COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the inclusion of greenhouse gas emissions and removals from land use, land use change and forestry into the 2030 climate and energy framework and amending Regulation No 525/2013 of the European Parliament and the Council on a mechanism for monitoring and reporting greenhouse gas emissions and other information relevant to climate change
Date: 2016-07-20
Institutions: Directorate-General for Climate Action, European Commission
Subjects: EU environmental policy, European forestry policy, climate change, climate change policy, disclosure of information, economic accounts for agriculture, environmental monitoring, greenhouse gas, land use, pollution control

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 20.7.2016  SWD(2016) 249 final   COMMISSION STAFF WORKING DOCUMENT  IMPACT ASSESSMENT  Accompanying the document Proposal for a  REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on the inclusion of greenhouse gas emissions and removals from land use, land use change and forestry into the 2030 climate and energy framework and amending Regulation No 525/2013 of the European Parliament and the Council on a mechanism for monitoring and reporting greenhouse gas emissions and other information relevant to climate change {COM(2016) 479 final} {SWD(2016) 246 final}  
 
 
 
 
  
 
 
1.  PROBLEM DEFINITION ........................................................................................... 1 

Contents 

1.2. 

1.1.  Context ......................................................................................................................... 1 
Political context ............................................................................................. 1 
1.1.1. 
1.1.2. 
Regulatory context ........................................................................................ 2 
Identifying and describing the main problem components .......................................... 3 
Lack of governance for LULUCF following the Paris Agreement ............... 3 
1.2.1. 
Existing  measures  are  not  sufficient  to  reach  the  2030  and  2050  EU 
1.2.2. 
targets ............................................................................................................ 4 
1.2.3.  Accounting of emissions from biomass use .................................................. 5 
1.3.  Baseline scenario, and drivers of the main problems ................................................... 6 
Continuation of Kyoto rules .......................................................................... 6 
LULUCF  sector  not  expected  to  improve  its  performance  in  baseline 
scenario ......................................................................................................... 9 
1.4.  Evidence of the extent of the problems, and identification of solutions .................... 11 
1.4.1.  Need to upgrade and improve LULUCF accounting rules .......................... 11 
1.4.2.  Declining forest removals and increased use of biomass ............................ 12 
1.4.3. 

Lower  mitigation  potential  of  the  agriculture  sector  and  synergies 
between mitigation on land and the agriculture non-CO2 sector ................. 14 
1.4.4.  Absence of consistent governance framework for forest management ....... 20 
1.5.  Who is affected? ......................................................................................................... 21 

1.3.1. 
1.3.2. 

2.  SUBSIDIARITY: WHY SHOULD THE EU ACT? ................................................. 22 

3.  OBJECTIVES: WHAT SHOULD BE ACHIEVED? ............................................... 23 

3.1.  General objectives ...................................................................................................... 23 
3.2.  Specific objectives ...................................................................................................... 23 
3.3.  Operational objectives ................................................................................................ 23 
3.4.  Consistency with other policies and the Charter for fundamental rights .................... 24 

4.  POLICY OPTIONS ................................................................................................... 24 

4.1. 

Improvement of accounting rules ............................................................................... 25 
4.1.1.  Alternative choice of base year/period ........................................................ 25 
Streamlining of the reporting framework – land-based accounting ............ 26 
4.1.2. 
4.2.  The need for flexibility towards agriculture in the ESD ............................................ 28 
4.2.1. 
First screening of flexibility options ........................................................... 28 
4.2.2.  Design of flexibility options towards ESD.................................................. 30 
4.2.3.  Options for credit generation in LULUCF and technical conditions .......... 32 
4.3.  Forest land: Future governance of the projected forest reference levels .................... 33 
4.4.  Summary of options ................................................................................................... 36 

5.  WHAT ARE THE IMPACTS OF THE DIFFERENT POLICY OPTIONS AND 

WHO WILL BE AFFECTED? .................................................................................. 36 

5.1. 
Introduction ................................................................................................................ 36 
5.2.  Modelling framework ................................................................................................. 37 

ii 

 
 
5.3.  Sensitivity  analysis  is  carried  out  to  demonstrate  robustness  of  the  modelling 

tools. Improving LULUCF accounting rules .............................................................. 37 
Impact of the alternative choice of base year/period ................................... 37 
5.3.1. 
Impacts of streamlining the reporting framework ....................................... 40 
5.3.2. 
Impact  of  improved  rules:  Estimates  of  the  credit  generation  for 
5.3.3. 
afforestation and agricultural land ............................................................... 42 
5.4.  Forest Land estimates: governance ............................................................................ 45 
Impact of flexibility options ....................................................................................... 46 
5.5. 
5.5.1.  Distribution of credit potential between Member States ............................. 46 
Environmental impacts of flexibility options F1, F2 and F3 ...................... 48 
5.5.2. 
Economic  impacts:  abatement  costs  and  production  impacts  in  the 
5.5.3. 
Agriculture sector ........................................................................................ 52 
5.6.  Administrative, monitoring and reporting costs and who would be affected ............. 55 
5.7.  Distributional, social and employment impacts ......................................................... 56 

6.  COMPARING THE OPTIONS ................................................................................. 58 

6.2.1. 
6.2.2. 

6.1. 
Introduction ................................................................................................................ 58 
6.2.  Comparison of rule improvements and flexibility options ......................................... 58 
Comparison of accounting rule improvements ........................................... 58 
Comparison  of  options  with  different  levels  of  flexibility  between 
LULUCF and Agricultural emissions in the ESD ....................................... 59 
Selection  of  level  of  improved  rules  and  flexibility  level  between 
LULUCF and agriculture emissions in the ESD ......................................... 61 
6.3.  Selection of options .................................................................................................... 61 

6.2.3. 

7.  HOW WILL MONITORING AND EVALUATION BE ORGANISED? ............... 62 

7.1. 
Introduction – international framework ...................................................................... 62 
7.2.  Quality assurance ....................................................................................................... 62 
7.3.  Obligations for Member States ................................................................................... 63 
7.4.  Compliance cycle ....................................................................................................... 63 
7.5.  Need to monitoring progress towards the EU Non-ETS target .................................. 64 

Figures 

Figure 1: The three main problems addressed and their drivers – structure in this document .............. 4 

Figure 2: Projection of reported emissions (+) and removals (-) from LULUCF main activities for the 
EU28 2005 - 2030, in MtCO2eq ................................................................................................ 10 

Figure  3:  Non-CO2  agricultural  emissions  and  the  volume  of  production  in  the  EU28  agriculture 
sector, 1990-2012 ....................................................................................................................... 15 

Figure 4: Variable share of agriculture non-CO2 in the ESD, 2008-12. ............................................. 17 

Figure 5: Gross and net mitigation modelled in 2030 (% change versus EcAMPA REF 2030) ........ 18 

Figure  6:  Four  options  of  trajectories  for  Agriculture  non-CO2  reduction  between  2020  and  2030 
without and with flexibility (F3 follows the trajectory of Reference 2016) ............................... 31 

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Figure  7:  Improving  accuracy  and  coverage  in  the  LULUCF  sector  in  accordance  with  IPCC 
guidance ..................................................................................................................................... 33 

Figure 8: Overview of EUCLIMIT modelling components used for the assessment of impacts related 
to agriculture and LULUCF ....................................................................................................... 38 

Tables 

Table  1:  Estimates  of  potential  for  credit  generation  in  three  major  LULUCF  activities 
(Afforestation,  Agricultural  land  and  Forest  Management)  for  EU28  for  the  period  2021-30 
under existing Kyoto rules (all figures in MtCO2eq) ................................................................. 11 

Table 2: Biomass demand and LULUCF emissions/removals in the Reference 2016 scenario, 2005 
and 2030 ..................................................................................................................................... 12 

Table 3: Extract from EcAMPA  [draft] final report, area  and production  changes for the EU-28 in 
2030, all scenarios -20% reductions for agricultural non-CO2 emissions ................................. 18 

Table  4:  Estimated  accounted  sink  (negative)/source  (positive)  for  forest  under  KP,  with  different 
forest management scenarios and different reference levels ...................................................... 20 

Table 5: Overview of options considered in this Impact Assessment ................................................ 36 

Table 6: Impact of the base year change on the potentially available LULUCF RMUs for the EU28 
from agricultural land, 2021-2030, including additional mitigation enhanced at a carbon price 
of €20/tonne, in MtCO2, negative value is credits ..................................................................... 38 

Table  7:  Impact  of  base  year/period  change  on  the  potential  credit  generation  (removal  units)  for 
agricultural land, in MtCO2eq per year (negative numbers represent removals, positive numbers 
emissions) ................................................................................................................................... 39 

Table 8: Impact of streamlining framework different accounting rules on credit generation potential 
for  Afforested  Land  (RMUs  in  MtCO2eq)  EU28  2021-2030  including  additional  mitigation 
enhanced at a carbon price of €20/tonne, negative value is credits ............................................ 41 

Table 9: Impact of streamlining the framework different accounting rules on Member States' credit 
generation potential for Afforested Land (RMUs in MtCO2eq), 2021-2030 per Member State, 
negative  numbers  represent  removals,  positive  numbers  emissions  including  additional 
mitigation enhanced at a carbon price of €20/tonne ................................................................... 42 

Table  10:  Estimates  of  total  potential  credit  generation  (for  RMU's)  EU28  for  the  period  2021-30, 
under existing Kyoto rules and alternative rules (30 year transition for afforestation, base period 
2005-2007 for agricultural land), in MtCO2eq ........................................................................... 43 

Table 11: Projected credit* generation potential (for RMUs) for Afforestation and Agricultural land 
per  Member  State  in  2020,  2025,  2030,  and  total  2021-2030,  including  additional  mitigation 
enhanced at a carbon price of €20/tonne, in MtCO2. ................................................................. 44 

Table  12:  Distribution  of LULUCF  credit  limit  for  the  ESD  on  the  basis  of  share  agriculture  non-
CO2 in the ESD, for Option F2................................................................................................... 47 

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Table  13:  Distribution  per  Member  State  of  LULUCF  credit  limit  (cap)  for  the  ESD  for  all  three 
flexibility  options  (low,  medium,  high)  in  MtCO2eq  for  the  period  2021-2030.  Negative 
numbers represent removals. ...................................................................................................... 49 

Table  14:  Distribution  of  potential  credit  generation  under  the  cap,  for  Options  F1,  F2  and  F3  in 
MtCO2 for the period 2021-2030 (figures in bold illustrate when the cap will not be reached) 50 

Table  15:  Direct  impact  of  different  levels  of  flexibility  between  LULUCF  and  ESD  on  GHG 
abatement  costs  in  the  agriculture  non-CO2  sector  (annual  costs  in  2030  in  €  2013)  and 
assuming a 20% reduction in 2030 compared to 2005 ............................................................... 53 

Table 16: Economic impacts in 2030 (% change compared to baseline) based on an assumed 20% 
reduction in agricultural non-CO2 emissions ............................................................................. 55 

Table  17:  Comparison  of  the  options  for  flexibility  between  LULUCF  (with  improved  accounting 
rules) and agricultural emissions in the ESD ............................................................................. 60 

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List of acronyms 

AFOLU 

Agriculture, Forestry and Other Land Use 

ARD 

BAU 

CAP 

CL 

CM 

CP2 

COP 

D 

ESD 

ETS 

FAO 

FL 

FM 

G4M 

GDP 

GHG 

GL 

GM 

GPG 

HWP 

INDC 

IPCC 

JRC 

KP 

Afforestation, Reforestation and Deforestation  

Business as Usual 

Common Agricultural Policy 

Cropland 

Cropland management  
2nd commitment period of the Kyoto Protocol 

Conference of the Parties 

Deforestation  

Effort Sharing Decision 

Emissions Trading System 

Food and Agriculture Organization of the United Nations.  

Forest land 

Forest Management  

Global Forest Model 

Gross Domestic Product 

Greenhouse gas 

Grassland 

Grazing land management  

Good Practice Guidance 

Harvested Wood Products 

Intended Nationally Determined Contribution 

Inter-governmental Panel on Climate Change 

Joint Research Centre of the European Commission 

Kyoto Protocol 

LULUCF 

Land Use, Land Use Change and Forestry 

MRV 

MS(s) 

NFI 

NGOs 

NIRs 

RMU 

SMEs 

TFEU 

Monitoring, Reporting and Verification 

Member State(s) 

National Forest Inventories 

Non-Governmental Organizations 

National Inventory Reports  

Removal Units 

Small- and Medium sized Enterprises 

Treaty on the Functioning of the European Union 

UNFCCC 

United Nations Framework Convention on Climate Change 

vi 

 
 
 
 
 
List of definitions1 

Accounting* 

Accuracy 

Activity data 

Additionality* 

Afforestation 

Biomass 

Carbon pool 

The  use  of  reported  data  to  quantify  meaningful  action  on  mitigation, 
applying standardised rules and usually in the context of target compliance. 

Accuracy  is  a  relative  measure  of  the  exactness  of  an  emission  or  removal 
estimate.  Estimates  should  be  accurate 
they  are 
systematically  neither  over  nor  under  true  emissions  or  removals,  so  far  as 
can  be  judged,  and  that  uncertainties  are  reduced  so  far  as  is  practicable. 
Appropriate methodologies conforming to guidance on good practices should 
be used to promote accuracy in inventories. 

the  sense 

that 

in 

Data on the magnitude of human activity resulting in emissions or removals 
taking  place  during  a  given  period  of  time.  In  the  LULUCF  sector,  data  on 
land  areas,  management  systems,  lime  and  fertilizer  use  are  examples  of 
activity data. 

Direct  human-induced  mitigation,  usually  considered  beyond  a  business  as 
usual reference 

The direct human-induced conversion of land that has not been forested for a 
period of at least 50 years to forested land through planting, seeding and/or 
the human-induced promotion of natural seed sources.  

Organic material both above ground and below ground, and both living and 
dead, e.g. trees, crops, grasses, tree litter, roots etc. Biomass includes the pool 
definition for above - and below - ground biomass. 

A  reservoir  containing  carbon,  which  is  a  component  or  components  of  the 
climate system where a greenhouse gas or a precursor of a greenhouse gas is 
stored.  Examples  of  carbon  pools  are  forest  biomass,  wood  products  and 
soils. 

Carbon stock 

The quantity of carbon in a carbon pool.  

Comparability 

Completeness 

Comparability  means  that  estimates  of  emissions  and  removals  reported  by 
Parties in inventories should be comparable among Parties. For this purpose, 
Parties should use the methodologies and formats agreed by the Conference 
of the Parties (COP) for estimating and reporting inventories. 

Completeness  means  that  an  inventory  covers  all  sources  and  sinks  for  the 
full  geographic  coverage,  as  well  as  all  gases  included  in  the  IPCC 
Guidelines in addition to other existing relevant source/sink categories which 
are  specific  to  individual  Parties  (and  therefore  may  not  be  included  in  the 
IPCC Guidelines). 

1 

Source: IPCC (2003; 2006), with the exception definitions marked with a star (*).  

vii 

 
 
                                                 
Consistency 

Consistency means that an inventory should be internally consistent in all its 
elements  over  a  period  of  years.  An  inventory  is  consistent  if  the  same 
methodologies  are  used  for  the  base  year  and  all  subsequent  years  and  if 
consistent data sets are used to estimate emissions or removals from sources 
or sinks. Under certain circumstances referred to in paragraphs 10 and 11 of 
FCCC/SBSTA/1999/6/Add.1, an inventory using different methodologies for 
different years can be considered to be consistent if it has been recalculated 
in a transparent manner taking into account any good practices. 

[LULUCF] Credit* 

Removal  Units  (RMUs)  able  to  be  applied  to  flexibility  with  other  (non-
LULUCF) sectors 

Cropland 

This  category  includes  arable  and  tillage  land,  and  agro-forestry  systems 
where vegetation falls below the threshold used for the forest land category, 
consistent with the selection of national definitions. 

Cropland management  The system of practices on land on which agricultural crops are grown and on 

land that is set aside or temporarily not being used for crop production. 

[LULUCF] Debit 

In  the  LULUCF  sector,  the  increase  in  net  emissions  (or  decrease  in  net 
removals) requiring compensation from other, non-LULUCF sectors. 

Deforestation 

The direct human-induced conversion of forested land to non-forested land.  

Disturbances* 

Events  including  wildfires,  insect  and  disease  infestations,  extreme  weather 
events and geological disturbances, but not harvesting. 

Emissions* 

Release of greenhouse gas to the atmosphere. 

Emission factor 

Flexibility* 

Forest 

Forest land 

A  coefficient  that  relates  the  activity  data  to  the  amount  of  chemical 
compound which is the source of later emissions. Emission factors are often 
based on a sample of measurement data, averaged to develop a representative 
rate  of  emission  for  a  given  activity  level  under  a  given  set  of  operating 
conditions. 

The possible exchange of removal units, credits, or debits,between or within 
sectors. 

A  minimum  area  of  land  of  0.05–1.0  hectare  with  tree  crown  cover  (or 
equivalent  stocking  level)  of  more  than  10–30  per  cent  with  trees  with  the 
potential  to  reach  a  minimum  height  of  2–5  metres  at  maturity  in  situ.  A 
forest  may  consist  either  of  closed  forest  formations  where  trees  of  various 
storeys  and  undergrowth  cover  a  high  proportion  of  the  ground  or  open 
forest.  Young  natural  stands  and  all  plantations  which  have  yet  to  reach  a 
crown  density  of  10–30  per  cent  or  tree  height  of  2–5  metres  are  included 
under forest, as are areas normally forming part of the forest area which are 
temporarily unstocked as a result of human intervention such as harvesting or 
natural causes but which are expected to revert to forest. 

This  category  includes  all  land  with  woody  vegetation  consistent  with 
thresholds  used  to  define  forest  land  in  the  national  GHG  inventory,  sub-
divided  at  the  national  level  into  managed  and  unmanaged  and  also  by 
ecosystem type as specified in the IPCC Guidelines.6 It also includes systems 
with  vegetation  that  currently  falls  below,  but  is  expected  to  exceed,  the 
threshold of the forest land category. 

viii 

 
Forest management 

Grassland 

A  system  of  practices  for  stewardship  and  use  of  forest  land  aimed  at 
fulfilling  relevant  ecological  (including  biological  diversity),  economic  and 
social functions of the forest in a sustainable manner.  

This category includes rangelands and pasture land that is not considered as 
cropland.  It  also  includes  systems  with  vegetation  that  fall  below  the 
threshold  used  in  the  forest  land  category  and  is  not  expected  to  exceed, 
without human intervention, the thresholds used in the forest land category. 
This category also includes all grassland from wild lands to recreational areas 
as  well  as  agricultural  and  silvo-pastural  systems,  subdivided  into  managed 
and unmanaged, consistent with national definitions. 

Grazing land 
management 

The  system  of  practices  on  land  used  for  livestock  production  aimed  at 
manipulating the amount and type of vegetation and livestock produced. 

Gross-net accounting*  Accounting  approach  for  the  actual  reported  net  emissions  (or  removals)  in 
each year of the commitment period without comparing it with 1990 or other 
base year or reference. 

Key category 

Land Category* 

Net-net accounting* 

Reforestation 

A category that is prioritised within the national inventory system because its 
estimate  has  a  significant  influence  on  a  country’s  total  inventory  of  direct 
greenhouse  gases  in  terms  of  the  absolute  level  of  emissions,  the  trend  in 
emissions, or both. 

The  categorisation  of  land  cover/use  into  basic  categories  of  Forest,  Crop, 
Grass,  Settlement,  Wetland  and  Other  Land,  applied  by  the  UNFCCC 
reporting approach. 

Accounted  using  the  reported  net  emissions  in  each  year  of  the  accounting 
period minus the net emissions in 1990 (or other base year). In the situation 
where the net emissions have decreased, a country may issue removal units, 
(RMUs) and if net emissions have increased, it must cancel units (i.e. take on 
debits).  

The  direct  human-induced  conversion  of  non-forested  land  to  forested  land 
through  planting,  seeding  and/or  the  human-induced  promotion  of  natural 
seed  sources,  on  land that  was  forested  but  that has  been  converted  to  non-
forested  land.  For  the  KP  first  commitment  period,  reforestation  activities 
will be limited to reforestation occurring on those lands that did not contain 
forest on 31 December 1989. 

Removals* 

Used, for the purposes of this report, together with "sink". 

Removal Units 

Revegetation  

Units  showing  decrease  in  emissions  or  increase  in  removals  within  the 
LULUCF accounts. 

A  direct  human-induced  activity  to  increase  carbon  stocks  on  sites  through 
the establishment of vegetation that covers a minimum area of 0.05 hectares 
and does not meet the definitions of afforestation and reforestation contained 
here.  

Sequestration 

The process of increasing the carbon content of a carbon pool other than the 
atmosphere. It is preferred to use the term “sink”. 

ix 

 
Sink* 

Source 

Transparency 

Wetland 

The  rate  of  build-up  of  CO2  in  the  atmosphere  can  be  reduced  by  taking 
advantage  of  the  fact  that  carbon  can  accumulate  in  vegetation  and  soils  in 
terrestrial ecosystems. Any process, activity or mechanism which removes a 
greenhouse  gas  from  the  atmosphere  is  referred  to  as  a  "sink."  Denoted  in 
accounting and reporting with the negative (-) sign. 

The  rate  of  emissions  of  CO2  in  the  atmosphere  can  be  increased  by 
anthorpogenic action releasing carbon accumulated in vegetation and soils in 
terrestrial  ecosystems.  Any process,  activity  or  mechanism  which  releases  a 
greenhouse gas from the atmosphere is referred to as a "source." Denoted in 
accounting and reporting with the negative (+) sign. 

Transparency  means  that  the  assumptions  and  methodologies  used  for  an 
inventory should be clearly explained to facilitate replication and assessment 
of  the  inventory  by  users  of  the  reported  information.  The  transparency  of 
inventories 
the 
communication and consideration of information. 

the  process  for 

the  success  of 

is  fundamental 

to 

This  category  includes  land  that  is  covered  or  saturated  by  water  for  all  or 
part  of  the  year  (e.g.,  peatland)  and  that  does  not  fall  into  the  forest  land, 
cropland,  grassland  or  settlements  categories.  This  category  can  be 
subdivided into managed and unmanaged according to national definitions. It 
includes reservoirs as a managed sub-division and natural rivers and lakes as 
unmanaged sub-divisions. 

x 

 
 
1.  PROBLEM DEFINITION  

1.1.  Context  

1.1.1.  Political context  

The Paris Agreement includes a long-term goal to put the world on track to limit global warming 
to  well  below  2°C  above  pre-industrial  levels,  and  to  pursue  efforts  to  limit  the  temperature 
increase  to  1.5°C.  Regarding  the  agriculture,  forestry  and  other  land  use  sector,  the  Paris 
Agreement  spells  out  that  the  contribution  from  land  use  and  forests  in  reaching  the  long  term 
climate mitigation objectives will be critical.2  

In  line  with  scientific  findings  reported  by  the  Intergovernmental  Panel  on  Climate  Change 
(IPCC)  in  the  fourth  Assessment  Report,  the  EU's  objective,  in  the  context  of  necessary 
reductions by developed countries as a group, is to reduce GHG emissions by 80-95% by 2050 
compared  to  1990.  The  Commission  in  its  2050  Low  Carbon  Economy  Roadmap  proposed 
concrete  milestones  to  ensure  the  EU  is  on  track  to  reduce  these  emissions  by  at  least  80% 
domestically by 2050, with milestones of 40% and 60% reductions in 2030 and 2040. For 2020, 
the  EU  had  agreed  in  2007  on  an  economy-wide  and  binding  target  of  at  least  20%  GHG 
emission  reductions,  as  well  as  a  binding  renewables  target  of  20%  and  an  indicative  target  of 
20% energy savings. Land use, however, was not included in either of these initiatives. 

