Energy system impacts and policy implications of the European Intended Nationally Determined Contribution and low-carbon pathway to 2050

In March 2015 the European Union (EU) submitted to the United Nations Framework Convention on Climate Change (UNFCCC) the Intended Nationally Determined Contribution (INDC) in view of the Paris Conference of Parties (COP21). The binding target of lowering domestic greenhouse gases emissions by at least 40% by 2030 compared to 1990 levels, coupled with long-term decarbonisation goals, will have profound energy system, macroeconomic and policy implications. EU targets are qualitatively discussed and quantitatively assessed with the simulation of a Reference and an alternative decarbonisation scenario to 2050. Simulations are carried out with the technology-rich PRIMES energy-system model and the GEM-E3 Computable General Equilibrium model. Restructuring of the EU energy system induces changes in the energy mix and production with small effects on the EU GDP, 0.4% in 2030 and 1% in 2050 compared to the Reference scenario. Energy efficiency improvements, increasing penetration of renewables, fuel switching towards natural gas, and technical progress in process related to emissions abatement are identified as essential options to the EU INDC implementation. The electrification of final energy demand, particularly transport electrification, complemented with decarbonised power supply is found to play a critical role in the successful transition towards a low-carbon economy by 2050.