REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL PROGRESS TOWARDS ACHIEVING THE KYOTO OBJECTIVES(required under Article 5 of Decision 280/2004/EC of the European Parliament and of the Council concerning a mechanism for monitoring Community greenhouse gas emissions and for implementing the Kyoto Protocol)
Date: 2011-10-07
Institutions: European Commission
Subjects: EU Member State, accession to the European Union, economic sector, environmental monitoring, reduction of gas emissions, tradeable emission permit

EUROPEAN COMMISSION 

Brussels, 7.10.2011 
COM(2011) 624 final 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

PROGRESS TOWARDS ACHIEVING THE KYOTO OBJECTIVES 
(required under Article 5 of Decision 280/2004/EC of the European Parliament and of 
the Council concerning a mechanism for monitoring Community greenhouse gas 
emissions and for implementing the Kyoto Protocol) 

{SEC(2011) 1151 final} 

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TABLE OF CONTENTS  

1. 

2. 

2.1. 

2.2. 

2.3. 

2.4. 

3. 

SUMMARY ................................................................................................................. 3 

ACTUAL PROGRESS 1990-2009 .............................................................................. 5 

GHG emissions trends in Member States .................................................................... 5 

GHG intensities and emissions per capita in 2009....................................................... 6 

GHG emissions in 2009 compared to 2008 ................................................................. 7 

Emission trends in the main sectors ............................................................................. 8 

PROJECTED PROGRESS TOWARDS MEETING THE KYOTO TARGET .......... 9 

3.1. 

Projections of GHG emissions ..................................................................................... 9 

3.1.1.  EU-27 ........................................................................................................................... 9 

3.1.2.  EU-15 ........................................................................................................................... 9 

3.1.3.  EU-12 ......................................................................................................................... 10 

3.2. 

3.3. 

State of implementation of the Union's climate change policy.................................. 12 

Implementation of the EU Emissions Trading System (EU ETS)............................. 14 

3.3.1.  Second trading period (2008-2012) ........................................................................... 14 

3.3.2.  Use of JI and CDM by operators................................................................................ 14 

3.4. 

3.5. 

4. 

4.1. 

4.2. 

4.3. 

5. 

6. 

Projected use of Kyoto mechanisms by Union's governments .................................. 14 

Projected use of carbon sinks..................................................................................... 15 

MEETING THE 2020 TARGET ............................................................................... 15 

Union's GHG emission reduction target by 2020 ...................................................... 15 

Policies contributing to the fulfilment of targets........................................................ 16 

Projected distance to targets....................................................................................... 16 

ADAPTATION TO CLIMATE CHANGE ............................................................... 18 

SITUATION IN THE UNION'S CANDIDATE COUNTRIES................................ 18 

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1. 

SUMMARY 

On track to reach the Kyoto target, 2008-2012 

In 20091, total EU-27 greenhouse gas (GHG) emissions without emissions and removals from 
Land Use, Land Use Change and Forestry (LULUCF) were 17.4% lower compared to 1990 
levels.  Emissions  decreased  by  7.1%  compared  to  2008  while  during  the  same  period  the 
Gross Domestic Product (GDP) in EU-27 dropped by around 4% as a result of the economic 
recession. 
Additionally,  according  to  the  provisional  2010  data2,  EU-15  and  EU-27  GHG  emissions 
changed by 2.3% in 2010 compared to 2009. Based on these estimates, EU-15 emissions are 
10.7% below the base-year level. EU-27 2010 emissions are approximately 15.5% below the 
1990 level. The change of GDP in 1990-2010 was 39% for EU-15 and 41% for EU-27, and 
around 1.8% between 2009-2010. 

Under  the  Kyoto  Protocol,  the  EU-15  has  agreed  to  reduce  its  GHG  emissions  by  8%  by 
2008–12 compared to base year levels. Based on the latest available inventory data of 20091, 
total GHG emissions in the EU-15 have fallen for the sixth consecutive year and were 12.7% 
below base year emissions without LULUCF. While since 1990, the EU-15 economy in terms 
of GDP has grown significantly by almost 37%, GHG emissions in EU-15 have declined.  

In  2009,  EU-15  GHG  emissions  decreased  significantly,  by  6.9%  compared  to  2008  well 
exceeding the drop of EU-15 GDP of around 4% as a result of the economic recession, which 
proves that in 2009, the deep economic crisis in the Union did not stall the transformation of 
the  Union's  economy  towards  a  low  carbon  economy.  The  rate  of  improvement  in  GHG 
intensity remained at the same level as in the years before.  

All in all, projections3 of total GHG emissions as shown in Figure 1 indicate that the EU-
15 is well on track to reach its Kyoto target. The estimate shows that the target is likely to 
be overachieved.  

Figure 1: Actual and projected emissions for EU-15 

Note: The arrows are based on 2008-2012 average and therefore do not correspond exactly to 2010 values of 
projected emissions.Source: European Commission, EEA 

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According  to  the  recent  GHG  projections  six  Member  States  (Finland,  France,  Germany, 
Greece, Sweden, the United Kingdom) are on track to achieve their individual GHG reduction 
targets domestically. Taking into account the planned use of the Kyoto flexible mechanisms, 
use of unused allowances from the EU ETS new entrants reserve and carbon sinks as well as 
additional policy measures, only three Member States (Austria, Italy and Luxembourg) might 
face difficulties with achieving their targets.  

In most of the twelve Member States which acceded the Union as from 2004, emissions are 
projected  to  slightly  increase  between  2009  and  2012.  However,  nine  of  them  that  have  a 
Kyoto  target  are  projected  to  meet  or  over-achieve  their  commitments  using  only  existing 
policies  and  measures.  Slovenia  is  estimated  to  meet  its  target  when  all  the  existing  and 
planned measures, including the purchase of Kyoto credits, deliver as expected.  

