Explanatory Memorandum to COM(2016)479 - Inclusion of greenhouse gas emissions and removals from land use, land use change and forestry into the 2030 climate and energy framework - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2016)479 - Inclusion of greenhouse gas emissions and removals from land use, land use change and forestry into the 2030 climate and ... |
|---|---|
| source | COM(2016)479  |
| date | 20-07-2016 |
Contents
- CONTEXT OF THE PROPOSAL
- BUDGETARY IMPLICATIONS
- 2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY
- 3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS
- 5. OTHER ELEMENTS
- Article 1: Subject matter
- Article 2: Scope
- Article 3: Definitions
- Article 4: Commitments
- Article 5: General accounting rules
- Article 6: Accounting for afforested land and deforested land
- Article 7: Accounting for managed cropland, managed grassland and managed wetland
- Article 8: Accounting for managed forest land
- Article 9: Accounting for harvested wood products
- Article 10: Accounting for natural disturbances
- Article 11: Flexibilities
- Article 12: Compliance check
- Article 13: Registry
- Article 14: Exercise of delegation
- Article 15: Review
- Article 16: Consequential amendments to Regulation No. 525/2013/EU
• Reasons for and objectives of the proposal
Climate change is a trans-boundary problem which cannot be solved by national or local action alone. Since 1992, the EU has worked to develop joint solutions and drive forward global action to tackle climate change.
The Paris Agreement was adopted in December 2015 at the 21st Conference of the Parties of the United Nations Framework Convention on Climate Change (UNFCCC). The Agreement includes a long-term goal and spells out that the contribution from land use and forests in reaching the long term climate mitigation objectives will be critical. 1
This proposal also implements EU commitments under the Paris agreement on climate change. On 10 June 2016 the Commission presented a proposal for the EU to ratify the Paris agreement 2 . This proposal followed the Commission's assessment of the Paris agreement 3 .
The European Council's guidance on including land use, land use change and forestry (LULUCF) into the EU's 2030 climate and energy framework is also reflected in the EU's Intended Nationally Determined Contribution. The EU announced that its target is 'an economy-wide absolute reduction from base year emissions', reaching 'at least 40% domestic reduction', covering 100% of the EU's emissions. As for LULUCF, it was added that 'policy on how to include Land Use, Land Use Change and Forestry into the 2030 greenhouse gas mitigation framework will be established as soon as technical conditions allow and in any case before 2020.' 4
The objective of this proposal is to determine how the LULUCF sector will be included into the EU climate policy framework, as of 2021. Up to this date, the Kyoto Protocol places constraints on the EU and each of its Member States, as they need to ensure that the LULUCF sector does not yield extra emissions. However, the Kyoto Protocol will expire at the end of 2020. Consequently, governance for the LULUCF sector needs to be further developed within the EU.
• Consistency with existing policy provisions in the policy area
The current 2020 EU climate policy framework covers most sectors and greenhouse gases. It consists of two main elements:
(a)The EU Emissions Trading System (EU ETS);
(b)Sectors 5 outside the EU ETS are addressed by the Effort Sharing Decision (ESD).
Progress towards the 2020 targets is ensured through annual reporting obligations and compliance checks, set out in Regulation 525/2013/EC. 6
Emissions and removals 7 of greenhouse gases in LULUCF are currently covered by international obligations under the Kyoto Protocol only, up to 2020. The implementation of the current LULUCF Decision (529/2013/EU) is under way and will deliver improved accounting systems by 2020. Without a legal framework consolidating this implementation and defining the applicable rules for the period post-2020, the way in which LULUCF would be included in the overall framework could be heterogeneous across the EU. Differences in reporting and accounting rules from one Member State to the other would negatively affect the optimal functioning of the single market.
• Consistency with other Union policies
A legal proposal for the inclusion of LULUCF into the 2030 EU climate and energy policy framework is a key part of the Commission strategy for a resilient Energy Union with a forward looking climate change policy, underpinning its decarbonisation dimension. The proposal is also needed to complete the integrated framework for climate and energy policies up to 2030 endorsed by the European Council in October 2014.
According to the international rules under UN Framework Convention on Climate Change and the Kyoto Protocol, emissions related to biomass use are reported and accounted for under LULUCF, i.e. biomass use in the energy sector is zero rated. In this way double counting of emissions is avoided.
• Legal basis
Articles 191 to 193 of the Treaty on the Functioning of the European Union confirm and specify EU competencies in the area of climate change. The legal basis for this proposal is Article 192.
• Subsidiarity (for non-exclusive competence)
Climate change is a trans-boundary problem which cannot be solved by national or local action alone. The European Union competence to take action on climate change derives from Article 191 of the Treaty on the Functioning of the European Union. As the EU addresses climate change commitments jointly, LULUCF also needs to be addressed in a coordinated manner.
• Proportionality
The inclusion of LULUCF into the 2030 framework will provide a common framework on how the sector can be counted towards the EU's joint reduction target. The choice of action in pursuit of the various objectives related to LULUCF will be up to the Member States, thereby also fully respecting subsidiarity.
