On 14 December, the Estonian Presidency and the European Parliament reached an informal agreement on the land use, land-use change and forestry (LULUCF) regulation. The text of the agreement to cut greenhouse gas (GHG) emissions from forests as a way to tackle climate change provides "robust EU-wide" accounting rules for LULUCF activities, developed to ensure the proper and consistent accounting of emissions and removals from 2021-2030.
Overall, the sectors which fall outside the scope of the EU emissions-trading system (ETS) are required to contribute a 30 percent emissions cut by 2030 compared to 2005 levels. The provisional agreement will help reduce overall EU GHG emissions over the 2021-2030 period through the better protection and management of land and forests across the Union.
The EU is putting in place the tools it needs to reach its Paris climate goals. We have reformed our emissions trading system and are working to set binding emission reduction commitments in effort sharing sectors. With today’s agreement, our green resources will also help us mitigate climate change. I am very satisfied with today’s outcome and hope the member states can endorse it still this year. Tackling climate change has been a priority of the Estonian presidency and with an agreement on ETS, deal on LULUCF and adoption of the Council position on effort sharing, we have managed to deliver more than we dared to hope for, said Siim Kiisler, Minister for the Environment of the Republic of Estonia.
The text of the agreement provides robust EU-wide accounting rules for LULUCF activities, developed to ensure the proper and consistent accounting of emissions and removals from 2021-2030. EU ambassadors will assess this provisional deal with a view to endorsing it on December 20, 2017.
However, the formal adoption of the legislation will only occur once an agreement is found in the Effort Sharing regulation given the links between both legislative acts.
The new regulation provides a framework for ensuring that emissions and removals generated by this sector are accounted for. This will enable the EU to reach its Paris agreement target to cut emissions by at least 40 percent by 2030.
Forest management should continue to be active and sustainable in the future, as this is the only way to ensure that it has a positive impact on ecology and economy. We have found a credible balance between flexibility and comparable accounting rules for the 28 member states. Having the countries in charge of this issue will ensure that the principle of subsidiarity is fully respected. In addition, these requirements relate exclusively to member states and will not bind or restrict owners, said lead MEP Norbert Lins (EPP, DE).
‘No-debit rule’ key
The ‘no-debit rule’ from the original proposal remains the cornerstone element of the regulation. This is a binding commitment whereby all member states will have to guarantee that their total emissions from this sector are in balance and do not exceed carbon dioxide (CO2) removals.
Member states will account for their emissions, with the target of balancing the emissions and removals to be met in both the two five-year periods.
If more CO2 is absorbed than emitted by land use in the first 5-year period (2021-25), this credit can be “banked” and used later, to help achieve goals for the second five-year period (2026-30). Member states may also use part of such credits to comply with emission reduction targets under the Effort Sharing Regulation.
If a member state does not meet its commitment in either period, the shortfall will be deducted from its allocation of credits under the Effort Sharing Regulation.
2000-2009 forest reference
Afforestation and enhanced supervision of national forests, croplands and grasslands are examples of ways to generate further carbon absorption. A new EU governance process has been devised for the determination of national forest management reference levels (FRL). It has been decided that those levels will be set on the basis of the historical reference period from 2000 to 2009.
The specific circumstances of member states will be catered for by the additional managed forest land flexibility proposed by the Council. This new compensation mechanism will contain up to 360 million tonnes of CO2 equivalent and will be available to all member states over the 2021-2030 period.
A number of strict conditions must be fulfilled for its use, in order to preserve the environmental integrity of the regulation. Compliance with the ‘no-debit rule’ by the EU as a whole is the most important of all.
Furthermore, EU countries may only receive compensation on the condition that their national forests still generate a sink and up to a pre-established amount calculated for each member state on the basis of their average sink over the 2000-2009 period.
Both co-legislators have agreed to grant additional compensation of 10 million tonnes of CO2 equivalent to Finland for the 2021-2030 period in recognition of the country’s special circumstances in this sector.
Wetlands to be included
The proposed law would lay down rules under which EU countries have to ensure CO2 emissions are balanced by CO2 absorption by forests, croplands and grasslands. MEPs ensured that managed wetlands will also be included in the accounting system, given that they, too, store important quantities of CO2.
As a compromise, and given the lack of current data on wetlands, accounting for this sector will become mandatory for the 2026-2030 period, unless it is found appropriate to postpone the mandatory inclusion by five years in light of the experience gained with the use of the Intergovernmental Panel on Climate Change (IPCC) refinement to the 2006 guidelines for national greenhouse gas inventories.
Facts
Background and timeline
The European Commission presented two proposals on the sectors not covered by the ETS – effort sharing and LULUCF – in July 2016 on the basis of the guidelines provided by the European Council in its October 2014 conclusions.
Discussions on non-ETS sectors took place in parallel within the Council due to the numerous links between the two proposals. These files were on the agenda of three Environment Council (ENVI) meetings before a negotiating position was agreed: a policy debate on October 17, 2016, a state-of-play briefing on December 19, 2016, and a progress report in June 2017. The Council reached its general approach on October 13, 2017, and started negotiations shortly afterwards with the European Parliament, which adopted its position on September 13, 2017, during its plenary session.
Two other trilogues on October 19 and November 22, 2017, paved the way for negotiations to be concluded December 14. The provisional text will be presented to EU ambassadors for analysis and endorsement on December 20, 2017. The formal adoption of the legislation will only occur once an agreement is found in the Effort Sharing regulation.