The EU became the first major economy to present its climate plan for the Paris Conference (i.e. 
Intended  Nationally  Determined  Contribution  or  "INDC")  on  6  March  2015.  This  reflects  the 
2030  climate  and  energy  policy  framework  set  by  the  October  2014  European  Council  and  the 
European Commission's blueprint for tackling global climate change beyond 2020.3 The EU has 
set  an  ambitious  economy-wide  domestic  target  of  at  least  40%  greenhouse  gas  emission 
reduction for 2030.  

The 2014 European Council conclusions also mandated the European Commission to put forward 
policy  to  include  Land  Use,  Land  Use  Change  and  Forestry  (LULUCF)  into  the  EU's  2030 
climate  and  energy  framework.  The  European  Council  specifically  acknowledged  "the  multiple 
objectives  of  the  agriculture  and  land  use  sector,  with  their  lower  mitigation  potential,  and  the 
need  to  ensure  coherence  between  the  EU's  food  security  and  climate  change  objectives".  It 
invited the Commission "to examine the best means of encouraging the sustainable intensification 
of food production, while optimising the sector's contribution to  greenhouse  gas mitigation and 
sequestration, including through afforestation". 

The European Council's guidance on including LULUCF into the EU's 2030 climate and energy 
framework is also reflected in the EU's INDC. The EU announced that its target is "an economy-
wide absolute reduction from base year emissions", reaching "at least 40% domestic reduction", 

2    The new long term goal was defined as achieving "a balance between anthropogenic emissions by sources and 

removals by sinks of greenhouse gases in the second half of this century." Paris Agreement, Art. 4 (1) 
3   European Council Conclusions, 2030 Climate and Energy Policy Framework, EUCO 169/2014 para 2.14 

1 

 
                                                 
covering  100%  of  the  EU's  emissions.  As  for  LULUCF,  it  was  added  that  "policy  on  how  to 
include  Land  Use,  Land  Use  Change  and  Forestry  into  the  2030  greenhouse  gas  mitigation 
framework  will  be  established  as  soon  as  technical  conditions  allow  and  in  any  case  before 
2020."4  

1.1.2.  Regulatory context  

The  current  2020  EU  climate  policy  framework  covers  most  sectors  and  greenhouse  gases.  It 
consists of two main elements: 

–  The  EU  Emissions  Trading  System  (EU  ETS),  directly  involving  more  than  11000  large 
installations  in  power  generation  and  manufacturing  industries,  and  operators in  the aviation 
sector.  

–  A  large  part  of  the  emissions  from  sectors5  outside  the  EU  ETS  are  addressed  by  the  Effort 
Sharing  Decision  (ESD).  The  ESD  sets  2020  targets,  and  defines  a  linear  trajectory  of 
corresponding binding emission limits for each year from 2013 to 2020.  

Progress towards the 2020 targets is ensured through annual reporting obligations and compliance 
checks, set out in Regulation 525/2013/EC.6   

Emissions and removals from the land use sector are treated differently: 

–  Land Use, Land Use Change and Forestry (LULUCF) greenhouse gas accounting results were 

not included in the EU’s domestic reduction target for 2020.   

–  Emission and removals7 of greenhouse gases in this sector are instead covered by international 
obligations only, up to 2020. The rules for the LULUCF sector for the first commitment period 
(2008-2012)  of  the  Kyoto  Protocol  were  finalised  among  international  Parties  in  2001,  and 
formally  adopted  in  2005.  A  set  of  improved  methodologies  and  rules,  valid  for  the  second 
commitment period of the Kyoto Protocol (2013 to 2020), was adopted at the Durban climate 
conference in 2011.  

–  Emissions and removals from LULUCF are accounted applying the so-called "no debit rule". 
This means that internationally, the EU and each of its Member States need to ensure that the 
LULUCF sector does not result in extra emissions – after accounting rules are applied. 

4  

Intended  Nationally  Determined  Contribution  of 
http://www4.unfccc.int/submissions/INDC/Published%20Documents/Latvia/1/LV-03-06-EU%20INDC.pdf 
5   The so-called "non-ETS" with more than 55% of the EU’s total emissions e.g. CO2 emissions from transport, 

its  Member  States,  6  March  2015, 

the  EU  and 

heating of buildings, non-CO2 emissions from agriculture and waste 

6   Regulation  525/2013/EC  on  a  mechanism  for  monitoring  and  reporting  greenhouse  gas  emissions  and  for 
reporting other  information  at national  and Union  level  relevant  to  climate  change  and  repealing Decision No 
280/2004/EC 

7   When CO2 is absorbed from the atmosphere, for example when trees and plants grow, this is termed "removal", 

in contrast to an emission which occurs when the biomass is burnt or decays. 

2 

 
                                                 
–  Reporting – but not accounting – in the LULUCF sector, as part of the EU's annual greenhouse 

gas inventory, is addressed by Regulation 525/2013/EC.8 

1.2. 

Identifying and describing the main problem components  

1.2.1.  Lack of governance for LULUCF following the Paris Agreement 

Governance today for LULUCF falls under the auspices of the UNFCCC and is agreed through 
the  relevant  decisions  of  the  so-called  Conference  of  the  Parties  serving  as  the  meeting  of  the 
Parties  to  the  Kyoto  Protocol  (CMP).  Accounting  of  removals  and  emissions  in  the  LULUCF 
sector is thus contingent on the specific technical guidance developed for the implementation of 
the Kyoto Protocol, which itself takes into account related IPCC guidelines. The current Kyoto 
Protocol  LULUCF  accounting  rules  have  been  incorporated  into  EU  legislation  by  Decision 
529/2013/EU ("LULUCF Decision"), but these do not apply beyond the 2nd commitment period 
of  the  Kyoto  Protocol(2013-2020).  Moreover,  the  results  of  these  accounts  play  no  part  in  the 
EU’s domestic reduction target for 2020. 

In  a  significant  step  forward,  the  Paris  Agreement  requires  all  Parties  to  report  information  on 
their LULUCF emissions and removals. In a change to the international framework and contrary 
to  the  Kyoto  Protocol,  however,  it  does  not  contain  a  single  harmonised  set  of  legally  binding 
accounting rules. It also does not specify how emissions and removals from land use have to be 
counted  towards  national  reduction  targets.  Parties  will  not  be  bound  by  one  stringent 
international set of standards. Instead, they may be allowed to choose from a "menu of options" 
on how to govern LULUCF9.  

The EU's INDC clearly outlines the principles for the inclusion of LULUCF into its international 
commitment. The implementation of the current LULUCF Decision is underway and will deliver 
improved  systems  and  broader  coverage  of  accounting  for  the  Member  States,  by  the  end  of 
2020.  Nevertheless,  without  a  legal  framework  consolidating  this  implementation  and  defining 
the applicable rules for the post-2020 period, the way in which LULUCF would be included into 
the 2030 framework could be heterogeneous across the EU.  

In conclusion, in order to address the lack of international governance, governance within the EU 
needs  to  be  further  developed.  The  LULUCF  sector  needs  to  be  fully  covered  under  the  EU 
climate  policy  framework  as  of  2020,  which  requires  establishing  the  accounting  rules  to  be 
applicable  before  this  date.  Timely  action  is  needed  to  ensure  that  Member  States,  currently 
improving  systems,  direct  this  work  towards  the  establishment  of  appropriate  monitoring 
frameworks.  EU  action  on  the  LULUCF  sector  could  also  have  a  wide-ranging  influence  on 
global approaches to land-based emissions and removals, influencing the overall global ambition 
for the period beyond 2020. 

8   Greenhouse gas Monitoring Mechanism Regulation (MMR), http://rod.eionet.europa.eu/instruments/652  
9   Final report "LULUCF and the Paris Agreement" ICF/COWI, 2016 

3 

 
                                                 
Figure  1:  The  three  main  problems  addressed  and  their  drivers  –  structure  in  this 
document 

1.2.2.  Existing measures are not sufficient to reach the 2030 and 2050 EU targets  

On the basis of current policies, GHG emissions are not expected to decrease sufficiently to reach 
the  EU's  2030  target  of  30%  GHG  domestic  reductions  under  the  ESD.  In  the  EU  Reference 
Scenario 2016, reflecting current trends and policies, emissions covered by the ESD are projected 
to decrease by around 16% in 2020 and achieve 24% reduction in 2030 compared to 2005. This 
reflects full implementation of existing legally binding targets as well as adopted policies. This 
leaves  a  gap  of  6  percentage  points  to  the  30%  reduction  in  2030,  requiring  cumulatively  still 
around 1 billion ton additional reductions in the period 2021-2030.10 

The  results  of  earlier  impact  assessments  for  203011  and  2050  firmly  underline  the  growing 
importance over time of mitigation action in forests and agriculture. In the case of an overall EU 
emission reduction of 80%, and without additional mitigation action in agriculture compared to 

10   Further details may be found in Sec 1.3 of the Impact Assessment on Effort Sharing in 2030 Climate and Energy 

Policy Framework  

11   COM(2014)  15,  http://ec.europa.eu/clima/policies/2030/documentation_en.htm  .  Hereinafter:  "2030  Impact 

Assessment" 

4 

 
 
 
                                                 
today,  the  proportion  of  agricultural  emissions  is  estimated  to  rise  to  about  one  third  of  all  EU 
emissions by 2050. This is double its current share in the EU’s emission budget.12 

At  the  same  time,  the  LULUCF  sector  offers  untapped  potential  for  emission  reduction  and 
enhanced removals through carbon sequestration and substitution of fossil carbon.13  

In  conclusion,  the  importance  of  both  land  use  and  agriculture  in  terms  of  climate  policy  is, 
therefore, set to increase and additional mitigation efforts both in agriculture and in the LULUCF 
sector are needed. This is particularly important to prepare for the long-term, as emissions in the 
period after 2050 may well have to be counterbalanced by higher removals.14    

1.2.3.  Accounting of emissions from biomass use  

The increased utilisation of biomass for energy and wood products can lower emissions in other 
sectors  through  energy  and  material  substitution.  Enhancing  the  bio-economy  can  therefore 
contribute  positively  to  climate  mitigation.  However,  the  increased  use  of  biomass  for  the 
production of renewable energy and for material substitution shifts the accounting of emissions 
from the energy and others sectors to the land use sector, in particular to forest management. It is 
therefore of key importance that the use of biomass is appropriately accounted for in LULUCF.  

Under  the  current  Kyoto  accounting  rules,  the  combustion  of  biomass  counts  as  zero  in  the 
energy sector while the resulting carbon stock changes are accounted as emissions in LULUCF. 
This avoids double counting of emissions15. Under the current EU climate and energy package, 
bioenergy emissions are counted as zero in the ETS and in the ESD, but LULUCF is not yet fully 
included in the EU's domestic reduction target. Moreover, in the absence of uniform international 
rules  after  the  end  of  the  Kyoto  regime,  accounting  for  emissions  generated  by  biomass  use 
would be incomplete, and the EU framework would be unbalanced. 

If  a  change  in  the  amount  of  biomass  harvested  is  a  result  of  more  biomass  being  used  for 
bioenergy or materials, the impact of higher than Business as Usual (BAU) harvests would result 
in  decreased  accounted  removals  (or  increased  emissions)  in  the  LULUCF  sector  with  a 
corresponding decrease of accounted emissions in the ETS and ESD. The net impact of a harvest 
rate beyond the BAU in LULUCF accounts would therefore appropriately reflect – and balance – 
the biogenic emissions of the zero-rated energy feedstock in the full, economy wide accounts. In 
addition,  any  benefits  (i.e.  reduction  of  emissions)  would  potentially  occur  off  the  accounting 
sheet of the Member State producing the biomass, if the energy feedstock was exported. 

into 

change 

climate 

12   SEC(2011) 288 final, http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52011SC0288  
13  Mainstreaming 

2014, 
http://www.ecologic.eu/10439;  Policy  options  for  including  LULUCF  in  the  EU  reduction  commitment  and 
policy  instruments  for  increasing  GHG  mitigation  efforts  in  the  LULUCF  and  agriculture  sectors,  2011, 
http://ec.europa.eu/clima/policies/forests/lulucf/docs/synthesis_report_en.pdf;  Impact  assessment  on  the  role  of 
land  use,  land  use  change  and  forestry  (LULUCF)  in  the  EU's  climate  change  commitments,  SWD(2012)  41 
final; ClimWood2030 ‘Climate benefits of material substitution by forest biomass and harvested wood products: 
Perspective 2030’ Final Report (revised draft) , March 2016  

policy,  Ecologic 

development 

Institute 

rural 

14   See Paris Agreement, Article 4 (1) 
15   See JRC Reference report EUR25354 EN 

5 

 
                                                 
In  conclusion,  a  robust  and  credible  accounting  regime  for  the  LULUCF  sector,  within  the 
overall  EU  accounting  framework,  is  necessary  to  guarantee  that  emissions  and  removals 
resulting from biomass use are properly accounted.  

1.3.  Baseline scenario, and drivers of the main problems 

1.3.1. Continuation of Kyoto rules  

In  the  baseline  scenario  the  continuation  of  the  current  (2013-2020)  Kyoto  accounting  rules  is 
assumed including for the three main LULUCF categories: 

  Afforestation and deforestation 

  Agricultural land (crop and grasslands) 

  Forest management. 

1.3.1.1. Reporting and accounting rules  

The  internationally  agreed  Kyoto  rules  applied  by  the  EU  make  a  key  distinction  between 
"reported"  and  "accounted"  emissions  and  removals  in  LULUCF.  While  reporting  concerns  an 
inventory of emissions and removals, accounting aims to identify those which are human induced 
and the result of real action. A significant part of the removals associated with forests and soils is 
the result of the natural carbon cycle, and needs to be identified.  

Until the end of the Kyoto Protocol's second commitment period, Member states are required to 
report  in  parallel  under  two  different  regimes:  that  of  the  UNFCCC  (where  all  Parties  need  to 
report emissions and removals) and the Kyoto Protocol (specifically for developed countries). At 
the end of the Kyoto Protocol, this latter obligation will stop. 

Because  of  the  accounting  rules,  only  a  limited  amount  of  carbon  sequestration  reported  in 
the  LULUCF  sector  can  be  used  towards  compliance  with  Kyoto  targets.  This  restriction 
helps address methodological uncertainties and preserve environmental integrity.  

The  reporting  and  accounting  of  afforestation  and  deforestation  as  well  as  forest  management 
follow the mandatory rules applicable during the 2nd commitment period of the Kyoto Protocol. 
However, this reporting and accounting is specific to the Kyoto Protocol and not consistent with 
the reporting required from all parties under the UNFCCC. 

The  LULUCF  Decision  introduced  requirements  for  Member  States  to  extend  their  use  of 
reporting on croplands and grasslands. As of 2013, they must provide estimates of accounts for 
the  Kyoto  Protocol  activities  of  cropland  management  and  grazing  land  management  to  the 
Commission. The LULUCF Decision provides a step-wise path for implementation16, up to the 
last  year  of  the  Kyoto  Protocol  (2020).  The  obligation  is  introduced  in  a  gradual  manner, 

16   LULUCF Decision Impact Assessment, 2011, SWD(2012) 41 final   

6 

 
 
                                                 
allowing Member States first to submit preliminary and non-binding annual estimates, with full 
accounting only starting for the accounting year 2021.17  

Significant  progress  has  been  made  in  collating  and  analysing  relevant  data.  According  to  a 
recent  study18,  the  level  of  detail  of  reporting  on  cropland  and  grassland  in  Member  States  has 
improved substantially, since the adoption of the LULUCF Decision in 2013. 

Nevertheless,  Kyoto  Protocol  reporting  and accounting  presents  issues  with  respect  to  being  fit 
for  purpose  post  2020,  and  furthermore  obliges  a  double  reporting  requirement  upon  Member 
States.  

1.3.1.2.Forest management 

Kyoto  rules  permit  the  accounting  of  emissions  or  removals  from  forest  management  against 
projected forest reference levels, to exclude legacy management effects and other natural factors 
from  accounts.  The  actual  mitigation  performance  in  the  sector  is  compared  to  a  nationally 
determined projected forest reference level. Member State specific reference levels for 2013-20 
are estimates of future removals or emissions. Some are based upon historic trends, others may 
take policy implementation into account, for instance harvest rates. The Kyoto Protocol granted a 
significant  degree  of  choice  in  how  these  forward-looking  estimates  are  calculated.  Indeed  the 
assumptions made in approaches applied by EU Member States, vary to a great extent.  

Furthermore, under the Kyoto Protocol rules a cap is used in LULUCF accounts to limit the use 
of potential credits from forest management by a Party. The role of the cap is to limit uncertainty 
associated  with  the  projections  which  underpin  forest  management  reference  levels19,  and  to 
ensure  the  environmental  integrity  of  the  accounts.  Forest  Management  removal  units  used  to 
balance emissions from other LULUCF activities are only allowed up to a maximum of 3.5% of a 
Party's 1990 total emissions (see Annex 5). 

1.3.1.3. Intra-LULUCF flexibility rules 

Flexibility  is  already  granted  within  the  Member  State  LULUCF  accounts:  Member  States  can 
use  enhanced  mitigation  in  one  LULUCF  activity  (e.g.  forests)  to  compensate  for  accounted 
emissions  by  other  LULUCF  activities  (e.g.  emissions  resulting  from  conversion  of  land  to 
settlements). They can also trade removal units among the Kyoto Protocol Parties.  

1.3.1.4.No-debit rule for LULUCF sector 

As described above, emissions and removals from LULUCF are currently accounted towards the 
Kyoto Protocol obligations of Member States applying the so-called "no debit rule". These Kyoto 
accounts  mostly  concern  emissions  and  removals  from  afforestation,  deforestation  and  forest 

17   Ref to CLIMA Guidance documentation for 529/2013 estimates under Art 3(2)b 
18   Hart K, Buckwell A, Freibauer A, Weiss P (2015), Assessment of costs of developing more detailed LULUCF 
reporting  and  accounting  systems,  Task  5  of  a  study  for  DG  Climate  Action:  ‘LULUCF  implementation 
guidelines  and  policy  options’,  Contract  No  CLIMA.A2/2013/AF3338,  Institute  for  European  Environmental 
Policy, London 
19   SWD(2012) 41 final 

7 

 
                                                 
management.  Few  Member  States  have  elected  non-forest  activities  under  their  international 
obligations20.  

Under  EU  legislation  for  the  second  commitment  period,  emission  reductions  in  the  LULUCF 
sector  cannot  be  used  to  compensate  for  increased  emissions  in  other  sectors.  In  other  words, 
LULUCF  credits  and  debits  are  calculated  only  for  reporting  purposes  and  are  not  taken  into 
account in measuring compliance with the EU 2020 targets in the EU ETS and the Effort Sharing 
Decision. 

When distributing the overall EU reduction target to individual Member States, there are strong 
reasons  in  favour  of  keeping  the  current  "no  debit"  approach,  whereby  each  Member  State 
maintains the obligation to ensure that its LULUCF sector is not in debit:   

–  During the stakeholder consultation and at expert meetings, many Member States signalled a 

preference of avoiding a complicated target-setting exercise for LULUCF; 

–  As Member States must comply with no debit targets during the second commitment period of 
the  Kyoto  Protocol,  it  would  contravene  the  principle  of  "no  backsliding"  to  opt  for  a 
collective level target in the post-2020 period;  

–  For  all  options  that  involve  flexibility,  LULUCF  accounts  per  Member  State  can  only  be 

calculated using individual Member State LULUCF targets; 

–  Intra-LULUCF  trading  flexibility  already  permits  the  re-distribution  of  effort  between 

Member States; a target-setting exercise would to some extent duplicate this.  

In  conclusion,  the  "no  debit"  approach  is  retained  both  for  the  overall  EU  target  and  the 
individual MS targets. This maintains the same ambition level of the "at least -40%" target, under 
the conditions as applied today under the Kyoto Protocol.  

1.3.1.5. No use of LULUCF credits for compliance under ESD 

In the baseline scenario, the use of the accounted LULUCF sink, or "flexibility" in the context of 
this impact assessment, refers only to the possible exchange of removal units within the LULUCF 
pillar. The baseline scenario assumes that no flexibility (or use) of LULUCF credits is permitted 
in the Climate and Energy Framework, as is the case for the current 2020 package. 

Should intra-LULUCF flexibility not  be sufficient to  comply  with  the "no-debit rule",  Member 
States can use ESD credits to compensate for inadequate mitigation in the LULUCF sector.21  In 

20   DK, PT, ES (croplands only); other Member States (UK, DE, IE, IT) may include non-mandatory activities in 

the Initial report for the second commitment period 

21   Essentially,  an  ESD  unit  can  be  converted  back  to  an  assigned  amount  unit  which  then  may  be  used  for 
compliance under the Kyoto Protocol. See Council Decision 2015/1339 of 13 July 2015 on the conclusion, on 
behalf of the European Union, of the Doha Amendment to the Kyoto Protocol to the United Nations Framework 
Convention  on  Climate  Change  and  the  joint  fulfilment  of  commitments  thereunder;  Commission  Delegated 

8 

 
 
                                                 
 
other words, current flexibility between different pillars of the EU's climate policy exists in one 
direction: from the ESD towards LULUCF. 

1.3.1.6.Summary of existing provisions in the baseline scenario 

The  following  legacy  conditions  will,  as  explained  in  the  sections  above,  be  included  in  the 
baseline scenario:   

  Application of accounting rules applicable to the 2nd commitment period of the Kyoto 

Protocol  

  Specifically, application of the projected reference level approach for assessing the 
performance of enhanced removals and emissions from forest land, including the 
application of the 3.5% cap on removal unit generation.   
Intra-LULUCF flexibility and trade of removal units between Member States; 

 
  No-debit rule for the LULUCF sector; Member States must maintain their LULUCF 

accounts without debits at the end of the applicable compliance period; 

  No use of LULUCF credits for ESD compliance. 

Variants of these in terms of the options to be compared are specified in Table 5. 

1.3.2.  LULUCF sector not expected to improve its performance in baseline scenario 

The  reference  scenario  projects22  that  the  LULUCF  sector  in  2030  would  continue  to  be  an 
important  net  sink  in  the  EU-28  (see  Table  2  and  Figure  2).23    Net  removals  would  decrease 
slightly  from  about  -299  Mt  CO2  in  2005  to  -288  Mt  CO2  in  2030,  under  the  assumed 
continuation of the current reporting and accounting regime.24 To give some scale to this figure, 
this annual reported net sink from LULUCF is a little over 10% of the annual net emissions of the 
ESD in 2005.  

While the overall LULUCF reported sink is projected to remain stable, the contribution by forest 
management (i.e. harvests of timber), new planting (afforestation), and conversion from forest to 
other  land  use  (deforestation)  does  vary  over  time.  In  particular  the  sink  related  to  forest 
management is projected to decline substantially. This is in part due to the natural cycle of forests 
in Europe, and in part due to increased biomass demand for energy.  

Differences  among  Member  States  can  be  substantial.  Several  Member  States  expect  forest 
management  to  become  a  source  by  2020  (i.e.  emitting  more  CO2  than they  absorb);  examples 
are Ireland, Estonia, and Austria. By contrast, other countries project the forest management sink 
to  develop  positively  by  2020,  for  example  Hungary,  Slovakia,  Spain,  Cyprus  and  the  Czech 
Republic25. 

Regulation  2015/1844  of  13  July  2015  amending  Regulation  (EU)  No  389/2013  as  regards  the  technical 
implementation of the Kyoto Protocol after 2012 

22   The  Reference  2016  projection  does  include  a  number  of  existing  and  market  driven  policy  effects  (e.g. 

continued afforestation). It is consistent with that used in the ESD IA. See Annex 4 for more details.  

23   See Annex 4.11 for more details.  
24   Reference scenario 2016 
25   See Annex 6 Synthesis of Member States' LULUCF  reports 

9 

 
                                                                                                                                                              
In addition, the rate of afforestation reached a peak in 2009, and appears to have slowed down.26 
While the effects of earlier Afforested Land will continue to be shown in accounts for a number 
of decades, this positive impact is in decline.  

