On 20 July, the European Commission published two proposals for regulations dealing with emissions outside the EU Emission Trading Scheme for years 2021-30. After the summer break at the European Parliament, this week we learnt the names of rapporteurs and committees members who will be responsible to take the proposals through the legislative process.
The new for mechanism setting emissions budgets, known as the Effort Sharing Regulation (ESR), will require Member States to cut their emissions from transport, buildings, agriculture and waste sectors and other sources of non-CO2 greenhouse gases. Besides that, it will newly cover emissions from land use, land use change and forestry (LULUCF).
Unlike the previous emissions budget regulations in Europe that allowed lower income Member States to actually increase their emissions, the ESR will require all countries to reduce their emissions compare to 1990 levels (apart from Bulgaria who can, as the country with lowest GDP per capita in the whole Union, keep their emissions at the same level as in 1990). The shared target is a 30% reduction of non-ETS emissions but the individual targets and reduction trajectories differ among Member States according to their wealth and emission levels between 2016-18. Our analysis (attached below) shows that a key determinant of whether the EU is able to meet these new targets is the degree to which additional action is taken in relatively rich, big emitting countries such as Germany.
The new proposal includes flexibilities used in the past (such as trade between countries) and adds a couple of new ones, specifically an option for some Member States to transfer a part of their allowances under the EU’s Emissions Trading Scheme into ESR, and an opportunity to claim extra allocations from LULUCF removals and use them to compensate emissions from other sectors.
We have prepared a short briefing report summarising these proposals and highlighting the key areas of interest. The document can be downloaded here: ESR briefing report.