The EU effort sharing legislation is one of the key policy instruments of the EU’s climate and energy policy to achieve domestic and international climate targets. It aims to cut greenhouse gas (GHG) emissions in the sectors that are not included in the EU Emissions Trading System (EU ETS) or the Land Use, Land Use Change and Forestry (LULUCF) Regulation. This represents a wide range of sources, such as petrol and diesel use for road transport, energy use for heating and cooling in households and commercial buildings, animal digestion and fertiliser use in agriculture, waste treatment and small industries. Altogether, these emissions make up about 60 % of total GHG emissions at EU level.
What the data are telling us
- In 2018, effort sharing sector emissions were almost 11 % below 2005 levels and largely driven by improvements in energy efficiency and the switch to less carbon-intensive fuels for heating and cooling, including renewable energy sources.
- While this collective reduction by the EU Member States is in line with the EU’s GHG emission target for 2020, emission reductions in all effort sharing sectors need to accelerate if they are to contribute adequately towards the EU’s 2030 emission reduction target.
- Progress towards 2020 targets is more diverse at national level. In 2018, 11 Member States (Austria, Belgium, Bulgaria, Cyprus, Estonia, Finland, Germany, Ireland, Luxembourg, Malta and Poland) had emission levels in effort sharing sectors higher than their respective annual targets. Preliminary estimates indicate that, in 2019, these same 11 countries, and Czechia, had emission levels higher than their 2019 targets.
- To reach their national 2030 emission reduction targets in the effort sharing sectors, a total of 21 Member States will have to increase the pace of their average annual reductions in GHG emissions compared with the pace that they achieved between 2005 and 2018. Notably, Greece and Hungary already reported emission levels in 2018 that were below their national 2030 targets.
EU GHG emissions under the effort sharing legislation decreased by 11 % between 2005 and 2018, with differing contributions from each sector.
Measures addressing energy use for heating and cooling in the buildings sector helped to deliver the largest contribution to overall reductions in effort sharing emissions between 2005 and 2018 (50 %). Measures to improve energy efficiency and the switch to less carbon-intensive fuels for heating and cooling, including renewable energy sources, were most effective.
In contrast, the transport sector contributed very limited emission reductions during that period (8 %). Transport emissions have increased annually since 2014, driven by growing demand in passenger and freight road transport. The EU Member States and the United Kingdom anticipate significant emission reductions in this sector between 2018 and 2030. These will be achieved through a wide range of measures, for instance improving vehicle efficiency, using low-carbon fuels and electric vehicles, a shift in transport modes and improving transport systems.
Small reductions (1 %) were also contributed by the agriculture sector. Support for farms addressing agriculture emissions, as well as organic farming and requirements on fertiliser use, are examples of measures that could help reduce emissions from agriculture. EU Member States and the United Kingdom indicate a limited potential for emission reductions in this sector.
The effort sharing legislation sets annual national GHG emission targets for the periods 2013-2020 (Effort Sharing Decision, ESD) and 2021-2030 (Effort Sharing Regulation, ESR). These annual targets are different for each country.
The national emission targets for 2020 range from a 20 % reduction by 2020 (from 2005 levels) for the richest countries to a 20 % increase for the least wealthy one, Bulgaria. Taken together, the national 2020 targets represent a 10 % reduction in EU effort sharing sector emissions compared with 2005, which is in line with the EU target of a 20 % reduction in all GHG emissions by 2020 (including those in the EU ETS), compared with 1990.
The annual progress towards the national targets under the ESD is assessed by comparing effort sharing sector GHG emission levels with the relevant annual targets under the legislation. To achieve compliance under the ESD, countries are permitted to use flexibility options to a certain extent, such as carrying forward (i.e. ‘borrowing’) emission allocations (AEAs) from the following year or carrying over any surplus AEAs from a previous year. Buying emission allocations from other countries or using international project credits under the Kyoto Protocol up to a certain limit are also permitted.
Following the emission reductions caused by the COVID-19 pandemic in 2020, Member States are now awaiting the end of the compliance period under the ESD. Preliminary data for 2020 show that Germany, Ireland and Malta will not achieve their national target in 2020 and will need to buy additional emission allocations from other Member States or use international project credits to comply.
For 2030, the national emission targets range from 0 % (no change from 2005 levels) to 40 % below 2005 levels (applicable to effort sharing sector emissions only). These targets correspond to an EU reduction of 30 % from 2005 levels by 2030, as a contribution towards the current reduction target of 40 % below 1990 levels for all GHG emissions in the EU Member States and the United Kingdom. The national targets will need to be revised to reflect the raised ambition of the EU’s 2030 target in the European Climate Law.