements for all parties to track progress of their emission reduction targets. In addition, parties approved texts that ensure an increase in financial commitments ensuring that the previously agreed $100 billion annual goal of financial aid by developed countries for 2021-2025 will be reached as soon as possible.

As for the EU, European Commission President Ursula von der Leyen pledged €1 billion in funding for the Global Forests Finance, announced a Just Energy Transition Partnership with South Africa and launched the Global Methane Pledge, a joint EU-US initiative that aims to cut their collective methane emissions by at least 30% by 2030, compared to 2020 levels.

European businesses were highly interested in the outcome of the negotiations as it is mainly them who are and will be leading the green transition process in the EU and worldwide. The EU is a global frontrunner in this area and managed to cut greenhouse gas emissions significantly in recent years, currently accounting only for 8% of GHG emissions.

However, the EU can’t be left alone in this endeavour and especially the main world polluters need to step up their commitments. In this context, European businesses are disappointed with the outcome of COP26 as it failed to increase the ambitions of EU’s largest trading partners. While some countries showed progress in terms of long-term ambitions, they didn’t set 2030 targets like the EU.

On the other hand, businesses welcome that COP26 managed to achieve agreement on Paris Agreement Rulebook and it is crucial to have the framework in place as soon as possible.