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: 2012-10-24
Institutions: European Commission
Subjects: accession criteria, air quality, climate change, greenhouse gas, reduction of gas emissions, tradeable emission permit

EUROPEAN 
COMMISSION 

Brussels, 24.10.2012  
COM(2012) 626 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) 
{SWD(2012) 353 final} 

EN 

   EN 

 
 
 
  
 
 
TABLE OF CONTENTS  

1. 

2. 

2.1. 

2.2. 

2.3. 

2.4. 

3. 

Summary ...................................................................................................................... 3 

Actual progress 1990-2010 .......................................................................................... 5 

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

GHG intensities and emissions per capita in 2010....................................................... 6 

GHG emissions in 2010 compared to 2009 ................................................................. 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)............................. 15 

3.3.1.  Second trading period (2008-2012) ........................................................................... 15 

3.3.2.  Use of JI and CDM by operators................................................................................ 15 

3.4. 

3.5. 

4. 

4.1. 

4.2. 

4.3. 

5. 

6. 

Projected use of Kyoto mechanisms by Union's governments .................................. 15 

Projected use of carbon sinks..................................................................................... 16 

Meeting the 2020 target ............................................................................................. 16 

Union's GHG emission reduction target by 2020 ...................................................... 16 

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

Projected distance to targets....................................................................................... 17 

Adaptation to climate change..................................................................................... 19 

Situation in the Union's candidate countries .............................................................. 19 

EN 

2 

   EN 

1. 

SUMMARY 

On track to reach the Kyoto target, 2008-2012 

In 20101, total EU-27 greenhouse gas (GHG) emissions without emissions and removals from 
Land  Use,  Land  Use  Change  and  Forestry  (LULUCF)  were  15%  lower  compared  to  1990 
levels.  Emissions  increased  by  2.4%  compared  to  2009.  This  partly  compensates  the 
significant decrease of GHG emissions in 2009 as a result of the economic recession (-7.3%). 
Leaving  the  exceptional  drop  in  2009  aside,  2010  GHG  emissions  continue  to  follow  the 
general decreasing trend seen from 2004 onwards. 
Additionally,  according  to  the  provisional  2011  data2,  EU-15  and  EU-27  GHG  emissions 
decreased  by  3.6%  and  2.5%  in  2011  compared  to  2010.  Based  on  these  estimates,  EU-15 
emissions are 14% below the base-year level. EU-27 2011 emissions are approximately 18% 
below the 1990 level. The change of GDP in 1990-2011 was 43% for EU-15 and 48% for EU-
27,  and  around  1.5%  between  2010  and  2011.  While  the  economy  has  grown  significantly, 
emissions in both the  EU-27  and  the EU-15 have been decreasing, which demonstrates that 
decoupling  of  economic  growth  from  GHG  emissions  has  been  progressing  steadily  since 
1990. 

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 20101, 
total GHG emissions in the EU-15 were 11% below base year emissions without LULUCF. 
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 (MtCO2-eq.) 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 

EN 

3 

   EN 

 
According  to  the  GHG  projections  submitted  in  2011  and  updated  in  2012,  six  EU-15 
Member  States  (Finland,  France,  Germany,  Greece,  Sweden,  the  United  Kingdom)  are  on 
track  to  achieve  their  individual  GHG  reduction  targets  domestically  as  shown  in  Figure  5. 
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 one Member State (Italy) is not on track to achieve 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 ambitious Europe 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.  It  forms 
one of the five headline targets of the Europe 2020 jobs and economic growth strategy. From 
2013 onwards the total effort of the Union 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 first commitment period under 
the  Kyoto  Protocol  and  cannot  be  directly  used  to  assess  progress  towards  the  Union's 
domestic commitment by 2020 because of its broader sectoral coverage. 

Preparations for the implementation of the GHG reduction commitment by  2020  are almost 
completed. With regard to the EU ETS, substantial progress in preparing for Phase 3 (2013-
2020)  has  been  made  since  the  last  progress  report  in  October  2011,  including  on  the 
auctioning  platform,  on  the  Single  Union  Registry  and  on  adoption  of  harmonised  rules  on 
monitoring, reporting, accreditation and verification. 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  State  (MS)  is  concerned,  work  on  implementing 
measures is continuing, 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 take 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  change  mitigation  the  existing  and 
planned  measures  are  not  yet  sufficient  to  reach  the  2020  headline  targets.  Many  Member 
States  need  to  make  additional  efforts  to  meet  their  obligations  under  the  Effort  Sharing 
Decision. 