Without  additional  policies,  timber  used  in  the  harvested  wood  products  pool  is  affected;  its 
contribution to the sink decreases by half. The trend for decreasing deforestation is encouraging 
and the afforestation sink is projected to increase in the reference projection, even if future rates 
of new planting will decrease in most countries. 

Concerning  agricultural  and  non-forest  land  categories,  most  of  the  benefits  expected  in 
decreased emissions from crops result from more efficient management and (to a limited extent) 
the  emergence  of  some  energy  crops.  With  more  land  being  converted  to  grassland,  a  modest 
improvement in sink is also projected. The remaining emissions of wetlands and settlements are 
projected to remain stable and of low magnitude.  

Figure 2: Projection of reported emissions (+) and removals (-) from LULUCF main 
activities for the EU28 2005 - 2030, in MtCO2eq  

Notes: Removals (sink) and emissions (source) represented as negative and positive values, respectively 
Source: EUCLIMIT Reference 2016 model projections  

The impact of increased biomass demand on the EU LULUCF sink is made uncertain by different 
factors regarding the biomass sources. The emergence of energy crops on marginal agricultural 
land  may  perhaps  not  materialize,  or  timber  demand  could  be  higher,  or  the  expected  positive 
changes in certain LULUCF sub-sectors (e.g. afforestation) might not occur. In these cases, the 

26   Data  on  land  converted  to  forest  land,  http://www.eea.europa.eu/data-and-maps/data/data-viewers/greenhouse-

gases-viewer  

10 

 
 
                                                 
overall  LULUCF  sink  could  decrease  more  significantly  by  2030,  having  a  negative  impact  on 
the EU's overall emissions.  

In conclusion, the baseline scenario shows the complex interaction of land uses and their effects 
on emission and removals from the LULUCF sector. Biomass demand and supply factors create 
an important uncertainty in the modelling process. Existing incentives and rules for biomass may 
undermine the historical trend of an overall sink for the EU, potentially wasting an opportunity to 
underpin the EU's longer term commitment under the Paris Agreement. 

1.4.  Evidence of the extent of the problems, and identification of solutions 

1.4.1.  Need to upgrade and improve LULUCF accounting rules 

Assuming  a  continuation  of  the  existing  Kyoto  Protocol  rules,  the  total  accounted  sink  from 
LULUCF in 2021-2030 could be in the order of nearly 2000MtCO2eq over the ten-year period 
(see Table 1). Significant uncertainties exist for forest management in particular, as explained in 
Section 1.4.4.  

Table  1:  Estimates  of  potential  for  credit  generation  in  three  major  LULUCF  activities 
(Afforestation, Agricultural land and Forest Management) for EU28 for the period 2021-30 
under existing Kyoto rules (all figures in MtCO2eq) 

KP Activity: 

Existing KP rules 

Afforestation, Deforestation 

Agricultural land (cropland and grazing land) 

Forest management 

Total 

-900 

-720 

Up to -360 

-1980 

Notes: Removals (sink) and emissions (source) represented as negative and positive values, respectively 
Source: EUCLIMIT modelling 

At  the  same  time,  until  the  end  of  the  Kyoto  Protocol's  second  commitment  period,  Member 
states are required to report in parallel under two different regimes: that of the UNFCCC (where 
all  Parties  need  to  report  emissions  and  removals)  and  the  Kyoto  Protocol  (specifically  for 
developed  countries).  This  creates  additional  administrative  burden,  and  renders  the  reporting 
system more complex.  

In conclusion, as the Paris Agreement no longer requires reporting and accounting in technical 
compliance  with  the  Kyoto  Protocol,  an  opportunity  exists  to  streamline  reporting  to  the  one 
mandatory UNFCCC approach. This would simplify the administrative and technical effort to be 
made  both  by  Member  States  and  the  Commission,  and  remain  compatible  internationally  with 
the EU's INDC. 

11 

 
 
 
1.4.2.  Declining forest removals and increased use of biomass  

Although overall LULUCF removals are projected to decrease only slightly by 2030, removals on 
forest land are in decline. Forest land removals are projected to decrease from -353 MtCO2eq in 
2005 to approximately -242 MtCO2eq by 2030. This is a more than 30% reduction in the Forest 
Management sink over these 25 years. A number of interlinked reasons are behind this trend. 

Table  2:  Biomass  demand  and  LULUCF  emissions/removals  in  the  Reference  2016 
scenario, 2005 and 2030  

Demand biomass (Mtoe) 

Of which bioenergy production (Mtoe) 

Of which net imports of bioenergy (Mtoe) 

Domestic production biomass feedstock (Mtoe) 

of which: forestry 

of which: crops 

Total harvest (million m3) 

of which forest wood for energy (million m3) 

plantation wood and energy crops used for energy (million m3) 

LULUCF emissions/sink  (MtCO2) (emissions +ve, removals –ve) 

Total forest land 

of which forest management 

of which afforestation/reforestation 

of which deforestation 

Total Cropland 

Total Grassland 

Total Wetlands 

Total Settlements 

Total Other land 

Harvested Wood Products 

2005 

2030 

86.4 

85.0 

1.4 

93.6 

29.2 

3.5 

516.3 

91.2 

0.0 

-299.1 

-337.1 

-353.7 

-46.2 

62.8 

61.0 

-9.3 

13.9 

28.0 

-1.7 

-53.8 

178.3 

152.0 

26.3 

188.4 

53.1 

23.0 

564.8 

159.2 

13.5 

-288.0 

-321.0 

-242.1 

-99.0 

20.0 

49.8 

-18.6 

12.4 

20.2 

-1.7 

-29.2 

Notes:  Emissions  and  removals  are  absolute  but  remain  only  partially  calibrated  due  to  scope  and 
coverage of the modelling framework 
Source: EUCLIMIT Reference 2016 model projections  

The  decline  of  the  forest  removals  is  partly  explained  by  earlier  management  decisions. 
Typically, older forests approach a steady state where gains due to growth are balanced by losses 
due  to  decay.  Removal  rates  in  mature  or  unmanaged  forest  would  gradually  approach  zero. 
Although in the baseline projection carbon sequestration on afforested land increases, this is due 

12 

 
 
 
 
 
to the maturing of already planted trees and despite an expected decreasing trend in new planting 
up to 2030. 

The  trend  of  increased  land-take  for  settlements  is  also  a  concern.  This  land  use  change  is  not 
only reducing the area available for productive land, but also reduces capacity to store carbon.27 
Trends  of  deforestation  are  projected  to  decline  but  land-take  remains  a  major  environmental 
issue.28  

Another factor that could have an influence is the increasing use of biomass.29 Forest harvests are 
driven  mainly  by  demand  for  material  wood  products,  even  though  the  demand  for  energy 
increases in the Reference 2016 projection. Bioenergy is currently the biggest renewable energy 
source  and  is  projected  to  remain  so  up  through  to  2030.  Under  the  Renewable  Energy 
Directive,30  binding  national  targets  for  2020  commit  Member  States  to  raise  the  share  of 
renewable  energy  in  their  energy  consumption.  In  2013,  biomass  use  for  heat,  power  and 
transport represented over 60% (or 105 Mtoe) of the overall EU renewable energy consumption. 
Under  the  2016  Reference  scenario,  bioenergy  consumption  in  the  EU  is  projected  to  grow  by 
20% between 2015 and 2020, and will stabilise or slightly grow between 2020 and 2030. Direct 
harvest for energy in this scenario expands to 28% (159.2Mm3) of harvest by 2030.  

Moreover,  there  is  uncertainty to  what  extent  biomass  demand  would be  met  through  domestic 
sources  (i.e.  agriculture,  forestry  and  waste)  or  imports.  If  more  of  the  supply  gap  were  met 
through imports, it could shift the negative impacts on the carbon sink from the EU to non-EU 
countries.  However,  the  Paris  Agreement  contains  provisions  so  as  to  make  sure  that 
corresponding  international  emissions  from  biomass  harvest  are  to  be  reported  and  accounted 
towards third party nationally determined commitments.  

The  share  of  imported  biomass  for  bioenergy  is  projected to  increase  from  less  than  4%  of  the 
final consumption in 2015 to about 15% in 2020, then slightly decline by 2030.  

Many stakeholders, in particular environmental NGOs, have expressed concerns about increased 
bioenergy use and consider it an important driver of emissions. At the same time, forest or other 
biomass producers were of the view that current rules focus too  much on maintaining the sink, 
thereby limiting use of wood and other biomass. Overall, many stakeholders pointed out the need 
to avoid an "accounting gap" in biomass use (Section 1.2.3). 

In  conclusion,  biomass  and  land  use  change  can  be  identified  as  key  drivers  of  the  LULUCF 
sink. 

27   In  terms  of  emissions,  up  to  half  comes  from  forest  lands,  and  a  quarter  each  from  cropland  and  grassland; 

European Union Inventory 2013, Submission 2015 v1 to UNFCCC  

28   http://www.eea.europa.eu/soer-2015/europe/land 
29   Study on  the  Wood  Raw  Material  Supply  and  Demand  for  the  EU  Wood-processing  Industries,  Final  Report, 
http://ec.europa.eu/growth/sectors/raw-materials/industries/forest-based/pulp-

2013, 

December 
paper/index_en.htm 

30   Renewable  Energy  Directive  (2009/28/EC):  national  targets  will  enable  the  EU  as  a  whole  to  reach  its  20% 
renewable  energy  target  for  2020  –  more  than  double  the  2010  level  of  9.8%  –  as  well  as  a  10%  share  of 
renewable energy in the transport sector. 

13 

 
                                                 
1.4.3.  Lower  mitigation  potential  of  the  agriculture  sector  and  synergies  between 

mitigation on land and the agriculture non-CO2 sector    

Past performance, 1990-2012 

Since  1990,  agriculture  non-CO2  emissions  in  the  EU28  have  declined  by  24%,  or  in  absolute 
terms by nearly  150 Mt CO2eq per  year.31 Indeed  by 2012, the  sector’s  emissions  amounted to 
10.3 % of total emissions in the EU.32 The largest relative reductions were reported for nine EU 
Member States that joined the EU in 2004 or later, headed by Bulgaria (-65%), Latvia (-59%) and 
Estonia  (-58%).  In  the  same  period,  the  EU-15  Member  States  reduced  their  agricultural  GHG 
emissions  by  -15%,  with  the  biggest  relative  reductions  reported  for  the  Netherlands  (-29%), 
Denmark (-23%) and Germany (-21%). This decrease demonstrates a significant de-coupling of 
emissions and agricultural output (Figure 3). This was achieved without specifically addressing 
the main actors (farmers) under direct climate legislation.  

The share of agriculture emissions in national greenhouse gas ESD emissions varies considerably 
within the EU (Figure 4). On the basis of emissions in the period 2008-12, the share is lowest in 
Luxembourg  (7%),  Malta  (8%),  and  the  Croatia  (9%)  and  highest  in  Ireland  (40%),  Lithuania 
(28%) and Denmark (27%). Member States with higher shares could be expected to need to find 
more mitigation in the sector to meet their future targets. 

The most important source of the EU's agriculture non-CO2 emissions is nitrous oxide emissions 
from agricultural soil management.  These represent around half of the total agriculture emissions 
in  the  EU,  mainly  due  to  the  application  of  manure  and  mineral  nitrogen  fertilizer.  Enteric 
fermentation  emissions  of  methane  gas  make  up  one-third,  mainly  from  cattle  and  sheep. 
Emissions of both gases from manure management add a further 16%.33  

Since  1990,  each  of  these  three  major  sources  has  shown  a  decline  in  emissions  of  more  than 
20 %.34 Figure 3 shows that maintaining agricultural output can be compatible with a reduction of 
emission  intensities.  The  decrease  so  far  can  be  attributed  to  several  factors,  most  of  all  to 
productivity  increases  and  a  decrease  in  cattle  numbers,  as  well  as  improvements  in  farm 
management practices.35  

31   EU  GHG  Inventory  2014,  http://www.eea.europa.eu/publications/european-union-greenhouse-gas-inventory-

2014 

32   EU total emissions excluding LULUCF 
33    Insert ref to EcAMPA 2 final report 
34   http://ec.europa.eu/clima/policies/g-gas/docs/kyoto_progress_2014_en.pdf. 
35   An  economic  assessment  of  GHG  mitigation  policy  options  for  EU  agriculture  -  EcAMPA  -;  An  economic 
assessment  of  GHG  mitigation  policy  options  for  EU  agriculture  -  EcAMPA  2  -  Final  Report  –  DRAFT, 
February 2016 

14 

 
                                                 
Figure  3:  Non-CO2  agricultural  emissions  and  the  volume  of  production  in  the  EU28 
agriculture sector, 1990-2012 

Source: Compiled by European Commission, data from Eurostat and FAO 

Support  for  climate-friendly  agriculture  through  the  Common  Agricultural  Policy  (CAP)  has 
significantly  contributed  to  this  "decoupling".    Emission  trends  have  been  influenced  by  CAP 
measures, such as the decoupling of agricultural production from CAP subsidies since the early 
2000s, and the abolishment of milk quotas. Cross-compliance under the CAP with environmental 
legislation  will  have  played  a  significant  role,  such  as  national  and  EU  legislation  to  reduce 
nitrogen  and  ammonia  emissions  to  water  and  air.36  The  CAP  rural  development  policy,  for 
instance,  supports  farm  modernisation  in  order  to  cut  energy  consumption,  produce  renewable 
energy,  improve  input  efficiency,  and  thereby  reduce  emissions.  In  2015,  it  is  estimated  that 
€13.6 bn of the CAP budget was climate relevant.  

Despite these successes, continuing the trend of steady emission reductions from agriculture may 
be  challenging.  In  most  Member  States  the  reduction  path  slowed  down  significantly  between 
2001 and 2012. For some countries, much of the low cost mitigation potential in agriculture non-
CO2 emissions has already been utilised. 37 

Future prospects until 2030 

Agriculture non-CO2 emissions in 2005 amounted to 446 MtCO2 for the EU28. In the Reference 
2016  baseline  scenario,  agriculture  emissions  are  projected  to  decline  by  just  2.1%  by  2020, 
compared to an overall 10% reduction that is required for all sectors under the ESD.  

36   2030 Impact Assessment  
37   An  economic  assessment  of  GHG  mitigation  policy  options  for  EU  agriculture  -  EcAMPA  -  An  economic 
assessment  of  GHG  mitigation  policy  options  for  EU  agriculture  -  EcAMPA  2  -  Final  Report  –  DRAFT, 
February 2016. 

15 

 
 
                                                 
Regarding agricultural production, medium-term prospects show increasing production of many 
agricultural commodities, such as cereals, oilseed, sugar, poultry, eggs, milk and dairy products 
in  the  period  2015-202538.  Even  so,  the  total  utilised  agricultural  area  is  projected  to  decrease 
slightly.  Similarly,  a  small  decline  in  dairy  cow  numbers  is  expected,  in  spite  of  the  domestic 
increase  in  dairy  product  supply.39  Consistent  with  this,  the  Reference  2016  baseline  scenario 
projects very limited reductions of emission to around 2.4% by 2030 compared to 2005. This is 
significantly  more  limited  than  the  expected  reductions  of  other  ESD  sectors,  with  existing 
measures. 

Studies looking into the technical emission reduction potential show that limited opportunities for 
further  reduction  of  non-CO2  emissions  exist  in  the  agricultural  sector  (see  for  instance  the 
results of the ECAMPA study40 in Box 1). This is, to some extent, addressed by availability of 
cost-efficient CO2 mitigation in the LULUCF sector, also on agricultural land. Furthermore, the 
importance of its role in mitigation action is dependent upon the importance of the sector, which 
varies considerably between Member States (Figure 4). 

Hence,  while  the  agricultural  sector  has  a  role  to  play  in  reducing  emissions,  the  cost-efficient 
mitigation  potential  of  agriculture  is  apparently  lower  than  for  other  sectors.  This  has  been 
acknowledged  in  the  European  Council  Conclusions  of  October  2014.  As  the  overall  2030 
reduction  target  for  the  non-ETS  sectors  has  been  set  at  -30 %,  other  sectors  such  as  buildings, 
transport, and waste would have  to deliver relatively  higher emission  reductions to compensate 
for  lower  mitigation  in  agriculture.  For  Member  States  with  agriculture  sectors  that  dominate 
ESD emissions, this impact would be the even stronger. 

In conclusion, there are clear synergies between mitigation on land and the agriculture non-CO2 
sector. The results of a meta-study on mitigation action on agricultural land (see Box 2) showed 
considerable cost-effective potential for the reduction of CO2 emissions in agricultural land. This 
impact assessment will therefore look at using the increased potential of mitigation in LULUCF 
to address the issues of lower mitigation potential of agriculture. 

38   EU Agricultural Outlook Report, Dec 2015, DG Agriculture and Rural Development 
39   Prospects  for  EU  agricultural  markets  and  income  2014-2024,  http://ec.europa.eu/agriculture/markets-and-

prices/medium-term-outlook/index_en.htm 
40   Final draft Report of EcAMPA 2, JRC 2016.  

16 

 
 
 
 
 
 
 
 
                                                 
Figure 4: Variable share of agriculture non-CO2 in the ESD, 2008-12.  

Source: 2015 MS inventories 

17 

 
 
 
Box 1: Why can the Agriculture non-CO2 sector only deliver limited mitigation? 
Objective:  The  EcAMPA  study  examined  impacts  on  production,  concluding  that  these  would  be 
relatively  severe  if  the  sector  was  to  deliver  a  -20%  reduction.  In  a  scenario  without  explicit 
subsidization  of  mitigation  technologies  [HET20],  supply  reductions  of  all  activities  would  be 
significant,  ranging  from  -1.3%  (poultry)  to  -8.9%  (beef  meat  activities).  Livestock  herds  reduce 
substantially, especially for beef production (-16.1%).  In subsidized scenarios, the production impacts 
are more limited, although at the cost of a large budget. 
Table 3: Extract from EcAMPA [draft] final report, area and production changes for the EU-28 
in 2030, all scenarios -20% reductions for agricultural non-CO2 emissions 

Note: total supply of beef includes beef from suckler cows, heifers, bulls, dairy cows and calves 

in 

the  study,  subsidies  may  range  from  EUR 13.6 billion  [SUB80V_20] 

When  complying  with  a  20%  emission  reduction  target  [HET20],  farmers  may  start  adopting  some 
technologies  to  dampen  the  effect  on  production.  With  subsidies  in  place  (SUB80V_20  and 
SUB80O_20), the rate of implementation increases further, and profitability may return. According to 
assumptions 
to 
EUR15.6 billion [SUB80V_20TD], and subsidies per tonne CO2-equivalent range between EUR 188 
and EUR 215. The technologies anaerobic digestion, nitrification inhibitors, fallowing of histosols and 
precision  farming  have  the  largest  contribution  in  total.  The  impact  on  displacement  of  production 
outside the EU would also be of significance. In the non-subsidised scenarios, nearly 1/3rd (29%) of 
mitigation achieved could be undermined by leakage. Subsidies may partially alleviate this problem, 
which however remains significant (14-20% of mitigation achieved). In a scenario with subsidies but 
no compulsory emission reduction target (SUB80V_noT), the delivery is about 13.5% of emissions' 
reduction compared to 2005 emissions and no displacement of production outside the EU. In this case, 
the necessary subsidies would be EUR 12.7 billion (EUR 278/t CO2-eq). 
Figure 5: Gross and net mitigation modelled in 2030 (% change versus EcAMPA REF 2030) 

Source for Box1: An 
economic assessment of 
GHG mitigation policy 
options for EU 
agriculture, JRC Policy 
and Science Report 
(Pérez Domínguez et 
al., 2016 forthcoming) 

18 

 REF HET20 SUB80V _20 SUB80O _20 SUB80V _20TD  Hectares or herd size Supply Hectares or herd size Supply Hectares or herd size Supply Hectares or herd size Supply Hectares or herd size Supply  1000 ha or hds 1000 t,  1000 ha %-difference to REF Cereals 57,270 336,323 -4.4 -4.6 -3.1 -3.1 -3.2 -3.1 -1.9 -1.9 Oilseeds 12,040 34,137 -2.5 -2.5 -2.4 -2.4 -2.4 -2.4 -1.5 -1.7 Dairy cows 21,517 172,726 -3.4 -2.0 -3.2 0.1 -3.2 0.1 -2.7 1.0 Beef meat activities 17,985 7,822 -16.1 -8.9 -10.2 -6.0 -10.4 -6.1 -6.6 -4.1 Pig fattening 233,781 22,653 -4.0 -4.1 -0.6 -0.5 -0.7 -0.6 0.4 0.4 Sheep and Goat fattening 44,235 754 -8.8 -8.3 -7.0 -6.6 -7.2 -6.7 -5.3 -4.9 Poultry fattening 6,882 14,531 -1.2 -1.3 0.3 0.1 0.3 0.1 0.8 0.6   
 
 
Box 2: Meta-review study of the potential mainstreaming of climate action in the current 
Common Agricultural Policy (CAP) framework 

Objective:  The  study  collected  existing  literature  and  made  a  "meta-review"  of  studies  and 
scientific  articles.  An  expert-reviewed  list  of  mainly  CO2  mitigation  actions  was  assessed  and 
information provided per action to aid understanding of their potential, geographic applicability, 
mode  of  action  and  implementation  barriers.  The  study  shows  that  mitigation  actions  on 
agricultural land with high potential are mostly related to the actions on agricultural soils, 
land use management and land use change related practices, and to carbon audits.  

Of  the  22  mitigation  actions  assessed,  11  showed  significant  mitigation  potential  (each  at  least 
500kt CO2eq/yr at EU level). Of these, eight were related to land use, land use change or crop 
production,  and  were  focussed  on  carbon  sequestration;  two  related  to  mitigation  of  N2O 
emissions from fertilizer application, and one (carbon audits) is a means of identifying relevant 
actions  at  a  farm  business  level.  Two  mitigation  actions  (zero  tillage  and  wetland/peatland 
conservation/restoration)  show  low  EU  level  potential,  but  are  notable  for  high  potential  at 
regional  level  where  the  soil  conditions  show  potential  for  action.  CO2  mitigation  actions 
associated with livestock systems performance generally have low potential (compared with 
other GHG mitigation actions). The CO2 related feasible additional mitigation potential at 
EU level in 2030 is estimated to lie within the range of 26-56 Mt CO2eq/yr with a median value  
of 40,7 Mt CO2eq/yr. 

The ability and limitations to account mitigation action in national inventories was also assessed. 
Most  of  the  crop  production  and  land  use  actions  reviewed  are  relatively  straight  forward  to 
account for as there is a physical change in the land use or activity that can be observed, recorded 
and  reported.  It  is  more  difficult  to  account  for  efficiency  measures  or  indirect  impact 
measures (e.g. carbon auditing).  

Cost to farmers:  The evidence collected shows very low opportunity costs associated with the 
majority  of  climate  mitigation  actions,  as  many  encourage  efficient  means  of  production,  e.g. 
input  use.  High  opportunity  costs  occur  for  measures  requiring  significant  land  use  changes  or 
high  upfront  capital  costs.  The  study  also  points  to  the  issue  of  profit  margins  of  farming 
enterprises often being too small to enable cost efficient, long term investments.   

Adequacy  of  policy  tools:    The  CAP  has  an  important  role  to  play  in  encouraging  and 
supporting  the  agricultural  and  forest  sectors  to  reduce  greenhouse  gas  emissions  and  increase 
removals. The majority of mitigation actions identified in this study, particularly those related 
to  the  action  on  agricultural  soils,  land  use  management  and  change  can  already  be 
supported under the measures available within the CAP. Attention could be paid to how Member 
States  choose  to  implement  (or  not) these  policy  tools,  and how  they  design  the  detailed  rules, 
definitions  and  support  measures.  Focus  should  be  made  on  uptake  of  measures  and  targeting 
areas with greatest mitigation potential. 