New measures to reach the Union’s ambitious 2020 target 

The  climate  and  energy  package4  adopted  in  2009  provides  an  integrated  and  ambitious 
package of policies and measures to tackle climate change until 2020 and beyond. From 2013 
onwards  the  total  Union's  effort  to  reduce  greenhouse  gas  emissions  by  20%5  by  2020 
compared to 1990 will be divided between the EU ETS and non-ETS sectors. The GHG data 
presented  in  the  previous  section  refer  to  the  scope  of  the  1st  commitment  period  under  the 
Kyoto  Protocol  and  cannot  be  directly  used  to  assess  progress  towards  Union's  domestic 
commitment by 2020 because of its broader sectoral coverage. 

Preparations  for  the  implementation  of  the  GHG  reduction  commitment  by  2020  have 
continued  to  advance  swiftly.  In  regard  to  the  EU  ETS  Directive  as  revised,  last  year  the 
technicalities of the rules for free allocation and auctioning of allowances, use of international 
credits, setting the cap and the modalities for changes of the registries have been decided. As 
far as the Effort Sharing Decision, which regulates GHG emissions in sectors outside the EU 
ETS  by  setting  binding  annual  GHG  emissions  targets  for  each  Member  States  (MS),  is 
concerned, work on implementing measures continued, especially in relation to determining 
the absolute values for Member States' targets and the compliance system which will be put in 
place for monitoring Member States' action annually and helping them to make any necessary 
corrective measures if they fail to meet their targets. 

The 20% GHG reduction objective is rooted in the Europe 2020 strategy for jobs and smart, 
sustainable  and  inclusive  growth  adopted  by  the  European  Council  in  June  2010.  The 
emission  reduction  target  is  one  of  the  five  headline  targets.  As  noted  in  the  Commission's 
Annual  Growth  Survey  2011,  in  the  field  of  climate  mitigation  the  existing  and  planned 
measures are not yet sufficient to reach the 2020 headline targets. Therefore, many Member 
States  need  to  make  additional  efforts  to  meet  their  obligations  under  the  Effort  Sharing 
Decision. According to recent GHG projections estimates only 11 MS are expected to meet 
their commitmnents with policies already in place, further 7 MS would deliver on their targets 
when their additional policies and measures deliver as expected. The remaining 9 MS need to 
design additional policies in order to accomplish their targets. 

Figure 2 illustrates the gap between projections for 2020 and the Union's 2020 targets (-20% 
and  -30%  respectively)  requiring  the  Union  to  step  up  its  efforts  to  further  reduce  its 
greenhouse gas emissions. 

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Figure 2: Actual and projected emissions for EU-27 

6.000

5.500

5.000

.
q
e

4.500

First 
commitment 
period

Post-2012

2
O
C
t

M

4.000

3.500

3.000

1990

1995

2000

2005

2010

2015

2020

GHG emissions including international aviation

Primes/Gains baseline

Primes/Gains full package implementation (-20%)

30 % target by 2020

Note: PRIMES/GAINS projections3 used to projected changes in emissions over the period 2010-2020 
Source: European Commission, EEA 

Projections  based  on  PRIMES/GAINS  model  which  include  implemented  Union's  and 
national policies as of mid 2009 and covers the Climate and Energy Package emissions scope 
show that the cut in Union's GHG emissions (with measures already in place) would be at the 
level of 15.3% between 1990 and 2020.  

2. 

ACTUAL PROGRESS 1990-2009 

2.1. 

GHG emissions trends in Member States 

The  overall  Union  GHG  emissions  trend  is  strongly  influenced  by  the  two  largest  emitters 
Germany  and  the  United  Kingdom,  together  accounting  for  about  one  third  of  total  EU-27 
GHG  emissions.  In  2009,  these  two  Member  States  have  achieved  total  GHG  emission 
reductions of 538 Mt CO2 equivalents compared to 1990.  

The  main  reasons  for  the  favourable  trend  in  Germany  (-26.3%  in  1990-2009)  are  the 
continuous  efficiency  improvements  in  power  and  heating  plants,  the  increased  use  of 
renewable energies and combined heat and power, as well as the significant investments in the 
economic modernization of the five new Länder after the German reunification. The reduction 
of GHG emissions in the United Kingdom (-27.0% in 1990-2009) was primarily the result of 
liberalising  energy  markets  and  the  subsequent  fuel  switching  from  oil  and  coal  to  gas  in 
electricity production as well as reducing N2O emissions in adipic acid production. Lately, the 
recession had also impact on the decrease in emissions in these two countries affecting mainly 
energy and industrial sectors.  

Italy and France are the third and the fourth largest emitters, each with a share of around 11%. 
Italy’s GHG emissions were about 5.4% below 1990 levels in 2009. The observed decreases 
in  2009  were  mainly  linked  to  the  economic  recession  which  affected  especially  electricity 
and  heat  production  as  well  as  industrial  sector.  France’s  emissions  were  8.1%  below  1990 
levels in 2009. Large reductions were achieved in N2O emissions from adipic acid production. 

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However,  CH4  emissions  from  waste  and  CO2  emissions  from  road  transport  increased 
considerably between 1990 and 2009. 

Poland and Spain are the fifth and the sixth largest emitters in the EU-27, each accounting for 
about  8%  of  total  EU-27  GHG  emissions.  Poland  decreased  GHG  emissions  by  16.8  % 
between  1990  and  2009  (by  33.2%  since  1988,  its  base  year).  Main  factors  for  decreasing 
emissions  in  Poland  -  as  for  other  Central  and  Eastern  European  Member  States  -  were  the 
decline of energy inefficient heavy industry and the overall restructuring of  the economy in 
the  late  1980s  and  early  1990s  as  well  as  energy  efficiency  improvements  over  1990-2009. 
The notable exception were transport, especially road transport, where emissions increased by 
around  95%  as  well  as  some  indusrtial  sectors  such  as  pertoleum  refining  and  chemicals. 
Spain  increased  emissions  by  29.8  %  between  1990  and  2009.  This  was  largely  due  to 
emission  increases  from  waste,  road  transport,  electricity  and  heat  production  and 
manufacturing industries. 