Figure  2  illustrates  the  considerable  emission  reduction  effort  required  between  business  as 
usual for 2020 and the Union's 2020 targets (-20% and -30% respectively). In 2011, EU-27 
emissions (including international aviation emissions) were 16% below 1990 level. Business 
as  usual  based  on  the  PRIMES/GAINS  model  includes  implemented  Union  and  national 
policies  as  of  mid-2009  and  covers  the  Climate  and  Energy  Package  emissions  scope. 
Business as usual would lead to an emissions cut of around 15% between 1990 and 2020. 

EN 

4 

   EN 

According  to  the  latest  available  GHG  projections  which  include  the  implementation  of  the 
Climate and Energy Package, the EU would collectively meet its 2020 target (see Figure 6 for 
the details). However, only 13 MS can expect to meet their 2020 commitments with policies 
already in place, further 8 MS could deliver on their targets when their additional policies and 
measures deliver as expected. The remaining 6 MS need to design additional policies in order 
to accomplish their targets and/or make use of the flexibilities provided for in the Climate and 
Energy Package. 

Figure 2: Actual and projected emissions (MtCO2-eq.) for EU-27 

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

2. 

ACTUAL PROGRESS 1990-2010 

2.1. 

GHG emissions trends in Member States 

The overall EU GHG emission trend is dominated by the two largest emitters, Germany and 
the  United  Kingdom,  accounting  for  about  one  third  of  total  EU-27  GHG  emissions.  These 
two Member States have achieved total GHG emission reductions of 483 million tonnes CO2-
equivalents compared to 1990. The main  reasons for the favourable trend in  Germany  were 
increasing efficiency in power and heating plants and the economic modernisation of the five 
new  Länder  after  German  reunification.  The  reduction  of  GHG  emissions  in  the  United 
Kingdom  was  primarily  the  result  of  liberalising  energy  markets  and  the  subsequent  fuel 
switches from oil and coal to natural gas in electricity production and N2O emission reduction 
measures in the production of adipic acid.  

EN 

5 

   EN 

France and Italy were the third and fourth largest emitters in 2010, respectively accounting for 
11.1  %  and  10.6  %  of  total  EU-27  emissions.  France's  emissions  were  6.6  %  below  1990 
levels in 2010. In France, large reductions were achieved in N2O emissions from adipic acid 
production, but CO2 emissions from road transport and HFC emissions from consumption of 
halocarbons increased considerably between 1990 and 2010. Italy's GHG emissions were 3.5 
% below 1990 levels in 2010. Emissions increased since 1990 primarily from road transport, 
electricity and heat production and petroleum refining but the country's total GHG emissions 
have decreased significantly (7.2 %) since 2008.  

Poland and Spain are the fifth and sixth largest emitters in the EU-27, accounting for 8.5 % 
and 7.5 % of total EU-27 GHG emissions in 2010. Poland decreased GHG emissions by 12.4 
% between 1990 and 2010, and by 28.9 % since the base year, which in Poland's case is 1988. 
The main factors for decreasing emissions in Poland — as for other new Member States — 
were  the  decline  of  energy  inefficient  heavy  industry  and  the  overall  modernisation  of  the 
economy in the late-1980s and early 1990s. The notable exception was transport (especially 
road  transport)  where  emissions  increased.  Spain  increased  emissions  by  25.8  %  between 
1990 and 2010 and by 22.8 % since the base year. This was largely due to emission increases 
from road transport, electricity and heat production, and manufacturing industries. 

In  2010,  six  Member  States  had  GHG  emissions  above  base  year  levels  (mostly  1990) 
whereas  the  remaining  nineteen  Member  States  had  emissions  below  base  year  levels.  The 
percentage  changes  of  GHG  emissions  from  the  base  year  to  2010  range  from  -56% 
(Romania) to +23% (Spain). Cyprus and Malta do not have emission reduction commitments 
under the Kyoto Protocol. In those two Member States, emissions in 2010 were above 1990 
levels. 

2.2. 

GHG intensities and emissions per capita in 2010 

Emissions  in  both  the  EU-27  and  the  EU-15  have  been  decreasing  while  the  economy  has 
grown  significantly.  Figure  3  demonstrates  that  decoupling  of  economic  growth  from  GHG 
emissions has been progressing steadily since 1990. 

