The EU agrees on stricter rules for members’ emissions
The European Parliament and Council agreed to stricter CO2 emission regulations in all member states, resulting in less flexibility and more transparency.
As the COP27 climate conference is underway in Egypt, Parliament and Council negotiators, have agreed on a draft of the effort-sharing regulation (ESR), which will regulate binding annual greenhouse gas (GHG) emission reductions for European Union member states. The ESR currently regulates roughly 60% of EU emissions.
EU negotiators agreed to increase the mandatory GHG reduction 2030-target from 30% to 40%. This means that, for the first time, all EU countries must now reduce GHG emissions with targets ranging from 10-50%. Each member state’s target is based on its GDP and cost-effectiveness.
Timeline for member states’ targets
To achieve these more ambitious national reduction targets, each member state must ensure they stay within their annual GHG emission allocation every year. These are defined by a linear trajectory ending in 2030 and starting in the following year:
- For 2021-2022, the annual emission allocations currently in force apply;
- For 2023-2025, in 2022 on the annual GHG emission allocation for that member state in 2022;
- For 2026-2030, on the nine-twelfth between 2023 and 2024, the average of its GHG emissions during the years 2021, 2022, and 2023.
Member states have the flexibility to meet targets
This deal is intended to balance the EU’s need for flexibility to achieve its targets while ensuring just and socially fair transitions for everyone. This was achieved by restricting the possibilities for transferring, borrowing, and saving emission allocations compared to the Council’s position, as follows:
- For 2021-2025, member states will only be able to trade up to 10% of their allocations. 2026-2030, the maximum is 15%. Any proceeds from trading should go towards climate action.
- The maximum borrowing allocated for member states from 2021-2025 is 7.5% of allocations from the following year, which can be used in years where emissions are higher than the annual limit. For 2026-2030, the maximum borrowing will be 5%.
- Some countries can bank their emissions if they produce less than the allotted quota in one year. For example, in 2021, 75% of a country’s annual emissions allotment can be saved and used the following year. For those countries that are allocated a higher percentage, in 2022-2029, it’s 25%.
The European Commission is trying to make states more accountable by publishing information about their actions on global platforms. This will give everyone easy access to national action data, as requested by Parliament.
After reaching an agreement, rapporteur Jessica Polfjärd (EPP, SV) said: “This deal is a major step towards achieving the EU’s climate objectives. Our revised rules for national emission cuts ensure that all member states contribute and that loopholes and exceptions are closed. And because of this, we will go to COP27 with a strong signal from the EU in support of competitive and efficient climate action.”
The agreement will have to be officially approved by Parliament and Council before the new law can come into force.