On 06 March 2015, the EU submitted its Intended Nationally Determined Contribution (INDC) to the UNFCCC (UNFCCC 2015a, 2015b) formally putting forward a binding, economy-wide target of at least 40% domestic greenhouse gas emissions reductions below 1990 levels by 2030. We rate this target Medium.
The overall level of GHG emissions reductions proposed in the INDC is not yet sufficient to fall within the range of approaches for fair and equitable emission reductions for the EU28. Currently implemented policies are projected to reduce domestic emissions by 23–35% below 1990 levels and hence do not—yet—put the EU on a trajectory towards meeting either its 2030 or 2050 targets.
A positive element of the EU’s INDC is the specification that it includes economy-wide emission reduction goals.
The INDC confirms the inclusion of land use, land use change and forestry (LULUCF) accounting into the 2030 GHG mitigation framework but does not provide information on the accounting rules and potential magnitude of their impact on emissions levels in 2030. Of concern is the proposal that these elements are only to be clarified after 2015.
In addition to increasing its overall emissions reductions target preceding the negotiations in Paris, the EU should clarify to what degree will the inclusion of the LULUCF influence emissions reduction in other sectors. This can be done by guaranteeing that its “at least 40% domestic emission reductions” target applies only to industrial greenhouse gas emissions (Kyoto protocol Annex A sources and gases), and would be achieved irrespective of LULUCF accounting. In addition, given that the question of the length of commitment periods remains unresolved, the EU would also need to indicate an emissions’ reduction target for 2025.
In relation to 2020, the EU has signed up to the second commitment period of the Kyoto Protocol (2013–2020) with a QELRO equivalent to a 20% reduction from base year emissions, averaged over the second commitment period. Currently implemented policies are estimated to lead to a 22–27% reduction below 1990 levels by 2020, meaning that the EU is on track to significantly over-achieve its Kyoto second commitment period target. However, with current policies the EU is not on track to meet its more ambitious conditional Copenhagen pledge of reducing emissions by 30% below 1990 levels by 2020.
2020 pledge and Kyoto target
Under the Copenhagen Accord the EU proposed to decrease emissions by 20%-30% below 1990 by 2020 and by 80%-95% below 1990 by 2050. The more ambitious 30% reduction by 2020 target was linked conditionally to other developed countries committing to comparable efforts and developing countries contributing according to their capabilities.
In May 2012, the EU submitted a provisional QELRO(Quantified Emission Limitation or Reduction Objective) level equivalent to 20% reduction from base year emissions averaged over the second commitment period; this approximates a 21% reduction in Kyoto Protocol Annex A emissions from 1990 levels by 2020. This is to be fulfilled jointly by the EU and its Member States. But as by 2012 emissions of industrial GHGs were already approximately 19% below 1990 levels, it wasn’t considered to be an ambitious target (the first commitment period was approximately 16% below 1990).
In February 2011 the EU leaders have endorsed the objective of reducing Europe's GHG emissions by 80–95% below 1990 levels by 2050 (European Council, 2011) conditional on necessary reductions to be collectively achieved by developed countries in line with the Intergovernmental Panel on Climate Change (IPCC). An attempt to adopt an independent European target failed in October 2012.
In October 2014, EU leaders agreed on a 2030 climate and energy policy framework for the EU putting forward a legally binding EU target of at least a 40% reduction in domestic emissions by 2030 below 1990, with other main building blocks of the 2030 policy framework for climate and energy, as proposed by the European Commission in January 2014 (European Council, 2014)
On 06 March 2015, the EU submitted its INDC to the UNFCCC committing to a target of at least 40% domestic emissions reductions below 1990 by 2030 (UNFCCC, 2015). Parallel to this, the European Commission (one of the three decision-making bodies of the EU next to the Council of Ministers and the European Parliament) issued a statement, which differs from the INDC in respect of the contribution of the LULUCF to the emissions reduction (see below under “Uncertainty in effect of LULUCF accounting”).At the end of September the EU Council of Ministers for Environment adopted the Negotiations Mandate for the European Union with "at least 40% domestic reduction in greenhouse gas emissions by 2030 compared to 1990” and proposal for "a dynamic five-yearly mitigation ambition mechanism”.
Transparency of accounting and reporting of emissions
Quantitative assessments of any emissions reduction target necessitate that the stated target is clear and quantifiable regarding any reference emissions levels, sectors and gases included, and that the accounting rules to be applied are clear. While the EU INDC does state the gas and sector coverage and reference year, it does not provide sufficient accounting detail to ensure full clarity on these issues.
