2. Progress of the European Union towards its greenhouse gas emission targets

• The EU is well on track to achieve its GHG emission reduction target of a 20 % decrease compared with 1990 levels by 2020. In 2015, GHG emissions were already 22 % less than 1990 levels. The latest national projections available from Member States indicate that by 2020, EU GHG emissions will remain well below the 2020 target.
• In 2015, emissions increased compared with 2014, when emissions were the lowest since 1990. A decrease in emissions is expected to have occurred in 2016 (according to preliminary estimates), which would bring EU GHG emissions back to 23 % below 1990 levels as in 2014.
• The pace of GHG emission reductions is projected to slow after 2020. A continuation of this slower pace will not be sufficient to achieve the EU's target of a 40 % reduction by 2030 (compared with 1990 levels). Much faster rates of GHG emission decreases are necessary to achieve an 80 %, or even a 95 %, decrease by 2050, even if the 2030 target is met.
• Emissions from stationary installations under the EU ETS in 2015 were 24 % less than in 2005 and, according to preliminary estimates ('proxy'), were 27 % less in 2016. These reductions were mainly the result of lower emissions in the energy industry sectors. Emissions covered by the ESD show a decrease of 12 % in 2015 compared with 2005, but an increase compared with 2014. In 2016, preliminary estimates suggest again a small increase compared with 2015, resulting in an emission reduction of 11 % compared with 2005. Emission reductions in the ESD sectors were mainly a result of efforts in the buildings and industry sectors.

2.1 Progress in reducing total greenhouse gas emissions in the European Union

In 2015, the EU's total GHG emissions were at 4 452 million tonnes of carbon dioxide equivalent (MtCO₂e.), which is 22 % less than 1990 levels [1]. With this, the EU is well on track to achieve its GHG emission reduction target of a 20 % decrease, compared with 1990 levels, by 2020. Preliminary estimates suggest that emissions in 2016 were 4 423 MtCO₂e., which is 23 % below 1990 levels. While emissions increased by 0.6 % in 2015 compared with 2014, they fell by 0.7 % from 2015 to 2016.

In 2017, Member States reported new national GHG projections. Compared with projections reported in previous years, emission levels were slightly lower than anticipated from the latest projections available from Member States. According to these national projections, aggregated EU GHG emissions are expected to decrease until at least 2035 (see Figure 2.1).

• According to the scenario 'with existing measures' (WEM), which reflects the effects of all adopted and implemented measures at the time the projections were prepared, GHG emissions will be reduced by 26 % by 2020 and by 30 % by 2030 (compared with 1990 levels).
• According to the scenario 'with additional measures' (WAM), which also takes into account the measures that were at planning stage at the time the projections were prepared [2], GHG emissions will decrease by 27 % by 2020 and by 32 % by 2030 (compared with 1990 levels).

Although the 2020 reduction target is expected to be met by a sufficient margin, the policies and measures currently accounted for in national projections alone will not be sufficient to deliver the savings needed to achieve the EU's reduction target of at least 40 % by 2030 (compared with 1990 levels). The pace of GHG emission reductions is currently projected to slow after 2020, and achieving the mid- and long-term targets will require much faster reductions.

The European Commission has developed a number of policy proposals with regard to the EU's mid-term goals on climate and energy. These proposals are now being discussed by Member States and by the European Parliament. For example, these concern:

• a reform of the EU ETS to include a more stringent cap reduction after 2020 (EC, 2015d);
• new annual binding GHG emission targets for Member States for the period from 2021 to 2030, specifically covering emissions that are not covered by the EU ETS (a new 'effort sharing' between Member States), as well as new flexibilities to achieve these targets (EC, 2016g);
• the integration of the land use, land-use change and forestry (LULUCF) sector into the EU 2030 climate and energy framework (EC, 2016i);
• a European strategy to cut emissions from the transport sector (EC, 2016a);
• a proposal for the governance of the Energy Union and Climate Action, currently being negotiated with Member States (EC, 2016h) (among other things, this will require Member States to draft national energy and climate plans that include new information on their envisaged efforts post 2020, covering all five dimensions of the Energy Union, and Member States shall also submit long-term emission strategies);
• a revision and extension of the RED, setting the aim of increasing the share of renewables in the energy mix to at least 27 % by 2030 (EC, 2016f);
• an update of the Energy Efficiency Directive, including a new 30 % energy efficiency target for 2030 (European Council, 2017).