• Choice of the instrument
The European Council has agreed to a single binding objective for climate and energy policy between 2021 and 2030, for an overall economy-wide reduction of at least 40% of greenhouse gas emission levels below 1990 levels. Requirements are placed on the Member States to contribute to achieving the necessary emission reductions as well as on the European Environment Agency. This proposal accompanies that of for a Regulation [] on binding annual greenhouse gas emission reductions by Member States from 2021 to 2030 for a resilient Energy Union and to meet commitments under the Paris Agreement and amending Regulation No 525/2013 of the European Parliament and the Council on a mechanism for monitoring and reporting greenhouse gas emissions and other information relevant to climate change, which covers more than half of these greenhouse gas emissions, and the objective of the proposal is best pursued through a Regulation.
• Ex-post evaluations/fitness checks of existing legislation
There was no related ex-post evaluation or fitness check related to this proposal.
• Stakeholder consultations
Between March and June 2015, the European Commission conducted a public consultation on how best to address emissions from agriculture, forestry and other land use in the context of the 2030 EU climate and energy policy framework. In total, 138 contributions were received On the policy architecture options, half of respondents had no clear preference, and approximately one third of respondents, mostly environmental NGOs and forestry organisations, were in favour of keeping LULUCF as a separate pillar within the climate policy framework. The option of merging agriculture and LULUCF in a separate pillar outside the ESD received the least support. National governments showed most preference for a separate LULUCF pillar, possibly with flexibility, or to merging LULUCF into the ESD. The wide ranging set of views meant that no single option considered by the Commission was able to respond to all these opinions. Accounting was regarded as key to environmental integrity by most respondents. Strong interest was shown to streamline parallel reporting systems and continue with forest reference levels.
• Collection and use of expertise
The quantitative assessment of future impacts in the EU is consistent with the analyses undertaken for the 2030 framework proposal and the Regulation [] on binding annual greenhouse gas emission reductions by Member States from 2021 to 2030 for a resilient Energy Union and to meet commitments under the Paris Agreement. The Commission contracted the National Technical University of Athens, International Institute for Applied Systems Analysis and EuroCare to model EU scenarios.
• Impact assessment
The Impact Assessment has been prepared and developed in full cooperation with the applicable Better Regulation guidance, and has been evaluated by the Regulatory Scrutiny Board, receiving a Positive opinion. Improvements as recommended by the Board have been incorporated into the final version.
In the conclusion of the Impact Assessment, a stand-alone LULUCF policy pillar, which would continue to be utilised together with the no-debit rule, was identified as the preferred option. A limited degree of flexibility between LULUCF and the non-ETS sectors would be enabled, justified on the need derived from the lower mitigation potential of agriculture and the share of the agriculture sector for each Member State. This option would be compatible with food security and biodiversity objectives and would not result in negative employment effects. Such a hybrid option would limit changes of the overall architecture and would thereby minimize administrative burden and red tape while maximising the contributions to the overall achievement of the EU's 2030 targets. The inclusion of LULUCF on the basis of such a hybrid option would also incentivize additional mitigation action in the land and forestry sector and hence be fully compliant with the long term vision for limiting temperature increase as outlined in the Paris Agreement.
• Regulatory fitness and simplification
In line with the Commission commitment to Better Regulation, the proposal has been prepared inclusively, based on transparency and continuous engagement with stakeholders. As LULUCF accounting is done at national level, with the technical support from research institutes or agencies, associated administrative burden and costs for administering compliance will only affect the Member States, the Commission and the European Environment Agency. There are no direct reporting obligations for microenterprises, Small and Medium Enterprises or other enterprises under the current legislation. The proposal would not change this situation.
By far the most significant proposed change is to streamline the two existing parallel reporting systems into a single system. This will reduce administrative burden and costs for Member States and the Commission. As to the administrative impacts of the accounting rule changes, this is expected to be minimal, because the relevant accounting rules have already been set up as a consequence of LULUCF Decision 529/2013/EU. The administrative costs of the existing regime were analysed in the Impact Assessment accompanying the proposal for the existing LULUCF Decision (SWD (2012) 41 final).
The proposal identifies flexibility and synergies of cost-effective mitigation between all activities related to agriculture and land use. The proposal is aligned with the INSPIRE Directive (Directive 2007/2/EC) concerning digital and geographic data.
This proposal is not an initiative within the Regulatory Fitness Programme.
• Fundamental rights
As the proposed policy primarily addresses Member States as institutional actors it is consistent with the Charter for fundamental rights.
The indirect impacts on Member States’ budgets will depend on the choice of national policies and measures for greenhouse gas emission reductions and other mitigation action in the land use sector covered by this initiative chosen in each specific country. The proposal eliminates one (of the existing two) reporting frameworks, streamlining the process of accounting compared to that required under the Kyoto Protocol. This will reduce the administrative costs for Member States and the European Commission. This proposal has very limited implications for the EU budget, which are presented in the attached legislative financial statement.
• Implementation plans and monitoring, evaluation and reporting arrangements
Environmental integrity always needs to be kept in mind when considering options allowing the enhanced use of flexibility. Mitigation activities in LULUCF should result in additional, measurable and sustainable enhancement of carbon sinks. Assurance of these conditions requires a rigorous monitoring, reporting and verification system.
