To halt climate change, the EU has set ambitious targets for the reduction of CO2 emissions. Through various directives, these targets are translated into concrete rules and requirements for countries, sectors and industries. Many of these directives are closely linked to the CO2 Performance Ladder. In this blog, we list a selection of important European directives related to emission reduction.
At the 2015 Paris climate summit, countries from around the world agreed to work together to combat climate change. The European Union has translated this agreement into climate goals for the near (2030) and more distant future (2050). In order to achieve these goals, it is crucial to start reducing greenhouse gas emissions, and fast.
In 2019, the European Commission launched the European Green Deal. With this series of policy initiatives, the Commission aims for a climate neutral Europe by 2050. As an intermediate goal for this, CO2 emissions in 2030 must be 55% less than in 1990. These targets are set out in the European Climate Law, a legal framework with binding targets for all EU member states.
Through various directives, the EU shapes its CO2 reduction targets and ambitions. Some of these directives predate the Paris Agreement and the Green Deal. With the Fit for 55 package – presented in 2021 – the EU revises several existing directives to accelerate towards 55% emission reduction by 2030. The Fit for 55 package also introduces a number of new directives.
Furthermore, the package tightens the reduction targets for each EU member state. In addition, the Fit for 55 package includes specific targets and requirements, such as 40% renewable energy by 2030, the obligation to measure CO2 emissions from building materials through their whole life cycle and an increase in taxation on fossil fuels.
Many of the European directives overlap with the requirements of the CO2 Performance Ladder. In most cases, the Ladder goes a step further in terms of ambition. So by getting certified on the Ladder or using the Ladder in tenders, you automatically contribute to achieving climate targets. The Ladder is also a useful tool for complying with European legislation. This applies even more to the new version of the CO2 Performance Ladder (version 4.0) than to its predecessors.
Below, we list a selection of the European directives for parties using the CO2 Performance Ladder.
Since January 2023, the Corporate Sustainability Reporting Directive (CSRD) has been in force. This directive requires large companies (more than 250 employees) to report on the impact of their activities on people and the environment and vice versa (double materiality). More transparency on this is intended to help ensure that companies take more action on, among other things, reducing greenhouse gas emissions, partly because (potential) investors have more insight into this.
What exactly must be disclosed in sustainability reporting is described in the European Sustainability Reporting Standards (ESRS). The first set of 12 standards has already been published and applies to all CSRD-regulated companies. The European Commission has proposed in early 2025 that the obligation should apply from 1,000 employees. This proposal still needs to be approved by the European Parliament.
Read more about the relationship between the CSRD and the CO2 Performance Ladder here.
The Energy Efficiency Directive (EED) is a directive to ensure that the same results can be achieved with less energy use. Energy use is a major contributor to CO2 emissions. In the Energy Efficiency Directive, the EU has set requirements and rules for increased energy efficiency in various sectors, such as construction and transport. This can be achieved by using energy-efficient techniques or taking measures against wasting energy, among other things.
The CO2 Performance Ladder can help you understand your energy consumption and take measures that contribute to energy savings. In the Netherlands, the CO₂ Performance Ladder version 3.1 is, from level 3 onwards, also accepted as an alternative means of complying with the EED energy audit requirement. Whether this will also apply to version 4.0 of the Ladder is still under review.
The Emissions Trading System (EU ETS) is a system for trading greenhouse gas emission allowances. As part of the Fit for 55 package, the EU ETS was revised in 2024. The revised version strengthens the overarching target for the relevant sectors (heavy industry, energy companies and aviation) to a 43 per cent emission reduction by 2030 compared to 2005.
In addition, the review accelerates the abolition of emission allowances and from 2027 there will be no free allowances for intra-EU aviation. This means that emission rights will become more expensive, requiring companies to invest more in efficiency and reducing CO2 emissions. It also stipulates that shipping will be covered by the EU ETS from 2024, followed by built environment, transport and other sectors (ETS 2) from 2028.
The EU taxonomy for sustainable activities is a classification system under the Green Deal set up to determine which economic activities can be considered green. A clear framework makes it easier for parties to invest in green activities and thus accelerate the transition to a sustainable economy. It should also counteract greenwashing.
An activity is considered green if it makes a significant positive contribution to at least one of these six categories:
Use of the taxonomy is mandatory for EU member states, EU institutions, financial market participants and large public-interest companies with more than 500 employees. With this, it therefore also interfaces with the CSRD. As with the CSRD, there may still be changes regarding the (size of) companies mandated to use the taxonomy.
The CO2 Performance Ladder can enhance the effects of the taxonomy by helping companies stand out from others within their sector and rewarding them for their efforts through tenders. At the same time, the Ladder goes a little further than the taxonomy in its requirements. For example, gas is considered ‘green’ within the taxonomy, while this is not the case with the Ladder.
Read more about the relationship between the green taxonomy and the CO2 Performance Ladder here.
Procurement can be a good tool to drive sustainable transitions. The Directive 2014/24/EU on public procurement sets out the requirements that tenders in the European market must meet. Requirements include, for example, that a tender must be objective, transparent and non-discriminatory. By using the CO2 Performance Ladder as a BPQR award criterion (Best Price-Quality Ratio), you comply with the rules of the European Procurement Act.
Read more about the legal frameworks for procurement here.
Based on its sustainability ambitions, the European Commission has drawn up criteria for Green Public Procurement (GPP). Obligations regarding sustainable procurement and the use of these GPP criteria have also been included in various European directives, such as the Energy Efficiency Directive, Batteries Regulation and Clean Vehicles Directive.
The CO2 Performance Ladder is considered a GPP best practice by several international organisations, such as IPCC, OECD and WEF. Read more about sustainable procurement with the CO2 Performance Ladder here.
Many European directives overlap with the requirements of the CO₂ Performance Ladder. In most cases, the Ladder goes a step further in terms of ambition. By becoming certified on the Ladder or using it in procurement processes, organisations automatically contribute to achieving climate goals. The Ladder is also a useful tool for complying with European legislation. This is even more true for the new version of the CO₂ Performance Ladder (version 4.0) than for its predecessor.
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