Even if the 2030 target is achieved, a faster pace of reductions in emissions will be required if the EU is to reach its long-term decarbonisation objective — a reduction of EU GHG emissions by 80-95 % by 2050, compared with 1990 levels. Such a reduction can take place only in the context of a major transformation of the EU's socio-technical systems, such as the energy, food, mobility and urban systems. As the effects of policies and measures often take time to materialise (e.g. increases in energy efficiency in buildings), long-term action should not be delayed and lock-in effects of investments should be considered. Member States tend to prioritise low-cost mitigation measures, but they should also take into consideration the long-term mitigation potential of far-reaching measures with long-term effects. Such measures are often postponed because of high initial costs or political controversies related to their implementation. However, investments in these measures often make economic sense even in the short term, as they contribute significantly to generating learning effects and thereby foster future cost reductions. Furthermore, measures also avoid damage (i.e. emissions) and, by adding avoided damage costs (see suggested cost rates: UBA, 2014) into the equation, measures associated with costs at first glance may actually render net benefits.  

Figure 2.1 Greenhouse gas emission trends, projections and targets in the EU, 1990-2050

Sources: EEA, 2017a, 2017b, 2017c, 2017d.

2.2 The European Union's policy framework for reducing greenhouse gas emissions

To achieve its short-term GHG emission target, the emissions covered by the EU ETS are subject to an EU-wide cap, while non-ETS emissions are subject to national targets as stated in the ESD:

• Emissions from large point sources, mostly from industrial installations, are covered by the EU ETS (EU, 2009a). These represent currently about 40 % of EU GHG emissions, and a large proportion of them stems from the power generation sector. Other activities covered by the EU ETS include cement production, iron and steel production, and oil refining. Since 2012, the EU ETS has covered GHG emissions from aviation (EU, 2009b). The mitigation of all ETS emissions is being addressed at EU level through a single ETS-wide emission cap [3] and a 'carbon market' through which emission allowances can be traded.
• GHG emissions not covered by the EU ETS are mainly addressed by the ESD (EU, 2009c). These emissions are produced by a more diverse range of sectors and activities, including road transport, energy consumption in buildings, agriculture (cattle and soils) and waste management. Since 2013, the ESD has set annual targets for each Member State from 2013 until 2020. Mitigation actions therefore take place at national level, through a combination of EU-driven policies and measures, and national initiatives. Member States are responsible for reducing or limiting emissions covered under the ESD individually, while ETS emissions are tackled at EU level.
• GHG emissions and removals from the LULUCF sector are not covered under the EU ETS or the ESD. LULUCF activities represent a net carbon sink, removing the equivalent of about 7 % of the EU's total GHG emissions every year. These removals are not taken into account in the EU's target under the 2020 climate and energy package. In 2016, the European Commission proposed to integrate this sector into the EU 2030 climate and energy framework from 2021 onwards. The legislative proposal for the post-2020 Effort Sharing legislation (i.e. the Effort Sharing Regulation) establishes a limited flexibility with the LULUCF sector. The tabled LULUCF regulation defines harmonised reporting and accounting rules to identify anthropogenic influence on emissions and removals in the sector.

GHG emissions in EU ETS sectors and in ESD sectors have been following slightly different trends since 1990 [4]. The projections reported by Member States also show differences between these two categories (see Figure 2.2). These trends are described and analysed in the following sections.

