After a diplomatic conference in Brussels among EU heads of state, the European Parliament ratified a climate and energy plan in December 2008.

The EU Plan seeks to 1) Reduce greenhouse gas emissions by 20% of 1990 levels, 2) Increase use of renewable fuels to 20% of total energy production and 3) Reduce energy consumption by 20% of projected 2020 levels.

The EU Plan will offer fewer emission allowances, or carbon credits, to industries and power producers through the EU Emissions Trading System. It will reduce the amount of allowances that it offers to the industries each year until the number of allowances distributed meets the target emissions level.

The EU Plan also outlines a system of binding national targets to reduce transportation, waste, agricultural and household emissions. Binding targets will also make it so that 20% of the European Union’s energy comes from renewable fuels. National targets will vary according to the wealth of the member state in question. Measures to meet the binding targets are left up to individual states, but may include Binding national targets for the sectors that the trade system does not cover.

The EU plan creates a framework for the introduction of carbon sequestration technology into EU power plants so that they can permanently store carbon underground. It also sets targets for increased fuel efficiency for automobiles and reduced carbon-content in fuel. These measures apply to automobile manufacturers and fuel providers registered in the EU. For more information on how the EU plans to reach its objective, see national climate change action plans for EU member states.

The EU raises funds through its Emissions Trading System. Member states raise funds for their individual plans through a variety of taxes and fees.