In  2009,  five  Member  States  had  GHG  emissions  above  base  year  levels  (mostly  1990) 
whereas the remaining twenty Member States had emissions below base year levels. Cyprus 
and Malta do not have emission reduction commitments under the Kyoto Protocol. In those 
two  Member  States,  emissions  in  2009  were  above  1990  levels.  The  percentage  changes  of 
GHG emissions from the base year to 2009 range from -60% (Estonia) to +27% (Spain).  

2.2. 

GHG intensities and emissions per capita in 2009 

Emissions  in  both  the  EU-27  and  the  EU-15  have  been  decreasing  while  the  economy  has 
grown  significantly.  This  indicates  that  a  decoupling  of  GHG  emissions  growth  from  GDP 
growth has been taking place.  

Figure 3: Development of GHG intensity, GDP, energy consumption and CO2 emissions 

)
0
0
1
=
0
9
9
1
(

x
e
d
n
I

150

140

130

120

110

100

90

80

70

60

50

1990

1995

2000

2005

2010

GDP (EU-27)

Energy consumption
(EU-27)
CO2 emissions (EU-27)

GHG/GDP (EU-15)

GHG/GDP (EU-27)

Source: EEA, DG ECFIN (Ameco database), Eurostat 

Between 1990 and 2009, in the EU-27 GDP grew by 38 % while emissions decreased by 17.4 
%  and  in  the  EU-15  GDP  increased  by  37%  with  a  12.7  %  reduction  of  GHG  emissions. 
Between 2008 and 2009 a decrease in GDP of around 4% in both the EU-27 and the EU-15 
was  noted  and  was  linked  to  the  economic  recession.  However,  the  decoupling  process 
continued also in 2009 as demonstrated by a further decline in GHG intensity of 3.0% in the 
EU-27  and  of  2.7%  in  the  EU-15.  The  2010  GDP  data  suggest  that  economic  recovery  has 

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started.  The economy-wide  trend  to  decoupling  of  GHG  emissions  and  GDP  growth  is  also 
confirmed in the development of the manufacturing sector observed since 1990. 

Between  1990  and  2009  GHG  intensity  decreased  in  all  MS.  The  deepest  decrease  was 
observed in Estonia (-80%), Slovakia (-73%), Bulgaria (-62%), Romania (-61%), Lithuania (-
60%), Latvia (-59%) and Poland (-59%). The smallest changes took place in Portugal (-12%), 
Cyprus (-13%), Italy (-20%), Spain (-20%) and Malta (-22%). 

In 2009, in the EU-27 emissions per capita were at the level of 9.2 tCO2-eq. In the EU-15 
they were a bit higher, on average 9.4 tCO2-eq. per capita. Per capita emissions decreased by 
0.7  tCO2-eq.  compared  to  2008,  or  2.3  tCO2-eq.,  which  is  equivalent  to  an  almost  20% 
reduction  compared  to  1990.  However,  2009  GHG  emissions  per  capita  show  significant 
differences across Member States ranging from 4.7 (Latvia) to 23.7 (Luxembourg) tCO2-eq. 
per capita. They are to a large extent determined by the energy intensity and the energy mix of 
each  country.  Also  per  capita  emission  trends  differ  greatly  between  Member  States.  Since 
1990, largest per capita reductions have been made in Member States in central and Eastern 
Europe,  Luxembourg,  United  Kingdom,  Germany,  Sweden  and  Belgium.  In  six  Member 
States per capita emissions have increased since 1990. While per capita emissions in Malta, 
Portugal and Spain are well below the Union's average, in Slovenia, Greece and Cyprus they 
are above this average level. (see also figure 3 of the Staff Working Paper (SWP)) 

2.3. 

GHG emissions in 2009 compared to 2008 

Between 2008 and 20091, GHG emissions decreased in all Member States. Emissions within 
the EU-27 fell by 354.4 MtCO2-eq. (7.1%) with a decrease in the EU-15 by 274.3 MtCO2-eq. 
(6.9%). The current economic recession contributed to a large extent to the absolute year-on-
year cut and accelerated the downward trend since 2004. However, as outlined earlier GHG 
intensity improved further because of other factors such as increased use of renewable energy. 

Most significant cuts in GHG emissions, in absolute terms, were recorded in Germany (-61.4 
MtCO2-eq), the United Kingdom (-54.0 MtCO2-eq), Italy (-50.6 MtCO2-eq) and Spain (-37.2 
MtCO2-eq). Important decreases in GHG emissions took place also in Romania, France and 
Poland  (-22.6  MtCO2-eq.,  -21.9  MtCO2-eq.,  -19.1  MtCO2-eq.  respectively).  The  emission 
decreases  were,  in  particular,  due  to  lower  public  electricity  and  heat  production,  lower 
emissions from manufacturing industries as well as transport.  

In  terms  of  relative  changes,  deepest  declines  in  GHG  emissions  were  observed  in  Estonia 
(16.1%),  Romania  (14.7%)  and  Bulgaria  (13.8%).  Many  Member  States  such  as  Lithuania, 
Latvia, Slovakia, Italy, Spain, Slovenia, Hungary, UK, Ireland, Austria and Belgium recorded 
a decrease ranging between 8% and 10%. The smallest decrease took place in the Netherlands 
(2.8%). 

