EU Green Deal

In December 2019, EC announced EU Green Deal, a policy package and growth strategy covering all sectors, including the environment and economy, to achieve carbon neutrality by 2050. EU Green Deal has stated to reinforce GHG reduction targets by 2030 and 2050. The

strategy also sets the direction for a system for the stable supply of clean energy at an affordable price in the energy sector (EC, 2019a). In addition, EU Green Deal presented directions for achieving carbon neutrality in various fields, such as the industrial transition to a clean and circular economy, new construction and remodeling of energy-efficient buildings, and establishing a sustainable and smart transportation system (Table 2-1).

Table 2-1. Highlights of EU Green Deal

Source: Kim, S. and C. Kim (2020), p.8

From EU Green Deal, EC not only presents directions for each sector to achieve carbon neutrality but also proposes a financing plan to implement the EU Green Deal and a plan to support carbon-intensive activities through the European Green Deal Investment Plan. One of the main characteristics of this investment plan is that it has established just transition mechanisms so that no countries or regions are left behind in the transition to a climate-neutral society (S. Kim and C. Kim, 2020, p.35).

Sectors Highlights

GHG Reinforcement of reduction targets in 2030 and 2050 Energy Stable dissemination of clean energy at an appropriate price Industry Industry transition to a clean and circular economy Building Construction and remodeling of energy efficient buildings Transportation Building a sustainable and smart transportation system

Food Building a fair and healthy eco-friendly food system - from farm to table

Ecosystem Ecosystem and biodiversity protection

Pollution Creating an environment

free from harmful substances and pollution

In addition, EC believes that the participation and will of the public sector and stakeholders are essential for the success of EU Green Deal.

Accordingly, the EC has proposed the European Climate Pact as a venue to promote diverse citizen participation. Citizens can use this opportunity to share information and ideas about climate change and environmental issues and increase their understanding. In addition, an on/offline space will be established where citizens can share new ideas and activities and study them together. EC expects these activities to feed the grassroots movement about climate change and environmental issues (EC, 2019a).

The EU Green Deal presented only the direction for each sector to achieve carbon neutrality, and detailed implementation strategies for each sector were subsequently announced sequentially. First and foremost, in March 2020, the EC announced a new industry package for an internationally competitive clean digital Europe. This new industry package aims to strengthen international competitiveness by promoting green and digital transformation of the industrial sector and includes three detailed strategies: the new strategy for industries, the new strategy for small and mideum-sized enterprises (SMEs), and single market creation. The new industry strategy selected seven essential tasks, including the single digital market, climate-neutral support, investment, and finance, for carbon-neutral orientation and digitalization of the industrial structure (Y. Jang et al., 2020, p.5).

In July 2020, EC announced EU strategy on energy system integration.

This strategy is to lay the foundation for the green energy transition. EC states that it will be difficult to achieve 2050 carbon neutrality at minimal cost if energy-consuming sectors (transport, industry, buildings, etc.) and energy sources (electricity, gas, etc.) continue to operate under different value chains, rules, infrastructures, or schemes. judged (EC,

2020b). Accordingly, EC intends to establish a system that can comprehensively plan and operate by connecting various consumption sectors, energy carriers, and related infrastructure. To this end, EU strategy on energy system integration suggested 38 detailed plans centered on three pillars: building a circular energy system, electrification and securing renewable energy sources, and supplying clean fuels (KEEI, 2020c).

EC announced the hydrogen strategy for EU carbon neutrality at the same time as EU strategy on energy system integration. EC expects that hydrogen will contribute to decarbonization in difficult-to-electrify sectors. In addition, EC believes that hydrogen can help decarbonize industries, transport, power generation, and buildings in EU's integrated energy system by absorbing the volatility of renewable energy.

Ultimately, carbon-neutrality requires green hydrogen produced from RE (wind power, PV, etc.). However, EC has made it possible to use low-emission hydrogen to drive GHG reduction and market development in short to medium term (Figure 2-1; KEEI, 2020a).

In September 2020, EC announced a plan to raise the 2030 NDC goal from a 40 % reduction compared to 1990 to a 55 % reduction compared to 1990. EC suggested strengthening and expanding the scope of AEU-ETS, establishing regulations on land-use emissions, improving energy efficiency and renewable energy targets, and enhancing emission regulations for road transport vehicles to achieve the upwardly adjusted goal (KEEI, 2020f).

FIgure 2-1. Step-by-Step Path to the Hydrogen Ecosystem

Source: EC (2020d)

Then, in December 2020, the upgraded 2030 NDC was agreed on by the European Council (EUCO). The EC began reorganizing the system to achieve the raised reduction goal and, in July 2021, announced the Fit-for-55 policy package. This package aims to revise existing systems and policies aligned with the upgraded 2030 NDC (M. Kim and D. Kim, 2021). The main contents of the Fit-for-55 package include carbon pricing for road transport and building sector, introducing a carbon border adjustment mechanism, revising effort sharing regulations, amending energy tax, reorganizing the road transport sector, establishing sustainable transport fuel systems, revising the Renewable Energy Directive, and expanding net carbon sinks (M. Kim and D. Kim, 2021).

In October 2020, the EC unveiled the Renovation Wave to improve building energy efficiency. This strategy was designed on three main pillars to improve building energy efficiency: ▲ relieving energy poverty,

▲Improving energy efficiency in the public sector, and ▲ enhancing energy efficiency of cooling and heating (KEEI, 2020b). EC suggested

that this could be included in the EU Energy Efficiency Directive amendment. The introduction of the energy efficiency first principle, which sets out the minimum energy standard for all existing buildings in Europe, was also implied (KEEI, 2020b).

In October 2020, EC announced EU strategy on methane emission reduction and the strategy for the chemical sector that presents sustainability. After that, the EC offered the strategy to expand the maritime RE for EU carbon neutrality in November 2020. In December 2020, EC released the sustainable smart transportation strategy for decarbonizing the transportation sector and an amendment to the battery directive to enhance the sustainability of batteries.

Among the detailed implementation strategies announced after EU Green Deal, this report will focus on EU strategy on energy system integration and the Renovation Wave.