Source for Box 2: Effective performance of tools for climate action policy - meta-review of Common Agricultural 
Policy (CAP) mainstreaming. Prepared by Ricardo-AEA Ltd under contract to European Commission Specific 
contract number 340202/2014/688088/SER/CLIMA.A.2 implementing Framework Contract 
CLIMA.A.4/FRA/2011/0027  

19 

 
 
 
 
1.4.4.  Absence of consistent governance framework for forest management 

Under  the  baseline  scenario,  forest  land  would  have  a  broadly  neutral  impact  on  the  accounted 
sink due to the application of the projected forest reference level. However, this is sensitive to the 
chosen forest reference level (FRL) against which the performance of the forest management is 
assessed.  Two  hypotheses  for  post-2020  FRL  illustrate  the  range  of  possible  results.  It  may  be 
expected that future forest reference levels would be between the outer boundaries (here named 
"strongest" or "weakest"). For this exercise, the "strongest" hypothesis assumed a continuation of 
current  reference  level  values  in  EU  legislation41.  The  "weakest"  hypothesis  was  based  on  the 
preliminary projections used for the FRL under the period 2013-2020, aligning with a business as 
usual (BAU) projection.  

The sensitivity analysis shows a range from  -360 MtCO2 (accounted sink)42 under lower forest 
harvest  conditions,  to  +840  MtCO2  (accounted  source)  when  a  higher  than  business  as  usual 
(BAU) increase in harvests occurs. 

Table  4:  Estimated  accounted  sink  (negative)/source  (positive)  for  forest  under  KP,  with 
different forest management scenarios and different reference levels  

Forest Land Scenario 

Low 

forest 

harvest 

Higher 
perennials available 
Normal  forest  harvest,  with  high 
perennials (IA2013 Reference) 
Lower forest harvest (-10%) 

Forest (Management) Reference Levels 
Units MtCO2 2021-2030 

FMRL as in LULUCF 
Decision 
(strongest) 

Forest Reference Level 2021-
2030 
(weakest) 

+840 

+400 

-220 

+430 

+15 

-360 

Notes:  1)  FM  3.5%  cap  is  applied  at  national  level;  2)  Emissions/source  +  (positive),  Removals/sink  – 
(negative); 3) Harvested Wood Products (HWP) not included in projections or reference 
Source: EUCLIMIT and JRC modelling 

The sensitivity analysis shows that the variation of the harvest levels within a range of +/- 10% 
leads to increases or decreases in GHG balance by some 400-600 MtCO2 of the activity through 
the  period,  for  each  reference  level  hypothesis.  Reporting  for  2013  and  2014  already  shows 
around a 9% lower harvest than projected for the current Kyoto commitment period, implying an 
improved  sink  of  around  30  to  40MtCO2  per  year  at  EU  28  level  (see  Annex  5,  Table  5.7). 
Indeed, some 80 to 100MtCO2eq potential credit is being potentially being generated for the first 

41   Annex II of Decision 529/2013/EU 
42   This represents an impact ranging from emissions of 31% to a sink of 13.5% of the expected 2.7 Gt reductions required in the 

Non-ETS    

20 

 
 
 
 
 
 
                                                 
two  years  of  the  period.  This  may  point  to  a  lack  of  standardisation  with  respect  to  the 
methodology applied, particularly with respect to policy assumptions which drive harvest levels. 

As  stated  in  Section  1.2.1  above,  there  will  be  no  international  process  for  establishing  forest 
reference  levels  under  the  Paris  Agreement.  The  wide  range  of  projected  sink  and  source 
outcomes for forest land in the absence of concrete values for FRLs is a major justification for 
today  not  including  credits  from  Forest  Land  as  part  of  the  flexibility  mechanism  towards  the 
ESD.    Consequently,  a  neutral  impact  of  Forest  Land  is  assumed  in  this  impact  assessment's 
analysis, and flexibility approaches with the ESD discussed in this and subsequent chapters will 
not include direct generation of credits from this land use category.  

Should  the wide  range of  uncertainty  around  the  projected sink  and  source  outcomes  for  forest 
land  improve,  the  inclusion  of  credits  generated  from  Forest  Land  as  part  of  the  flexibility 
mechanism  could  be  re-considered.  In  particular,  if  Forest  Reference  Levels  will  have  been 
established  and  adopted,  and  an  assessment  has  shown  that  they  are  consistent  with  projected 
harvest rates, this option could be taken into account.    

It  has  been assumed,  however,  in  the  baseline  scenario  analysis that  Forest  Land  accounting  in 
the  sector  is  to  be  applied  as  under  today's  KP  rules43.  Removal  units  generated  by  forest 
management  could  still  be  used  by  Member  States  to  balance  out  their  national  LULUCF 
accounts, and for LULUCF sector trading between Member States. Any accounted source from 
Forest  Land  would  need  to  be  offset  by  enhanced  mitigation  from  other  LULUCF  activities. 
Where  this  would  not  be  possible,  additional  emission  reductions  from  other  non-ETS  sectors 
(i.e. compliance with the no-debit rule) would be needed. 

In  conclusion,  a  new  process  to  enhance  and  strengthen the  post-2020  process  for  establishing 
reference levels for forest land will be required, given the new governance framework of the Paris 
Agreement44. More analysis on this subject is provided in Chapter 5 and Annex 5.   

1.5.  Who is affected?  

The projected growing share of agriculture and LULUCF in the EU's emissions budget could be 
considered a risk if these sectors do not achieve their cost-effective mitigation potential. In such a 
case,  other  sectors  (transport,  buildings,  waste  etc.)  would  need  to  reduce  even  more,  which 
would  come  at  a  higher  cost.  This  failure  could  affect  a  wide  range  of  players  and  economic 
sectors. 

In the absence of a proper accounting framework, the zero rating for biomass use (the assumption 
that the combustion of biomass does not produce emissions) could result in underestimating EU 
emissions associated with the production of bioenergy.  

While farmers and foresters are key actors in the implementation of climate action on land, the 
preceding discussion has shown how the EU has previously successfully protected carbon stores 

43   Including Harvested Wood Products as a forest pool, and applying a cap of 3.5% 
44   Agriculture and LULUCF in the 2030 Framework – Final Report, SPECIFIC CONTRACT 
No 340202/2015/715996/CLIMA.A.2 

21 

 
                                                 
and  reduced  emissions  without  directly  regulating  individual  actors.  The  agriculture  sector  has 
historically shown its ability to decouple its decarbonisation process, maintaining overall stable 
production while simultaneously reducing emissions at the EU28 level. 

Rather than the small and medium enterprises which comprise the millions of farm and forestry 
holdings  across  the  EU,  the  proposed  Regulation  is  addressed  at  Member  States  and  to  be 
implemented at national level. This is consistent with this past experience. Moreover, it builds on 
existing legislation which already takes this approach, in particular Decision 529/2013/EU.  

In  conclusion,  the  proposal  maintains  this  path  of  further  integrating  LULUCF  into  the  EU's 
domestic climate and energy framework, rather than introducing a system change.  

2.  SUBSIDIARITY: WHY SHOULD THE EU ACT? 

Climate change is a trans-boundary problem which cannot be solved by national or local action 
alone.  The  European  Union  competence  to  take  action  on  climate  change  derives  from  Article 
191  of  the Treaty  on  the  Functioning  of  the  European  Union.  The  reduction  of  greenhouse  gas 
emissions  and  the development of renewable  energy sources  are among the top  10 priorities  of 
the European Commission. As the EU addresses climate change commitments jointly, LULUCF 
also needs to be addressed in a coordinated manner.  

The EU has adopted a common emission reduction target through its 2030 Climate and Energy 
Framework. The implementation of the overall policy framework and its sectoral building blocks 
require Union-wide legislation. The general problem analysis showing this has been done in the 
previous impact assessment on the 2030 Climate and Energy Framework.  

Corresponding  to  the  2030  Climate  and  Energy  Framework,  the  EU  put  forward  an  intended 
nationally  determined  contribution  (INDC)  under  the  Paris  Agreement.  The  INDC  emission 
reduction  target  is  economy-wide  and  therefore  includes  emissions  from  agriculture  and 
LULUCF.  

This Impact Assessment and proposal is a direct response to the request of the European Council, 
in its 2014 October conclusions, to  the European Commission to put forward policy on how to 
include Land Use, Land Use Change and Forestry (LULUCF) into the EU's 2030 greenhouse gas 
mitigation framework. 

As the continuation of current Member State policies would lead to a gap of 7% compared to the 
necessary  2030  emission  reductions  of  30%  in  the  non-ETS  sectors,  Member  State  action  will 
remain  crucial.  Responsibility  for  progress  up to  2030  will have  to  be  shared,  as  is  already  the 
case in the current  2020 climate and energy package. The Effort Sharing Decision sets binding 
national targets, leaving it to Member States to decide how these are to be achieved, while fully 
respecting the principle of subsidiarity.  

Similarly, the inclusion of LULUCF into the 2030 framework will provide a common framework 
on how the sector can be counted towards the EU's joint reduction target. The choice of action in 
pursuit  of  the  various  objectives  related  to  LULUCF  will  be  up  to  the  Member  States,  thereby 
also  fully  respecting  subsidiarity.  The  harmonised  elements  of  such  a  common  framework  can 

22 

 
ensure  the  functioning  of  a  single  market  within  the  EU's  agricultural  and  forest  sector, 
minimizing any market distortions.   

The  proportionality  of  the  proposed  framework  is  ensured  by  striking  the  balance  between  the 
multiple objectives of the area, namely: the limited mitigation potential of agriculture, the need to 
ensure food security, protection of biodiversity and the long term objective of enhancing sinks on 
land in line with the aspirational target of balancing emissions, post-2050.  

3.  OBJECTIVES: WHAT SHOULD BE ACHIEVED?   

3.1.  General objectives 

The general policy objectives of the initiative are: 

–  Contribute to the 10 priorities of the Juncker Commission – in particular the Resilient Energy 
Union  with  a  Forward-Looking  Climate  Change  Project  by  consolidating  the  enabling 
environment for the transition to a low carbon economy; 

–  Support  progress  towards  the  EU's  objective  to  reduce  domestic  GHG  emissions  by  at  least 
40%  by  2030  compared  to  1990,  and  more  specifically,  towards  the  30%  GHG  reduction 
target in non-ETS sectors compared to 2005, while maintaining the environmental integrity of 
the targets. 

–  Uphold  the  fairness  of  the  overall  policy  framework,  with  respect  to  the  social  and 

distributional effects of the measures.  

–  Reflect  the  EU's  commitment  to  the  long  term  vision  for  limiting  temperature  increase  as 
outlined in the Paris Agreement, as carbon removals will play an increasing role on the road 
towards 2050.  

3.2. 

Specific objectives 

The specific objectives of this proposal are to: 

–  Maintain,  streamline  and  improve  standardised,  internationally  recognised  monitoring  and 
accounting  approaches,  thereby  addressing  the  lack  of  governance  created  by  the  end  of  the 
Kyoto Protocol;   

–  Determine how agriculture and LULUCF will contribute to supporting the emission reduction 
objectives  laid  down  by  the  European  Council  in  October  2014  for  the  2030  climate  and 
energy framework, for the non-ETS sectors, particularly with respect to the limited mitigation 
available in the Agriculture non-CO2 sector;  

–  Ensure that there is no accounting gap relating to the use of biomass for energy in the absence 

of uniform international rules after the end of the Kyoto regime. 

3.3.  Operational objectives 

The operational objectives of this proposal should: 

23 

 
–  Take  into  account  the  specificities  of  the  LULUCF  sector,  such  as  non-permanence,  natural 
disturbances,  legacy  effects  in  forest  management,  removals  related  to  existing  land  use  and 
the  need  for  further  improvements  related  to  monitoring  and  verification  of  emission 
reductions related to some LULUCF activities;    

–  Ensure  consistency  with  related  policies  such  as  policies  on  sustainable  forest  management 

and protection of biodiversity; 

–  Explore  the  links  between  LULUCF  and  the  lower  mitigation  potential  in  Member  State's 

agriculture sectors, including in terms of flexibilities; 

–  Determine  the  least  burdensome  approach  with  respect  to  administrative  effort  for  Member 

States, best aligned with other policies. 

3.4.  Consistency with other policies and the Charter for fundamental rights 

A  legal  proposal  for  the  inclusion  of  LULUCF  into  the  2030  EU  climate  and  energy  policy 
framework is a key part of the Commission framework strategy for a resilient Energy Union with 
a  forward  looking  climate  change  policy,  underpinning  its  decarbonisation  dimension.  In 
particular, the proposal is a key element needed to complete the integrated framework for climate 
and energy policies up to 2030 endorsed by the European Council in October 2014.  

Sustainable  use  of  biomass  can  –  and  must  –  make  a  positive  contribution  to  reducing  the  EU 
reliance on fossil fuels, and the achievement of the EU's 2030 renewable energy targets. To that 
end, a robust LULUCF accounting system is required to ensure that the emissions from land use 
linked to the increased biomass use in the EU can be captured. This is all the more important as 
under KP accounting rules, biomass combustion counts as zero emissions.  

Including  LULUCF  into  the  EU's  2030  climate  and  energy  framework  will  be  fully 
complementary and coherent with other related EU policy objectives, specifically:  

–  The EU has set the target to halt global forest cover loss by 2030 and to reduce gross tropical 
deforestation by at least 50% by 2020 (EU Deforestation Communication of 2008, reiterated 
in the 7th EAP).  

–  The  Biodiversity  Strategy  emphasises  the  need  for  improved  integration  of  biodiversity 

measures in forestry to support preventing the loss of species and habitats.  

–  The EU's Forest Strategy supports the principle of sustainable forest management throughout 

the Union. 

–  As  the  proposed  policy  primarily  addresses  Member  States  as  institutional  actors,  it  is 

consistent with the Charter for fundamental rights. 

4.  POLICY OPTIONS 

Chapter 1 described  the change in  the international governance following the Paris Agreement, 
highlighting the need to develop LULUCF governance at EU level. It was recalled how the 2014 

24 

 
October European Council conclusions confirmed that LULUCF forms part of the non-ETS part 
of the overall 2030 policy package. It was also highlighted that a possible "accounting gap" could 
emerge  if  biomass  use  were  further  increased  without  a  corresponding  effect  in  the  LULUCF 
accounts.  In  order  to  include  LULUCF  in  a  coherent  way  and  to  respond  to  the  Council 
Conclusions the two most critical design issues that need to be assessed are:   

–  Choice and improvement of underlying accounting rules;  

–  The need and extent for flexibility towards the Agriculture sector in the ESD.  

4.1. 

Improvement of accounting rules 

The overall contribution of the LULUCF sector to the EU target in 2030 can only be measured 
once  the  accounting  rules  are  defined.  Accounts  are  used  to  determine  the  possible  credits 
generated or debits incurred. The current rules of the LULUCF Decision are explained in detail in 
Annex 5.  

These rules need to be improved with regard to three key elements were identified in consultation 
with key stakeholders and Member States (see Annex 2):  

–  choice of base year or period;  

–  streamlining  the  reporting  and  accounting  systems  and  the  move  away  from  a  KP-based 

system;  

–  governance of projected reference levels for forests and harvested wood products.  

4.1.1.  Alternative choice of base year/period  

The base year used for the Kyoto Protocol is by default 1990. The level of emissions in this year 
is used as a reference to compare emissions or removals for major LULUCF categories (e.g. crop 
land)  in  a  given  accounting  year.  The  use  of  a  consistent  base  year  facilitates  comparability 
between  commitments  internationally45,  and  avoids  the  selection  of  a  reference  that  may 
artificially influence accounting results.  

Current INDCs annexed to the Paris Agreement46 use a variety of dates. In the case of land use it 
is usually 2005 (for example, United States, Canada).47     

Also in  contrast to  the Kyoto Protocol, the EU Emissions  Trading  Scheme  (ETS) and the ESD 
uniformly apply 2005 as the base year. However, the ESD applies a period average to determine 
the starting point of 2020 target trajectories, in order to avoid introducing random "winners and 
losers"  through  the  selection  of  one  single  reporting  year.  A  similar  period  approach  might  be 
suitable for the LULUCF base year.  

45   However, 1990 is not used by a small number of Member States, who negotiated their first reduction targets in 
the Kyoto system outside the collective framework of EU policy. The actual base year used varies between 1985 
and 1992. 

46   http://www4.unfccc.int/submissions/indc/Submission%20Pages/submissions.aspx  
47     http://unfccc.int/focus/indc_portal/items/8766.php or synthesis report 
http://unfccc.int/focus/indc_portal/items/9240.php  

25 

 
                                                 
Conceptually,  the  use  of  a  more  recent  base  year  or  period  for  LULUCF  accounting  would 
provide several significant advantages: 

–  Alignment with the Effort Sharing Decision;  

–  Enhance accuracy, and reduce the uncertainty of estimates48. Information on agricultural land 
was significantly enhanced as of 2005 due to reforms in the collection of spatial data on farms 
under the Common Agricultural Policy49; 

–  Improvement  in  the  assessment  of  which  mitigation  action  related  to  cropland  and  grazing 

land is truly additional, rather than historical;  

–  Applying  a  period  (e.g.  2005-2007)  instead  of  a  single  base  year  would  help  addressing  the 
issue  of  high  inter-annual  variability  in  LULUCF,  while  having  little  overall  impact  on  the 
aggregated EU accounts. 

Member states and other stakeholders frequently preferred the application of periods for technical 
reasons stated above.  

Consequently, the following two options (Options B0 – B1) will be further assessed: 

  B0: status quo: 1990 Kyoto base year 

  B1: Applying a base period of 2005-2007  

4.1.2.  Streamlining of the reporting framework – land-based accounting  

A  significant  issue  for  Member  States  imposed  by  the  Kyoto  Protocol  is  the  requirement  to 
maintain two systems for showing national GHG balances from LULUCF:  

–  the reporting and accounting framework of LULUCF under the Kyoto Protocol (carried out by 

so-called "Annex 1" developed Parties that ratified the Protocol), and 

–  the  reporting  obligations  under  the  UN  Framework  Convention  on  Climate  Change 

(UNFCCC) (to some degree carried out by every Party).  

Small, but significant differences in the approaches make the conversion to and from these two 
systems  complex.  This  requires  Member  States  to  maintain  two  parallel  systems  and  thereby 
substantially increases the administrative burden.  

In essence, the UNFCCC approach requires  reports on the current land cover categories (forest 
land,  grassland  or  cropland,  settlements,  etc.),  whereas  the  Kyoto  Protocol  reporting  and 
accounting  is  focused  on  activities  (e.g.  forest  management)  or  uses  (of  Harvested  Wood 
Products). Streamlining would require converting Kyoto activities into equivalent UNFCCC land 
categories.  For  example,  the  Kyoto  activity  of  Forest  Management  would  be  replaced  by  the 
UNFCCC reporting category Forest Land remaining Forest Land. Similarly, the Kyoto activity 

48   A major technical issue with the 1990 base year is the collection of adequate and accurate datasets, as the time 

series for land use change need to reach back to 20 years before the base year, i.e. to 1970. 

49   Council Regulation 1782/2003 and Commission Regulation 796/2004 

26 

 
                                                 
Afforestation  would  be  replaced  by  the  UNFCCC  reporting  categories  of  Land  converted  to 
Forest Land.50 

The adoption of the UNFCCC so-called "land-based" accounting approach would present several 
advantages: 

–  Reporting would be streamlined and simplified, as only one system would need to be managed 

by Member States and reviewed by the Commission; 

–  The  change  would  be  wholly  consistent  with  the  change  of  the  base  period  2005-7,  thereby 
discounting the historical  effects of land management  more than 30 years before the start of 
the 2030 framework period;  

–  It  would  dismiss  the  static  approach  whereby  land  "afforested"  or  "deforested"  under  Kyoto 

rules continues to be categorised as such indefinitely; 

–  It  would  ensure  more  accurate  data  collection,  which  would  be  aligned  to  the  approaches 
applied  for  land  at  EU  level,  such  as  LUCAS51,  the  Common  Agricultural  Policy  payment 
systems IACS52, and land monitoring under the COPERNICUS programme53;  

–  Forest  land  area  under  Kyoto  accounts  must  continuously  decline,  as  it  is  never  replenished 
after deforestation. This complicates the monitoring of the sector, since the labelling of an area 
of land will increasingly not  correspond to  its current  land cover, or  even land use. Under a 
land-based approach this is avoided. 

–  Since few – if any – other international parties plan to continue with the Kyoto-style activity-
based  approach,  land-based  accounting  would  provide  better  comparability  with  third 
countries.  

At  the  same  time,  streamlining  would  have  an  impact  on  the  potential  to  generate  LULUCF 
credits.  Land  use  change  categories  under  UNFCCC  reporting  transform,  after  a  20  year 
transition period54, to their destination land category. This is in contrast to Kyoto reporting and 
accounting,  where  these  areas  remain  labelled  with  the  activity  indefinitely.  Specifically,  land 
planted  with  trees  (i.e.  afforested)  since  1990  under  Kyoto  remains  labelled  Afforestation  even 
beyond  2030  and  even  if  it  undergoes  harvesting,  and  land  labelled  Deforestation  remains  so 
even if it is replanted.  

The adaptation of Kyoto Protocol rules to the "land-based" UNFCCC reporting systems has been 
discussed  with  Member  States  and  is  generally  considered  practicable  (see  Annex  2).  One 

50   See Annex 5 for a full description of equivalence between land categories and KP activities. 
51   European  Land  Use 

and  Land  Cover  Survey  LUCAS: 

http://ec.europa.eu/eurostat/statistics-

explained/index.php/LUCAS_-_Land_use_and_land_cover_survey 

52   Integrated 

Administration 

and 

Control 

System, 

IACS 

http://ec.europa.eu/agriculture/direct-

support/iacs/index_en.htm  

53   Copernicus 

the 
http://ec.europa.eu/growth/sectors/space/copernicus/index_en.htm  

European 

– 

Earth 

Observation 

programme 

54   2006  IPCC  Guidelines  for  National  Greenhouse  Gas  Inventories,  Volume  4,  Agriculture,  Forestry    and  Other 

Land Use 

27 

 
                                                 
question  to  explore  further  could  be  the  length  of  period  over  which  afforested  land  would  be 
considered as such, before it moves into the forest land category.  

The  20  year  transition  period  is  the  default  under  UNFCCC  reporting,  and  it  is  appropriate  for 
accounting for land conversion in general. The application of the UNFCCC default would reduce 
the  number  of  credits  from  historical  afforestation  action  sharply.  By  the  end  of  the  Kyoto 
Protocol, the period actually applying to afforestation will be 30yrs (2020 – 1990). Consequently, 
the application of a 30-year transition period – instead of the IPCC default 20-years – could also 
be considered for this category55, if appropriately justified. A 30 year period may be appropriate 
for  certain  Member  States  because  of  systematically  longer  rotation  periods,  for  instance  when 
forests continue to sequester large amounts of carbon during slower forest growth conditions.  

The following three options (Options R0 – R2) are therefore assessed in Chapter 5: 

  R0 - status quo: continuation of the two concurrent systems of reporting under UNFCCC and 

Kyoto; 

  R1: land-based UNFCCC reporting with 20yr transition period for Afforested Land; 

  R2: land-based UNFCCC reporting with 30yr transition period for Afforested Land. 

4.2.  The need for flexibility towards agriculture in the ESD 

When examining flexibility options, the problem analysis pointed to two key concerns that need 
to be taken into consideration: 

  The  lower  mitigation  potential  of  the  agriculture  sector:  The  2014  October  European 
Council established a link between the lower mitigation potential in agriculture and LULUCF, 
in particular afforestation.  

  Environmental  integrity  of  the  non-ETS  emissions  reduction  target:  Allowing  unlimited 
use  of  LULUCF  credits  in  the  ESD  could  significantly  weaken  incentives  for  emissions 
reductions across all ESD sectors, thereby putting the environmental credibility of the ESD as 
a whole at risk.  