Figure 2.2 Effort Sharing Decision (ESD), Emissions Trading System (ETS), land use, land-use change and forestry (LULUCF) and aviation emission trends and projections, 1990-2035

2.3 Emission trends under the European Union Emissions Trading System

GHG emissions from the sectors covered by the EU ETS have decreased significantly since 1990 (see Figure 2.3). The EU ETS target was defined to reduce emissions by 21 % between 2005 and 2020. In 2016, EU ETS emissions from Member States' stationary installations had already decreased by 27 % since 2005, and reached their lowest level since the start of the scheme in 2005 [5]. The decrease since 2005 was mostly driven by reductions in emissions related to power generation. Ex post evaluation of climate policies show that the reduction in emissions was largely the result of changes in the combination of fuels used to produce heat and electricity, and in particular, a decrease in the use of hard coal and lignite fuels, better and more efficient installations, and a substantial increase in electricity generation from renewables, which almost doubled over the period. In addition, the reduced production volumes reduced emissions in this sector, too. Emissions from the other industrial activities covered by the EU ETS have also decreased since 2005, but they remained stable in the current trading period (2013-2016) (see Figure 2.3).

According to the projections submitted by Member States in 2017, future cuts in national GHG emissions will take place mainly under the EU ETS. With the existing measures in place, emissions from stationary installations under the EU ETS are projected to decrease by 6 % between 2016 and 2020, and by 6 % between 2020 and 2030. According to scenarios that consider planned measures, reductions of an additional three percentage points are projected for 2020 and 2030, compared with the reductions predicted by the scenario with existing measures. Most of the projected reductions by 2020 and 2030 are expected to occur in the energy industries sector, while emissions from other activities are envisaged to remain more or less stable during this period. The emissions from international aviation, however, nearly doubled between 1990 and 2014 and are expected to increase further by 2030.

Figure 2.3 Greenhouse gas emission trends and projections under the scope of the EU ETS, 1990-2030

Notes: Solid lines represent historical GHG emissions (available for the 1990-2016 period). Dashed lines represent projections of the WEM scenario. Dotted lines represent projections under the WAM scenario.
The EU ETS GHG emissions presented were estimated based on the attribution of GHG emissions, reported by source categories in national GHG inventories and national projections, to EU ETS sectors and/or Effort Sharing sectors.

Sources: EEA, 2017a, 2017b, 2017c, 2017d.

2.4 Emission trends under the Effort Sharing Decision

GHG emissions from sectors covered by the ESD have decreased since 1990, albeit at a slower rate than those covered under the EU ETS. This reflects the diversity and mitigation potentials of the sectors covered by the ESD. In 2015, ESD emissions were 11.6 % below 2005 levels [6]. This reduction is greater than the 9.3 % reduction objective for ESD emissions between 2005 and 2020 at EU level. However, GHG levels in 2015 increased by 1.7 % compared with the previous year and are estimated to increase again slightly by 0.85 % in 2016 according to preliminary estimates for 2016. In particular, emissions from buildings and the transport sector have been rising in recent years.

According to national projections based on the WEM scenario, ESD emissions could be 195 MtCO₂e. below the ESD target for 2020, and cumulative ESD emissions in the EU for the whole period 2013-2020 could be lower than the overall emission budget for all Member States under the ESD by 1 747 MtCO₂e. [7]. In addition, if planned measures are taken into account, this cumulative surplus could increase to over 1 819 MtCO₂e. Despite the overall decrease of emissions at EU level, certain Member States have more difficulties than others in achieving their ESD targets (see Chapter 3).

For 2030, Member States project a 20 % reduction of ESD emissions compared with 2005 in the WEM scenario, and a 22 % reduction in the WAM scenario. These reductions remain insufficient compared with the 30 % reduction that non-ETS sectors should achieve by 2030, as a contribution to delivering the EU target of an at least 40 % domestic reduction in GHG emissions by 2030 compared with 1990 (see Figure 2.2). The 2030 targets thus require efforts from Member States beyond the measures that are currently implemented or planned.

Since 1990, the building sector has contributed most to absolute emission reductions in the sectors covered by the ESD. However, emissions from the transport sector, which is the largest contributor to GHG emissions under the ESD, increased continuously between 1990 and 2007. After a decrease between 2007 and 2014, emissions from this sector increased again in 2015 and 2016.

Member States have projected only limited decreases in ESD emissions between 2016 and 2030, particularly after 2020. The largest decreases are expected to take place in the building sector. In the transport and agricultural sectors, emissions are projected to remain relatively stable. The largest reductions in relative terms are projected to be achieved in emissions from industry, in particular product use, and waste between 2015 and 2030. Implementing additional measures (i.e. at the planning stage up to early 2017) would lead to further minor decreases in emissions, especially in the transport sector (see Figure 2.4).

