Explanatory Memorandum to COM(2008)17 - Effort of Member States to reduce their greenhouse gas emissions to meet the EC’s greenhouse gas emission reduction commitments up to 2020

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dossier COM(2008)17 - Effort of Member States to reduce their greenhouse gas emissions to meet the EC’s greenhouse gas emission reduction ...
source COM(2008)17 EN
date 23-01-2008
1. INTRODUCTION

The ultimate objective of the United Nations Framework Convention on Climate Change, which was approved on behalf of the European Community by Council Decision 94/69/EC of 15 December 1993 i concerning the conclusion of the United Nations Framework Convention on Climate Change (UNFCCC), is to stabilise greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system.

The Community has, on multiple occasions, stressed that, in order to meet this objective, the overall global annual mean surface temperature increase should not exceed 2°C above pre-industrial levels, which implies that global greenhouse gas emissions should be reduced to at least 50% below 1990 levels by 2050. All sectors of the economy should contribute to achieving these emission reductions. Developed countries should continue to take the lead by committing to collectively reducing their emissions of greenhouse gases in the order of 30% by 2020 compared to 1990.

In this context, the European Council has, at its meeting in March 2007, endorsed an EU objective of a 30% reduction in greenhouse gas emissions by 2020 compared to 1990 as its contribution to a global and comprehensive agreement for the period beyond 2012, provided that other developed countries commit themselves to comparable emission reductions and economically more advanced developing countries commit themselves to contributing adequately according to their responsibilities and capabilities.

The European Council has also emphasised that the EU is committed to transforming Europe into a highly energy-efficient and low greenhouse-gas-emitting economy and has decided that, until a global and comprehensive post-2012 agreement is concluded, and without prejudice to its position in international negotiations, the EU makes a firm independent commitment to achieve at least a 20% reduction of greenhouse gas emissions by 2020 compared to 1990.

In order to cost-effectively achieve this 20% reduction of greenhouse gas emissions by 2020 compared to 1990 levels, additional policies and measures should be implemented to further limit the emission of greenhouse gases from sources not covered under the EU's greenhouse gas emissions trading scheme (EU ETS) i to the levels as set out in the Annex to this Decision.

The effort of each Member State to contribute to meeting the Community’s greenhouse gas emission reduction commitment for 2020 through limiting greenhouse gas emissions from sources outside the EU ETS should be determined in relation to the level of its 2005 greenhouse gas emissions, which is the latest available verified greenhouse gas emissions data.

Contents

1.

2. SCOPE : CONTRIBUTION OF THE REDUCTIONS OF GREENHOUSE GASES EMISSIONS FROM SECTORS NOT INCLUDED IN THE EU ETS TO REACH THE OVERALL EU TARGET


This Decision determines the contribution of Member States to meeting the Community’s greenhouse gas emission reduction commitment from 2013 to 2020 for greenhouse gas emissions from sources not covered under Directive 2003/87/EC (sources outside the EU ETS). It provides for the evaluation of the achieved emissions reductions resulting from the implementation of this Decision. It also promotes flexibility in achieving this effort through allowing for the use of certified emission reductions resulting from clean development mechanism projects under Article 12 of the Kyoto Protocol and resulting from emission reduction activities in third countries to implement this effort.

The implementation by Member States of EU wide measures outside the EU ETS contributes to the achievement of the target for each Member State.

2.

3. SHARING THE EFFORT: FAIRNESS AMONG MEMBER STATES


Member State reduction efforts should be based on the principle of solidarity between Member States and the need for sustainable economic growth across the Community, taking into account the relative per capita GDP of Member States. Member States that currently have a relatively low per capita GDP and thus high GDP growth expectations may increase their greenhouse emissions compared to 2005. Nevertheless these targets still represent a limit to their emissions and will require those Member States to take measures to limit the growth of their emissions. Member States that currently have a relatively high per capita GDP will need to reduce their greenhouse emissions compared to 2005.

To further ensure a fair contribution of each Member State to the implementation of the Community’s independent commitment to achieve at least a 20% reduction of greenhouse gas emissions by 2020 compared to 1990, no country should be required to reduce its greenhouse gas emissions in 2020 to more than 20% below 2005 levels and no country should be allowed to increase its greenhouse gas emissions in 2020 to more than 20% above 2005 levels.

Reductions in greenhouse gas emissions should take place between 2013 and 2020. This proposal allows each Member State to carry forward from the following year a quantity equal to 2% of the greenhouse gas emission limit of that Member State. It also allows a Member State of which the emissions are below its limit to carry over its excess emission reductions to the subsequent year.

3.

4. THE USE OF CREDITS FROM PROJECTS IN THIRD COUNTRIES


To provide for flexibility for Member States in implementing their commitments and to promote the sustainable development in third countries, in particular in developing countries, and to provide certainty to investors, the Community should continue to recognise credits from greenhouse gas emission reduction projects in third countries, also before a future international agreement on climate change has been reached. The use of these credits should be consistent with the EU’s goal of climate leadership through significant greenhouse gas emission reductions internally, the goal of generating 20% of its energy from renewable sources by 2020, promoting the EU’s energy security and promoting innovation and the EU’s competitiveness.