The 2009 recession affected all economic sectors in the Union. This resulted in a fall in fossil 
fuel  consumption,  mainly  coal,  and  lower  activity  levels  in  industry.  Despite  a  cold  winter, 
emissions went down also in the residential sector due to lower use of fuels, especially liquid 
ones, in non-distributed heat. As a result, most significant decreases in GHG emissions were 
recorded in public electricity and heat production (-103.2 Mt CO2-eq or 7.8%), manufacturing 
industries (-65.7Mt CO2-eq or 12.9%), iron and steel production (-53.6 Mt CO2-eq or 29.6%), 
road  transport  (-23.7  Mt  CO2-eq.  or  2.7%),  households  and  services  (-22.0Mt  CO2-eq.  or 
3.2%). 

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Despite GHG emissions decreases in the transport sector between 2008 and 2009, this sector 
remains an important emission source. 87% of transport emissions originate from the EU-15 
Member States and the observed GHG emissions reductions from road transport in the EU-27 
(-23.7Mt  CO2-eq.)  are  proportionate  to  this  and  mainly  due  to  the  EU-15  Member  States  (-
20.5 Mt CO2-eq.).  

Also  emissions  from  the  international  aviation  and  shipping  fell  for  a  second  year  in  row, 
mainly  due  to  the  impacts  of  the  economic  recession  (7%  for  aviation  and  10%  for 
international  shipping).  Currently,  these  two  sectors  account  for  about  6.3%  of  total  GHG 
emissions in EU-27 but are not included in the Kyoto targets.  

2.4. 

Emission trends in the main sectors 

Figure 4 shows that energy supply and use including transport are the most important sectors 
accounting for 80% of total Union's emissions in 2009. Transport is responsible for 22% of 
total  GHG  emissions,  agriculture  for  10%,  industrial  processes  for  7%  and  waste  for  3%. 
Since  1990,  the  decreases  in  energy,  agriculture,  industrial  processes  and  waste  have  been 
partially offset by significant increases in the transport sector (for further details see also the 
SWP). However, in 2009, the economic recession lead to lower transport emissions.  

Figure 4: Change in EU-15 and EU-27 GHG emissions by sector and share of sectors in total 
GHG emissions 

Past change in sectoral GHG emissions

Past change 1990-2009, EU-15

Energy supply

-12,2%

Energy use

-19,9%

Transport

16,8%

Industrial processes

-29,1%

Agriculture

-14,1%

Waste

-38,8%

Solvents and other

-30,9%

Past change 1990-2009, EU-27

Energy supply

-18,9%

Energy use

-26,1%

Transport

20,8%

Industrial processes

-30,8%

Agriculture

-22,0%

Waste

-31,6%

Solvents and other

-32,5%

-60% -40% -20%

0%

20%

40%

60%

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Share by sector in EU-15, 2009

Share by sector in EU-27, 2009

Solvents 
and other 
0,3%

Waste 
3,0%

Agriculture 
10,2%

Industrial 
processes 
6,7%

Transport 
21,8%

Waste 
3,2%

Solvents 
and other 
0,2%

Agriculture 
10,3%

Energy 
supply 
29,8%

Industrial 
processes 
7,0%

Energy 
supply 
32,4%

Energy use 
28,3%

Transport 
20,2%

Energy use 
26,7%

Source: EEA 

3. 

PROJECTED PROGRESS TOWARDS MEETING THE KYOTO TARGET 

3.1. 

Projections of GHG emissions  

3.1.1.  EU-27 

In  the  Kyoto  commitment  period,  total  EU-27  GHG  emissions  are  projected  to  be  about 
17.9%  below  base-year  levels.  This  estimate  is  based  on  MS  projections3  and  takes  into 
account existing polices and measures. The projected decline is even bigger when the effect of 
acquisitions of credits via the Kyoto mechanisms by governments, carbon sinks and additional 
measures are accounted for (for more details see tables 7a and 7b in the SWP). 

3.1.2.  EU-15  

The aggregate projections for all sectors estimate that total GHG emissions of the EU-15 are 
likely  to  be  10.5%  below  base-year  levels  during  the  Kyoto  commitment  period.  When 
including,  

(1) 

(2) 

the  government  use  of  the  Kyoto  mechanisms  which  is  expected  to  deliver  an 
additional 2.5% emission reduction, and 

the total removal of carbon sinks due to activities referred to in Art. 3.3 and 3.4 of 
the Kyoto Protocol in the EU-15 corresponding to a 0.9% reduction, 

the  EU-15  is  projected  to  reduce  its  emissions  even  further.  Assuming  that  all  measures 
deliver as expected and allowance and emission reduction credits trade under the EU ETS is 
taken into account, the projected overall reduction of GHG emissions could be up to 13.4% in 
the Kyoto commitment period compared to base year levels.  

Figure  5  presents  the  gaps  between  projected  non-ETS  emissions  and  the  respective  targets 
for the sectors concerned per each Member State. This analysis indicates that existing policies 
and measures would be sufficient for the EU-15 to meet its part of the collective Kyoto target 
attributed to the non-ETS sectors. However, as some Member States are going to retire their 
Assigned Amount Units (AAUs) surplus in practice all Member States will need to meet their 
respective  individual  commitments  in  order  to  ensure  that  the  Union  will  deliver  on  its 
collective target under the Kyoto Protocol. 

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3.1.3.  EU-12  

Aggregate emissions based on existing domestic policies and measures from the 12 Member 
States which joined the Union after 2004 are projected to slightly increase compared to 2009 
and  will  be  about  38.7%  below  their  base  year  levels  in  the  Kyoto  commitment  period. 
Slovenia  is  the  only  Member  State  out  of  the  EU-12  that  intends  to  invest  in  Kyoto 
mechanisms.  The  Czech  Republic,  Hungary,  Latvia,  Lithuania,  Poland,  Romania  and 
Slovenia intend to account for carbon sinks. The Czech Republic, Estonia, Hungary, Latvia, 
Lithuania, Poland and Slovakia plan to sell part of their AAUs.  