Figure 2.4 Greenhouse gas emission trends and projections under the scope of the Effort Sharing Decision, 1990-2030

Notes: The Effort Sharing sector emissions presented are estimated based on the attribution of GHG emissions, reported by source categories in national GHG inventories and national projections, to EU ETS sectors and/or Effort Sharing sectors. The sector here summarised as 'industry' aggregates ESD emissions of energy supply, manufacturing and product use, i.e. inventory source categories 1.A1., 1.A.2, 1.B, 1.C and 2.

Sources: EEA, 2017a, 2017b, 2017c, 2017d.

2.5 Emissions from land use, land-use change and forestry

Land use, land-use change (LULUCF) and forestry activities, which include the management of soils, trees, plants, biomass and timber, can result in both emissions (source) and removals (sink) of CO₂. In 2015, the EU's LULUCF sector represented a net reported carbon sink of about 304.9 MtCO₂e., despite Denmark, Ireland, Latvia, Malta and the Netherlands reporting net emissions from their LULUCF sectors. Over the past decade, the relatively large proportion of young forests and moderate harvest rates have led to a net carbon accumulation in European forests which means that more carbon is removed from the atmosphere than released.

While being a net sink, the sector was also a source of CO₂ emissions for some sub-categories. The largest source was land conversion, especially from forests to other land uses (also known as deforestation), and emissions from organic soils converted to cropland. Since 2000, the net reported annual LULUCF sink has been on average 312 MtCO₂e., with an unfavourable declining trend over the past 7 years. According to the EU Reference Scenario 2016 (EC, 2016d), the net reported LULUCF sink in the EU is expected to shrink by about 10 % between 2010 and 2020, partly due to higher emissions from increased harvest rates and despite expected lower emissions from cropland and grassland (due to less land conversion to cropland and emission reduction expected from agricultural soils).

The main component of the LULUCF sink is the carbon sink in managed forest land (-373 MtCO₂e. in 2010 without applying any accounting rules). The managed forest land sink is driven by the balance of forest harvest and forest increment rates (accumulation of carbon in forest biomass as a result of tree growth). In 2030, forest harvest is projected to increase over time from 516 million m³ in 2005 to 565 million m³, due to growing demand for wood for material uses and energy production. Along with the ageing of EU forests — which reduces the capacity of forests to sequester carbon — the forest increments are projected to decrease from 751 million m³ in 2005 to 725 million m³ in 2030. As a consequence, the rate of accumulation of carbon and therefore the main component of the EU's LULUCF carbon sink in managed forest land will decline by 32 % until 2030. This is expected to be partially compensated by the continuation of increasing carbon removals from afforestation, and a decreasing trend in emissions from deforestation, which are projected to decline from 63 MtCO₂e. in 2005 to 20 MtCO₂e. in 2030 (EC, 2016d).

To address this unfavourable projected decrease of the EU's LULUCF net sink, the European Commission proposed a binding commitment for each Member State covering GHG emissions and removals from forestry and other land uses, and an update of accounting rules to identify anthropogenic changes in the carbon balance of forests and soils, which are used to determine compliance with this commitment (EC, 2016i). These changes are expected to improve the identification of additional mitigation action, and to thereby enhance the contribution of the sector to climate action. Stronger incentives for action are also provided by enabling trade between Member States within the LULUCF sector and by creating a limited flexibility for the use of certain, robust LULUCF credits in other non-ETS sectors.

The proposal requires each Member State to ensure that accounted GHG emissions from land use are entirely compensated by an equivalent accounted removal of CO₂ from the atmosphere in non-ETS sectors (the 'no debit rule'). For instance, if a Member State converts forests to other land uses (deforestation) or increases emissions from cropland, it must compensate for the resulting emissions by planting new forests (afforestation) by improving the sustainable management of existing forests, croplands and grasslands, by cancelling allocations from the other non-ETS sectors, or by agreeing to buy credits from other Member States.