Effort Sharing

The Climate Action Regulation, also known as the Effort Sharing Regulation (EU ESR) is Europe’s tool to reduce the climate impact of sectors that are not covered by the EU’s Emissions Trading System. Covering 60% of the EU’s greenhouse gas emissions, the law sets binding national emission reductions targets for the 2021-2030 period for sectors such as transport, buildings, agriculture and waste management.

Under the Climate Action Regulation, the EU-wide emissions reduction effort is shared between all the EU Member States. This is done mostly on the basis of a country’s wealth as measured by GDP per capita. These national targets add up to an overall 2030 target of -30% compared to 2005 emission levels for the EU as a whole.

To make it less costly to comply with their climate targets, Member States are allowed to make use of different flexibilities. Some of them, however, undermine the carbon-free transition of the non-ETS sectors by allowing more greenhouse gases to be emitted in these sectors up to 2030. These loopholes include for example using forestry credits or allowances from Europe’s carbon market.

The success of the Climate Action Regulation to decarbonise the transport, building, agriculture and waste sectors depends on how it is implemented across Europe. The EU Member States must develop National Energy and Climate Plans (NECPs), in collaboration with stakeholders, that will detail which policies and measures will be adopted to meet the climate commitments.

Carbon Market Watch calls for countries and regions to ensure that decisions taken in the next few years in relation to for example city planning, agricultural subsidies, public transport infrastructure, building renovations and waste collection, set in motion the transition to carbon-free societies.