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Figure 5: Relative gaps (over-delivery or shortfall) between GHG projections in the non-ETS 
sectors  for  the  commitment  period  and  the  respective  2008-2012  targets  based  on  GHG 
projections and the use of Kyoto mechanisms and carbon sinks.  

Austria

Luxembourg

Italy

Portugal

Netherlands

Denmark

Belgium

Slovakia

Ireland

Finland

Germany

20,5%

22,6%

7,5%

1,7%

6,1%

1,1%

9,3%

3,7%

6,1%

2,4%

5,8%

-14,1%

-1,0%

-1,3%

-1,9%

-2,4%

-2,6%

-2,8%

-0,7%

-3,1%
-2,0%
-3,2%

Czech Republic

-17,2%

16,9%

7,0%

-5,0%

-5,1%

-5,7%
-5,6%
-6,6%
-6,9%
-8,2%

Spain

Slovenia

Greece

France

United Kingdom

Sweden

Latvia

Poland

Hungary

Romania

Lithuania

Bulgaria

-45,9%

-11,6%
-12,0%

-14,6%

-17,6%

-18,6%

-24,1%
-24,6%

-33,1%

-30,7%

-35,1%
-35,1%

-41,0%

-37,6%

-41,3%
-40,3%

Estonia

-49,6%

-46,9%

EU15

-1,2%

-5,1%

-60%

-40%

-20%

0%

20%

40%

Percentage points over-delivery (-) or shortfall (+)
in % of base-year emissions

Gap with existing measures (domestic reductions only)

Gap with additional measures, Kyoto mechanisms and carbon sinks

Note: (1) For BG, PT, RO estimates are based in PRIMES/GAINS projections; (2) For all the other MS, 
(excluding Cyprus and Malta which do not have emission reduction commitments under the Kyoto Protocol) 
estimates are based on national projections; (3) Use of unused allowances from the NER under the EU ETS is 
taken into account for those MS which indicated plans to use them for non-ETS compliance (Ireland) 
Source: EEA, European Commission 

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3.2. 

State of implementation of the Union's climate change policy 

The European Climate Change Programme (ECCP) 

Across  the  EU-27,  an  assessment  of  Member  States'  policies  and  measures  identified  eight 
Common and Coordinated Policies and Measures (CCPMs) that are projected to deliver 
significant GHG emissions savings in the Union. The largest savings can be expected from 
the  EU  ETS  Directive  (2003/87/EC)  as  revised  and  the  Renewable  Energy  Directive 
(2009/28/EC) promoting electricity produced from renewable energy sources. In the transport 
sector,  the  fuel  quality  legislation  and  reduction  of  CO2  from  cars  are  of  significant 
importance.  Further,  energy  demand  will  be  reduced  through  the  implementation  of  the 
Directives on the energy performance of buildings, eco-design requirements, energy taxation 
and  the  promotion  of  co-generation  (combined  heat  and  power).  Finally,  use  of  the  Kyoto 
Protocol's flexible mechanisms is projected to deliver significant GHG emissions savings. 

In addition to these eight key policies and measures, a further five CCPMs were identified 
that are also predicted to deliver important savings across the Union. These five policies are 
the  Landfill  Directive  (99/31/EC),  the  efficiency  standards  for  new  hot-water  boilers,  the 
Directive  on  labelling  of  appliances  (2000/13/EC),  the  Industrial  Emissions  Directive 
(2010/75/EU) and the Motor Challenge programme, aimed at improving the energy efficiency 
of industrial electric motors. A  Report from the Commission on the application, effects and 
adequacy of the Regulation EC No 842 concludes that this Regulation has already achieved 
some  reduction  of  emissions  of  F-Gases  compared  to  a  scenario  without  the  Regulation. 
Together  with  the  MAC  Directive  (2006/40/EC)  they have  the  potential  to  achieve  a 
significant reduction of projected emissions by 2020 and beyond.  

The top eight policies account for 92% of the total expected savings attributed to CCPMs in 
the EU-27. This underlines the importance of these key policies in helping Member States to 
achieve their emission reduction commitments.  

Recent developments  

Since the adoption of the climate and energy package, work on implementation measures is 
ongoing. Before the end of 2012, about twenty new legal acts and documents have to be in 
place in order to ensure proper functioning of the EU ETS as revised as well as to prepare the 
ground for the implementation of national GHG emission targets in the non-ETS sectors.  

Recently, the EU ETS cap for 2013-2020 has been updated taking into account the extended 
scope of the system post-2012. Enhancement of the integrity and the security of the registries 
system  underpinning  the  EU  ETS  have  been  prepared.  The  Commission  has  proposed  to 
amend the list of sectors and subsectors which are deemed to be exposed to a significant risk 
of carbon leakage. This proposal covers adding a few additional sectors such as for example 
manufacture of bricks, tiles and constructions products in baked clay, and production of salt. 
These two last proposals are currently subject to the scrutiny by the European Parliament and 
the  Council.  Preparation  for  the  3rd  trading  period  continued  also  in  regard  to  further 
enhancement of a harmonised application of the allocation rules. 

Also  an  agreement  has  been  reached  on  a  proposal  to  start  auctioning  of  up  to  120  million 
allowances  in  the  form  of  futures  or  forwards  already  in  2012,  so  ahead  of  the  start  of  the 
2013-2020 trading period. Its aim is to ensure a smooth transition from the second to the third 

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trading period of the EU ETS,  which  underpins  proper  functioning of  the secondary carbon 
market.  

Work on enhanced rules for monitoring and reporting of GHG emissions by operators covered 
by  the  EU  ETS  as  well  as  requirements  for  the  verification  of  emission  reports  and  the 
accreditation and supervision of verifiers is ongoing and aims for improved harmonisation of 
the applied rules. Two new regulations are to be finalised by the end of 2011. 