The major issues concerns the basic question of what is to be included in the base year emissions. This is puzzling given the EU declaration that its accounting rules under the UNFCCC and for its 2012-2020 EU energy and climate package were more stringent than the current rules under the Kyoto Protocol.
The INDC includes the following additional rules compared to Kyoto Protocol:
The uncertainty around LULUCF accounting
For further details, please refer to our INDC briefing paper.
Although the INDC confirms the inclusion of LULUCF accounting into the 2030 GHG mitigation target, it lacks transparency on which sectors from land use, land use change and forestry (LULUCF) are to be included in its emissions accounting in the base year (1990), as well as for the period 2021 to 2030, and what the accounting rules and modalities would be for these. Of concern is the proposal that these elements are only to be clarified after 2015, and before 2020.
This leaves open several important issues, including whether the 40% reduction goal is set against an industrial greenhouse gas emissions baseline in 1990, as under the Kyoto protocol, or whether LULUCF emissions and/or removals are to be included in the base year, and if so how. The choices here have substantial implications for the environmental integrity of greenhouse gas reduction targets due to the significant uncertainties associated with monitoring of LULUCF emissions and sinks, and the risk of asymmetric accounting when the base year includes LULUCF.
This open question could be seen as contradicting the EU Commission’s proposal (separate statement and proposal from February - EC, 2015) that specified the post-2020 LULUCF accounting would build upon rules previously agreed under the Convention, applicable COP decisions and the EU’s domestic legislation, and “the current level of environmental integrity.” Such language has not been retained in the INDC text.
In the current INDC text, the EU commits to providing further information on the LULUCF accounting rules “as soon as conditions allow and in any case before 2020.” In the absence of further information, it may be extremely difficult to quantify the likely effect of the EU’s 2030 proposal before Paris, and a rigorous quantification would have to await either the EU’s policy announcement post 2015, or the completion of negotiations on implementing architecture and rules. Due to lack of publically available data, the CAT is unable to quantify the range of likely outcomes as it usually does at this point, and it would seem inappropriate to simply assume the most favourable - or indeed the worst - estimates. However, based on estimates for the pre-2020 period and projections for the whole LULUCF sector in 2030 (EC, 2014b), we could envisage an impact of including LULUCF accounting on reductions of industrial greenhouse gas emissions in the range of 1–4% of 1990 emissions, depending on the exact accounting rules applied (see Pledge Data sources and assumptions)
It should be noted that neither the INDC nor the Commission’s proposal make any specific reference to the Kyoto Protocol accounting rules. The Commission refers instead to the Convention, which has only general reporting guidelines. The absence of a commitment to continue a Kyoto Protocol-type accounting architecture gives rise to concern that the EU could be envisaging a substantial change in this area. This may embolden other parties to also defer specification of their targets to the period after the Paris summit. Historically, negotiations over LULUCF have been long, difficult and have resulted in substantial accounting asymmetries, leading to weakening the targets by adding negative emissions from LULUCF. By specifying its LULUCF accounting rules the EU should contribute to avoiding such behaviour in the future.
Since a more widespread utilization of biomass for energy purposes will create further pressure on greenhouse gas inventory systems, all relevant emissions of non-CO2 greenhouse gases, as well as changes in carbon stocks on the EU28 land surface due to these activities, should be counted in considering energy system emissions.
We rate European Union’s INDC “medium”. This means that the EU is within the upper and least ambitious end of the range of the effort-sharing results. If all governments would move to the least ambitious end of the range, the aggregate of all the proposals would result in emissions well above what is required to keep warming below 2?C. For the EU, proposals based on equality and capability/cost lead to higher emissions allowances whereas approaches that focus on capability only and equal cumulative/equal per capita emission would require more stringent reductions. The rating for the 2020 pledge is “inadequate”, as it is in line only with the very least stringent of categories (capability/costs).
The INDC text also provides further information on the EU’s views on its fair share and its emissions reduction targets. First, the EU states that “the target represents a significant progression beyond its current undertaking of a 20% emissions reduction commitment by 2020 compared to 1990”. Indeed, the proposed INDC target is not only twice as high than the target for 2020, but – differently to the period before 2020 - it will make no use of international credits as it refers to domestic emission reductions. Moreover, the INDC is broadly consistent with the 2050 target, which reinforces EU’s intent to reduce its emissions by 80–95% by 2050 compared to 1990.
