Effort Sharing Regulation

Written by Dessislava Yougova,

The European Union aims to reduce at least 40% of its greenhouse gases emissions by 2030 compared to 1990 levels. The main instruments to achieve this target are the EU ETS and the effort sharing exercise that covers the non-ETS sectors, mainly transport, buildings, waste and agriculture. On 20 July 2016 the European Commission presented a legislative proposal to regulate the GHG emissions from these sectors for the period from 2021 to 2030 by setting out binding emission reductions for Member States. The proposed Regulation follows up on the Effort Sharing Decision (ESD), which established national emissions targets for Member States in the non-ETS sectors between 2013 and 2020. The new Commission proposal is a part of a package of measures to accelerate the transition to low-carbon emissions in all sectors of the European economy in the context of the recently ratified Paris Agreement on climate change.

According to the latest national projections , the emissions from non-ETS sectors will be lower than the 2020 targets in most Member States. For environmental groups this means that the targets are too weak. They also consider that the new proposal for an Effort Sharing Regulation weakens the EU target of 40% emission reduction by 2030. According to experts , even the 40% target is not enough in view of the Paris Agreement and the commitment to limit the increase in global temperature to well below 2°C. At the same time, some Member States argue that the cost of making the necessary emissions reductions in the non-ETS sectors is too high. Several points from the Commission proposal will be under debate in the Council and Parliament. The rapporteur, MEP Gerben-Jan Gerbrandy (ALDE, NL) plans to publish his draft report before the end of this year , in order to submit it for voting in the Environment, Public Health and Food Safety Committee in May 2017.

See also EPRS briefing Effort sharing regulation, 2021-2030: Limiting Member States’ carbon emissions , September 2016

Overviews

Objectifs de GES de l’UE pour 2030: la révision de la décision du “Partage de l’effort” entre les états-membres , Charlotte Vailles, I4CE, octobre 2016
Présentation détaillée de la proposition de la Commission

7 takeaways on the Commission’s emissions-cutting package , Kalina Oroschakoff, Sara Stefanini, Politico, July 2016
Introduction to the main points to be negotiated and the Member States’ first reactions to the proposal

Factsheet on the Commission’s proposal on binding greenhouse gas emission reductions for Member States (2021-2030), 20 July 2016
Questions and answers related to the Commission’s proposal

Analysis

EU Effort Sharing after 2020: Review and ratcheting up EU climate targets , Nils Meyer-Ohlendorf, Ralph Bodle, Ecologic, October 2016, 22 p.
The Paris agreement requires Parties to scale up their commitments every five years. According to this paper, the Commission proposal does not support adequately continuous scaling up of the EU greenhouse gas reduction targets. See also the  comments (September 2016, 4 p.) that overview the positive elements in the proposal as well as the elements that should be improved.

The 2030 Effort Sharing Regulation: How can the EU’s largest climate tool spur Europe’s low-carbon transition?, Carbon Market Watch Policy Briefing, September 2016, 8 p.
According to this briefing, the current 2030 target for reducing emissions in the sectors not covered by the EU ETS is too low to address the global warming challenge and the introduction of loopholes will limit in reality the emissions reduction to 23% instead of targeted 30%.

Starting point + banking: a fatal combination for the ESR?, Transport & Environment, September 2016, 8 p.
This paper explains what the starting point is, why it is important for the achievement of the 2030 target, and what the options to fix it are.

Holding on to the EU’s climate ambition?, Sini Eräjää, BirdLife, September 2016
This brief points out the issue of flexibilities that can be useful, in theory, to ensure cost-efficiency of the measures taken to reduce national emissions but lead, in practice, to the creation of loopholes which allow less reduction of emissions.

National 2021–2030 climate targets for non-ETS sectors , Moritz Bonn, Götz Reichert, CEP, 2016, 4 p.
According to this policy brief all economic sectors should be included in the EU ETS “because only the ETS guarantees that the agreed GHG reduction will be achieved at the lowest possible cost.” Some positive options in the Commission proposal for ESR are highlighted, notably “the ability to transfer excess GHG emission allocations to subsequent years, the ability to sell excess GHG emission allowances to other Member States and the use of emission allowances in non-ETS sectors.”

Evaluation of the European Commission’s Effort Sharing Regulation proposal , CAN Europe, September 2016, 8 p.
According to this brief “the proposed Regulation is not the most ambitious interpretation of the Council’s at least 40% 2030 reduction target, which in itself is too weak to be in line with the objectives of the Paris Agreement to keep temperature rise well below 2°C and pursue efforts to limit it to 1.5°C.”
See also: A trick list of how countries can avoid climate action in their non-ETS sectors, 15 July 2016, 7 p. and No cheating from the start: 2030 climate targets for EU Member States , July 2016, 9 p.

Première évaluation de la proposition de la DRE pour l’atténuation des émissions de GES en Europe, Nicolas Berghmans, IDDRI blog, 31 août 2016
Ce blog post analyse la proposition de la Commission à la lumière du but des objectifs nationaux qui doivent « inciter les états-membres à adopter d’autres politiques entraînant des réductions plus importantes ». La conclusion est que les dispositions d’assouplissement prévues dans la proposition et les valeurs modestes des objectifs peuvent provoquer un « comportement attentiste » de la part des  états-membres.

Europe, do you dare to share?: Essentials of the draft Effort Sharing Regulation , Thomson Reuters Point Carbon, 22 July 2016, 7 p.
This paper analyses the impact on the effort sharing task of some options such as the distribution of the targets according to member states’ GDP performance, the way the starting point for the ESR reduction pathway is fixed in the proposal, and the Brexit vote.
See also the article in ENDS Europe

Analysis: How UK leaving the EU would increase climate targets for others , Simon Evans, Carbon brief, 20 July 2016
The proposal for ESR is analysed in the context of the 2030 EU climate targets and possible flexibilities, the Brexit vote, and the Paris agreement.

Bend it, don’t break it: Introducing new flexibilities into the EU Effort Sharing Decision , Sandbags, July 2016, 23 p.
This report, written before the publication of the Commission proposal, highlights the issue of enhanced flexibilities and their role in achieving more ambitious cost-effective emissions reductions. The analysis shows that 50% reduction in emissions by 2030 against 2005 levels are achievable and can be delivered cost-effectively.

Stakeholder views

Environment Council: Debate on two proposals on greenhouse gas reductions in the sectors not covered by the EU emissions trading system , 17 October 2016 -video
See also the article in ENDS Europe from 18 October

NGOs: Open letter to environment ministers on the Effort Sharing and the LULUCF Regulations , 14 October 2016
29 organizations from across Europe call MS to ensure that the EU delivers its commitments in the Paris Agreement by taking effective and ambitious action to limit global warming to 1.5°C.
See also Infographic

European Parliament: The coordinators of the ENVI Committee for seven political groups in the European Parliament wrote in June 2016 a letter , asking the Commission to “ensure real world delivery of the proposed targets and make it consistent with the outcomes of the Paris Agreement”.

Stakeholder consultation held from 26 March to 18 June 2015: analysis of the contributions

Related legislative procedure

Procedure file in the EP Legislative observatory

Procedure 2016/0231/COD in EUR-Lex