Preparation of the implementing measures under the Effort Sharing Decision is ongoing and 
currently  focuses  on  determining  the  absolute  values  for  Member  States'  annual  emissions 
targets  in  2013-2020  and  setting  rules  for  transfers  of  annual  emission  allocations  among 
Member States as well as ensuring their transparency. 

In addition, the revision of the EU Monitoring Mechanism has started. It is driven by the need 
to address the reporting needs of the climate and energy package, Europe 2020 Strategy, new 
requirements deriving from the Cancun agreements as well as lessons learnt so far. 

Work on the implementation measures of the Regulation (EC) 443/2009 related to emissions 
from  cars  is  ongoing.  The  procedure  for  the  approval  and  certification  of  innovative 
technologies for reducing CO2 emissions from passenger cars should be adopted soon. 
In  addition,  a  White  Paper  on  Transport  (COM(2011)  144  final)  which  sets  out  a  list  of 
important  measures  to  be  taken  in  order  to  reduce  transport  emission  further  in  the  coming 
years has been recently adopted. 

Legal acts recently adopted 
Implementation of the climate and energy package: 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

Other: 

EU  ETS  Cap:  Commission  Decision  2010/634/EU6  adjusting  the  Union-
wide quantity of allowances to be issued under the Union Scheme for 2013.  

EU ETS Auctioning – third trading period: Commission Regulation (EU) 
No. 1031/20107 on the timing, administration and other aspects of auctioning 
of greenhouse gas emission allowances.  

EU ETS Harmonised allocation rules: Commission Decision 2011/278/EU8 
determining  transitional  Union-wide  rules  for  harmonised  free  allocation  of 
emission allowances.  

NER  300:  Commission  Decision  2010/670/EU9  laying  down  criteria  and 
measures for the financing of commercial demonstration projects.  

EU ETS Use of international credits: The Commission Regulation (EU) No 
550/201110  on  determining  certain  restrictions  applicable  to  the  use  of 
international credits from projects involving industrial gases.  

Aviation  and 
(EU)  No 
394/201111 amending  Regulation  (EC)  No  748/2009  on  the  list  of  aircraft 
operators.  

the  EU  ETS:  Commission  Regulation 

CO2 and cars: Commission Regulation (EU) No 1014/201012 on monitoring 
and reporting of data on the registration of new passenger cars.  

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(8) 

(9) 

CO2  and  cars:  Commission  Regulation  (EU)  No  63/201113  laying  down 
detailed provisions for the application for a derogation from the specific CO2 
emission targets. 

CO2 and vans: Regulation (EU) No 510/201114 setting emission performance 
standards for new light commercial vehicles. 

3.3. 

Implementation of the EU Emissions Trading System (EU ETS) 

The first period of the EU ETS covered the years 2005-2007. Currently, operators subject to 
the EU ETS are approaching the last year of the second trading period (2008-2012). In 2013, 
a  substantially  revised  system  will  begin  its  operation.  For  more  information  on  the 
implementation of the EU ETS as revised see section 3.2. 

3.3.1. 

Second trading period (2008-2012) 

The EU-wide average annual cap for 2008-2012 amounts to 2.081 billion allowances per year, 
10.5% lower than what was initially proposed in the national allocation plans submitted by the 
Member States. In 2010, more than 12000 installations participated in the system. The total 
amount  of  verified  emissions  in  2010  from  EU  ETS  installations  in  the  EU-27  was  1.913 
billion  tonnes15  of  CO2-eq.,  around  3%  higher  than  in  2009.  The  increase  reflects  the 
economic recovery following the recession which caused an exceptional fall of 11.6% in 2009 
emissions.  However,  the  EU  ETS  emissions  in  2010  remained  well  below  the  cap  for  the 
2008-2012 period and in comparison to 2005 have fallen by an average of more than 8%.  

In 2010 average emissions per installation were more than 17,000 tonnes CO2eq. lower than in 
2005,  when  the  EU  ETS  was  launched.  Although  emissions  increased  slightly  in  2007  as 
Romania and Bulgaria joined the Union, and again in 2010 in line with the recovery from the 
economic crisis, average annual emissions per installation are now 8.3% below 2005 levels. 
For more information see tables 10 and 11, and figure 2 in the SWP. 

During  the  first  3  years  2008-2010  of  the  2nd  trading  period,  on  aggregate,  operators 
surrendered mostly allowances (EUAs) (appr. 95%) to cover their emissions. The remaining 
(appr.  5%)  of  their  surrendering  obligation  was  met  with  Certified  Emission  Reductions 
(CERs) and/or Emission Reduction Units (ERUs). 

3.3.2.  Use of JI and CDM by operators 

As  part  of  the  second  National  Allocation  Plans  (NAPs),  a  limit  was  established  by  each 
Member  State  for  the  maximum  use  of  project-based  credits  by  operators  (Joint 
Implementation (JI) and Clean Development Mechanism (CDM)). In total, up to 278 million 
CERs  or  ERUs  may  be  used  per  year  by  ETS  installations  from  all  Member  States  in  the 
second  trading  period,  which  corresponds  to  13.4  %  of  the  EU-wide  cap  for  this  period.  In 
2010, operators used 137 million CERs or ERUs which was 7.1% of all units surrendered for 
compliance. From 2013 onwards the rules for the use of JI and CDM credits will be revised as 
set in the EU ETS Directive as revised.16 

3.4. 

Projected use of Kyoto mechanisms by Union's governments 

Ten Member States of the EU-15 as well as Slovenia have decided to purchase and use Kyoto 
mechanisms  to  reach  their  Kyoto  targets.  Together,  these  EU-15  Member  States  would 
acquire  up  to  108.4  Mt CO2-eq.  per  year  for  compliance  under  the  first  commitment  period 

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under the Kyoto Protocol. This would represent approximately 2.5 percentage points towards 
the EU-15 Kyoto target of -8 % (see Table 12 in the SWP).  