Figure 3: Evolution of GDP, GHG emissions and emission intensity (ie. ratio of greenhouse 
gas emissions produced to GDP) – Index (1990 = 100) 

EN 

6 

   EN 

160

140

120

100

80

60

40

20

0

GDP

GHG emissions

GHG intensity

1990

1995

2000

2005

2010

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

Between 1990 and 2010, in the EU-27 GDP grew by 46 % while emissions decreased by 15 
%  and  in  the  EU-15  GDP  increased  by  41%  with  a  11  %  reduction  of  GHG  emissions. 
Between 2009 and 2010 GDP increased by 2% and emissions by 2.4%. Therefore, emission 
intensity  also  increased.  However,  it  can  be  noted  that  the  emission  intensity  in  2010  was 
better than the one in 2008. 

Between  1990  and  2010  GHG  intensity  decreased  in  all  MS.  The  deepest  decrease  was 
observed in Estonia (-75%), Slovakia (-72%), Romania (-63%), Lithuania (-62%), Bulgaria (-
62%).  The  smallest  changes  took  place  in  Portugal  (-18%),  Cyprus  (-18%),  Italy  (-21%), 
Spain (-22%) and Malta (-23%). 

In  2010,  in  the  EU-27  emissions  per  capita  were  at  the  level  of  9.4  tCO2-eq.  Per  capita 
emissions  decreased  by  2.4  tCO2-eq.,  which  is  equivalent  to  a  21%  reduction  compared  to 
1990.  However,  2010  GHG  emissions  per  capita  continues  to  show  significant  differences 
across  Member  States  ranging  from  5.4  (Latvia)  to  24.1  (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,  Denmark,  Sweden,  France  and  Belgium.  In  six 
Member States per capita emissions have increased since 1990. Per capita emissions in these 
Member States, however, are lower than the Union's average except for Greece and Cyprus 
(see also figure 2 of the Staff Working Paper (SWP)). 

2.3. 

GHG emissions in 2010 compared to 2009 

European GHG emissions increased in 2010 (+2.4%) due to the return to economic growth – 
after European GHG emissions drastically decreased in 2009 mainly because of the economic 
recession (-7.3%) – and a colder than usual winter. 

EN 

7 

   EN 

  
Among  the  industrial  sectors,  the  largest  combined  increase  stemmed  from  manufacturing 
industries and construction (including iron and steel process emissions) and from public heat 
and electricity production. Higher industrial activity during 2010, after the strong contraction 
in 2009, appears to have led to a sharp increase in final energy demand and emissions in these 
sectors. The sector that contributed most to higher emissions in the EU in 2010 was, however, 
‘residential and commercial’, which broadly falls outside the scope of the EU ETS. The key 
reason  for  the  43  million  tonnes  increase  in  emissions  there  was  the  cold  winter  in  2010, 
which  increased  demand  for  heating,  particularly  by  households.  The  continued  strong 
increase  in  renewable  energy  use  and  the  improved  carbon  intensity  of  fossil  fuels  - 
underpinned  by  strong  natural  gas  consumption  -  prevented  the  increase  in  GHG  emissions 
from being higher.  

About  56  %  of  the  EU  increase  in  GHG  emissions  was  accounted  for  by  Germany  (+3%), 
Poland (+5%) and the United Kingdom (+3%). In percentage terms, growth in emissions was 
highest  in  Estonia  (+25%),  Finland  (+13%),  Sweden  (+11%)  and  Latvia  (+10%). 
Contrastingly,  Spain,  Greece,  Portugal,  Romania,  Cyprus  and  Ireland  continued  reducing 
GHG emissions in 2010. The increase in emissions in 2010 was partly driven by the economic 
recovery  from  the  2009  recession  in  many  European  countries,  which  had  itself  caused 
substantial emission reductions in 2008 and 2009 in all Member States. Final energy demand 
increased by 3.7 % in 2010, outpacing the increase in economic output (2.0 %). 

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 78% of total Union's emissions in 2010. Agriculture is responsible for 10% of 
total GHG emissions, 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,  total 
transport emissions have also been decreasing since 2007. 

