A robust climate policy framework is a key element of the EU's Energy Union and a successful transition to a low-carbon economy. This is a necessary shift that will require a contribution from all sectors of the economy. Incentives for climate-friendly land use and forestry ensure the continued growth and sustainable productivity of our rural communities, which provide important services and economic benefit. A sustainably managed land use sector can supply renewable energy and materials, ensuring that the EU remains a world leader in these markets.
1. What is the Commission's proposal on land use and forestry about?
In October 2014, the EU agreed on a clear commitment: all sectors, including land use and forestry, should contribute to the EU's target to reduce greenhouse gas emissions by at least 40% by 2030 compared to 1990 levels. Today's proposal on land use and forestry sets out a binding commitment for each Member State and the accounting rules to determine compliance and covers CO₂ from forestry and agriculture .
Together with last year's proposal for the revision of the EU Emission Trading System (ETS) and today's Effort Sharing proposal on national emissions targets for all other sectors not covered by the EU ETS (see fact sheet), this will contribute to the achievement of the EU's commitments under the Paris Agreement on climate change. The new regulatory framework is based on the key principles of fairness, solidarity, flexibility and environmental integrity.
The Commission proposes a careful balance between more incentives to capture carbon in soil and forests and the need to maintain the environmental integrity of the EU climate framework, so as to incentivise emission reductions in the buildings, transport and agriculture sectors.
Land use and forestry include our use of soils, trees, plants, biomass and timber, and are in a unique position to contribute to a robust climate policy. This is because the sector not only emits greenhouse gases but can also remove CO₂ from the atmosphere. EU forests absorb the equivalent of nearly 10% of total EU greenhouse gas emissions each year.
2. What are the benefits for European citizens, farmers and foresters?
By helping to preserve and strengthen the capacity of our forests and soils to capture CO₂ in a sustainable way, this proposal benefits all Europeans. Member States and the EU will be able to better assess climate change benefits related to agriculture and forestry, get a better understanding of effective climate protection measures in these sectors, while at the same time securing food production, protecting biodiversity, and encouraging the development of a bio-based economy.
Emissions of biomass used in energy will be recorded and counted towards each Member State's 2030 climate commitments. This addresses the common criticism that emissions from biomass in energy production are not currently accounted for under EU law. As forest management is the main source of biomass for energy and wood production, more robust accounting rules and governance for forest management will provide a solid basis for Europe's future post-2020 renewables policy.
The new rules will support farmers in developing climate-smart agriculture practices, which seek synergies between productivity, resilience and emissions reductions, without imposing restrictions or red tape for individual farms. It will support foresters and forest-based industries through greater visibility for the climate benefits of wood products which have a longer life-time and which store carbon from the atmosphere for long periods. It will provide a framework for Member States to incentivise more climate-friendly land use.
3. What is the "no-debit" commitment for land use?
The proposal requires each Member State to ensure that accounted CO₂ emissions from land use are entirely compensated by an equivalent removal of CO₂ from the atmosphere through action in the same sector. This commitment is referred to as the "no debit rule". In essence, if a Member State cuts down their forests (deforestation), it must compensate the resulting emissions by planting new forest (afforestation) or by improving the sustainable management of their existing forest, croplands and grasslands. In this way the "no-debit" commitment incentivises Member States to take actions that increase the absorption of CO₂ in agricultural soils and forests. Although Member States undertook this commitment under the Kyoto Protocol up to 2020, the proposal enshrines the commitment in EU law for the period 2021-2030.
The proposal also contains the accounting rules to be used by all Member States so that compliance with the "no-debit" commitment is calculated consistently across all Member States. The accounting rules regulate how emissions and removals – i.e. the absorption of CO₂ by agricultural lands and forests – are to be recognised, measured and compiled in a standardised way.
4. What are the accounting rules set out in the proposal?
The more robust accounting rules in the Commission proposal build on those previously established at international level under the Kyoto Protocol, which commits its Parties by setting internationally binding emission reduction targets. The modifications that the Commission proposes today will make the accounting rules fit for purpose for the period from 2021 to 2030.