International obligations under the UNFCCC framework will mean that the reporting exercise remains annual. Monitoring and reporting continues to rely on the requirements specified in Regulation 525/2013/EC, amended to purpose by this Regulation. Regulation 525/2013/EC should be further complemented in order to create a comprehensive post-2020 monitoring and compliance framework for all non-ETS sectors, including LULUCF. These provisions are planned to be integrated into the Governance of the Energy Union, for which a Commission proposal is foreseen by the end of 2016 in the Commission’s work programme and might be further streamlined as part of that proposal. Accounting of LULUCF actions is best enabled over longer periods. For LULUCF to be integrated with the other sectors in the Non-ETS, compliance checks will take place every five years.
• Detailed explanation of the specific provisions of the proposal
This article explains that the Regulation lays down the commitments of Member States towards meeting the greenhouse gas emission reduction commitment of the Union for the period from 2021 to 2030, and rules for accounting and checking compliance.
The article defines the scope of coverage of the Regulation. It mirrors the coverage of the existing EU legislation for Member States under the Kyoto Protocol (529/2013/EU). The mandatory scope is in essence forest land and agricultural land, and land for which the use has changed from or to these uses. The approach proposed discards the parallel Kyoto Protocol reporting framework and streamlines the system with the UNFCCC 'land-based' reporting framework. The scope includes greenhouse gases CO2, CH4 and N2O.
The article defines specific terminology.
The commitment for each Member State is to ensure that the LULUCF sector should have, after the application of the accounting rules specified in the Regulation, and taking into account the flexibilities, no net emissions on their territory. This principle is referred to in the Impact Assessment as the 'no-debit rule'.
The Article lays down general rules to avoid double counting, to manage the transitions between land use categories and to account for each carbon pool, except those falling under a 'de minimis' rule. It is closely based on the general accounting rules in Decision 529/2013/EU, adding a dynamic rule for the transition of land use categories.
This article outlines the specific accounting rules for land use changed from (deforested) and to (afforested) forest land. These land accounting categories are accounted using the 'gross-net' approach, i.e. accounting emissions and removals over the period in their entirety. It is essentially the same as in Decision 529/2013/EU, except for introducing the option of using 30 years instead of the default value for transitioning other land use categories to forest land. The use of this value instead of the default value should be duly justified in the Member State's greenhouse gas inventory submitted to the UNFCCC, in accordance with the Intergovernmental Panel on Climate Change Guidelines.
This article outlines the specific accounting rules for managed cropland, grassland and wetland, including categories of land changing from and to these categories. This land use change is accounted relative to emissions or removals compared to a historical reference.
It is essentially the same as in Decision 529/2013/EU, except that a more recent historical reference is proposed in order to improve accuracy of the estimates, align better with the rest of the non-ETS sectors, and simplify accounting by reducing the need for the historical time series.
This Article provides for accounting rules for managed forest land using a forest reference level to exclude the effects of natural and country-specific characteristics. It is closely based on the relevant rules in Decision 529/2013/EU. The article also establishes an EU governance framework to be used given the expiry of the Kyoto Protocol post-2020. Provisions aim at enhancing the accuracy and transparency of the forest reference levels and the process establishing them. This should include stakeholder consultation in the Member States and a review assisted by Member State experts.
This article determines the accounting approach to this carbon pool in afforested land and managed forest land. The methodology is essentially unchanged compared to Decision 529/2013/EU.
This Article permits Member States to exclude emissions from natural disturbances (forest fire, pest invasion, etc.) from their accounts. The methodology is essentially unchanged compared to Decision 529/2013/EU. The establishment of the background level will, in the absence of the Kyoto Protocol review, need to be transparent. The Commission will therefore oversee that the applicable guidance and rules have been respected.
This article provides for Member States to compensate for emissions from one land accounting category by removals from another land accounting category in their territory. It also enables a Member State to cumulate the net removals identified in their accounts over the 10 year period. Excess removals may be transferred to another Member State to help ensure their compliance with the no-debit rule. Finally, Member States are required to ensure adequate monitoring that is in compliance of this regulation, in order to avail of the flexibilities.
This Article outlines the requirements for Member States to ensure appropriate monitoring for accounting purposes, and establishes regular compliance checks by the Commission. In order to ensure a high standard of quality the European Environment Agency will assist the Commission in this work.
This Article relates to the use of Registry for transactions while ensuring no double counting.
The proposal empowers the Commission to adopt delegated acts according to relevant procedures.
A review of all elements of the regulation to determine whether they remain fit for purpose
is to be performed in 2024, and every 5 years thereafter.
Regulation No. 525/2013/EU is being amended in order to ensure that the reporting requirements currently applying to LULUCF are continued within the framework of that Regulation. Member States are required to report yearly their relevant GHG emissions and they will continue to be required to report every two years on their projections and policies and measures implemented to ensure compliance with their targets. Monitoring requirements for LULUCF are strengthened to ensure the environmental integrity of accounting.