These 10 Member States together have decided to invest up to € 2.8 billion to acquire units 
through  JI,  CDM  or  emissions  trading.  Austria,  the  Netherlands,  Spain,  Ireland  and 
Luxembourg allocated the largest budgets (€  531 million, € 500 million, € 386 million, € 290 
million and € 250 million, respectively) for the five-year commitment period. In Slovenia, the 
budget has been estimated for € 80 million. Howe ver, given the impact of the recent recession 
on  GHG  emissions  MS  might  not  need  as  many  emission  reduction  credits  as  initially 
estimated. So far, this hypothesis seems to be supported by the fact that the amount of credits 
actually  delivered  to  Member  States'  accounts  in  the  registry  only  amounts  to  about  28  Mt 
CO2-eq. 

As regards Assigned Amount Units (AAUs) sold by Member States, according to data in the 
registry about 56 Mt CO2-eq. have been transferred. The Czech Republic, Estonia, Hungary, 
Latvia,  Lithuania,  Slovakia  and  Poland  reported  that  they  intend  to  further  sell  AAUs.  One 
Member State (UK) has legislated that it would retire any surplus AAUs between the Kyoto 
target and UK unilateral ‘carbon budget’ after the 1st commitment period.  

3.5. 

Projected use of carbon sinks  

In addition to the policies and measures targeting various sources of GHG emissions, Member 
States can make use of carbon sinks. The information provided so far indicates that total net 
sequestration  during  the  commitment  period  from  afforestation  and  reforestation  activities 
under  Art.  3.3  of  the  Kyoto  Protocol  will  be  about  8.9  MtCO2  per  year  for  the  EU-15.  In 
addition, the use of activities under Art. 3.4 is projected to contribute 27.7 MtCO2 per year of 
the commitment period in the EU-15. Taking in addition into account contributions from EU-
12 it will amount to 35.5 MtCO2 per year (for details see Table 13 in the SWP). 

Together,  activities  under  Art.  3.3  and  3.4  in  the  EU-15  Member  States  are  projected  to 
reduce  emissions  by  40.2  Mt CO2  per  year  of  the  commitment  period.  This  is  equivalent  to 
almost  1  percentage  point  of  the  EU-15  reduction  commitment  of  8  %  during  the  1st 
commitment period compared to base year emissions.  

4. 

MEETING THE 2020 TARGET 

4.1. 

Union's GHG emission reduction target by 2020  

The  Climate  and  Energy  Package  set  a  20%  GHG  emission  reduction  target  for  EU-27  by 
2020 compared to 1990, which is equivalent to -14% compared with 2005. This effort will be 
divided between the EU ETS and non-ETS sectors as follows:  

(a) 

(b) 

21% reduction in EU ETS sector emissions by 2020 compared to 2005;  

reduction of around 10% by 2020 compared to 2005 for the sectors that are not 
covered by the EU ETS.  

These greenhouse gas emissions reduction targets were included in the Europe 2020 strategy 
for smart, sustainable and inclusive growth.  

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4.2. 

Policies contributing to the fulfilment of targets 

The emission caps from 2013 until 2020 are defined in the Effort Sharing Decision (ESD) and 
the revised ETS Directive. The EU ETS is a market based mechanism covering over 12,000 
installations.  The  ESD  obliges  Member  States  to  limit  their  GHG  emissions  between  2013 
and  2020  according  to  a  linear  trajectory  with  binding  annual  targets  which  will  ensure  a 
gradual move towards agreed 2020 targets. The ESD regulates GHG emissions in all sectors 
except  installations  and  aviation  covered  by  the  EU  ETS,  LULUCF  and  international 
maritime shipping. In the ESD sectors, complementary Union-wide policies will contribute to 
reaching  the  targets  by  Member  States,  such  as  the  binding  targets  for  renewable  energy, 
energy efficiency measures, the emission performance standards for new light-duty vehicles, 
the CCS Directive, F-Gases Regulation or the Fuel Quality Directive. Also the Commission's 
and  Member  States'  efforts  to  facilitate  the  demonstration  and  deployment  of  innovative 
technologies in reducing GHG emissions such as under the SET Plan and the NER300 could 
play a role here.  

Under  the  ESD,  Member  States  will  be  responsible  for  implementing  these  Union-wide 
policies  and  measures  in  these  sectors,  and,  if  necessary,  for  defining  additional  national 
policies and measures to limit their emissions. A robust reporting and compliance system will 
be  put  in  place  for  monitoring  Member  States'  action  and  help  them  make  any  necessary 
corrective measures if they fail to meet their targets. 

4.3. 

Projected distance to targets 

Despite  the  positive  trends  towards  KP  commitment  achievement  shown  by  2008-2012 
projections, more effort and additional policies will be necessary to achieve the Union's 
2020  objectives.  The  flexibilities  provided  for  in  the  ESD  and  the  revised  ETS  Directive, 
such as the use of project credits, will also contribute to the attainment of the targets. Figure 6 
shows first estimates of the gap between non-ETS GHG  emissions  projections by  2020 and 
2020 targets. 

According  to  these  provisional  projections  still  much  effort  will  be  needed  by  individual 
Member States to deliver on their 2020 targets set for the non-ETS sectors. Only 11 Members 
States are expected to reach these commitments with existing policies and measures. Further 7 
MS would meet their targets with planned additional policies and measures. 9 Member States 
are  unlikely  to  be  able  to  deliver  on  their  commitments  even  with  the  additional  measures 
foreseen for now. However, as regards EU-27, the estimates show that the overall non-ETS 
target would be delivered. This analysis does not yet take into account the use of credits from 
JI and CDM projects. 

In order to pave the way for a smooth compliance with the 2020 target, it is imperative that 
Member  States  not  only  ensure  timely  delivery  of  emissions  reductions  of  existing  policies 
and measures but also accelerate the development and full implementation of their additional 
policies  and  measures  as  well  as  consider  other  options  including  the  use  of  international 
credits.  

