We have agreed on the long-term direction for our energy and climate change policy. We show how the European Union's leadership in global climate action is beyond doubt and we show that we can do this in a way that is beneficial for the economy.
An ambitious and smart "2030 strategy" will contribute to Europe's share in global climate action, but will also help to reduce our costly dependency on import of gas and oil, boost our green technology industry and sustainable growth by providing a stable long-term perspective for our companies to invest.
So this "2030 proposal" is critically important. Climate change is a defining challenge of our time, while a truly European energy policy is key for our competitiveness. What we are presenting today is both ambitious and affordable. It shows that we are beyond the debate where you had to either be "green" or a defender of industry. We believe these two issues are not contradictory, but can perfectly go together if handled smartly.
Let me begin with the main headline figures:
Since we are on track with our 2020 policies, we should build on them and go beyond. We are therefore proposing a binding 2030 greenhouse gas reduction target for the European Union of minus 40% (relative to 1990). That is ambitious, but feasible. 40% is the most cost-effective milestone on the 2050 road map for decarbonizing Europe's economy.
We also set a binding 2030 target for renewables at European Union-level. The goal is at least 27% of energy consumption. It is a function of the 40% target, because we can't reach the greenhouse gas target without a collective effort on renewables.
Having such a European Union renewables objective is also a very important signal to investors who need long-term certainty to make investments, and also a clear signal in terms of our security of supply.
However, we propose not to set national binding targets for renewables anymore, individually from Member State to Member State as we do now; because one lesson we have drawn from experience is that they risk the fragmentation of the internal market and do not allow us to reach the targets in the most cost effective way.
Here we will lead a bottom-up approach, leaving more flexibility to member states. They will work with us to make sure the national efforts add up to the European Union target. This flexibility is possible, because we are in a much more advanced stage of renewables policy than a few years ago. But of course our proposals will make it sure that with the new governance system we will be completely assured that we are going to reach the overall targets at European level.
I would like also to be especially clear on this: Member States remain free to set their own national renewables goals if they so wish; they can continue to support renewables, provided they remain within our state aid rules. And some of them are ready to be more ambitious than others. As you know, regarding the state aid rules, we are currently reviewing them to make sure there are no distortions. Because we have seen in the past that in some countries there were distortions precisely because of these national targets on renewables, including heavy subsidiarisation with sometimes important costs for competiveness and also creating distortion in terms of the internal market.