In Chapter 1, it is shown that the potential credit generation under the continuation of the Kyoto 
Protocol rules could be as  much as  2000MtCO2eq in  the period 2021-2030. In  a  next  step, the 
potential  credit  need  of  agriculture's  lower  mitigation  potential,  and  how  to  link  this  with 
LULUCF  mitigation,  must  also  be  identified,  and  how  the  improved  accounting  rules  would 
affect this overall amount needs to be explored.  

4.2.1.  First screening of flexibility options 

The Communication on "A policy framework for climate and energy in the period from 2020 to 
2030" and its impact assessment56 identified three principal flexibility options: 

55   Namely that for the transition categories cropland, grass land, wetland, settlements and other land converted to 
forest land (CL-FL, GL-FL, WL-FL, SL-FL and OL-FL) a 30 year period could be applied instead of 20 years.   

56   COM(2014) 15, http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:52014DC0015  

28 

 
                                                 
–  A0: self-standing pillar for LULUCF ("status quo"), i.e. with no flexibility of credits; this is 

the current baseline, assuming the application of Kyoto rules; 

–  A1:  merge  agricultural  (non-CO2)  emissions  with  those  from  LULUCF  in  a  combined  land 

sector pillar;  

–  A2: integrate LULUCF together with agricultural (non-CO2) emissions into the Effort Sharing 

Decision (ESD).  

A first screening highlights significant risks related to an unlimited flexibility between LULUCF 
and Agriculture under the ESD. In particular, the following arguments speak against option A1:  

–  Option  A1  received  the  least  support  by  the  stakeholders  in  general;  it  was  the  least 
favoured  approach  in  each  of  the  stakeholder  groups  (governments,  non-governmental 
organisations, business and sectoral organisations). This approach would also oblige Member 
States to combine sectors rather than flexibility remaining optional.  

–  Overall, the existing ESD delivers the intended outcomes for agriculture efficiently. The 
ex-post evaluation of the Effort Sharing Decision57 shows that individual Member States, and 
the EU as a whole, currently perform well against their annual emission limits under the ESD. 
Bearing  in  mind  the  positive  result  of  this  evaluation,  changing  the  ESD  scope  (i.e.  by 
removing  agriculture  non-CO2  emissions  from  the  ESD)  could  be  a  negative  step,  reducing 
overall policy coherence and efficiency. 

–  Reduced  Integration,  overall:  Although  Option  A1  would  facilitate  a  more  integrated 
approach  of  landscape  management,  and  could  better  reflect  the  sectors'  specificities  (e.g. 
permanence,  long  time-cycles,  inter-annual  variability,  integrated  action  for  mitigation  and 
adaptation), it would lack the advantage of flexibility between agricultural emissions and other 
sectors within the overall ESD.  

–  Increase  in  administrative  burden:  The  ESD  was  found  to  have  resulted  in  limited 
additional  administrative  burden  at  Member  State  level.58  Given  the  substantial  structural 
change  option  A1  would  entail,  it  would  almost  certainly  increase  administrative  burden  for 
Member State authorities. 

The  main  arguments  against  retaining  option  A2  with  broad,  unlimited  flexibility  between  the 
LULUCF and Agriculture non-CO2 sectors are the following;  

–  Allowing  unlimited  flexibility,  in  terms  of  LULUCF  compensating  for  any  volume  of 
emissions  by  any  of  the  ESD  sectors,  is  not  foreseen  in  the  2014  October  Council 
conclusions.  Instead,  Council  guidance  points  to  the  need  to  acknowledge  the  multiple 
objectives  of  agriculture  and  land  use  and  ensure  policy  coherence,  through  optimisation. 
Stakeholders,  especially  governments  and  agriculture  sector  organisations  also  emphasized 
this point in a number of submissions during the stakeholder consultation.  

57   Ex-post ESD evaluation report 
58   ESD IA, Chapter 1 

29 

 
                                                 
that  unconstrained  flexibility  from  LULUCF  would  risk  reducing 

–  Risk  of  undermining  the  environmental  ambition  of  the  "at  least  -40%"  reduction 
target:  It  is  also  evident  that  there  are  serious  concerns  among  stakeholders  regarding  the 
impact  of  LULUCF  credits  on  the  overall  ambition  of  the  ESD.  It  was  pointed  out  in  many 
submissions 
the 
environmental  ambition  of  the  "at  least  -40%"  reduction  target.  Forestry  organisations  also 
warned  of  what  they  perceived  as  a  risk  that  emissions  in  other  sectors  could  be  offset  by 
measures in forestry. Finally, many environmental NGOs were strongly opposed to providing 
any  flexibility  by  using  LULUCF  credits  in  the  ESD,  arguing  that  this  would  effectively 
undermine the credibility of the EU's emission reduction efforts. 

–  Option  A2  would  increase  complexity  of  the  ESD  and  raise  methodological  issues, 
including concerns related to environmental integrity and technical compliance issues, which 
would have to be specifically addressed (e.g. potentially large annual fluctuations in removals 
and emissions, or combining accounting of removals from LULUCF with emissions of other 
non-ETS sectors).  

In  conclusion,  neither  option  A1  nor  A2  seems  fit  for  purpose.  At  the  same  time,  exploring 
different  levels  of  flexibility  points  towards  a  hybrid  architecture,  combining  features  from 
options  A0  and  A2.  Under  such  an  approach,  a  stand-alone  LULUCF  policy  pillar  would 
continue  to  be  utilised,  along  with  a  full  range  of  flexibility  to  all  other  non-ETS  sectors 
justified on the need derived from the agriculture sector share for each Member State in the 
ESD. 

4.2.2.  Design of flexibility options towards ESD 

Political guidance from the October 2014 European Council Conclusions clearly links flexibility 
from  LULUCF  to  the  lower  mitigation  potential  of  the  agricultural  sector.  Stakeholders,  in 
particular  governments  and  agriculture  sector  organisations  emphasized  this  link  during  the 
stakeholder  consultation.  At  the  same  time  it  is  evident  that  there  are  serious  concerns  among 
stakeholders regarding the impact of LULUCF credits on the overall ambition of the ESD. Many 
submissions  point  out  that  unconstrained  flexibility  from  LULUCF  could  reduce  the 
environmental ambition of the "at least -40%" reduction target. As a consequence, the maximum 
amount of LULUCF credits that could be used in the other non-ETS sectors should therefore be 
limited in function of the emission reduction effort required in the agriculture non-CO2 sector of 
the ESD.  

As  shown  in  the  ESD  IA,  the  Reference  Scenario  points  towards  achieving  around  -16% 
reductions in 2020 compared to 2005 for the ESD as a whole. This is projected to continue and 
reach  around  -23%  in  2030.  This  performance  is  due  to  the  long  term  impacts  of  numerous 
existing  policies  such  as  transport  and  the  Energy  Performance  standards  for  buildings,  whose 
influence  will  continue  to  be  felt  in  the  ESD  even  after  2020.  As  shown  in  Figure  6,  the 
Reference 2016 scenario projects only a modest reduction of agricultural non-CO2 emissions to 
around -2.4% by 2030 compared to 2005.  

An assumed 20% reduction in the agriculture non-CO2 greenhouse gas emissions would require 
an emission reduction of nearly 425 MtCO2eq between 2021 and 2030, compared to the reference 
projection. Such a -20% reduction of non-CO2 emissions from agriculture was examined in the 

30 

 
EcAMPA study, concluding that the impacts on production would be significant and substantial 
emission leakage could occur (see Box 1 in Chapter 1).  

To  adjust  this  effort  and  avoid  adverse  impacts  on  the  agriculture  sector,  flexibility  from 
LULUCF  could  be  envisaged  from  between  around  half  to  the  full  level  of  this  assumed 
reduction for the period. Flexibility could be determined for each Member State, in accordance 
with a need justified by its agriculture non-CO2 sector. Use of flexibility by the other non-ETS 
sectors  would  be  further  enabled  throughout  the  period  through  banking,  under  options  F1,  F2 
and F3. As illustrated in Figure 6, the following four options should be analysed: 

  F0: No flexibility ('status quo'): agricultural non-CO2 emissions would have to be reduced by 

20%; no contribution would be provided by LULUCF; 

  F1: Low flexibility: Around half of the assumed agricultural emission reduction effort could 
be undertaken through reductions in the LULUCF sector, i.e. 190 Mt between 2021-2030; 

  F2:  Medium  flexibility:  Up  to  two  thirds  of  the  assumed  emissions  reductions  could  be 

undertaken in the LULUCF sector, i.e. 280 Mt between 2021-2030; 

  F3:  High  flexibility:  Emissions  reductions equivalent to a reduction of non-CO2 agricultural 
emissions  by  -20%  could  be  undertaken  in  the  LULUCF  sector,  i.e.  425  Mt  between  2021-
2030. 

Figure 6: Four options of trajectories for Agriculture non-CO2 reduction between 2020 and 
2030 without and with flexibility (F3 follows the trajectory of Reference 2016) 

Source: own presentation 

31 

 
 
4.2.3.  Options for credit generation in LULUCF and technical conditions 

Various options exist regarding the range of activities59 that could be used to generate credits and 
deliver flexibility. The possible eligible activities, the following could be considered:  are:  

–  Net balance of afforested and deforested land: greenhouse gas fluxes from the direct human-

induced conversion of land through planting, seeding, etc.   

–  Net balance of agricultural land: emissions and removals resulting from the management of 

cropland and grassland, and the associated land use change to and from other land uses.  

Credit  generation  from  forest  management  for  compliance  under  the  ESD  has  been  excluded 
because of the high level of uncertainty and the range of variability, as explained in section 1.  

Moreover,  environmental  integrity  always  needs  to  be  kept  in  mind  when  considering  options 
allowing  the  enhanced  use  of  flexibility.  Mitigation  activities  in  LULUCF  should  result  in 
additional, measurable and sustainable enhancement of carbon sinks.  

Accuracy should be enhanced through a continuous process, and assured through two minimum 
technical  conditions.  As  a  safeguard  for  compliance,  LULUCF  sector  credit  generation  should 
only be permitted:  

(1)  When a Member State's total LULUCF account produces enhanced mitigation, i.e. it has 

an overall balance with more potential credits than debits, and  

(2) 

In  Member  States  where  monitoring  and  reporting  meet  the  technical  conditions  laid 
down by EU legislation (see Chapter 7.2) and the Paris Agreement60.  

59   For all activities, see Iversen P., Lee D., and Rocha M., (2014) Understanding Land Use in the UNFCCC.  
60   FCCC/CP/2015/L.9/Rev.1, Paris Agreement, Art 4  

32 

 
 
                                                 
Figure  7:  Improving  accuracy  and  coverage  in  the  LULUCF  sector  in  accordance  with 
IPCC guidance  

Source: own presentation 

Principles for these conditions may include: 

–  Monitoring,  reporting  and  accounting  should  provide  transparent  and  full  coverage  of 
significant  sinks  and  sources;  removals  may  only  be  accounted  for  after  a  complete, 
comparable and consistent coverage of land categories. 

–  The adoption of international accounting rules as applicable to EU Parties, in accordance with 

guidance adopted by the Conference of the Parties; 

–  The parameters chosen to apply these accounting approaches, such as base years, business as 
usual  projections,  and  the  data  needed  to  determine  these  parameters,  are  determined  in 
accordance with IPCC guidance for higher level tiers and approaches (e.g. Tier 2 and above) 
as illustrated in Figure 7;  

–  The  adoption  of  applicable  best  practice  solutions,  to  enhance  accuracy  and  environmental 
integrity  of  accounts,  developed  under  the  LULUCF  Decision  and  agreed  between  Member 
States in technical guidance. 

4.3.  Forest land: Future governance of the projected forest reference levels 

As explained in Chapter 1.2.1, the international framework governing climate mitigation policies 
from 2021 to 2030 will not be the same as under the Kyoto Protocol. This will also apply for the 
treatment  of  emissions  and  removals  from  LULUCF  in  general  and  the  criteria  for  the 
determination  of  projected  forest  reference  levels  in  particular.  The  latter  will  be  of  critical 
importance for sound forest and biomass GHG accounting.  

33 

 
 
Alternatives to the projected forest reference level approach have been considered – and applied – 
in the past61. In the first commitment period, the reference level was set at zero; in other words, 
parties  could  account  for  the  actual  reported  net  emissions  (or  removals)  in  each  year  of  the 
commitment  period  without  comparing  it  with  a  base  year  (so  called  gross-net  accounting). 
Nevertheless, this approach was subject to much criticism; during the preparation of the Durban 
COP Decision, there was general agreement on the need for improvement.  To address this, an 
alternative  approach  was  discussed  where  the  annual  level  of  net  emissions  (or  removals)  is 
compared  to  the  historical  reference  (so-called net-net  accounting).  This  was  finally  rejected  in 
favour of the projected reference level, combined with a cap (Box3), representing a compromise 
solution  between  gross-net  and  net-net  accounting.  Based  on  these  considerations  and  the 
feedback in the stakeholder consultation, there is a strong rationale for continuing this approach 
in the post-2020 period, while improving transparency and comparability across Member States' 
FRL.  

In  view  of  determining  forest  management  reference  levels  for  the  period  between  2021  and 
2030, two elements are relevant:  

–  the criteria upon which projected forest reference levels would be based, and  

Box 3: Cap on the use of Forest for generating credits: 

Under the Kyoto Protocol rules a cap is used in LULUCF accounts to limit the use of potential 
credits from forest management by a Party. The role of the cap is to limit uncertainty associated 
with  the  projections  which  underpin  forest  management  reference  levels62,  and  to  underpin 
environmental  integrity  of  the  accounts.  Forest  Management  removal  units  used  to  balance 
emissions from other LULUCF activities are only allowed up to a maximum of 3.5% of a Party's 
1990 total emissions (without LULUCF) (see Annex 5).  

The actual impact of this cap on forest accounting depends on how far the reported forest (and 
Harvested  Wood  Product)  sink  would  deviate  from  the  projected  forest  reference  level.  If  the 
forest  reference  level  was  close  to  the  final  reported  value,  the  cap  would  only  have  marginal 
impacts on overall accounting results. But if the reported sink is much greater than the projected 
reference level, the cap has a strong effect of limiting credits and distorting incentives. However, 
modifying the cap values or adopting other approaches is difficult without first establishing the 
projected  reference  level;  additional  complications  with  any  changes  may  outweigh  potential 
short term benefits (see Annex 5). 

–  the governance mode for the setting of forest reference levels.  

The  criteria  for  the  setting  of  projected  forest  management  (and  HWP)  reference  levels  for  the 
second  commitment  period  of  the  Kyoto  Protocol  have  already  been  the  basis  for  determining 
today’s  domestic  legislation63.  In  essence,  and  irrespective  of  the  governance  approach,  the 
criteria  for  setting  FRL  would  remain  the  same  as  under  current  rules  (see  Annex  5),  and  will 

61   See for example LULUCF decision Impact Assessment where options were evaluated 
62   SWD(2012) 41 final 
63   See Annex 5/section 1 for the description of the criteria  and EC Decision 529/2013/EC 

34 

 
                                                 
address the following points regarding Member States' reference levels and the assumptions used 
for setting them: 

–  consistency with the goal of achieving a balance between anthropogenic emissions by sources 
and removals by sinks of greenhouse gases in the second half of this century as defined in the 
Paris Agreement Article 4.1; 

–  reflect on how to treat: forest management practices before the start of the accounting period, 
assumptions  on  the  future  impact  of  policies  and  markets,  and  projected  harvest  rates  with 
existing infrastructures, current technical capacity and economic viability; 

Clarifying  the  role  of  policy  assumptions  in  the  establishment  of  FRL  and  by  adding  the  long-
term goal defined in Paris, would have several benefits for forest land accounting: 

–  it  would  help  avoiding  the  generation  of  "business-as-usual"  removal  units  from  forest 
management,  which,  based  on  the  early  evidence  from  the  second  commitment  period,  is  a 
likely result if loose assumptions on future policy and market impacts are factored in the FRL; 

–  it would appropriately reflect – and balance – the biogenic emissions of the zero-rated energy 

feedstock in the full, economy wide accounts; 

–  it  would  take  national  characteristics  into  account,  including  national  policies  preceding  the 
cut-off  date  (31/12/2009)  determined  in  current  international  rules,  for  sustainable  forest 
management, and ensure the establishment of FRL that would nor create undue "business-as-
usual" removal units nor undue debits in case of good forestry practices based on sustainability 
principles.   

In terms of possible sink and source scenarios, appropriately established FRLs would likely result 
in  the  accounted  sink  being  in  between  the  "strongest"  and  the  "weakest"  FMRL  scenario 
described in Table 2. In a model case, it would generate close to zero removal units/debits in the 
absence of significant change in the forest harvest practices (unless such change is justified by the 
age-class structure and other national forest characteristics). 

The  Kyoto  Protocol  governance  for  the  setting  and  review  of  forest  reference  levels,  however, 
will  discontinue  and  therefore  a  new  system  has  to  be  specified  in  the  legal  proposal.  Most 
Member States, as well as other stakeholders, call for the review of the governance process and 
support 
further  standardisation  of  methodologies  and  enhanced  consistency  of 
implementation.  The  following  governance  options  for  determining  forest  reference  levels 
post 2020 (Options G0 – G2) have therefore been reviewed and their impact will be assessed in 
Chapter 5: 

the 

  G0 - Status quo:  An independent  body shall check compliance of the forest reference levels 
submitted  by  Member  States  with  existing  UNFCCC/IPCC  guidance  (i.e.  technical 
assessment).  

  G1:  The  Commission,  with  the  support  from  experts  from  Member  States,  shall  check  and 
review that forest reference levels 2021-2030 submitted by Member States are in line with EU 
guidance on the methodology for forest reference levels.  

35 

 
  G2: The Commission shall check and review that forest reference levels 2021-2030 submitted 
by Member States are in line with EU guidance on the methodology for forest reference levels. 

4.4. 

Summary of options  

Table 5: Overview of options considered in this Impact Assessment 

Status quo 

Options 

Accounting Rules 

for 

Base  year 
agricultural 
land 

B0: 1990 
Kyoto base 
year 

B1: Applying a 
base period of 
2005-2007 

--- 

Reporting 
framework 

R0: continue 
two systems - 
UNFCCC and 
Kyoto 

R1: land-based 
UNFCCC reporting 
with 20yr transition 
for Afforested Land 

R2: land-based 
UNFCCC reporting 
with 30yr transition 
for Afforested Land 

Governance  of 
forest  reference 
levels 

G0: An 
independent 
body 

G1: The 
Commission, with 
support from MS 

G2: The 
Commission checks 
and reviews 

--- 

--- 

--- 

Link with ESD 

Flexibility 

F0: No 
flexibility  

F1: Low flexibility, 
190Mt between 
2021-2030  

F2: Medium 
flexibility, 280Mt 
between 2021-2030 

F3: High 
flexibility, 425Mt 
between 2021-
2030 

5.  WHAT  ARE  THE  IMPACTS  OF  THE  DIFFERENT  POLICY  OPTIONS  AND  WHO  WILL  BE 

AFFECTED? 

5.1. 

Introduction 

This chapter presents an analysis of the impacts related to the options selected in Chapter 4, in 
line with the specific objectives of this proposal as outlined in section 3.2: 

–  Environmental  impacts  will  be  evaluated  in  terms  of  the  extent  to  which  the  options  will 
enhance the existing LULUCF sink, ensure overall environmental integrity of the EU climate 
framework, and the long-term stability of carbon pools (forests, soils);  

36 

 
 
 
 
–  Economic impacts will be assessed with respect to the impact of different flexibility options 
on  production  volume  and  mitigation  costs  of  mitigation  options  available  in  the  Member 
States; 

–  Social impacts will be reviewed in light of employment and the impacts of extra burden for 

the SMEs (specifically farms and forest holdings). 

5.2.  Modelling framework 

The  quantitative  assessment  presented  here  has  been  undertaken  using  the  multi-component 
economic  modelling  framework  EuCLIMIT,  utilised  for  the  entire  non-ETS  sector64.  No  single 
model exists that would combine agricultural commodity markets, agricultural land, forestry and 
the energy sector together with associated greenhouse gas cycles. Instead a cascade of models has 
been applied (Figure 8):  

–  Population  projections,  GDP  and  the  continuation  of  current  policies  are  included  in  the 

reference scenario, simulated with PRIMES.  

–  Links between greenhouse gas targets and agricultural commodity markets are assessed using 

CAPRI.  

–  The sector effects related to forestry measures are assessed with GLOBIOM.  

–  The potential credit generation from modelled emissions and removals for different LULUCF 
activities  are  assessed  through  a  LULUCF  accounting  tool  implementing  the  alternative 
accounting rules outlined in chapter 4.  

5.3. 

Sensitivity  analysis  is  carried  out  to  demonstrate  robustness  of  the  modelling 
tools. Improving LULUCF accounting rules 

5.3.1.  Impact of the alternative choice of base year/period 

As outlined in section 4.1.1, the default base year under the Kyoto Protocol is 1990. Updating the 
reference  against  which  emissions  and  removals  from  agricultural  (and  other)  land  will  be 
assessed  will  change  the  amount  of  removal  units  (internal  to  the  LULUCF  accounts)  and 
consequently the credits (or debits) that could be generated and used for flexibility.  

64   Full details of the framework can be found in Annex xx of the ESD Impact Assessment, and Annex 4 of this IA. 

37 

 
 
                                                 
Table  6:  Impact  of  the  base  year  change  on  the  potentially  available  LULUCF  RMUs  for 
the EU28 from agricultural land, 2021-2030, including additional mitigation enhanced at a 
carbon price of €20/tonne, in MtCO2, negative value is credits 

Activity 

Option B0  

Option B1  

Status quo 1990 

Base year: Avg. 2005-07 

Agricultural land 

-645 

-437 

Source: EUCLIMIT modelling 

Figure 8: Overview of EUCLIMIT modelling components used for the assessment of 
impacts related to agriculture and LULUCF 

Source: own presentation 

Table 6 shows the potential number of removal units (RMUs) under the two base year options B0 
(status quo, 1990) and B1 (base period 2005-2007). A carbon price similar to that applied to other 
ESD  sectors (i.e.  €20/tonne)65  – in  particular  the optimal value when flexibility is  available for 
the  Agriculture  non-CO2  sector  –  has  been  used  in  the  projection  to  determine  the  projected 
mitigation beyond reference on Afforested, Deforested and Agricultural land. Changing the base 
year to a more recent period will increase the accuracy of the estimates due to the more recent 
datasets used to compute the net emissions and removals. It will also reduce the EU28 potential 

65   As will be seen below, €20/tonne has been chosen since it is the optimal value when compared to the modelled 

marginal abatement costs for mitigation in the agriculture non-CO2 sector. 

38 

 
 
 
 
                                                 
availability of RMUs from agricultural land (i.e. cropland and grassland) from 645 MtCO2 to 437 
MtCO2  for  the  period  2021-2030,  helping  determine  more  precisely  the  additional  effort 
occurring  in  the  period  2021-2030.  Both  considerations  are  important  with  respect  to  the 
environmental integrity of the accounting. Lastly, the overall amount in both options still exceeds 
the highest option of required flexibility of 425 Mt (Option F3) that will be considered. 