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

EN 

8 

   EN 

Share in 2010

1990-2010 change

Energy supply

32%

-18%

Energy use (excluding
transport)

28%

-22%

Transport

20%

20%

Agriculture

10%

-22%

Industrial processes

7%

-26%

Waste

3%

Other

0%

-30%

-32%

Source: 2012 national inventories 

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 
18.2%  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  11.3%  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 1.8% 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 1.4% reduction, 

the  EU-15  is  projected  to  reduce  its  emissions  even  further.  When  also  taking  into  account 
allowance  and  emission  reduction  credits  trade  under  the  EU  ETS,  the  projected  overall 
reduction of GHG emissions could be up to 12.6% in the Kyoto commitment period compared 
to base year levels.  

EN 

9 

   EN 

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,  all  15  Member  States  will  need  to  meet  their 
respective  individual  commitments  under  the  joint  fulfillment  agreement  under  the  Kyoto 
Protocol.  According  to  the  information  presented,  two  Member  States  are  at  risk  of  not 
meeting the target. 

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 be very close to 2010 emissions and 
will be about 37.9% 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. 
Bulgaria,  the  Czech  Republic,  Hungary,  Latvia,  Lithuania,  Poland,  Romania,  Slovakia  and 
Slovenia intend to account for carbon sinks. Bulgaria, the Czech Republic, Estonia, Hungary, 
Latvia, Lithuania, Poland, Romania and Slovakia have sold or plan to sell part of their unused 
Assigned Amount Units (AAUs). 

EN 

10 

   EN 

Figure  5:  Relative  gaps  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.  Negative  and  positive  values  respectively 
indicate overdelivery or shortfall in percentage of base-year emissions. 

Note: For Ireland, the use of unused ETS allowances from the new entrants reserve is taken into account in the 
non-ETS target 
Source: EEA, European Commission 

EN 

11 

   EN 

 
 
 
 
 
 
 
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  (2010/30/EU),  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)  842/2006  concludes  that  this  Regulation  has  already 
achieved  some  reduction  of  emissions  of  F-Gases  compared  to  a  scenario  without  the 
Regulation41. Together with the Directive on mobile air-conditioning systems (2006/40/EC), 
this Regulation has 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.  

The revised EU ETS Directive provides for the centralisation of the EU ETS operations into a 
single  European  Union  registry  while  at  the  same  time  improving  its  security.  This  new 
registry is operated by the Commission and replaces all EU ETS registries previously hosted 
in  the  Member  States.  The  regulation  establishing  a  Union  Registry  was  adopted  by  the 
Commission  in  November  2011.  The  full  activation  of  the  Union  Registry,  including  the 
migration of over 30,000 EU ETS accounts from national registries, took successfully place in 
June 2012. 

The Commission has for a second time amended the list of sectors which are deemed to be 
exposed  to  a  significant  risk  of  carbon  leakage,  adding  mineral  wools  to  the  list.  The 
Commission currently assesses whether Member States' plans to implement the Commission 
decision on free allocation of allowances to industry are in compliance with the rules. 

EN 

12 

   EN 

 
 
 
As  of  2012,  aviation  emissions  are  subject  to  a  cap  in  the  EU  ETS,  a  change  which  alone 
increases  the  emissions  coverage  by  approximately  10%.  Substantial  work  has  gone  into 
implementing  this  change,  including  on  monitoring  and  facilitating  compliance  and  on 
preparing and coordinating, where necessary, action related to enforcement. 

The  Auctioning  Regulation  is  currently  under  review,  notably  as  regards  the  auction  time 
profile with a view to ensuring the orderly functioning of the market and addressing supply-
demand imbalances that have been caused by the transition to Phase 3 and been exacerbated 
by the existence of a surplus of allowances built up as a consequene of the economic crisis. In 
this context the Commission has also proposed a Decision to clarify the provisions of the EU 
ETS  Directive  regarding  its  own  powers  to  adapt  the  timing  of  auctions  of  emission 
allowances in such exceptional circumstances. 

The  European  Commission  authorised  requests  from  7  Member  States  to  grant  transitional 
free allocations of allowances to their power sectors beyond 2012. These decisions were taken 
under strict application of provisions in the Directive which allow, on certain conditions, for 
time-limited and gradually decreasing exemptions from the general rule of auctioning.  

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 were adopted in June 2012 and will be complemented 
by guidance documents in time for the third ETS period. 

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.  The  corresponding  legal  texts  are 
expected to be adopted at the end of 2012 or in early 2013. 

