‘Fit for 55’: EU strengthens emissions reduction targets for member states

The Council and the European Parliament today reached a provisional political agreement on stricter emission reduction targets for member states under the so-called effort sharing regulation.

Pending formal adoption, the interim agreement supports an EU-wide greenhouse gas emission reduction target of 40% compared to 2005, by 2030, for sectors not covered by the EU Emissions Trading System (EU-ETS), namely road transport and domestic maritime transport. transport, buildings, agriculture, waste and small industries. The agreement maintains the increased national targets allocated to each member state proposed by the Commission and adjusts how member states can use existing flexibilities to meet their targets.

These sectors, directly linked to our daily lives, generate around 60% of greenhouse gas emissions. I am glad that we have managed to reach a quick agreement on this proposal just in time for COP 27. This will allow the EU to show the world that it seriously intends to reduce emissions in line with its commitments under the Paris Agreement to keep warming within safe levels. It is our responsibility to preserve our planet for all future generations.

To take into account uncertainties related to unforeseen events that have an impact on emissions, the Council and Parliament agreed on an update in 2025 of the linear emissions trajectory set for each member state, which could lead to annual emission allocations being adjusted upwards or downwards for the period 2026 to 2030.

The interim agreement allows member states to ‘accumulate and borrow’ emissions allocations. For the year 2021, if their emissions were lower than their annual emission allocations, Member States can accumulate up to 75% of their annual emissions allocation for that year to subsequent years until 2030. For the years 2022 to 2029, Member States will be able to deposit up to 25% of their annual emission allocations until that year and use them in subsequent years until 2030.

In parallel, in years where emissions exceed the annual limit, Member States may borrow the following year’s allocations up to 7,5 % of their annual emission allocations for the years 2021 to 2025 and up to 5 % for 2026 to 2030.

The interim agreement also allows for buying and selling emission allocations between member states, up to 10% of their annual emission allocations for the years 2021 to 2025, and 15% for the years 2026 to 2030.

Member states will be able to use a limited amount of credits generated by the elimination of greenhouse gases in the land use, land-use change and forestry (LULUCF) sector to meet their objectives under the effort sharing regulation. This flexibility will be divided into two periods, from 2021 to 2025 and from 2026 to 2030, with no possibility of extension between periods.

The interim agreement also maintains an ETS flexibility that allows nine member states to use a limited number of ETS permits to offset emissions in the effort sharing sectors from 2021 to 2030.

The co-legislators agreed to remove from the proposal the additional reserve that would have been composed of net removals of “unused” greenhouse gases generated by member states in excess of their targets under the LULUCF Regulation.

The text of the interim political agreement will be available shortly.

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The proposal for an Effort Sharing Regulation revises the existing rules, last amended in 2018. The provisional political agreement reached today in the trilogue negotiations will have to be formally adopted by the Council and Parliament.

The proposal to revise the Effort Sharing Regulation is part of the “Fit for 55” package. Presented by the European Commission on 14 July 2021, the package aims to enable the EU to reduce its net greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels and achieve climate neutrality by 2050.

Parliament adopted a number of amendments to the Commission’s proposal at its plenary session of 8 June 2022. On 29 June 2022, the Environment Council reached a general approach on the proposal.

Source: Council of the European Union