European industry faces an extraordinary and immediate challenge: adjustment to fundamental new European Union (EU) regulations designed to accelerate transition to climate-friendly technologies and practices. In tandem with "prohibitive"a low carbon legislation, the EU has started to lay out a corresponding inducement regime of incentives and business opportunities.

During 23-29 January 2008 the European Commission of the EU published a major package of proposed legislation to combat climate change and improve the EU's energy security and competitiveness. This will implement specific targets endorsed by the European Council in March 2007


The package comprises the following measures:

  • COM(2008)16: Amendments to the Emissions Trading System (ETS) Directive to "broaden and strengthen" the ETS Phase III from 2013;
  • COM(2008)17: Decision setting differentiated limits on greenhouse gas emissions (GHG) for each Member State for sectors not covered by the ETS (transport, buildings, services, smaller industrial installations, agriculture and waste), where limits are to be met by 2020;

These two proposals will ensure the EU as a whole reduces its emissions to at least 20% below 1990 levels by 2020.