Member States should therefore be able to use greenhouse gas emission reduction credits resulting from Clean Development Mechanism (CDM) projects, issued for reductions that were made during the 2008-2012 period and that result from projects types which were accepted by all Member States during that period. Member States should also be able to use greenhouse gas emission reduction credits for reductions from CDM projects that were made after this period and that result from projects that were registered and implemented during the 2008-2012 period and that result from projects types which were accepted by all Member States during that period.

Very few clean CDM projects have been implemented in Least Developed Countries (LDCs). The Community supports the equitable distribution of CDM projects, including through the Commission’s Global Climate Change Alliance i. It is therefore appropriate to give certainty on the acceptance of credits also from projects started after the 2008-2012 period in LDCs, for project types that were accepted by all Member States during the 2008-2012 period. This acceptance should continue until 2020 or the conclusion of an agreement with the Community, whichever is the earlier.

In order to provide for further flexibility and to promote sustainable development in developing countries, the use by Member States of additional credits from high quality projects through agreements concluded by the Community with third countries should be foreseen. Such agreements may be applicable to more than one country. Without a future international agreement on climate change that determines the assigned amount for developed countries, Joint Implementation (JI) projects cannot continue after 2012. Greenhouse gas emission reduction credits resulting from such projects could however continue to be recognised through agreements with third countries.

The continued ability for Member States to use CDM credits is important to help ensure a market for those credits after 2012. To help ensure such market as well as to ensure further greenhouse gas emission reductions within the EU and thus further the implementation of the Community's renewable energy, energy security, innovation and competitiveness objectives, it is proposed to allow the annual use by Member States of credits from greenhouse gas emission reduction projects in third countries, until a future international agreement on climate change has been reached, up to 3% of each Member State’s emissions from sources outside the ETS in the year 2005. This quantity is equivalent to a third of the reduction effort in 2020. Each Member State should be allowed to transfer the unused part of this limit to another other Member States.

4.

5. WHAT CHANGE IN CASE OF AN INTERNATIONAL AGREEMENT?


In this context, the European Council has endorsed an EU objective of a 30% reduction in greenhouse gas emissions by 2020 compared to 1990 as its contribution to a global and comprehensive agreement for the period beyond 2012, provided that other developed countries commit themselves to comparable emission reductions and economically more advanced developing countries commit themselves to contributing adequately according to their responsibilities and capabilities.

Following the conclusion by the Community of a future international climate change agreement, Member State emission limits should be adjusted on the basis of the Community's new greenhouse gas emission reduction commitment set out in that agreement. The total quantity of additional greenhouse gas emissions reductions necessary to achieve this more ambitious greenhouse gas emission commitment shall be distributed between the sources covered under the EU ETS and the sources outside the EU ETS, where the sources not covered under the EU ETS are expected to contribute the same share of the emission reduction commitment that they contributed to the Community's commitment to reduce its emissions by at least 20% in 2020.

In order to ensure an equitable distribution of this additional reduction effort between Member States for the sources outside the EU ETS, each Member State will contribute to the Community's additional reduction effort in proportion to its share of the Community's total emissions from sources not covered under the EU ETS for the year 2020 under the Community's independent commitment to reduce its greenhouse gas emissions by at least 20%.

Also the limits for the use of credits generated through projects in third countries should be increased. This increase should be equal to half the additional reduction effort due to the international agreement. Once a future international agreement on climate change has been reached, Member States should only accept emission reduction credits from countries which have ratified that agreement and subject to a common approach.

5.

6. IMPLICATIONS FROM CHANGE IN THE SCOPE OF THE EU ETS


Any adjustments in the coverage of the EU ETS should be matched by a corresponding adjustment in the maximum quantity of emissions by sources covered under this Decision.

6.

7. MONITORING, REPORTING, VERIFICATION


Member States shall, in their annual reports submitted under Article 3 of Decision 280/2004/EC, report their annual emissions resulting from the implementation of Article 3 and the use of credits in accordance with Article 4. Member States shall submit also an update of their projected progress before 1 July 2016.

The Commission shall in its report submitted under Article 5 i of Decision 280/2004/EC evaluate whether progress is sufficient to fulfill the commitments under this Decision.

This assessment shall take into account progress in Community policies and measures and information from Member States in accordance with Article 3 and Article 5 of Decision 280/2004/EC.

Every two years, starting in 2013, this assessment shall also include the projected progress of the Community and its Member States towards fulfilling their commitments under this Decision.

The Commission shall draw up a report evaluating the implementation of this Decision. The Commission shall submit this report to the European Parliament and to the Council by 31 October 2016, accompanied by proposals as appropriate.