Why does the EU need a framework for non-ETS emissions?

If the EU is serious about reaching GHG reductions of 80-95% reductions by 2050 it must transition to low carbon development in all key sectors.  These transitions take time. Almost 60% of the EU’s GHG emissions are from sectors outside EU-ETS, yet these sectors are only required to reduce emissions by 10% by 2020. Significant gaps exist in the EU regulation of key sectors, such as agriculture, mining, transport, lighter industry and consumers. Gaps also exist for particular GHG gases such as methane emissions. Binding, economy-wide targets are essential to drive national measures.

The binding EU GHG reduction target for 2020 only exists through the ESD and the ETS legislation, there is no other legislation that makes the EU goal legally binding. The ESD is the structural instrument or ‘chapeau’ that translates the economy wide GHG target into national binding targets.  If for the period from 2020-2030 the EU only had the ETS plus sectoral policies, e.g. Energy Efficiency Directive, Renewable Energy Directive, Landfill Directive, there would be no legally binding economy wide target for the EU. The ESD ensures such an economy wide target and offers flexibility to EU Member States in their choice of policy mix to achieve GHG reductions. It furthermore aims to share the reduction effort in an equitable way by allocating different targets to different Member States.

Why do we need both Energy Savings Targets and a reformed Effort Sharing Decision in the 2030 framework?

Energy savings are crucial but do little to impact non-CO2 gases. CO₂ is the largest contributor to man-made climate change. In the EU CO₂ emissions are responsible for over 80% of greenhouse gas (GHG) emissions. The remaining 20% come from other GHGs, methane being the second largest contributor. These other emissions need to be addressed if the EU is to meet its 2050 reduction goal.

Even if the entirety of the EU’s CO₂ emissions were stopped in the EU by 2050, this would still not be sufficient to achieve the 80-95% emissions reductions required. It is essential that emissions of non-CO₂ climate gases are reduced substantially.  Unlike the ETS, which primarily regulates CO2 emissions the EU Effort Sharing Decision covers all of the six most important GHGs.

Energy savings targets are a crucial pillar for the post 2020 climate framework, and can deliver an important share of the reductions required for a science backed GHG target for 2030. However, energy efficiency measures reduce almost exclusively CO₂ emissions and do not address other GHGs.

It is furthermore unclear what form the Energy Savings targets will take for the 2030 Framework.  The targets could be expressed as absolute reductions of energy, an energy intensity target or an efficiency target.  Unfortunately, given the current political climate, it is likely that any agreed energy savings targets would fall short of the full range of energy savings. The ESD could help drive higher ambition for a broader set of energy savings measures by translating the EU economy wide GHG target into binding obligations for each MS.

Therefore, to effectively reduce emissions from all greenhouse gases, the EU will need both ambitious Energy Savings Targets and an instrument like the ESD to provide a governance framework for the economy wide GHG target, in order to be on track for a nearly fully decarbonised economy by 2050.

For more information see a longer Q&A published by Client Earth