Carbon Market Watch

For fair and effective climate protection.

European Parliament draft reports help unlock low-carbon potential in non-ETS sectors

25 Jan 2017

In 2016, the European Commission presented a legislative proposal to reduce the greenhouse gas emissions from the transport, buildings, agriculture and waste sectors. The Effort Sharing Regulation (ESR) is the EU’s largest climate instrument and regulates about 60% of our total emissions. In recent weeks, rapporteurs from three European Parliament committees presented their visions for moving the legislation forward.

The draft reports coming out of the transport, industry and environment committees all improve the Commission proposal in two ways:

  1. They increase the effectiveness of the ESR as a climate tool by closing loopholes and raise the likelihood that the EU’s 2030 climate target will be delivered.
  2. They contain a long-term trajectory for reducing emissions and help set Europe on a cost-effective path to reach the goals of the Paris Agreement.

Unlocking low-carbon opportunities in the ESR sectors

The ESR has potential to cut emissions by 1,025 Mt CO2 in the 2021-2030 period, but the current proposal by the Commission only delivers 77 Mt CO2 in the ten-year period. This is because the current starting point and the flexibilities with the EU’s Emissions Trading System and the land use (LULUCF) sector decrease the efficiency of the proposal. Fortunately, the three draft reports of the European Parliament all significantly increase the low-carbon potential of the Effort Sharing Regulation by closing loopholes in the law.

This is important as the measures that are undertaken to meet the ESR targets can result in significant co-benefits for citizens such as cleaner cities, more comfortable homes, and healthier food options.

Providing long-term predictability

There are still significant possibilities for the Effort Sharing Regulation to drive emission cuts in the sectors not covered under the EU ETS, however milestones need to be clearly marked if smart public policy is to be implemented early.  Creating long-term certainty not only helps Member States with robust decision making around carbon reductions, but is essential for delivering on Europe’s global climate commitments under the Paris Agreement.

The three draft Parliamentary reports all contain a long-term trajectory for reducing emissions, albeit with different levels of ambition.

Read more:

  • To learn more about the ESR and its potential to incentivise emission cuts in Member States, explore our new Effort Sharing Emissions Calculator here. The calculator was presented at a policy event in Brussels on Wednesday 25 January 2017.
  • If you want to build knowledge and understanding of the Effort Sharing Regulation, please read our guide here.
  • Our policy recommendations how to unlock the low-carbon opportunities in the non-ETS sectors can be found here.