Trade is a key building block of the EU, fostering job opportunities, economic growth, and enhanced welfare. At the same time, unsustainable trade and consumption patterns are one of the primary drivers behind the sustained high levels of greenhouse gas emissions at the global level.

This report sheds light on the intricate relationship between consumption, trade, and emissions in the EU and underscores the critical role of the EU in leading the global fight against climate change.

The EU has long prioritized mitigating territorial greenhouse gas emissions and most member states have clear ambitions and targets in place. Consumption-based emissions (CBEs) are a significant challenge to the EU’s efforts to combat climate change and a significant contributor to the region’s overall carbon footprint. However, by addressing CBEs, the EU can emerge as a global leader in climate action and set an example for other nations to follow.

This study delves into the complexities of CBEs within the EU, focusing on the environmental impact of EU consumption. Through analysing the current state of CBEs and trade within and beyond the EU, assessing existing policy frameworks, and in-depth case studies of three member states, this report offers valuable insights and recommendations to enhance the EU’s efforts to mitigate its CBEs.

Key messages

• Between 1990 and 2020, global CO2 emissions increased by 63%, while emissions
  in the EU decreased by 29%. Yet this reduction doesn’t capture the environmental
  footprint of the EU, which extends beyond its borders due to the import of
  emissions-intensive goods and services to satisfy EU demand.
• Since 2015, the EU has been a net importer of CO2 emissions: the emissions
  associated with goods and services imported for EU consumption exceed
  emissions associated with its exports, signalling a growing adverse impact of EU
  consumption on other countries.
• More than 30% of the EU’s imported emissions originate outside the EU, with the
  remainder traded within EU’s borders. China was the largest exporter of emissions
  to the EU accounting for 8.5% of EU consumption-based emissions, followed by
  Russia (4.8 %), the United States and India (both 1.6 %).
• Projections point to a rise in environmental impacts of EU consumption up to 2030,
  highlighting the need for additional measures to align with global climate goals.
• To lower consumption-based emissions, the authors recommend:
  – setting binding targets at the EU-level
  – standardizing methods for CBEs accounting
  – setting mandatory reporting requirements on MS
  – strengthening existing EU legislation to better address CBE
  – enhancing transparency in trade and value chains
  – fostering partnerships with trading partners committed to sustainable production practices, and
  – providing capacity-building support to developing countries to enhance their sustainable trade practices.