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Figure 6: Projected gap to 2020 targets for non-ETS sectors 

Luxembourg
Malta

Ireland
Lithuania
Belgium
Greece
Slovakia

Sweden
Denmark
Spain
Austria
Finland

Italy
United Kingdom
Latvia
Netherlands

Romania
Slovenia
Germany
France
Estonia

Portugal
Poland
Czech Republic
Bulgaria
Cyprus

Hungary
EU27

29%

22%

30%

20%

11%

10%

15%

8%

6%

6%

7%

4%

9%

4%

0%
0%

0%
0%
0%

-2%

-2%

3%

-5%

-6%
-6%

-2%

-8%

-2%

-8%
-9%
-9%

-10%

-11%

-11%

-8%

-12%

0%

0%

-17%
-17%

-18%
-18%
-17%

-19%

-24%
-24%

-31%

-36%

-40%

-1%

-8%

11%

11%

12%

13%

13%

-50%

-30%

-10%

10%

30%

50%

Percentage points over-delivery (-) or shortfall (+) 
of ESD target

Gap with existing measures

Gap with additional measures

Note:  (1) The underpinning data for this calculation are based on MS projections for 2020 non-ETS emissions, 
gap-filled  and  adjusted  where  necessary3,  as  well  as  estimated  2020  non-ETS  targets  for  MS  (still  subject  to 
some changes). Several Member States (CZ, EE, FI, LT, NL, PL) have not provided specific national projections 
for non-ETS  sectors,  so  the share of  these emissions had to be  estimated.  (2)  The  assessment  provided  in  this 
figure should be treated as indicative, due to differences in methodology and assumptions. Some data, such as 
the  Greek  and  Lithuanian   projection  for  instance  deviate  substantially  from  the  projections  made  for  the  'EU 
energy trends to 2030 - update 2009' (Publication by the European Commission, Directorate-General for Energy 
in collaboration with Climate Action DG and Mobility and Transport DG, ISBN 978-92-79-16191-9). 

Source: EEA, European Commission 

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5. 

ADAPTATION TO CLIMATE CHANGE 

Reducing  emissions  in  the  coming  decades  can  still  avoid  large  scale  dangerous  climate 
change. However, even if the world keeps the average annual global temperature increase to 
below  2  degrees  Celsius,  European  citizens  and  business  will  be  affected  by  the  adverse 
effects of inevitable climate change and therefore will have to adapt cost effectively.  

The European Commission adopted the White Paper on Adaptation to Climate change in 
April 2009 outlining the Union's policy framework for action to improve Europe's resilience 
to climate change. The four key pillars of action established by the White paper are building a 
solid  knowledge  base  on  the  impact  and  consequences  of  climate  change  for  the  Union, 
integrating  adaptation  into  Union's  key  policy  areas,  employing  a  combination  of  policy 
instruments  (market-based  instruments,  guidelines,  public-private  partnerships)  to  ensure 
effective  delivery  of  adaptation  and  stepping  up  international  cooperation  on  adaptation, 
which are currently in the process of being implemented by 33 actions (see table 15 in SWP). 

The 2009 White Paper on Adaptation to Climate Change also foresees the establishment of a 
European Adaptation Clearinghouse Mechanism on climate change impacts. It is a web-
based IT tool and database on adaptation to climate change, with the objective of providing an 
aid  for  the  development  and  implementation  of  adaptation  strategies.  It  will  entail  both 
technical  functions  (providing  relevant  data  and  information  and  visual  insight  in  spatially-
resolved  impacts,  vulnerability  and  adaptation  issues)  and  policy  support  functions  (in 
particular  via  an  adaptation  support  tool,  guiding  users  through  the  policy  cycle  for  the 
development  of  adaptation  strategies).  The  1st  prototype  of  the  Union's  Clearinghouse  has 
been  delivered  at  the  end  of  April  2011  and  is  currently  under  evaluation.  Following  an 
additional  development  phase,  the  final  version  will  go  live  in  March  2012.  From  that  date 
onwards, 
the  Adaptation 
Clearinghouse. 

the  European  Environment  Agency  (EEA)  will  manage 

The White Paper also put forward the idea of an Union's Adaptation Strategy, foreseen for 
adoption in 2013, with a time-frame for implementing actions under the Strategy from 2013-
2020.  The  aim  of  this  Strategy  will  be  the  development  of  a  comprehensive  framework  for 
adaptation-related activities at all levels. 

6. 

SITUATION IN THE UNION'S CANDIDATE COUNTRIES  

Between 199017 and 2009 Croatia's GHG emissions decreased by 8%, and compared to 2008 
they  decreased  by  7%.  However,  according  to  the  GHG  projections  included  in  the  5th 
National  Communication,  Croatia  is  projected  to  face  difficulties  with  achieving  its  Kyoto 
target with the current set of policies and measures. 

Iceland's GHG emissions between 1990 and 2009 increased by 35% and in 2009 were 5.4% 
lower  than  in  2008.  Taking  into  account  decision  14/CP.7,  and  according  to  the  GHG 
projections included in the 5th National Communication, Iceland is on track to meet its Kyoto 
target.  

In  2009,  Turkey’s  GHG  emissions  were  369.6  MtCO2-eq.  compared  to  187  MtCO2-eq.  in 
1990,  so  increased  by  97.6%  and  comparing  to  2008  increased  by  1%.  While  Turkey  is  an 
Annex  I  Party,  it  has  no  GHG  target  under  the  current  1st  commitment  period  of  the  Kyoto 
Protocol. 

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An up-to-date inventory of GHG emissions in the former Yugoslav Republic of Macedonia 
is not available. Between 1990 and 2005 total GHG emissions decreased by around 19%. 

For more information on GHG emissions in the Union's candidate countries please see section 
2 of the SWP. 

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