Loophole #1

What should the starting point for national 2030 Effort Sharing climate targets be?

The Effort Sharing Regulation (ESR) sets an overall EU climate target which it divides into national targets. However, the total amount of pollution released over the time period - the carbon budget – can change dramatically depending on the starting point for the targets. The European Commission proposes basing the 2030 targets on average emissions between 2016 and 2018, which is too high.

Total GHG Budget in the Effort Sharing 2021-2030 (CO2. eq.)

Your option:
5.000 Mt CO₂ eq.
saved
No accumulation of allowances in the Market Stability Reserve, removing 2.1 bn additional allowances
2.1 bn of allowances accumulated in the Market Stability Reserve until 2030 and still available from 2031
3,500
Annual GHG Emissions
1900
2021
2030
All other options set at EC proposal
EC proposed carbon budget:
22,644 Mt CO₂ eq.
Your proposed budget:
22,644 Mt CO₂ eq.
Oh dear. This allows EU Member States to start at an artificially high emissions level, meaning it is much easier for them to meet their emissions reduction target while still polluting more than they should.
Your proposed budget:
22,504 Mt CO₂ eq.
Almost. This option ensures that MS are not rewarded for failing to achieve their 2020 target; however, MS who overachieve their target start with a higher 2021 budget than their emissions actually are – allowing them to decarbonise more slowly.
Your proposed budget:
21,984 Mt CO₂ eq.
Excellent choice! This option ensures that countries that exceed their 2020 emissions targets and countries that don’t both make a real contribution to tackling climate change in Europe.
2511 2425 2378 2331 2284 2237 2190 2143 2096 2049
2483 2400 2356 2313 2269 2224 2180 2137 2093 2049
2379 2307 2275 2243 2211 2178 2146 2114 2082 2049



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Loophole #2

How will the LULUCF sector’s emission reductions be counted?

The land use and forestry (LULUCF) sector removes more carbon from the atmosphere than it releases. LULUCF carbon removals cannot be counted towards EU 2020 climate targets, but the EU Commission has proposed that a 280 million tonnes of CO2 equivalent can be counted towards the 2030 targets. The ‘carbon credits’ from these emissions removals would allow Member States to make less effort to cut emissions from the transport, buildings, agriculture and waste sectors.

Total GHG Budget in the Effort Sharing 2021-2030 (Mt CO2 eq.)

Your option:
5.000 Mt CO₂ eq.
saved
No accumulation of allowances in the Market Stability Reserve, removing 2.1 bn additional allowances
2.1 bn of allowances accumulated in the Market Stability Reserve until 2030 and still available from 2031
3,500
Annual GHG Emissions
1900
2021
2030
All other options set at EC proposal
EC proposed carbon budget:
22,644 Mt CO₂ eq.
Your proposed budget:
22,644 Mt CO₂ eq.
Whoops. This choice results in 280 MT more CO2 being emitted between 2021-2030 by allowing countries to use carbon credits to deliver their emissions cuts instead of real action.
Your proposed budget:
22,506 Mt CO₂ eq.
Uh-oh. This choice results in 140 MT more CO2e being emitted from 2021-2030 by allowing countries to use carbon credits to deliver their emissions cuts instead of real action.
Your proposed budget:
22,364 Mt CO₂ eq.
Great pick! This ensures the ESR is not undermined by carbon credits inflating the overall carbon budget. Member States will now have to take real action to reduce their emissions.
2511 2425 2378 2331 2284 2237 2190 2143 2096 2049
2511 2422 2372 2322 2272 2222 2172 2121 2071 2021
2511 2419 2366 2312 2259 2206 2153 2099 2046 1993



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Loophole #3

How can the oversupply of EU ETS pollution permits market be dealt with?

There are far too many emissions allowances available in the EU ETS. This is mainly due to the massive use of international offsets, the initial over-allocation of permits, and the economic recession. Under current legislation all surplus permits can be ‘banked’ (carried over) for later ETS trading phases. This means that there will continue to be too many pollution permits and countries will not have to make the necessary efforts to cut emissions.

