Negotiators from the European Parliament and the Council of the European Union will meet, on Thursday, 1 September for a first session of interinstitutional negotiations (‘trilogues’) on the revision of the EU’s Effort Sharing Regulation (ESR).
Adopted in 2018, this regulation sets a national target for each EU Member State to reduce greenhouse gas (GHG) emissions by 2030 that are not covered by the EU Emissions Trading System (ETS) or the Land Use, Land-Use Change and Forestry Regulation (LULUCF).
These are mainly emissions from road transport, the heating of buildings, agriculture, small industrial installations and waste management.
In its proposal for the revision of the ESR, the European Commission proposed different new targets depending on the Member State concerned. Ranging from a 10% reduction in emissions (Bulgaria) to a 50% reduction (Finland, Luxembourg, Germany, Denmark, Sweden), these ‘national contributions’ would lead to a 40% reduction in EU emissions by 2030 (compared to 2005 levels) in the sectors covered by the regulation (see EUROPE 12762/2).
In order to ensure that Member States meet their target and thus contribute to the collective effort, the regulation sets binding annual limits for each Member State, expressed in emission allowances, which are gradually reduced until 2030.
Flexibility mechanisms divide co-legislators
While both the Parliament and the EU Council have maintained the national contributions and the EU-wide target, their positions differ on the flexibility mechanisms to be included in the regulation (see EUROPE 12968/20, 12982/5).
The latter allows Member States to set aside allowances in years when emissions are below their annual emissions quota for use in subsequent years, or to transfer allowances from one Member State to another.
In an effort to make the regulation more ambitious, MEPs have reduced these flexibilities. They propose, for example, to abolish the ‘safety reserve’ - corresponding to a maximum of 105 million tonnes of CO2 equivalent - which allows an additional quantity of allowances to be allocated to a Member State with a deficit.
The EU Council, on the contrary, wants to strengthen them.
In particular, it advocates raising the level of annual emissions allowances that can be transferred between Member States to 10% for the period 2021-2025 and 20% for the years 2026 to 2030, compared to the current levels of 5% and 10%.
It also wants to facilitate the use of flexibility, which allows nine Member States to use a limited amount of ETS allowances to offset emissions in sectors covered by the ESR from 2021 to 2030.
In addition, the EU Council’s position provides for flexibility in the use of an additional safety reserve proposed by the Commission, whereas the Parliament rejected this proposal. (Original version in French by Damien Genicot)