Table  7:  Impact  of  base  year/period  change  on  the  potential  credit  generation  (removal 
units)  for  agricultural  land,  in  MtCO2eq  per  year  (negative  numbers  represent  removals, 
positive numbers emissions)  

Member 
State 

AT 
BE 
BG 
HR 
CY 
CZ 
DK 
EE 
FI 
FR 
DE 
EL 
HU 
IE 
IT 
LV 
LT 
LU 
MT 
NL 
PL 
PT 
RO 
SK 
SI 
ES 
SE 
UK 
EU28 

Projected RMU 
generation, B0 
Status quo 1990 
0,2 
-0,7 
-0,7 
0,0 
-1,1 
-3,8 
-1,5 
-0,3 
-3,7 
0,8 
-3,3 
-0,9 
0,1 
-1,8 
0,5 
-6,9 
-3,1 
0,0 
-1,1 
0,0 
-0,9 
-3,7 
-4,2 
-0,3 
0,4 
-0,2 
0,2 
-3,4 
-39,5 

Projected RMU 
generation, B1 
Base year: 2005-07 
0,0 
0,5 
-1,4 
0,0 
-0,8 
-2,7 
-1,2 
0,7 
-1,8 
0,1 
-4,9 
-1,0 
0,7 
-0,7 
1,4 
-3,0 
2,0 
0,0 
-0,4 
0,0 
-0,3 
-2,4 
-0,4 
-0,4 
-2,8 
0,0 
0,1 
-0,2 
-18,7 

Source: 2015 Member State inventories, EUCLIMIT modelling 

39 

 
The impacts on individual Member States may be more substantial and have some distributional 
effects.  Table  7  shows  the  distributional  effect  per  Member  State  per  year  of  the  base  year 
change,  in  relation  to  the  projected  potential  LULUCF  accounts  in  2030.  While  most  Member 
States would see minor differences in relation to their accounts, SE, FR, BG, would benefit the 
most  from  the  adoption  of  option  B1  (base  period  2005-7).  The  most  significant  reductions 
following this option in potential for credit generation would be in LT, IT, PT, UK and ES.66   

In  conclusion:  The  overall  application  of  a  more  recent  base  period  would  allow  for  a  clear, 
accurate and robust assessment of the additionality of potential credits, enhancing environmental 
integrity of the accounts. For the purposes of estimating potential credits for the period 2021 
–  2030  (presented  in  the  section  5.3.3  and  the  following  chapters),  option  B1  (base  period 
2005-2007) will be used as a base period. 

5.3.2.  Impacts of streamlining the reporting framework  

As  outlined  in  sections  1.3.1.1,  the  streamlining  of  the  current  dual  reporting  framework 
(UNFCCC and Kyoto Protocol) to the one mandatory in the post KP period (UNFCCC) would be 
a substantial simplification for Member States and the Commission.  

With respect to EU28 greenhouse gas accounting results for Agricultural Land, the move to the 
land-based reporting for accounts (Option R1) will have no significant effect. This applies indeed 
to all KP activities that are accounted using a comparison to a reference year or level67, known as 
the net-net accounting approach68.    

Even though the KP Deforestation activity foresees a temporal integration over several years in 
the accounting of emissions, this is not substantially affected by the use of the transitional period 
under  UNFCCC  land  categories.  No  impact  is  identified  for  the  rule  transposition  of  this 
category,  and  emissions  from  Deforested  Land  over  the  period  2021-2030  are  projected  at 
277MtCO2eq.  

For Afforested Land, the main difference is that instead of an indefinite period as under the KP 
Afforestation  activity  (R0),  a  transition  period  of  20  (option  R1)  or  30  years  has  been  utilised 
(option R2). As shown in Table 8, Option R1 reduces potential credits sharply, by 464Mt over the 
full  period.  Option  R2  reduces  potential  credits  by  171  Mt,  or  around  one-fifth  for  the  period 
2021-30. In both options the remaining amount of credits still exceeds the total amount of credits 
required for the high flexibility option (F3).   

66   Though it may appear as a disadvantage for these 5 MS, Table 6 clearly shows that in spite of the reduction of 
potential under Option B1, each of the 5 MS would still be able to reach its full credit generation potential within 
the cap under all 3 flexibility options. The only exception is the UK under Option F3.  

67   In  essence  all  land  categories  except  transitions  to  (afforestation)  and  from  (deforestation)  forest  land,  under 

current transposition of Kyoto Protocol rules.  

68   See Annex 5 for more details. 

40 

 
 
                                                 
Table 8: Impact of streamlining framework different accounting rules on credit generation 
potential  for  Afforested  Land  (RMUs  in  MtCO2eq)  EU28  2021-2030  including  additional 
mitigation enhanced at a carbon price of €20/tonne, negative value is credits 

Activity 

Option R0  

Status quo 

Option R1: Only 
land-based 
UNFCCC, 20yr 

Option R1: Only 
land-based 
UNFCCC, 30yr 

Afforested land 

-901 

-437 

-730 

Source: 2015 UNFCCC Inventory data and EUCLIMIT projections 

The  aggregate  impact  on  EU28  level  under  the  "Option  R2,  30yr  transition"  variant  would  be 
approximately 20% reduction in RMU generation potential. Looking at individual MS impacts, it 
appears  that  nine  Member  States  (BG,  CY,  DK,  LU,  MT,  NL,  PL,  HR,  SE)  would  slightly 
increase their RMU generation potential. Seven Member States would experience proportionate 
impact, i.e. a reduction of RMU generation potential in the range of 20% or less: AT, CZ, DE, 
FR, HU, IT, LT.  

Twelve Member States would be expected to experience more than 20% reduction in their RMU 
generation potential. Four of them (EE, ES, EL, SK) would see a change above 33%, i.e. losing 
one-third or more of the potential. Eight others (BE, FI, IE, LU, RO, SI, UK) would be affected 
within a range of 20-33%.  

On  the  other  hand,  the  potential  of  Member  States  to  generate  credits  (RMUs)  under  the  cap 
applied  for  credits  from  forest  management  (Box  3)  would  hardly  be  affected:  Table  10  shows 
that  EE,  ES,  EL  and  SK  could  achieve  their  maximum  credit  generation  potential  under  all 
options at low costs (20€/tonne CO2 eq). The same is true for PT, SI, RO and FI; the UK would 
achieve its maximum potential under both F1 and F2. The only cases with a difference are LU, IE 
and BE.   

In conclusion, using a land-based UNFCCC accounting approach and applying a 30 year moving 
window  for  Afforested  Land  (Option  R2)  could  potentially  deliver  credits  of  730MtCO2  from 
this  LULUCF  activity for  the  2021  to  2030  period.    Almost  all  Member  States  are expected  to 
generate  credits  based  on  the  currently  projected  afforestation  rates.  The  credit  generation 
potential  from  afforestation  could  further  increase  with  additional  support  measures.  For  the 
purposes of calculations presented in the section 5.3.3 and the following chapters, the accounting 
methodology based on the UNFCCC land categories will be used. 

41 

 
 
Table  9:  Impact  of  streamlining  the  framework  different  accounting  rules  on  Member 
States' credit generation potential for Afforested Land (RMUs in MtCO2eq), 2021-2030 per 
Member State, negative numbers represent removals, positive numbers emissions including 
additional mitigation enhanced at a carbon price of €20/tonne 

Member 
State 
AT 
BE 
BG 
CY 
CZ 
DE 
DK 
EE 
ES 
FI 
FR 
GR 
HR 
HU 
IE 
IT 
LT 
LU 
LV 
MT 
NL 
PL 
PT 
RO 
SE 
SK 
SI 
UK 
EU28 

Option R0, KP 
1990 
-26 
-4 
-19 
0 
-7 
-75 
-7 
-8 
-88 
-9 
-139 
-2 
-5 
-28 
-32 
-135 
-14 
-2 
-12 
0 
-6 
-66 
-70 
-63 
-27 
-7 
-12 
-40 
-901 

Option R1,  20yr 
transition 
-13 
-2 
-16 
0 
-4 
-33 
-6 
-2 
-19 
-3 
-77 
0 
-3 
-16 
-11 
-74 
-8 
-1 
-12 
0 
-4 
-50 
-18 
-25 
-20 
-2 
-4 
-13 
-437 

Option R2,  30yr 
transition 
-21 
-3 
-19 
0 
-6 
-60 
-7 
-5 
-53 
-6 
-122 
-1 
-4 
-25 
-21 
-115 
-12 
-1 
-14 
0 
-6 
-68 
-47 
-46 
-26 
-5 
-8 
-29 
-730 

Change R0 to 
R2, MtCO2 
-4,7 
-0,9 
0,1 
0,0 
-0,8 
-14,6 
0,1 
-2,8 
-34,9 
-2,6 
-17,3 
-0,7 
-0,3 
-3,0 
-10,3 
-20,0 
-2,2 
-0,6 
2,0 
0,0 
-0,6 
2,1 
-23,4 
-16,7 
-0,6 
-2,4 
-3,7 
-11,9 
-170,8 

Source: 2015 UNFCCC Inventory data and EUCLIMIT projections 

5.3.3.  Impact  of  improved  rules:  Estimates  of  the  credit  generation  for  afforestation 

and agricultural land 

The  accounting  rule  changes  for  agricultural  land  and  afforestation  would  have  an  aggregate 
effect on the overall credit generation potential from LULUCF. This needs to be compared to the 
existing  rules  under  the  Kyoto  Protocol  (status  quo).  In  the  case  of  the  continuation  of  current 
Kyoto rules, the accounted credits (RMUs) for the two land categories in LULUCF in 2021-2030 
could reach up to nearly 1300 MtCO2eq over the ten-year period.     

42 

 
The  total  RMUs  available  for  credit  generation  applying  the  alternative  rules  (Options  B1,  R1) 
outlined above (Table 10) would be slightly below 900 MtCO2eq for 2021-2030. Potential credits 
at  this  level  would  still  be  more  than  twice  the  maximum  flexibility  of  425  MtCO2eq  to  be 
considered under the high Flexibility Option F3.  

Importantly,  these  rule  changes  would  enhance  the  environmental  integrity  of  the  LULUCF 
credits  generated,  because  they  would  diminish  the  legacy  of  historic  action  and  improve  the 
accuracy of accounting. In practice, much of this land use change policy (such as afforestation) 
and the corresponding investment will have to be driven by a clear and deliberate policy support 
from  Member  States.  Much  will  depend  on  the  commitment  of  Member  States  to  deliver 
additional measures and programmes, in support of mitigation action related to afforestation and 
agricultural land.  

Table  10:  Estimates  of  total  potential  credit  generation  (for  RMU's)  EU28  for  the  period 
2021-30,  under  existing  Kyoto  rules  and  alternative  rules  (30  year  transition  for 
afforestation, base period 2005-2007 for agricultural land), in MtCO2eq  

Action/Activity: 

Existing KP rules  Alternative rules B1, R1 

Afforested Land (net) 

Agricultural land 

Total 

-623 

-645 

-1268 

-452 

-437 

-889 

Notes: Afforested land is shown net of projected deforestation. Agricultural land mitigation is shown net 
of enhanced mitigation potential at a carbon price of €20/tonne. Totals are net of possible debits within 
the Agricultural land and Afforested land categories. 
Source: EUCLIMIT Ref 2016 modelling. 

For  illustration,  Table  11  below  shows  the  projected  LULUCF  credit  generation  potential  (for 
RMUs)  from  Afforestation  and  Agricultural  land  per  Member  State,  for  the  years  2020,  2025, 
2030  and  the  total  period,  at  a  cost  of  €20  per  tonne  of  CO2.  According  to  the  projection,  the 
possibility to  generate RMUs would be broadly constant in the EU across the period at around 
94-96MtCO2/yr,  or  some  959MtCO2  over  the  entire  period.  However,  there  are  differences 
between  Member  States.  Some  show  the  potential  as  increasing  over  time  while  others  see  it 
decreasing.  

43 

 
 
 
 
Table  11:  Projected  credit*  generation  potential  (for  RMUs)  for  Afforestation  and 
Agricultural  land  per  Member  State  in  2020,  2025,  2030,  and  total  2021-2030,  including 
additional mitigation enhanced at a carbon price of €20/tonne, in MtCO2.  

Potential credits (for RMUs) from afforestation and 
agricultural land  at €20/tonne enhancement, MtCO2/yr  

2020  

2025  

2030  

Total period 
2021-2030  

Proportion of  
2008-12 agriculture 
Non-CO2 emissions 

-2,2 
-0,3 
-3,2 
-0,2 
0,0 
-1,6 
-1,0 
-0,7 
- 
-9,5 
-9,2 
-1,3 
-3,7 
-3,0 
-15,6 
- 
-2,3 
- 
- 
-0,8 
-8,3 
-7,0 
-8,8 
-1,0 
-1,3 
-9,5 
-1,3 
-2,6 
-94,5 

AT 
BE 
BG 
HR 
CY 
CZ 
DK 
EE 
FI 
FR 
DE 
EL 
HU 
IE 
IT 
LV 
LT 
LU 
MT 
NL 
PL 
PT 
RO 
SK 
SI 
ES 
SE 
UK 
EU-28 

-2,0 
-0,2 
-3,4 
-0,6 
0,0 
-2,0 
-1,1 
-0,5 
-0,3 
-14,6 
-9,6 
-0,8 
-4,2 
-2,0 
-13,1 
-3,2 
-2,4 
- 
- 
-1,9 
-12,9 
-3,8 
-8,4 
-0,7 
-0,9 
-3,3 
-3,0 
-1,3 
-96,1 
Source: EUCLIMIT modelling. * Potential credit values are net following the application of the 
no debit rule, and assuming a neutral impact of managed forest land accounting.  

-2,1 
-0,3 
-3,3 
-0,4 
0,0 
-1,8 
-1,1 
-0,6 
- 
-12,0 
-9,6 
-1,1 
-3,9 
-2,5 
-14,5 
-1,4 
-2,3 
- 
- 
-1,4 
-10,7 
-5,5 
-9,1 
-0,8 
-1,1 
-6,6 
-2,3 
-2,0 
-96,5 

-21 
-3 
-33 
-4 
0 
-18 
-11 
-6 
-1 
-120 
-95 
-11 
-39 
-25 
-144 
-15 
-23 
0 
0 
-14 
-107 
-55 
-89 
-8 
-11 
-65 
-22 
-19 
-959 

31% 
3% 
60% 
14% 
0% 
25% 
11% 
52% 
1% 
15% 
16% 
12% 
67% 
14% 
46% 
71% 
52% 
0% 
0% 
8% 
36% 
77% 
49% 
25% 
65% 
16% 
33% 
4% 
22% 

Applying  these  improved  rules  for  afforestation  and  agricultural  land  and  assuming  low 
mitigation  costs  on  agricultural  land  (20€/t  CO2  eq.)  most  Member  States  would  deliver 
significant  credits  (without  Forest  Management)  after  having  ensured  that  their  LULUCF 
accounts    would  be  a  sink.    Only  a  few  Member  States  (LV,  FI,  LU,  MT)  would  have  to 
implement additional mitigation action (beyond BAU) if they wish to deliver flexibility potential 

44 

 
 
 
 
 
in  the  LULUCF  sector.  This  could  be  through a  reduction of  deforestation  rates  which  are  still 
projected  to  be  high  for  instance  in  LV  and  FI  in  the  early  part  of  the  period,  increased 
afforestation  rates,  developing  forest  management  sink  to  offset  deforestation,  increasing  the 
HWP pool, or additional measures related to enhancing the sink for agricultural land.  

In  conclusion:  While  the  overall  distribution  is  varied,  the  projections  overall  show  a  positive 
picture  for  the  EU  with  respect  to  the  strong  potential  to  deliver  cost-effective  enhanced 
mitigation in the LULUCF sector, through afforestation and agricultural land management.   

5.4.  Forest Land estimates: governance  

As  described  in  section  1,  credit  generation  from  forest  management  and  HWP  for  compliance 
under  the  ESD  has  been  excluded  because  of  the  high  level  of  uncertainty,  the  lack  of  agreed 
reference  levels  and  the  range  of  variability.  Nevertheless,  the  accounting  of  forest  activities  is 
crucial  for  the  successful  implementation  of  policy  and  a  new  system  of  governance  has  to  be 
specified in the legal proposal (Section 4.3).  

Forest  reference  levels  have  been  identified  as  the  best  approach  to  account  for  emissions  and 
removals  from  EU  forests  and  harvested  wood  products.  In  order  to  ensure  environmental 
integrity it will be decisive that common criteria for the setting of reference levels are applied by 
Member  States  in  a  coherent  and  comparable  way.  Sensitivity  analysis  in  presented  in  Section 
1.4.4.  and  Annex  5  shows  that  already  today  a  substantial  difference  between  methodology 
applied – in particular harvesting rates around 10% lower than that modelled in accordance with  
policy assumptions – may lead to an overestimate of the projected sink by 300 to 350MtCO2 in 
the  period  2021-2030,  if  current  trends  continue.  Correctly  incorporating  domestic  policies  in 
accordance with Kyoto Protocol guidance, namely the limitation of policies to those in force pre-
2010, would help in reducing this divergence between projection and implementation. 

An  improved  governance  procedure,  implementing  current  rules  in  a  standardised  manner,  will 
also  be  necessary  for  the  review  and  adoption  of  nationally  determined  reference  levels.  This 
process  should  respect  the  existing  conditions  already  applied  by  Member  States  under  Kyoto 
Protocol guidance, in particular with respect to the impact of policy assumptions.  

The starting point for the assessment is to maintain the current  status quo (Option G0). Under 
Kyoto Protocol rules, an independent body has to check compliance of the forest reference levels 
with the 2013 Kyoto Protocol Supplement, and relevant CMP decisions (2.CMP/6, 2.CMP/7).  In 
practice the UNFCCC secretariat composes expert teams from parties who carry out a technical 
assessment of the submitted reference levels.  However, in the absence of internationally agreed 
rules  for  LULUCF  for  the  post  2020  period  this  option  does  not  exist  and  can  therefore  be 
discarded.   

A  second  governance  option  (Option  G1)  would  be  to  set  up  a  joint  and  independent  review 
body. In such an EU body the Commission could be supported by experts from Member States. 
They would have to assess jointly whether or not the Member State reference levels comply with 
the  common  criteria,  and  possibly  adjust  them.    This  governance  option  would  ensure  that 
LULUCF  experts  from  Member  States  participate  in  the  review  of  nationally  determined 

45 

 
 
reference levels. The costs for this option would be slightly higher (more costs for travel and per 
diems),  but  these  higher  costs  could  be  justified  by  the  fact  that  it  would  ensure  a  review  that 
includes a wider range of expert. This would encourage peer review and increased transparency 
among Member States, while ensuring consistent application of common criteria. 

A  third  governance  option  (Option  G2)  for  setting  forest  reference  levels  would  be  to  ask  the 
Commission  to  check and review that forest reference levels are calculated in a  consistent  way 
and  based  on  the  same  criteria.  The  Joint  Research  Centre  (with  other  EU  scientific 
organisations)  has  already  supported  Member  States  in  the  current  period  in  calculating  their 
reference levels. Administratively this option would be the least cost option, as it would not be 
associated  with  any  additional  costs.  This  would  contribute  to  harmonising  EU  modelling 
standards for forest reference levels, based on data collected and processed by the Member States, 
over a common reference period, and in a consistent manner. 

In  conclusion:  In  order  to  ensure  a  common  and  consistent  application  of  existing  and  agreed 
international  criteria,  option  G1  would  be  preferred  and  will  be  utilised  to  develop  the  new 
governance process for forest reference levels. Justification for choosing the option with slightly 
higher  cost  is  the  advantage  of  using  wider  expertise,  providing  additional  transparency  and 
facilitate knowledge-sharing and capacity-building between Member State experts.  

5.5. 

Impact of flexibility options 

5.5.1.  Distribution of credit potential between Member States 

The  final  step  is  the  assessment  of  the  impact  of  different  degrees  of  flexibility.  Section  3 
outlined that the flexibility options F1, F2 and F3 require a limitation of credits at 190MtCO2eq, 
280 and 425, respectively. Not only will such an upper limit need to be applied at EU28 level, but 
also  allocated  to  each  Member  State  reflecting  their  maximum  needs  based  on  the  lower 
mitigation potential of the agriculture sector (see section 1.4.3). While the mitigation options in 
agriculture are limited across  Europe,  Figure 3  highlights that the share of agriculture  non-CO2 
emissions  in  the  ESD  varies  significantly.  Member  States  which  have  a  higher  share  of 
agricultural emissions in the ESD are particularly affected by the limited mitigation potential in 
agriculture. They may therefore need higher access to the use of LULUCF credits.   

If flexibility was allocated to Member States on an equal basis (e.g., 5% of agriculture non-CO2 
emissions), the allocation would not respond to their different needs. Ranking the Member States 
by share and allocating pro-rata would create an allocation key extremely sensitive to inventory 
recalculation and measurement accuracy. 

To  avoid  such  issues  in  this  analysis,  Member  States  are  allocated  to  one  of  three  groups 
representing  their  need  related  to  the  relative  importance  of  agricultural  emissions  in  their 
national  emission  profile.  The  upper  and  lower  groups  contain  approximately  one-quarter  of 
agriculture non-CO2 emissions of the ESD, while the middle group contains half. The attribution 
to each group is based upon historical ESD share of agriculture non- CO2 in 2008-2012. Member 
States  with  a  25%  ESD  share  of  agricultural  emissions  or  more  are  allowed  to  use  LULUCF 
credits of up to 15% of their agriculture non-CO2 emissions, i.e. they would get a 15% flexibility; 

46 

 
 
those with over 14% to 24.9% would get flexibility of up to 7.5% of their agricultural emissions; 
less than 14% are given a 3.75% flexibility. This flexibility key is then multiplied by the average 
annual 2008-2012 agriculture non-CO2 emissions to generate a national cap. This approach also 
guarantees that every Member State may potentially generate LULUCF credits.  

Table 12: Distribution of LULUCF credit limit for the ESD on the basis of share agriculture 
non-CO2 in the ESD, for Option F2.  

Share* of 
agriculture non-
CO2 emissions in 
ESD 2008-2012 

16% 
40% 
28% 
27% 
25% 
24% 
21% 
20% 
20% 
18% 
18% 
16% 
16% 
16% 
16% 
15% 
15% 
15% 
14% 
14% 
13% 
13% 
13% 
13% 
13% 
11% 
10% 
8% 
7% 

Average annual 
limit of LULUCF 
credits as a % of 
annual 2008-2012 
agriculture 
emissions 
6% 
15% 
15% 
15% 
15% 
7.5% 
7.5% 
7.5% 
7.5% 
7.5% 
7.5% 
7.5% 
7.5% 
7.5% 
7.5% 
7.5% 
7.5% 
7.5% 
3.75% 
3.75% 
3.75% 
3.75% 
3.75% 
3.75% 
3.75% 
3.75% 
3.75% 
3.75% 
3.75% 

EU 
IE 
LT 
DK 
LV 
RO 
BG 
FR 
EE 
FI 
ES 
SE 
CY 
EL 
PT 
NL 
SI 
PL 
HU 
SK 
UK 
HR 
AT 
BE 
DE 
CZ 
IT 
MT 
LU 

Total limit of 
LULUCF credits 
over the period 
2021-2030 in 
million tonnes** 

Average annual 
limit of LULUCF 
credits as a % of 
annual 2005 ESD 
emissions) 

-280 
-26.8 
-6.5 
-14.6 
-3.1 
-13.2 
-4.1 
-58.2 
-0.9 
-4.5 
-29.1 
-4.9 
-0.6 
-6.7 
-5.2 
-13.4 
-1.3 
-21.7 
-2.1 
-1.2 
-17.8 
-0.9 
-2.5 
-3.8 
-22.3 
-2.6 
-11.5 
-0.03 
-0.25 

1.0% 
5.6% 
5.0% 
4.0% 
3.8% 
1.7% 
1.5% 
1.5% 
1.7% 
1.3% 
1.3% 
1.1% 
1.3% 
1.1% 
1.0% 
1.1% 
1.1% 
1.2% 
0.5% 
0.5% 
0.4% 
0.5% 
0.4% 
0.5% 
0.5% 
0.4% 
0.3% 
0.3% 
0.2% 

* Rounded to the nearest percentage point 
** Calibrated to match 280 million tonnes 

Source: Table based upon distribution key of proportion of ESD using National inventories (Mar 2016) 

This distribution and the ranked allocation by Member State is shown in Table 12, for the option 
F2.  Under  the  medium  flexibility  option,  a  Member  State  with  a  high  share  of  the  agriculture 
sector in the ESD would be permitted to generate up to maximum 15% of their agriculture non-
CO2 emissions as LULUCF credits. 