Total GHG Budget in the EU ETS 2021-2030 (Mt CO2 eq.)

Your option:
5.000 Mt CO₂ eq.
saved
No accumulation of allowances in the Market Stability Reserve, removing 2.1 bn additional allowances
2.1 bn of allowances accumulated in the Market Stability Reserve until 2030 and still available from 2031
3,500
Annual GHG Emissions
1900
2021
2030
All other options set at EC proposal
EC proposed carbon budget:
16,633 Mt CO₂ eq.
Your proposed budget:
16,600 Mt CO₂ eq.
Argh! The surplus pollution permits that will have accumulated by 2020 will stay on the market or go into the Market Stability Reserve (MSR). This postpones reduction efforts and is not cost-effective. Storing surplus allowances in the MSR will undermine the achievement of climate targets for the period after 2030.
Your proposed budget:
15,833 Mt CO₂ eq.
Good! Permanent cancellation of this surplus can be used to bring Europe back onto the least-cost path towards achieving its climate goals. Moreover, more than 2 billion allowances stored in the MSR are cancelled as well.
1764 1731 1693 1658 1626 1626 1649 1600 1651 1602
1805 1756 1706 1657 1608 1559 1509 1460 1411 1362




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Loophole #4

What should the starting point for the ETS be?

The majority of EU pollution is regulated by the Effort Sharing Directive. However, pollution from the EU’s largest industrial emitters is covered by the Emissions Trading Scheme (ETS). The ETS has a reduction target of 21% below 2005 levels by 2020 and of 43% by 2030. In reality, CO2 emissions counted under both the ESD and the ETS are going down far faster than the reduction target. In the ETS sectors, emissions will already be down 38% on 2005 levels by 2020.

Total GHG Budget in the EU ETS 2021-2030 (Mt CO2 eq.)

Your option:
5.000 Mt CO₂ eq.
saved
No accumulation of allowances in the Market Stability Reserve, removing 2.1 bn additional allowances
2.1 bn of allowances accumulated in the Market Stability Reserve until 2030 and still available from 2031
3,500
Annual GHG Emissions
1900
2021
2030
All other options set at EC proposal
EC proposed carbon budget:
16,633 Mt CO₂ eq.
Your proposed budget:
16,600 Mt CO₂ eq.
Oh no! Since the EU will overshoot the 2020 ETS target, setting the start date at that 2020 target level will artificially inflate the available carbon budget over the period.
Your proposed budget:
16,068 Mt CO₂ eq.
Better! This scenario avoids the creation of a new surplus of ETS emission allowances which would undermine efforts to cut emissions after 2020.
1764 1731 1693 1658 1626 1626 1649 1600 1651 1602
1711 1678 1640 1605 1573 1573 1596 1547 1597 1548



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Loophole #5

Should ETS allowances be allowed to count towards the ESR target?

EU leaders agreed in 2014 that some countries could use a limited number of emission allowances from the EU’s Emissions Trading System (EU ETS) to meet their national ESR targets. The Commission’s proposal allows a total of 100 million EU ETS allowances to be counted towards national targets, distributed between Belgium, Denmark, Ireland, Luxembourg, Malta, Netherlands, Austria, Finland and Sweden.

Why is this so important?
Since the EU ETS is likely to remain vastly oversupplied with emission allowances until at least 2030, the transfer of these surplus ETS allowances into the ESR is unlikely to have any ‘tightening’ effect on the sectors covered by the ETS, which will continue to emit as much pollution as before. It will however lead to less emission reduction in the ESR sectors, which will be able to take advantage of the vast oversupply of ETS pollution permits and their very low price, and delay action to cut emissions themselves. WWF therefore calls to reject the possibility for countries to use ETS allowances to reduce efforts in the non-ETS sectors, as long the reform the ETS doesn’t deliver a permanent solution to the vast oversupply of allowances and a more meaningful carbon price.

Learn more about the different options
Since the transfer of 100m ETS allowances in the ESR is “only” a transfer from the ETS to the ESR and not a change in the overall carbon budget between 2021 and 2030, we are not showing the results on a graph.

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