The technical rules are simplified and updated, with the current methodology regarding land use accounting mostly kept, but upgraded and made relevant for a post-Kyoto protocol period (post-2020) to improve environmental integrity. The main updates are:
- In order to improve both accuracy and the identification of new mitigation action, the proposal updates the base period to average accounts for the years from 2005 to 2007. This creates a stable benchmark more closely aligned with the non-ETS 2005 base year.
- Simplifying and streamlining the reporting and accounting systems to the internationally recognised approach based on tracking emissions and removals associated with different categories of land use (e.g. forest land, cropland, grassland). In the EU a standard accounting period of 20 years will be introduced for land use change, except for afforested land where Member States may choose a 30 year period, based on national justifications such as forest conditions.
The proposal also introduces a new EU governance process for monitoring benchmarks, called "forest management reference levels" that Member States will use to calculate emissions and removals from managed forests. This new EU governance approach will increase transparency and comparability across Member States, while fully taking into consideration national forest circumstances and priorities.
5. What are the new flexibilities for Member States to achieve their targets?
The proposal provides several flexibilities to Member States to meet their "no-debit" commitment while maintaining environmental integrity. If the net removals of CO2 are greater than the net emissions of CO₂ from land use in the first compliance period (2021-2025), these can be banked and used in the next compliance period (2026-2030). This gives Member States the flexibility to deal with fluctuations caused by growth cycles or other variable conditions.
If a Member States has net emissions from land use and forestry, it can use allocations from the Effort Sharing Regulation to satisfy its "no debit" commitment. They can also buy and sell net removals from and to other Member States. This encourages Member States to increase CO2 removals beyond their own commitment.
Where a Member State generates net removals beyond their commitment by increasing forest area (i.e. afforestation) or through good practice in agriculture (i.e. managed grassland and managed cropland) a number of these credits can be used to comply with national targets in the Effort Sharing Regulation, although this amount is strictly limited to ensure the environmental integrity of these targets. Only net credits generated domestically by afforested land, managed grassland and managed cropland can be transferred and used for compliance under the Effort Sharing Regulation. Before a similar flexibility is considered for managed forest land, the robustness of the reference levels for all Member States based on the new EU governance process should be evaluated.
6. How do the Member States report compliance with the new rules?
The proposal establishes two compliance periods from 2021-2025 and from 2026-2030 respectively. A five year cycle is appropriate for land use because absorptions and emissions in the sector can vary significantly from year to year, due to weather and other natural phenomena. This closely aligns the proposal with the 5-year review cycle set out in the Paris Agreement and is in line with the Commission commitment to Better Regulation.
Member States are nevertheless expected to report on their emissions and removals annually, applying the standardised accounting rules, and on policies and measures undertaken in the sector every second year. The Commission will carry out a comprehensive review of the data after each 5-year period and determine compliance with the "no debit" commitment.
Where a Member State does not meet its commitment in either period, the shortfall is deducted from their allocation in the Effort Sharing Regulation.
7. How does the proposal account for natural disasters that affect forests?
Certain natural events can cause trees to fall during storms, die (for example from infection and pests) or burn in wildfires. In the last 25 years, globally, forest fire seasons have already become 20% longer and more severe and this trend is expected to worsen in the coming decades due to increasing global temperatures.
The scale of emissions associated with extreme events that are driven by nature – i.e. natural disaster – can be substantial. Emissions that are outside the control of Member States may be excluded from the accounts for land use and forestry. Clear rules limit this exemption to ensure that it does not create a loop-hole.
Press release: Energy Union and Climate Action: Driving Europe’s transition to a low-carbon economy
Fact sheet: Questions and answers on the European Strategy for low-emission mobility
Fact sheet: Questions and answers on the Commission's proposal on binding greenhouse gas emissions reduction for Member States (2021-2030)