47 

 
 
For the F2 option (280Mt), the highest beneficiaries of access to LULUCF credits are IE, LT, DK 
and LV because of their  high shares of agriculture  emissions. These Member States potentially 
are allowed to apply the equivalent on average per annum of around 4% or more of 2005 ESD 
emissions, with IE having a limit of the equivalent of 5.6% of 2005 ESD emissions. By contrast, 
the  group  with  low  agriculture  shares  would  potentially  be  allowed  to  bring  the  equivalent  per 
annum on average of less than 0.5% of ESD emissions. 

Table 13 shows the distribution of LULUCF credits to Member States using the same distribution 
mechanism, but for all three flexibility options.  

5.5.2.  Environmental impacts of flexibility options F1, F2 and F3 

In the previous section a possible allocation of an EU cap on LULUCF credits between Member 
States based on historical data was presented. In a next step, it needs to be asked to which extent 
Member  States  are  likely  to  actually  meet  their  individual  cap  for  the  use  of  LULUCF  credits 
based  on  current  projections.  These  projections  have  to  estimate  to  which  extent  the  LULUCF 
activities that would be allowed to generate credits, i.e. agricultural land and afforestation, would 
actually deliver additional removals and hence credits.  

This is done in the following section first by assessing the projected credit generation potential 
for the period 2021–2030 individually for each MS and then aggregating it to show the overall 
impact on EU level using the preferred accounting rules as identified in previous sections. 

Table 14 shows therefore the projected 2021-203069 delivery of absolute credits by the LULUCF 
sector  for  that  Member  State,  when  restricted  by  the  limits  (the  Member  State  specific  cap) 
defined in Table 13.  

The credit generation potential through the period is mostly constant, due to the relatively high 
(compared  to  the  cap)  potential  generation  (see  Table  11).  The  availability  of  credits  is  mainly 
driven by the cap and not by the available potential of LULUCF enhanced mitigation. It can be 
noted  that  the  policy  options  selected  have  usually  constrained  the  potential,  even  at  Member 
State level. 

The low flexibility option F1 provides for a limited possibility of up to 190Mt to use LULUCF 
enhanced mitigation against the need to address the limited mitigation potential of the Agriculture 
Non-CO2  sector.  As  shown  in  Table  14,  all  but  three  Member  (MT,  LU,  CY)  States  would  be 
able  to  generate  LULUCF  credits,  with  187  MtCO2eq  being  delivered  when  mitigation  is 
enhanced at 20eur/t CO2eq.  

69   Yearly  potential  credit  generation  projected  for  the  years  2020,  2025  and  2030  was  aggregated  using  linear 

interpolation. 

48 

 
 
 
 
                                                 
Table 13: Distribution per Member State of LULUCF credit limit (cap) for the ESD for all 
three  flexibility  options  (low,  medium,  high)  in  MtCO2eq  for  the  period  2021-2030. 
Negative numbers represent removals. 

Cap based on ESD share only 
Option F2 
Med flex 
-2,5 

Option F1 
Low flex 
-1,7 

Option F3 
High flex 
-3,8 

-2,6 

-2,8 

-0,4 

-1,8 

-15,2 

-9,9 

-0,6 

-4,6 

-19,8 

-3,1 

-39,5 

-0,6 

-1,4 

-18,2 

-7,8 

-4,4 

-0,2 

-2,1 

0,0 

-9,1 

-14,8 

-3,5 

-8,9 

-3,4 

-0,9 

-0,8 

-3,8 

-4,1 

-0,6 

-2,6 

-22,3 

-14,6 

-0,9 

-6,7 

-29,1 

-4,5 

-58,2 

-0,9 

-2,1 

-26,8 

-11,5 

-6,5 

-0,2 

-3,1 

0,0 

-13,4 

-21,7 

-5,2 

-13,2 

-4,9 

-1,3 

-1,2 

-5,7 

-6,2 

-0,9 

-4,0 

-33,9 

-22,2 

-1,3 

-10,2 

-44,2 

-6,9 

-88,4 

-1,4 

-3,2 

-40,7 

-17,4 

-9,9 

-0,4 

-4,8 

0,0 

-20,4 

-33,0 

-7,9 

-20,0 

-7,5 

-1,9 

-1,9 

-12,1 

-190,0 

-17,8 

-280,0 

-27,0 

-425,0 

AT 

BE 

BG 

CY 

CZ 

DE 

DK 

EE 

EL 

ES 

FI 

FR 

HR 

HU 

IE 

IT 

LT 

LU 

LV 

MT 

NL 

PL 

PT 

RO 

SE 

SI 

SK 

UK 

EU 

Source: Table based upon distribution key of proportion of ESD using National inventories (Mar 2016) 

49 

 
 
 
 
 
Table 14: Distribution of potential credit generation under the cap, for Options F1, F2 and 
F3 in MtCO2 for the period 2021-2030 (figures in bold illustrate when the cap will not be 
reached) 

Potential credit generation within cap 
Option F3 
Option F2 
Option F1 
High flex 
Med flex 
Low flex 

-1,7 

-2,6 

-2,8 

0,0 

-1,8 

-15,2 

-9,9 

-0,6 

-4,6 

-19,8 

-0,8 

-39,5 

-0,6 

-1,4 

-18,2 

-7,8 

-4,4 

0,0 

-2,1 

0,0 

-9,1 

-14,8 

-3,5 

-8,9 

-3,4 

-0,9 

-0,8 

-12,1 

-187 

-2,5 

-2,7 

-4,1 

0,0 

-2,6 

-22,3 

-10,8 

-0,9 

-6,7 

-29,1 

-0,8 

-58,2 

-0,9 

-2,1 

-24,9 

-11,5 

-6,5 

0,0 

-3,1 

0,0 

-13,4 

-21,7 

-5,2 

-13,2 

-4,9 

-1,3 

-1,2 

-17,8 

-269 

-3,8 

-2,7 

-6,2 

0,0 

-4,0 

-33,9 

-10,8 

-1,3 

-10,2 

-44,2 

-0,8 

-88,4 

-1,4 

-3,2 

-24,9 

-17,4 

-9,9 

0,0 

-4,8 

0,0 

-13,9 

-33,0 

-7,9 

-20,0 

-7,5 

-1,9 

-1,9 

-19,4 

-373 

Source: EUCLIMIT modelling 

AT 

BE 

BG 

CY 

CZ 

DE 

DK 

EE 

EL 

ES 

FI 

FR 

HR 

HU 

IE 

IT 

LT 

LU 

LV 

MT 

NL 

PL 

PT 

RO 

SE 

SI 

SK 

UK 

EU 

50 

 
 
 
 
 
 
The medium flexibility option F2 provides for a limited but somewhat higher possibility (280Mt). 
Table  14  shows  the  delivery  of  credits  possible  under  the  projected  scenario  with  enhanced 
mitigation  action  for  Afforested  Land  and  Agricultural  land  (at  20eur/t  CO2eq).  Up  to 
269MtCO2eq of accounted mitigation would be available for credit towards the Non-ETS target 
compliance, slightly below70 the cap for EU-28 of 280MtCO2eq. At these low mitigation costs, an 
additional four Member States (FI, IE, BE and DK) are not forecast to be able to fully utilise the 
medium flexibility at a carbon price of € 20 per tCO2. In order to fully utilize the upper limit to 
use LULUCF credits, these Member States would have to invest in additional mitigation action in 
the LULUCF sector.  

In absolute terms, the Member States with the absolute highest credit generation potential from 
Afforestation and Agricultural land would be FR (58MtCO2), Spain (29), Ireland (25), Germany 
(22), and Poland (22). 

In  addition  to  the  new  flexibility  from  LULUCF  to  ESD,  Member  States  would  still  generate 
sufficient credits to balance the LULUCF sector as a whole and in order to comply with the no-
debit  rule.  This  would  be  assured  through  the  remaining  accounted  sink  in  the  sector  of  an 
estimated 609MtCO2 (see Table 10), or a little over 25% of the expected reported sink. The fairly 
constant  and  large  buffer  above  the  cap  would  also  provide  further  statistical  protection  and 
therefore stability with respect to inter-annual variation of the LULUCF sector.   

Under  the  high  flexibility  option  F3,  a  total  maximum  flexibility  of  425  MtCO2  would  be 
enabled over the ten-year period 2021-2030 compared to the Reference (see section 4.2).  

As shown in Table 14, in this case the cap could increase most significantly for Member States 
with  less  need  of  flexibility  in  the  agriculture  non-CO2  sector.  In  absolute  terms,  the  Member 
States  with the absolute highest  credit possibilities  under this  option  are FR (88MtCO2), Spain 
(44),  Germany  (34),  Poland  (33),  and  Ireland  (25).  However,  the  effect  on  credit  generation  is 
more heterogeneous because not all Member States would be able to generate the full number of 
credits  permitted  by  the  cap.  Indeed,  at  the  modelled  carbon  cost  of  €20/tonne,  only  some 
373MtCO2eq of flexibility would be realised. In order to fully utilise the Member States specific 
credit limit (as shown in Table 11) FI, LU, CY, IE, BE and DK, the UK and NL, would have to 
implement additional mitigation action in the LULUCF sector.  

In  conclusion:  Under  these  options  the  LULUCF  sink  would  be  enhanced  by  two  principle 
incentives: i) need for each Member State to ensure that the overall LULUCF sector is in balance 
and does not generate "debits" against accounting rules (i.e. it complied with the no debit rule); ii) 
the  option  for  each  Member  State  to  utilise  additional  credits  from  agricultural  land  and/or 
afforestation. Under a medium flexibility option, Member States would have to initiate significant 
new Afforestation action and extra sequestration on Agricultural land. Even with this new option 
of  utilising  LULUCF  to  address  the  limited  mitigation  potential  of  agriculture  in  the  ESD,  the 
LULUCF sector as a whole would remain in balance as required through the no-debit rule.  

70   The amount of credits delivered is below the cap, since not all Member states would be in a position to generate 

full credits.  

51 

 
                                                 
Other environmental impacts 

Without  specific  intervention,  environmental  impacts  of  all  options  on  soils  are  expected  to  be 
varied.  European  agricultural  soils  are  consistently  losing  carbon  due  to  management,  although 
estimates vary as to the speed of this process. This could be reversed with improved mitigation 
action on agricultural land71.  

Allowing  agricultural  land  to  generate  credits  can  incentivise  Member  States  to  promote 
additional  action  to  protect  or  enhance  soil  carbon.  Recent  estimates  of  this  have  been  using  a 
Tier  1  approach  and  LUCAS  data  by  the  JRC72,  focusing  on  the  trends  under  the  baseline 
projection. While the reference projection shows no substantial change in emissions for soils, 
land use conversion (especially conversion of organic soils) is considered the major driver of soil 
emissions  in  the  EU28.  Mitigation  actions  to  address  this  will  therefore  be  beneficial  to  soil 
organic  carbon  and  potentially  biodiversity.  The  JRC  studies  identify  a  number  of  effective 
mitigation actions to reduce direct and indirect (through land use change) emissions.  

5.5.3.  Economic  impacts:  abatement  costs  and  production  impacts  in  the  Agriculture 

sector 

Table  15  illustrates  the  direct  abatement  costs  for  the  different  levels  of  flexibility  between 
LULUCF  and  the  ESD  sectors  (F0,  F1,  F2,  and  F3),  resulting  from  the  GAINS/GLOBIUM 
model  framework.  Table  16  assesses  economic  (production,  trade)  impacts  derived  from  a 
different modelling framework, CAPRI. It should be noted that differences in compliance costs 
estimated  by  the  different  modelling  approaches  result  to  some  extent  from  differences  in  the 
models used (GAINS and CAPRI used in EUCLIMIT framework; CAPRI used in ECAMPA) as 
well as the assumptions on the availability and costs of mitigation technologies over the period 
2021-2030 applied. 

Under  the  GAINS  modelling  framework,  in  option  F0  (no  flexibility)  agriculture  non-CO2 
emissions would have to be reduced by 78MtCO2eq in 2030, assuming a 20% reduction in 2030 
compared to 2005. The options F1 to F3 show a progressive decrease in the mitigation cost in the 
agriculture  non-CO2  sector,  with  the  corresponding  increase  in  flexibility.  Under  flexibility 
options  F1  to  F3,  an  increasing  share  of  this  reduction  would  be  delivered  by  the land  use  and 
forestry sector.  

Without flexibility, a carbon price of €78.6/tonne CO2eq was modelled to meet the Agriculture 
non-CO2 sector emission reduction of just over 78MtCO2eq (a 20% reduction in 2030 compared 
to  2005.).  The  annual  (direct)  costs  of  this  would  be  €2.071bn  in  2030,  as  computed  by  the 
GAINS modelling framework.  

71   Mainstreaming climate change into rural development policy post 2013, Final Report Contract No. 
CLIMA.A.2/SER/2013/0010 
72   JRC reports CAPRESE (A. Jones et al. 2016) and Tier 1 soil modelling (R. Hiederer 2016) (in prep) 

52 

 
                                                 
Table  15:  Direct  impact  of  different  levels  of  flexibility  between  LULUCF  and  ESD  on 
GHG  abatement  costs  in  the  agriculture  non-CO2  sector  (annual  costs  in  2030  in  €  2013) 
and assuming a 20% reduction in 2030 compared to 2005 

Flexibility Options 

F0 
No flex 

F1 
Low  

F2 
Medium  

F2 
Medium 
(excluding 
breeding)  

F3 
High   

78.0 

0 

380 

0 

0 

43.0 

35.7 

215 

179 

190 

78.6 

32.5 

25.0 

25.0 

53 

125 

265 

280 

7.3 

53 

125 

265 

280 

31.4 

7.0 

70.7 

35 

354 

425 

0 

Non-CO2 Emission reduction 
in 2030, MtCO2eq 
LULUCF reduction in 2030  
MtCO2eq 
Non-CO2 Emission reduction 
in 2021-2030, MtCO2eq* 
LULUCF reduction in 2021-
2030 cf. 2005, MtCO2eq* 
Allocated flexibility of credits 
(MtCO2eq for period 2021-
2030) 
Marginal costs €/tCO2eq. for 
non-CO2 mitigation 

Source:  GAINS  model/GLOBIUM  for  LULUCF  based  on  AR4  Global  Warming  Potentials  and  using 
Reference 2016. * assuming a linear increase of mitigation between 2021 and 2030.  

As  a  consequence  of  allowing  increased  rates  of  flexibility  (Options  F1,  F2,  F3),  the  marginal 
cost  of  mitigation  in  the  agriculture  non-CO2  sector  fall  to  half  (€32.5/tonne)  under  the  Low 
flexibility  option  F1,  1/10th  (€7.3/tonne)  for  the  Medium  (F2)  and  zero  for  the  High  (F3) 
flexibility  options.  This  decrease  is  due  to  the  availability  either  of  LULUCF  credits  or  by 
provision  of  mitigation  options  in  the  agriculture  non-CO2  sector  modelled  (in  the  GAINS 
model) at zero cost.  

Examples  of  mitigation  measures  taken  into  account  in  the  GAINS  model  at  zero  cost  are: 
breeding/genetic  enhancement,  anaerobic  digestion  for  larger  farm  sizes  (typically  above  500 
LSU for cattle and pigs) and a ban on burning agricultural waste.  

As modelled under the Medium Flexibility option F2, agriculture non-CO2 mitigation would still 
need  to  deliver  emission  reductions  in  the  order  of  magnitude  of  25  MtCO2eq.  In  the  GAINS 
model  these  can  be  achieved  by  mitigation  options  which,  while  not  free  from  up-front  costs, 
have no or little net cost, for instance because they are associated with efficiency improvements. 
One  such  important  mitigation  option  that  would  result  in  such  efficiency  gains  is  breeding  of 
cattle focussed on health and fertility improvements. However, if these options are considered not 
to be available at zero cost, the benefit in the marginal cost reduction is weaker (column F2 no 
breeding)  as,  this  would  result  in  the  need  of  more  costly  mitigation  options  in  agriculture 
increasing  overall  mitigation  costs  (see  in  Table  15  column  F2  Medium  flexibility  with  no 
breeding).  

Table  16  below  presents  the  production,  consumption  and  net  trade  (competiveness)  impacts 
modelled  using  the  EUCLIMIT  framework  for  the  agricultural  and  forestry  sector  for  the  three 

53 

 
 
 
 
options assuming a 20% reduction in non-GHG emissions in agriculture. The modelling is based 
on the 2016 Reference projection, and uses the CAPRI model for agricultural non-CO2 emissions, 
applying AR4 global warming potentials73 and the GLOBIUM model for the LULUCF part.  

The Option F0 (no flexibility) broadly confirms the findings of the ECAMPA study, although at a 
different scale. Without flexibility, a carbon price of €120/t CO2eq would be needed to achieve a 
20%  reduction  in  emissions  in  2030  (or  84  MtCO2eq).  In  the  modelling  framework,  which 
inflexible  implements  this  reduction  target,  this  would  increase  prices  for  some  agricultural 
commodities  (e.g.  of  meat  and  dairy  products)  and  could  negatively  impact  on  consumption, 
production, and net trade.  

Under  the  low  flexibility  option  (F1)  access  to  LULUCF  credits  is  restricted  to  35Mt  in  2030. 
Assuming  that  the  full  amount  of  credits  would  be  used,  the  agriculture  non-CO2  reduction 
needed would be around 49 MtCO2eq (84 minus 35 Mt) in 2030 at marginal cost of €42/tonne. 
As a result, price increases would be much more limited than without access to LULUCF credits. 
Consumption  reductions  would  be  smaller,  production  losses  would  be  smaller  and  (net)  trade 
losses would be smaller.   

Under  the  Medium  flexibility  option,  the  pressure  to  reduce  agricultural  emissions  would  be 
sharply  decreased.  Given  the  limited  reduction  needed  by  agriculture  non-CO2  emissions  (31 
MtCO2eq)  price  increases  for  agricultural  commodities  would  be  much  more  limited,  and 
consequently  production  and  consumption  changes  would  be  very  modest  and  generally  below 
1%  (and  as  low  as  0.1%  for  dairy  products  and  meat).  Net  trade  effects  would  be  below  1% 
except  for  meat  (which  nevertheless  decreases  by  just  5%,  compared  to  over  25%  under  the 
reference). Compared to the reference run, the overall effects would be very limited.  

Granting high flexibility under Option F3 (i.e. up to 425MtCO2), and using LULUCF credits to 
offset the entire expected reduction of Agriculture non-CO2, would further reduce the impacts on 
consumption, production and (net) exports of agriculture as no reduction beyond baseline would 
be expected in the Agriculture non-CO2 sector.  

Sensitivity analysis shows the following. Assuming the baseline delivers no accounted LULUCF 
sink,  the  carbon  price  required  to  meet  the  non-CO2  reduction  in  an  efficient  way  would  be 
around €33/ton. The impacts would be less strong than case F1 for meat and dairy but somewhat 
higher for wheat, grain and oil seeds.  

Studies, specifically EcAMPA 2 (see Box 1)74, and Meta-review study of mainstreaming climate 
action (see Box 2)75 show that only a limited level of mitigation of emissions from agriculture is 
feasible  without  impacting  production.  Support  from  flanking  policies  such  as  Rural 
Development  Programmes  under  the  CAP  is  also  a  means  of  limiting  impacts.  The  studies 
highlight  in  particular  the  need  for  further  applied  research,  capacity  building,  innovation  and 
scaling up of the enabling environment for technology diffusion in the farm and forestry sectors. 

73   IPCC 4th Assessment Report (AR4) http://bit.ly/22cshAA  
74   Ref JRC 
75   Ref Ricardo IEEP 

54 

 
                                                 
Linking use of LULUCF flexibility to the need of the agriculture sector is a rational approach to 
limit potential economic impacts of reduction targets. 

Table 16: Economic impacts in 2030 (% change compared to baseline) based on an assumed 
20% reduction in agricultural non-CO2 emissions 

Credits (MtCO2) in 2030 
Carbon price agriculture non-CO2 (€/t CO2eq) 
Non- CO2 reduction agriculture (Mt CO2) 
PRICES 
Wheat  
Coarse grains  
Oilseeds  
Meat 
Dairy products 
CONSUMPTION 
Wheat  
Coarse grains  
Oilseeds  
Meat 
Dairy products 
PRODUCTION 
Wheat  
Coarse grains  
Oilseeds  
Meat 
Dairy products 
FOREST  
Forest area 
Final wood products 
NET TRADE (positive value: net export) 
Wheat  
Coarse grains  
Oilseeds  
Meat 
Dairy products 

F0 
No flex 

120 
84 

Flexibility options 
F2 
Medium  
53 
21 
31 

F1 
Low  
35 
42 
49 

F3 
High  
68 
10 
13 

1.4%  0.5% 
1.5%  0.6% 
2.4%  1.2% 
11.1%  3.7% 
3.8%  1.4% 

-2.3% 
-3.1% 
-1.1% 
-0.8% 
-0.7% 

-1.2% 
-1.6% 
-0.4% 
-0.3% 
-0.2% 

-2.8% 
-3.2% 
-2.5% 
-2.7% 
-1.0% 

-1.3% 
-1.6% 
-1.1% 
-1.0% 
-0.4% 

0.3%  0.2% 
0.4%  0.3% 
0.8%  0.5% 
1.8%  0.9% 
0.7%  0.4% 

-0.6% 
-0.9% 
-0.2% 
-0.1% 
-0.1% 

-0.3% 
-0.5% 
-0.1% 
-0.1% 
-0.1% 

-0.7% 
-0.9% 
-0.6% 
-0.5% 
-0.2% 

-0.4% 
-0.5% 
-0.3% 
-0.3% 
-0.1% 

0.2% 
0.0% 

0.1% 
0.0% 

0.1% 
0.0% 

0.1% 
0.0% 

-6.3% 
-5.2% 
2.5% 
-24.9% 
-7.5% 

-2.1% 
-1.5% 
 1.3% 
-9.2% 
-2.8% 

-1.5% 
-1.4% 
0.8% 
-5.0% 
-1.5% 

-1.2% 
-1.3% 
0.5% 
-2.4% 
-0.7% 

Source: CAPRI and GLOBIUM/G4M models using Reference 2016.  

5.6.  Administrative, monitoring and reporting costs and who would be affected 

LULUCF accounting is done at national level, but often with the technical support from research 
institutes  or  agencies.  Changes  to  the  accounting  framework  as  a  consequence  of  including 
LULUCF  into  the  EU's  domestic  2030  reduction  target,  and  any  related  needs  to  adjust 

55 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
monitoring and reporting, may potentially introduce impacts. These impacts are likely to be most 
felt  by  Member  State  administrations76  responsible  for  GHG  inventories,  the  Commission 
services  and  the  European  Environment  Agency  responsible  for  coordinating  and  verifying  the 
information. It is not expected that private actors would face additional data requirements. 

By far the most significant proposed  change is to  streamline the two existing parallel  reporting 
systems into a single system. This will reduce administrative burden and costs for Member States 
and at the EU level. As the administration of the Kyoto system at the level of the UNFCCC is 
fully  paid  by  the  few  Kyoto  Parties,  also  these  costs  will  fall  away  after  2023  when  the 
compliance of the 2nd commitment period of the Kyoto Protocol will have been finalised. 

The additional administrative impacts of the three proposed post-2020 changes is expected to be 
minimal,  because  the  relevant  accounting  rules  have  already  been  set  up  as  a  consequence  of 
LULUCF  Decision  529/2013/EU.  Member  States  are  thus  already  providing  information  on 
accounted  emissions  and  removals  for  LULUCF  activities.  They  are  also  developing  enhanced 
systems  to  account  for  emissions  and  removals  for  agricultural  land  –  and  other  elected  land 
categories  –  in  order  that  they  more  accurately  include  emissions  and  removals  in  the  national 
GHG  inventories,  and  thus  be  compliant  with  existing  legislation.  The  current  Community 
registry  system  will  have  to  be  expanded  to  fully  capture  the  LULUCF  sector  and  the  new 
transactions because of new flexibility.  

Most importantly, administrative costs will not differ under the three options F1-F3 as accounting 
rules are assumed to be the same in all cases.  