In addition, the revision of the EU Monitoring Mechanism and the proposal for accounting of 
land  use,  land  use  change  and  forestry  are  currently  under  negotiation  in  Council  and 
Parliament. These proposals are driven by the need to address in particular the reporting and 
accounting needs of the climate and energy package, Europe 2020 Strategy, new requirements 
deriving from the Durban decisions as well as lessons learnt so far. 

In  June  2012,  the  European  Parliament,  the  Council  and  the  EU  Commission  reached  a 
political  agreement  on  the  Energy  Efficiency  Directive.  This  directive  will  contribute  to 
achieving Europe's 20% energy efficiency target for 2020.  

Work on the implementating measures for Regulation (EC) 443/2009 related to CO2 from cars 
and Regulation (EU) 510/2011 related to CO2 from light commercial vehicles is ongoing. The 
implementation of the cars measures is more advanced than that for light commercial vehicles 
but the latter will be consistent with the former. The Commission has now made proposals to 
implement  2020  CO2  targets  for  cars  and  light  commercial  vehicles  which  will  now  be 
considered in the Council and Parliament. 

On  the  mainstreaming  of  climate  action  into  EU  policies  the  Commission  proposal  for  the 
next  Multiannual  Financial  Framework  (MFF)  2014-2020  includes  for  the  first  time  an 
objective to spend at least 20% of the overall budget on climate related action. In particular, in 
Cohesion  Policy,  a  stand-alone  thematic  objective  has  been  proposed  for  climate  change 
adaptation in addition to the low carbon thematic objective and a minimum floor of 20%/6% 
for  the  more  developed  regions  /  less  developed  regions  for  measures  to  increase  energy 

EN 

13 

   EN 

 
efficiency  has  been  included.  New  greening  measures  are  also  foreseen  in  the  proposed 
revised Common Agricultural Policy and the Rural Development Fund, and 35% of “Horizon 
2020”,  the  EU  Framework  Programme  for  Research  and  Innovation  should  be  allocated  to 
climate relevant research and innovation. As a new element, the LIFE Programme will have a 
sub-programme  dedicated  to  Climate  Action,  representing  around  25%  of  the  total  LIFE 
Programme.  The  Commission  will  ensure  that  progress  towards  the  proposed  20%  climate 
spending objective will be tracked and reported on. 

Finally,  a  staff  working  document  (SWD(2012)  5  final)  assessing  the  impacts  of  further 
reducing  emissions  from  20%  to  30%  by  2020  in  each  of  the  Member  States  was  issued  in 
early 2012. 

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

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

EU  ETS  Auctioning  –  early  auctions:  Commission  Regulation  (EU)  No 
1210/2011  amending  Regulation  (EU)  No  1031/2010  in  particular  to 
determine the volume of greenhouse gas emission allowances to be auctioned 
prior to 2013.  

EU  ETS  Registry  –  Union  Registry:  Commission  Regulation  (EU)  No 
1193/2011 establishing a Union Registry for the trading period commencing 
on  1  January  2013,  and  subsequent  trading  periods,  of  the  Union  emissions 
trading scheme 

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

EU  ETS  Monitoring,  reporting,  verification  and  accreditation  rules: 
Commission  Regulation  (EU)  No  600/2012  of  21  June  2012  on  the 
verification  of  greenhouse  gas  emission  reports  and  tonne-kilometre  reports 
and  the  accreditation  of  verifiers  and  Commission  Regulation  (EU)  No 
601/2012 of 21 June 2012 on the monitoring and reporting of greenhouse gas 
emissions. 

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.  

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

Other: 

EN 

14 

   EN 

 
(8) 

CO2  and  vans:  Commission  Implementing  Decision  2012/99/EU  -  on  the 
detailed  arrangements  for  the  collection  of  premiums  for  excess  CO2 
emissions from new light commercial vehicles. 

3.3. 

Implementation of the EU Emissions Trading System (EU ETS) 

2012 will be the last year of the second trading period of the EU ETS (2008-2012). In 2013, a 
substantially revised system will begin its operation.  

3.3.1. 

Second trading period (2008-2012) 

The  EU-wide  average  annual  cap  for  2008-2012  amounts  to  2081  million  allowances  per 
year.  In  2011,  EU  ETS  covered  more  than  12,000  power  plants  and  manufacturing 
installations. Verified emissions of greenhouse gases from these installations dropped to 1904 
million tonnes of CO2-eq. in 2011, more than 2% below the 2010 level and almost 9% below 
the cap. This was despite an expanding economy in Europe. 