Emissions in the EU28 have been on a decreasing trend since 1990. In 2012, emissions (excl. LULUCF) were 19% below 1990 levels. After a steep decline in 2009 due to the recession and an upward spike following the recovery in 2010, they dropped again until 2013.
According to our analysis, the future emissions projections under the EU’s currently implemented policies continue the past downward trend with similar, or slightly reduced, reduction rates each year, depending on the effectiveness of the policies adopted. While emissions decreased by an average of 0.9% per year between 1990 and 2012, they are projected to decrease between 0.5% and 1.2% per year up to 2020, and between 0.1% and 1% per year until 2030. Emissions are estimated to be between 4,115 MtCO2e and 4,374 MtCO2e (a 22-27% reduction below 1990) in 2020 and between 3,681 MtCO2e and 4,317 MtCO2e (23-35% below 1990) in 2030.
Current policy projections include all major EU policies implemented, including the EU ETS, the Effort Sharing Directive and a wide range of other EU wide regulations influencing GHG emissions such as the renewable energy directive. It also includes the most important national policies.
Several new policy developments took place at EU level since last year’s assessment. These include binding emission targets for new car and van fleets, a new regulation on fluorinated gases, and further implementation of the Ecodesign legislation for boilers and water heaters (EEA, 2014). With these policies, the EU still has one of the most comprehensive climate packages globally.
The framework for the EU on the 2020 timeframe has been its ‘2020 energy and climate package’, which contains “20-20-20” targets. These refer to increasing the share of renewable sources of energy to 20%, improvement of energy efficiency by 20% and the aforementioned reduction of GHGs emissions by 20%.
Analysis has shown that these targets are internally inconsistent; implementing the RE as well as the EE targets leads to an emission reduction of 30% rather than 20% (Höhne et al. 2011). Whereas the EU is well on track to achieve the renewable energy and emissions reduction targets, it lags behind in respect of the energy efficiency target.
The main development in the EU in 2014 was the creation of a framework for 2030. Under the EU ‘2030 framework for climate and energy policies’, the European Commission proposed a package of targets, including the above mentioned GHG target of 40% (this target now being the formally submitted INDC), a renewable energy target of 27% and an energy savings target.
The energy savings target for 2030 was introduced following a review of the Energy Efficiency Directive and originally included a proposal by the Commission to reduce energy use by 30%. However the European Council then only endorsed a target of 27%. In 2020 it will reconsider this 30% target proposed by the European Commission (EC,201A). Given that the GHG emissions reduction target of 40% below 1990 was defined based on the assumption of a 30% energy efficiency target, this potentially undermines the achievement of the GHG target.
By the end of 2012 the EU ETS, which is one of the EU’s most important instruments to help it achieve its 2020 and 2030 emissions reduction targets, had accumulated a surplus of emissions allowances of app. 1.8 GtCO2 (EEA 2014). The EU’s own calculations show this surplus is expected to grow to 2.6 GtCO2 by 2020. Therefore in September 2015 EU Environmental Ministers agreed on the introduction of the Market Stability Reserve (MSR), which aims at adjusting the supply of allowances on the market and thus their price. Instead of 2021 initially suggested by the Commission, this new instrument will already become operational in January 2019 so that 900 million allowances taken away from the market in 2013 can be directly transferred to the reserve instead of flooding the market and contributing to further decrease in the prices (European Council, 2015).
But the introduction of the MSR may not be enough to increase the carbon prices to a level which would encourage investment in energy efficiency and fuel switching away from hard coal and lignite to natural gas and renewables. Although over the last two years the price of carbon increased from around 4 to slightly over 7 Euro per tonne CO2eq (Intercontinental Exchange, 2015), it still remains well below the 25-30 Euro expected when the EU ETS was introduced. Therefore currently the Commission is working on a deeper reform of the emissions trading which would on one hand encourage further emissions reduction and on the other discourage energy intensive industries from carbon leakage.
Overall, despite relatively ambitious targets, the implementation of the European climate policy offers significant room for improvement. The lack of strong leadership on behalf of the European institutions on the one hand and the unwillingness of some EU member states to commit to a meaningful action on the other are threatening EU’s position as the leader in the fight against climate change.
