The current EU Effort Sharing Decision1 (ESD) ensures that the EU’s greenhouse gas (GHG) target for 2020 is legally binding for Member States and economy wide in scope. It covers almost 60% of Europe’s GHG emissions. Those sectors must deliver significant emissions reductions in the period from 2020 to 2030 if the EU is to develop on a competitive low carbon pathway. A legal framework for non-ETS emissions is therefore essential for the 2030 Climate package. In addition, effective policies in the ESD sectors can yield many other benefits such as job creation and improved public health. We urge the Parliament to utilize its upcoming report on the 2030 package to engage in a constructive debate and help secure the future and reform of the ESD. The reasons can be summarized as follows:
In order to be on track for the EU’s 2050 goals of a nearly fully decarbonised economy the EU needs a comprehensive policy framework for 2030 that incentivises investment and long term decarbonization in non-ETS sectors such as transport, buildings, agriculture and waste.
- The economy wide GHG target must be legally binding and backed up by an effective governance framework to ensure its implementation.
- The ESD needs to be strengthened: The current ESD targets are too low to drive additional emissions reductions and innovation. The EU as a whole is projected to achieve 18% reductions in these sectors by 2020, beyond the mere 10% reductions required by ESD targets.
- The 2030 ESD targets need to reflect the mitigation potential in non-ETSsectors: The ESD covers 58% of EU GHG emissions, yet these sectors are only expected to deliver 1 third of the emissions reductions for 2020. At the same time, recent studies show large amounts of cost effective potential by 2030. This can help support an overall EU 2030 GHG target of well beyond 40%.
- International offsets should no longer be allowed for compliance under the ESD. Such offsets hamper domestic action. The current Effort Sharing Decision allows MSs –to use offsets for up to 2/3 of the required reductions. This generous offset allowance further weakens the already weak targets.
- Improved design of the ESD can help improve investor certainty in key measures by focusing national and EU policy attention to ‘gaps’ in EU sectoral policies. This can be done whilst preserving overall flexibility for MSs in how to meet Effort Sharing Targets.
- The ESD grants flexibility to MSs in their choice of policy mix, and can be reformed to foster more collaborative and cost-optimized approach to GHG reductions in the EU.