The  level  of  compliance  by  the  installations  was  very  high.  Only  less  than  1%  of  the 
installations participating in the EU ETS did not surrender allowances covering all their 2011 
emissions by the deadline of 30 April 2012. 

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 and on average, 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 2008-2011, operators used 555 million CERs or ERUs which was 7% 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.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 
international  credits  from  Kyoto  mechanisms  to  reach  their  Kyoto  targets.  Together,  these 
EU-15 Member States would acquire up to 76 Mt CO2-eq. per year for compliance under the 
first  commitment  period  under  the  Kyoto  Protocol.  This  would  represent  approximately  1.8 
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 € 3.0 billion to acquire units 
through  JI,  CDM  or  AAU  trading.  Austria,  the  Netherlands,  Spain,  Ireland  and  Belgium 
allocated the largest budgets (€ 611 milli on, € 500 million, € 382 million, € 290 million and € 
276  million,  respectively)  for  the  five-year  commitment  period.  In  Slovenia,  the  budget  has 
been estimated for € 80 million. However, given 
the impact of the recent recession on GHG 
emissions MS might not need as many international credits as initially estimated. So far, this 
hypothesis seems to be supported by the fact that the amount of international credits actually 
delivered to Member States' accounts in registries only amounts to about 32 Mt CO2-eq. 

As regards AAUs sold by Member States, according to data in the registries about 68 Mt CO2-
eq.  have  been  transferred  so  far,  while  some  contracted  amounts  may  not  be  delivered  yet. 
Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania and Slovakia reported that 

EN 

15 

   EN 

they intend to further sell AAUs. One Member State (UK) has legislated that it would retire 
any surplus AAUs between the Kyoto target and the 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  14.8  MtCO2  per  year  for  the  EU-15.  In 
addition, the use of activities under Art. 3.4 is projected to contribute 30.6 MtCO2 per year of 
the commitment period in the EU-15. Taking in addition into account contributions from EU-
12, the accounting of these activities will amount to 25.8 and 38.4 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 57.9 Mt CO2 per year of the commitment period. This is equivalent to a 
bit more than 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.  

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.  

EN 

16 

   EN 

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 efforts 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  international  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 13 Members 
States can expect to reach these commitments with existing policies and measures. Further 8 
MS could meet their targets with planned additional policies and measures. 6 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 flexibilities 
provided for in the ESD, such as the use of international credits. 

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. More detailed country-specific recommendations were issued by the Council in July 
2012 as part of the 2012 European Semester.  

EN 

17 

   EN 

 
Figure  6:  Projected  gap  to  2020  targets  for  non-ETS  sectors.  Negative  and  positive  values 
respectively indicate overdelivery and shortfall in percentage of 2005 emissions. 

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 

EN 

18 

   EN 

 
 
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 33 actions announced in the White Paper are now in the final stages of 
implementation (see Table 15 in SWP).  

Climate-ADAPT,  the  European  Climate  Change  Adaptation  Platform  (http://climate-
adapt.eea.europa.eu/) for information sharing, was successfully launched in March 2012. The 
number of hits per day is close to 1000. Climate-Adapt fosters a better understanding of the 
state  of  play  of  research  on  adaptation  and  adaptation  policies,  projects,  programmes  and 
frameworks.  Adaptation  case  studies  and  good  practices  are  made  available,  as  well  as  a 
mapping of national and international activities. 

The European Union's Adaptation Strategy is under preparation and foreseen for adoption 
in Spring 2013. The general aim of the EU Adaptation Strategy is to identify actions at EU 
level  that  will  contribute  to  making  Europe  climate  resilient,  and  to  do  so  at  the  lowest 
possible  cost.  This  means  enhancing  the  EU's  preparedness  and  capacity  to  respond  to  the 
impacts of climate changefocusing in particular on transboundary issues and sectors that are 
closely integrated at EU level through common policies. 

6. 

SITUATION IN THE UNION'S CANDIDATE COUNTRIES  

Between 199017 and 2010 Croatia's GHG emissions decreased by 9%, and compared to 2009 
they  decreased  by  2%.  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 2010 increased by 30% and in 2010 were 3.4% 
lower  than  in  2009.  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.  

Turkey’s  GHG  emissions  increased  by  115%  between  1990  and  2010  and  8.7%  between 
2009 and 2010. While Turkey is an Annex I Party, it has no GHG target under the current 1st 
commitment period of the Kyoto Protocol. 

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. 

EN 

19 

   EN