Targets for 2020 and 2030 were calculated from the most recent national inventory submissions (CRF, 2014). We calculated EU's LULUCF accounting quantities for the period 2014-2020 for afforestation, reforestation and deforestation using the current Kyoto rules, and for forest management using a net-net approach with a projected reference level for 2014-2020. Some EU countries have included a background level for natural disturbances in their submitted Forest Management Reference Level. LULUCF quantities for the period of 2020-2030 have not been calculated because data projections are not detailed enough to allow their accounting. Furthermore reference levels for forest management have not been set and some additional activities (e.g. wetlands management) may be elected by individual member states thus making the calculation insecure.
The EU provided historical data on forest management and afforestation, reforestation and deforestation for many of its member states. Where members did not submit data it was - wherever available - compiled using the time series data from the national inventories (CRF, 2014).
The impact of including LULUCF accounting on reductions of industrial greenhouse gas emissions could be in the range of 1–4%, of 1990 emissions, depending on the exact accounting rules applied. If the rules for the first commitment period of the Kyoto Protocol are used, EU’s emission in 1990 would increase by 75 MtCO2 thus effectively weakening the 2030 target by 1.4%, or by 1.3% when expressed as a reduction of industrial greenhouse gas emissions against 1990 levels. Another reference could be the likely second commitment period credits, which the CAT has estimated will be roughly 145 MtCO2/a (see assumptions below); effectively weakening the EU’s target by 3.0% (compare “Kyoto targets” with “Kyoto emission allowances” in the figure), or 2.6% of 1990 Annex A emissions. The whole LULUCF sector is expected to be a net emissions sink of ~210 MtCO2/a in 2030 (EC, 2014b), or as much as 4% of 1990 emissions of all sectors.
Current policy projections
The current policy projections are based on the EEA projections, published in June 2014 (EEA, 2014) and the PRIMES/GAINES reference scenario. The two scenarios were chosen because they represent a ‘bottom-up’ and a ‘top-down’ manner of evaluating the impact of policies in the EU. While the EEA gathers scenarios on the implementation of existing measures as put forward by member states, the PRIMES model performs a separate modelling exercise to estimate the effects of policies.
For the upper end of current policy projection for 2020 and 2030 we used the EEA’s “with existing measures” scenario (EEA 2014), which only covers policies already implemented by Member States. Data was available until 2020 from the EEA directly, until 2030 we were only able to identify an overall % wise GHG emission reduction for 2030 for total GHG emissions excluding LULUCF but including international aviation. Using the assumption that emissions from international aviation stay the same in the period between 2021 and 2030 as in 2020, we estimated the total GHG emission excluding LULUCF and excluding international aviation. The figures were then harmonized the latest inventories submitted to the (UNFCCC EEA/DG Climate 2014).
For the lower end of the current policy projections for 2020 and 2030 we used the Commission's 2013 “baseline with adopted measures” climate policy scenario based on the PRIMES and GAINS models 2013 (EC 2013). This scenario was also harmonized with the latest inventories submitted to the UNFCCC (EEA/DG Climate 2014)
One major difference between the lower and the upper end of the scenarios is that while the PRIMES model considered the full impact of the Energy Efficiency Directive, this has not been fully taken into account by the projections submitted by member states (EEA 2014). According to the EEA (EEA 2014) member states might not have taken into account further regulations that are included in the PRIMES model evaluation, including the revision or the Energy Performance Buildings Directive (EPBD) and regulations on the CO2 emissions from cars.
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 The QELRO, expressed as a percentage in relation to a base year, denotes the average level of emissions that an Annex B Party could emit on an annual basis during a given commitment period.
 Annex A covers GHG emissions from the energy, industrial processes, solvent and other product use, agriculture and waste sectors
This QELRO is inscribed in the amendments agreed in Doha in December 2012. The EU has yet to ratify these amendments.
 The EU’s inclusion of international aviation into the European emissions trading scheme was the first effort to regulate emissions from this sector globally. We did not evaluate the impact of this on EU28’s 2020 target.
 Of concern in this area is the EU support for proposals to remove emissions from natural disturbances and to count removals from harvested wood products. We have not yet included these two aspects in our accounting calculations for the second commitment period, but inclusion could lead to higher credits (or lower debits), due to asymmetric accounting.
 The Reference scenario 2013 includes policies and measures adopted in the Member States by April 2012 and policies, measures and legislative provisions (including on binding targets) adopted by or agreed in the first half of 2012 at EU level in such a way that there is almost no uncertainty with regard to their adoption. This concerns notably the Energy Efficiency Directive, on which political agreement was reached by that time.