Questions and Answers – Increasing the ambition of the EU's Effort Sharing Regulation and boosting natural carbon sinks

What are the new targets in the Effort Sharing Regulation and what sectors are covered?

The Effort Sharing Regulation (ESR) sets emissions reductions targets for the EU and individual Member States in a wide range of sectors. It covers domestic transport (excluding aviation), buildings, agriculture, small industry and waste. In total, the emissions covered by Effort Sharing account for around 60% of total domestic EU GHG emissions.

The revised Regulation requires the EU to reduce greenhouse gas emissions in these sectors by at least 40% by 2030, compared to 2005 levels. This is a significant increase on the previous target of 29% emissions reductions.

Most Member States will have increased national targets under the revised Regulation. (Malta is the sole exception). The targets now range between -10% emissions (Bulgaria) and -50% emissions (Denmark, Germany, Luxembourg, Finland and Sweden). The table below shows the national targets as set in 2018 when the Effort Sharing Regulation was first adopted (column 1) and the more ambitious new targets following the 2023 review of the Regulation (column 2).

What are the new targets in the Regulation on land use, land use change and forestry?

The revised Land Use, Land Use Change and Forestry (LULUCF) Regulation increases the EU's target for net carbon removals by natural sinks to 310 million tonnes of CO2 equivalent by 2030. The legislation sets ambitious and fair targets for each Member State to enhance net removals and reverse the declining overall trend of the EU's carbon sink.

Member States are responsible for caring for and expanding their carbon sinks to meet the new EU target. Member States have many measures at hand to improve their land management, including sustainable forest management or the rewetting of peatlands and should update their strategic plans under the Common Agricultural Policy (CAP) to reflect the higher ambition for the land sector. EU funds like the LIFE programme offer financial support for climate action in agriculture and forestry.

The Regulation simplifies the existing rules and enhances the quality of monitoring, reporting and verification of emissions and removals, using more accurate and precise data monitoring such as geographical data and remote sensing. From 2021 to 2025, the national targets align to the so-called ‘no-debit' commitment to maintain current carbon sink levels.

In a second phase from 2026 to 2030 the EU's net removal target will increase to 310 Mt of CO2 equivalent, which will put the EU on track towards climate neutrality in 2050. Each Member State will contribute a fair share with the target distributed among them based on recent levels of removals or emissions and the potential to further increase removals.

How do these pieces of legislation intersect, and what flexibilities exist for Member States?

The Effort Sharing Regulation is directly linked with the Land Use, Land Use Change and Forestry Regulation. A number of flexibilities are integrated in the Effort Sharing and LULUCF rules to facilitate the achievement of the respective targets. Under certain conditions, an overachievement in the Effort Sharing sector (cutting more emissions than required) can be used to compensate excessive emissions in the LULUCF, and vice-versa. The Effort Sharing Regulation also allows nine Member States the choice to use a limited amount of ETS allowances for offsetting emissions in the effort sharing sectors. These EU ETS allowances would be deducted from the amounts that would be auctioned by national authorities for sectors covered by the ETS, meaning in effect that the emissions reductions would be shifted from one economic sector to another.

To ensure monitoring and compliance, Member States are required to report annually on their emissions under the Effort Sharing and the LULUCF sectors. The Commission evaluates and reports annually the progress made towards achieving the targets. If a Member State is not on track, it will be required to submit an appropriate action plan to the Commission. 

Nature restoration plays an important role in limiting the progress of global warming by capturing and storing carbon, and in adapting to climate change, as well as in mitigating the impact of increasingly violent natural disasters such as floods, droughts and heat waves. Many degraded habitats, like forests, peatlands, salt marshes, and sea-grass meadows have a significant potential to store carbon in biomass and in the soil. Their restoration is an essential part of strategies for climate change mitigation and can help deliver on the LULUCF-targets. 

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