5.7.  Distributional, social and employment impacts 

Distributional  and  social  impacts  depend  on  the  approach  chosen  by  Member  States  in  policy 
implementation  to  fulfil  the  ESD  and  LULUCF  obligations.  The  2030  climate  and  energy 
package does not stipulate a specific mitigation target for agriculture at EU or national, regional 
level.  Hence,  it  is  not  the  EU  but  Member  States  who  will  decide  about  the  distribution  of  the 
overall national mitigation ambition across the sectors concerned, including agriculture.  

As  cited  above,  the  EcAMPA  2  study  looked  at  the  cost-effective  mitigation  potential  in  EU 
Member States' agriculture non-CO2 sector, including scenarios with payments for environmental 
services  to  incentivise  the  adoption  of  agricultural  mitigation  measures.  EU  wide  scenarios 
simulating  emission  reductions  for  agriculture  non-CO2  of  between  15%  and  25%  in  2030  as 
compared  to  2005  were  tested,  distributed  between  Member  States  based  upon  cost-effective 
mitigation. 

According  to  the  report,  a  20%  mitigation  target  for  EU  agriculture,  if  implemented  without 
subsidies, would lead to slight aggregate welfare increases, mainly driven by higher income due 
to increased prices for agricultural goods. However, agricultural production, notably for the beef 
sector, would decrease, followed by a leakage of production from the EU into other parts of the 

76   Public  institutions  currently  and  potentially  involved  in  LULUCF  accounting  and  reporting  include  statistical 
offices, agricultural, climate, energy and environmental authorities, agencies dealing with zoning and territorial 
planning, as well as research institutes dealing with preparing inventories. 

56 

 
                                                 
world and increase in total related emissions, assuming that those other parts of the world would 
not (yet) follow an equivalent mitigation ambition.   

Such  decrease  in  EU  output  could  primarily  be  avoided  by  incentivising  the  adoption  of  cost 
efficient  agricultural  mitigation  technologies.  With  these  incentives,  such  technologies  and 
measures77 could reduce agricultural non-CO2 emissions without negatively impacting production 
and  food  security.  The  level  of  competitiveness,  modernisation,  quality  of  work,  and  sector 
income in agriculture would rise. However, the overall welfare effect would be slightly negative, 
given  that  the  "tax  payer"  (economic  actors  outside  agriculture)  would  have  to  finance 
agricultural subsidies. 

Employment  effects  would  be  driven  by  the  decline  in  agricultural  production:  they  would  be 
highest in a scenario without flexibility  between LULUCF and agricultural emissions under the 
ESD.  However,  there  also  could  be  positive  employment  effects  originating  from  the 
implementation of additional mitigation measures, such as anaerobic digestion plants. 

Moreover,  in  reality  the  negative  employment  effects  of  mitigation  action  in  agriculture  have 
been  smaller  than  projected  by  economic  models,  because  a  significant  share  of  the  additional 
costs  has  been  compensated  by  subsidies  originating  from  the  CAP.  Model  results  also  tend  to 
under-estimate  dynamic  effects:  mitigation  measures  have  been  a  driver  for  higher  resource 
efficiency  and  have  helped  to  decouple  agricultural  production  from  emissions  (see  Figure  3). 
Mitigation action also helped to increase the competitiveness of European farming, which helps 
to safeguard jobs, and not vice versa.    

Increasing  access  to  LULUCF  credits  and  hence  flexibility  would  therefore  further  reduce  the 
negative  employment  impact  related  to  non-CO2  agriculture  estimated  by  models.  The 
flexibilities  would  have  positive  impacts  on  employment  mainly  since  they  have  a  positive 
impact on output in agriculture (compared to a no flexibility scenario). By contrast, the expected 
impact on employment in forestry is rather small.  

Table 17:  Impacts on employment  in 2030 in agriculture &  forestry (change compared  to 
reference + 20% reduction in agricultural non-CO2 emissions 

Employment 
jobs) 

(x1000 

Employment (%) 

F1 

+98 

+1.5 

F2 

+128 

+1.9 

F3 

+149 

+2.2 

Distributional and social impacts will depend on the approach chosen by Member States in policy 
implementation  to  fulfil  the  ESD  and  LULUCF  obligations.  The  2030  climate  and  energy 
package does not stipulate a specific mitigation target for agriculture at EU or national / regional 

77   e.g. anaerobic digestion of animal manure, increase of the share of legumes on temporary grassland, variable rate 

technology/precision farming. 

57 

 
 
 
                                                 
level.  Hence,  it  is  Member  States  who  will  decide  upon  the  distribution  of  the  overall  national 
mitigation ambition across the sectors concerned, including agriculture.  

In  conclusion,  employment  effects  related  to  emission  reductions  in  the  non-CO2  agriculture 
sector  could  be  negative,  if  mitigation  measures  would  be  implemented  with  the  flexibility 
provisions  and  with  cost-compensating  flanking  support  through  the  CAP.  The  flexibilities 
offered  have  a  positive  impact  on  employment.  Mitigation  measures  which  improve  overall 
resource  efficiency  could  also  contribute  to  long-term  enhanced  competitiveness.  Moreover, 
some mitigation measures provide new and additional business opportunities to farmers such as 
afforestation or the production of renewables.   

6.  COMPARING THE OPTIONS 

6.1. 

Introduction 

Various  options  related  to  the  inclusion  of  agriculture  and  LULUCF  into  the  EU's  climate  and 
energy framework for 2030 have been analysed in this Impact Assessment. 

This section will first synthesize the comparison of the various accounting rule improvement and 
flexibility  options,  proceed  with  the  screening  of  the  main  options  on  policy  architecture,  and 
finally  conclude  on  selecting  the  combination  of  options  needed  to  best  meet  the  policy 
objectives.  

6.2.  Comparison of rule improvements and flexibility options 

6.2.1.  Comparison of accounting rule improvements 

With  the  current  LULUCF  accounting  rules  originating  from  the  Kyoto  Protocol  as  a  baseline, 
various  improvements  and  up-grades  were  all  evaluated  positively  in  Chapter  5,  resulting  in 
substantive  improvements/benefits  with  no  or  few  implications  for  additional  costs  (even, 
savings): 

–  B1:  Application  of  a  base  period  of  2005-2007 for  net-net  accounting  of  relevant  non-forest 

land categories; 

–  R2: land-based UNFCCC reporting framework for accounts, with an optional 30yr transition 

period for Afforested Land; 

–  G1:  Governance  of  the  forest  reference  level  assured  by  the  Commission  together  with 

Member States experts; 

In  conclusion,  these  modified  accounting  rules  are  used  therefore  in  the  analysis  of  different 
levels of flexibility between LULUCF and agriculture within the ESD (Options F0 to F3), since 
they showed reduced credit availability, higher accuracy and hence credibility and environmental 
integrity of the credit generation potential from LULUCF. 

58 

 
6.2.2.  Comparison of options with different levels of flexibility between LULUCF and 

Agricultural emissions in the ESD  

This  impact  assessment  also  examined  which  LULUCF  activities  could  generate  sound  and 
robust  credits.  Credits  from  forest  management  were  discarded  early  on  because  of  a  wide 
range of projected outcomes for this activity and the lack of approved and standardised reference 
levels. Allowing the use of credits from forest management towards compliance under the ESD 
would  therefore  be  associated  with  various  risks.  However,  such  removals  could  be  used  to 
balance emissions from other activities within the LULUCF sector up to a certain cap.  

By  contrast  credits  generated  from  afforestation  and  agricultural  land  would  be  more 
sound,  particularly  if  coupled  with  improved  accounting  rules.  Quantitative  analysis  indicates 
that each Member State would be able to generate additional yet limited credits from agricultural 
land and/or afforestation.  

In  a  next  step,  three  options  with  different  degrees  of  flexibility  between  LULUCF  and 
agricultural  emissions  in  the  ESD  were  assessed.  The  baseline  Option  (F0)  is  to  grant  no 
flexibility from LULUCF towards agricultural non-CO2 emissions under the ESD. Because of the 
limited mitigation potential in agriculture, there is a risk under this option that ESD compliance is 
threatened,  or  that  agricultural  production  is  placed  under  too  high  pressure.  A  specific  further 
risk  of  this  option  would  be  that  production  leakage  may  occur,  thereby  substantially  negating 
any accounted climate benefits of the reductions in the sector. Furthermore, employment effects 
of  an  option  without  flexibility  between  LULUCF  and  agricultural  emissions  under  the  ESD 
could  be  negative,  particularly  without  cost-compensating  support  measures  from  the  CAP. 
Consequently, a number of disadvantages for this option are evident (see Table 17). 

The next three options (F1, F2, and F3) assessed different levels of optional, limited flexibility of 
LULUCF  credits  that  would  be  allowed  to  compensate  for  the  lower  mitigation  potential  of 
agriculture under the ESD.  

The first option F1 introduces low flexibility with a maximum of 190 MTCO2eq over the period 
2021  to  2030  available  to  the  ESD.  The  effect  on  actions  to  enhance  mitigation  in  LULUCF 
would  be  negative  as  even  cost-effective  mitigation  from  land  use  and  forestry  will  be 
overlooked,  and  increasing  performance  compared  to  baseline  would  not  be  incentivised. 
Furthermore,  since  there  would  be  little  incentive  for  Member  States  to  generate  additional 
credits, the development of better, more accurate monitoring and reporting systems for LULUCF 
would  not  be  incentivised.  Consequently  the  pathway  to  important,  additional,  cost-effective 
potential related to land use and forestry would be left blocked. 

Under Option  F2 a Medium level of  flexibility (a  maximum of 280  MTCO2eq  over the period 
2021  to  2030)  was  assessed  allowing  a  limited  amount  of  LULUCF  credits  to  enter  the  ESD 
sector.  This would place the effort needed from the agriculture non-CO2 sector in the ESD to be 
in  the  range  closer  to  scenarios  which  had  limited  negative  impacts  on  the  sector,  while  at  the 
same  time  incentivising  additional  action  in  the  LULUCF  sector.  Nevertheless,  the  LULUCF 
sector would probably not generate debits, due to the relatively low number of credits that would 
be used for ESD compliance. 

59 

 
Table  17:  Comparison  of  the  options  for  flexibility  between  LULUCF  (with  improved 
accounting rules) and agricultural emissions in the ESD 

Flexibility option 

Baseline 

Low 

Medium 

High 

(F0) 

(F1 190Mt 2021-
2030) 

(F2 280Mt 
2021-2030) 

(F3 425Mt 2021-
2030) 

Specific objectives (Section 
3.2) 

Upgrade  rules  and  improve 
governance  

No 
improvement 

Upgraded, fit for 
2021-30 

Upgraded, fit 
for 2021-30 

Upgraded, fit for 
2021-30 

Promotion  of  cost-efficient 
mitigation  action  on  land 
low 
and 
addressing 
mitigation 
in 
agriculture 

potential 

Consistency  with  biomass 
and  energy  policies,  avoid 
accounting gap  

Operational 
(Section 3.3) 

objectives 

Multiple  objectives,  Food 
security 

Reduced 
incentive 

No significant 
additional effort 

Significant 
additional effort 

Significant 
additional effort, 
but risk of uneven 
effect 

Negative: gap in 
accounting 

Consistency 
improved 

Consistency 
improved 

Consistency 
improved 

Possible 
impacts on 
production high 

Somewhat 
Reduced impacts 
on production & 
jobs 

Reduced 
impacts on 
production & 
jobs 

Strongly reduced 
impacts on 
production & 
jobs 

Environmental 
integrity, 
specificities  of  LULUCF 
sector 

KP rules 
provide 
safeguard 

Upgraded rules 
provide better 
safeguard 

Upgraded rules 
provide better 
safeguard 

Eliminates 
additional 
reduction effort 
for Agriculture 

Administrative effort 

No change 

Reporting 
simplified 

Reporting 
simplified 

Reporting 
simplified 

Source: own presentation 

An  important  argument  in  favour  of  the  Medium  flexibility  option  F2  is  the  importance  of  a 
landscape approach in tackling climate action. By being relevant to the implementation of policy 
at a farm or holding level, a hybrid approach would give some flexibility and synergies of finding 
cost-effective  mitigation  between  all  activities  related  to  agriculture  and  land  use  (including 
afforestation, deforestation reduction, forestry, soil management, etc.). 

Finally, a High flexibility option F3 (a total of 425 MTCO2eq over the period 2021 to 2030) was 
assessed. A similar option – with unrestricted flexibility and including forest sink – was already 
considered in the context of the 2012 Impact Assessment for the inclusion of LULUCF into the 

60 

 
 
 
 
 
 
 
 
 
 
 
 
2020 climate and energy framework. In that assessment, the option was rejected mainly because 
it was seen as diluting ambition due to LULUCF rules defined in the 1st Commitment Period of 
the Kyoto Protocol.  

The High flexibility  variant  assessed in  this Impact Assessment shows some  improvements but 
the  effects  on  environmental  integrity  still  remain  a  concern.  The  option  F3  fully  alleviates 
pressure  on  the  agriculture  non-CO2  sector;  it  would  exempt  this  sector  from  further  emission 
reductions in contrast to all other sectors in the economy. This would be in contradiction with the 
agriculture non-CO2 sector's steady progress towards decarbonisation. 

Furthermore, the potential utilisation of such a high level of LULUCF mitigation could place the 
compliance  of  the  LULUCF  sector  itself  at  risk,  due  to  the  high  inter-annual  variability  of  the 
sector. This is underlined by the projected fulfilment of only 373Mt of the potential 425Mt cap 
under option F3, at carbon prices similar to those applied to other ESD sectors (i.e. €20/tonne).  

In  conclusion,  the  assessment  of  the  flexibility  between  LULUCF  and  agriculture  shows  that 
from economic, environmental and sector-specific points of views the best option forward would 
be an option with medium flexibility (i.e. option F2).  

6.2.3.  Selection  of  level  of  improved  rules  and  flexibility  level  between  LULUCF  and 

agriculture emissions in the ESD  

As  a  result  of  the  impact  assessment  and  analysis,  the  best  way  forward  for  the  inclusion  of 
agriculture and LULUCF into the 2030 climate and energy framework would include two main 
elements:  

(1) 

(2) 

An updating and streamlining of accounting rules for the determination of emissions 
and removals from land use and forestry. Various options have been identified (B1, R2, 
G1)  which  would  increase  the  robustness  and  environmental  integrity  of  the  accounting 
principles for the LULUCF sector. Including this sector into the 2030 framework based on 
these up-dated accounting rules would simplify the system and increase the credibility of 
the EU in the international negotiations.  

Allow  limited  flexibility  (Option  F2  medium  flexibility)  between  LULUCF  and 
agricultural emissions under the ESD. This option would provide additional incentives 
for further mitigation action related to the land use and forestry sector, while not unduly 
increasing  compliance  risk  for  the  LULUCF  sector.  It  would  address  the  limited 
mitigation  potential  of  the  agricultural  sector,  and  thereby  ensure  that  other  objectives 
such as food security can be met. At the same time, the agricultural sector would still have 
incentives to contribute to the overall reduction target for the non-ETS sectors.  

6.3. 

Selection of options 

Overall, the proposed way forward is that the legal framework for the inclusion of agriculture 
and LULUCF into the 2030 framework builds on the current policy architecture.  Limited 
adjustments would be made to LULUCF accounting rules, and the design of two-way flexibility 
between LULUCF and the ESD would provide additional incentives to improve and optimize the 
mitigation potential from LULUCF. 

61 

 
The preferred option would be underpinned utilising the following options assessed in Chapter 5 
and compared above: 

–  B1: Application of a base period of 2005-2007 for relevant non-forest land categories; 

–  R2: land-based UNFCCC reporting framework for accounts, with a 30yr transition period for 

Afforested Land; 

–  G1: Governance of the forest reference level will be assured by the Commission together with 
Member States experts, who shall check and review that forest reference levels were set in a 
transparent manner and in line with EU guidance; 

–  F2  -  Medium  flexibility:  Up  to  280  Mt  between  2021-2030  could  be transferred  to  the  ESD 

through credits generated by net afforestation and agricultural land.  

In conclusion, under this approach, a stand-alone LULUCF policy pillar would continue to 
be utilised together with the no-debit rule. A limited degree of flexibility between LULUCF 
and  the  ESD  would  be  enabled,  justified  on  the  need  derived  from  the  agriculture  sector 
share for each Member State in the ESD.  This option would be compatible with food security 
and biodiversity objectives and would not result in negative employment  effects. Such a hybrid 
option  would  limit  changes  of  the  overall  architecture  and  would  thereby  minimize 
administrative  burden  and  red  tape  while  maximising  the  contributions  to  the  overall 
achievement of the EU's 2030 targets. The inclusion of LULUCF on the basis of such a hybrid 
option  would  also  incentivize  additional  mitigation  action  in  the  land  and  forestry  sector  and 
hence be fully compliant with the long term vision for limiting temperature increase as outlined 
in the Paris Agreement.  

7.  HOW WILL MONITORING AND EVALUATION BE ORGANISED? 

7.1. 

Introduction – international framework 

Compliance  assessment  under  the  current  LULUCF  Decision  relies  on  an  already  existing, 
comprehensive  framework  of  monitoring  and  reporting.  Information  on  GHG  emissions  and 
removals  need  to  be  submitted  every  year  by  each  Member  State  as  part  of  the  UNFCCC  and 
Kyoto Protocol greenhouse gas inventory process (MMR Article 7 (1) c)-d).   Decision 24/CP.19 
of the UNFCCC stipulates that in preparing their annual inventories under the Convention due in 
the year 2015 and beyond, developed country Parties should apply the 2006 IPCC Guidelines for 
National  Greenhouse  Gas  Inventories:  Agriculture,  Forestry  and  Other  Land  Use.  The 
Guidelines  are  the  culmination  of  three  years  of  work  by  the  IPCC  National  Greenhouse  Gas 
Inventories  Programme,  to  update  its  own  previous  guidance  in  response  to  the  invitation  by 
UNFCCC Parties in 2002.  

7.2.  Quality assurance  

In accordance with the MMR Article 6(1), a Union Inventory system is established to ensure the 
timeliness,  transparency,  accuracy,  consistency,  comparability  and  completeness  of  national 
inventories with regard the Union GHG inventory.  To this aim, a team of technical experts lead 

62 

 
by  the  EEA  performs  the  Quality  Assurance  /  Quality  Control  (QA/QC)  of  all  individual 
countries’ GHG inventories, which involves many technical exchanges with Member States. The 
Commission (through the Joint Research Centre) is responsible for the QA/QC of the Agriculture 
and LULUCF sectors, and also supports specific projects and workshops to help Member States 
in applying correctly the agreed IPCC methodologies for determining their GHG emissions. 

7.3.  Obligations for Member States 

As  regards  the  LULUCF  accounted  emissions  and  removals,  most  Member  States  are  only 
obliged to complete their accounts at the end of the Kyoto Protocol second commitment period. 
The compliance assessment is done under Kyoto Protocol procedures, involving an international 
team of experts coordinated by the UNFCCC. It should be noted that three Member States (DK, 
HU,  FR)  chose  annual  accounting  for  LULUCF  in  the  first  commitment  period.  Decisions  by 
Member States for the second commitment period are not available yet. 

Only  a  minority  of  Member  States  have  elected  to  account  for  cropland  and  grazing  land 
management in the second commitment period.78 Those who did not elect these activities under 
the Kyoto Protocol are required, prior to 1 January 2022, provide and submit to the Commission 
"initial,  preliminary  and  non-binding  annual  estimates  of  emissions  and  removals"  under  the 
LULUCF  Decision.  Final  estimates  –  for  each  year  of  CP2  –  must  be  submitted  by  15  March 
2022. For the accounting period starting 1 January 2021, for which estimates would normally be 
delivered by 15 March 2023, full accounting for these two activities is foreseen by the LULUCF 
Decision. 

Chapters  4  and  5  introduced  and  assessed  the  planned  improvements  to  the  reporting  and 
accounting  framework,  involving  the  streamlining  of  the  parallel  KP  and  UNFCCC  reporting 
systems. The changes proposed would not only lead to simplification and reduced administrative 
burden,  but  would  also  enhance  data  accuracy  by  relying  on  more  recent  datasets  in  Member 
States.  

7.4.  Compliance cycle 

For LULUCF to be integrated with the other sectors in the Non-ETS, reporting and accounting 
obligations would need to be aligned ESD compliance cycle. For Member States which elect an 
accounting  compliance  cycle  matching  that  of  the  ESD  this  question  is  resolved.  However,  a 
longer  period  for  LULUCF  accounting  compliance  would  normally  not  only  be  statistically 
preferred, but would also reduce administrative overhead for Member States. This is reflected in 
the  Stakeholder  consultation,  where  many  submissions  expressed  a  preference  for  less  frequent 
than  annual  accounting,  partly  in  the  light  of  the  relatively  high  inter-annual  variation  in 
LULUCF, partly to keep administrative burden at a lower level (see Annex 2).  

International  obligations  under  the  UNFCCC  framework  will  mean  that  the  reporting  exercise 
remains annual. For reasons outlined in Annex 5, however, accounting of LULUCF actions are 

78   Three  Member  States  (ES,  DK,  PT)  elected  to  fully  account  for  cropland  management  and  two  (PT,  DK)  for 

grazing land management [further MSs tbc, upon submission of initial reports for CP2] 

63 

 
                                                 
  
best  enabled  over  longer  periods.  LULUCF  accounting  as  discussed  in  the  proposal  would  be 
implemented  over  the  full  period  (2021-2030),  as  under  previous  Kyoto  Protocol  commitment 
periods.  Nevertheless,  the  use  of  a  full  ten-year  period  would  imply  that  clear  data  on  the 
generation  of  flexibility  (for  use  with  the  ESD)  would  only  be  available  in  early  2032.  To 
facilitate this, a compliance assessment could be done at the mid-point and at the end point of the 
ten-year  period,  providing  two  five-year  compliance  cycles  (1  January  2021  to  31  December 
2025, and 1 January 2026 to 31 December 2030).  

Credits remaining with a Member State account at the midpoint compliance assessment would be 
banked.  Trading  between  Member  States  of  Removal  Units,  including  flexibility  within  the 
LULUCF  sector,  will  take  place  at  the  end  of  the  compliance  cycle.    A  five-year  compliance 
cycle  remains  in  line  with  many  of  the  stakeholder  views.  This  arrangement  would  enhance 
consistency  with  the  ESD  compliance  cycles,  and  would  also  make  an  overall  progress  check 
possible during the period, thereby reducing the risk of non-compliance at the end of the period.    

7.5.  Need to monitoring progress towards the EU Non-ETS target 

Progressive reporting and accounting information is necessary to  monitor  the progress not only 
towards the individual national targets but also towards the EU common target. The Commission 
aggregates  the  reporting  and  (when  applicable)  accounting  information  received  from  Member 
States every year and includes it in its progress report pursuant to article 21 of the MMR. This 
would  continue  to  occur  also  for  LULUCF  information  and  thereby  support  the  monitoring  of 
progress towards the EU Non-ETS target. 

In order to enable the EU to participate effectively in the stocktaking process laid down in Article 
14 of the Paris Agreement, a review of the level of ambition is recommended to be performed in 
timely manner, expected to be in 2023 or soon thereafter.  

64 

 
ANNEXES to LULUCF Impact Assessment 

Contents 

ANNEX 1: PROCEDURAL INFORMATION CONCERNING THE PROCESS TO 
PREPARE THE IMPACT ASSESSMENT REPORT AND THE RELATED 
INITIATIVE, INCLUDING EXTERNAL EXPERTISE AND CONTRACTS ........ 2 

ANNEX 2: STAKEHOLDER CONSULTATION ON "ADDRESSING GREENHOUSE 

GAS EMISSIONS FROM AGRICULTURE AND LULUCF IN THE CONTEXT 
OF THE 2030 EU CLIMATE AND ENERGY FRAMEWORK" ............................. 7 

ANNEX 3:  WHO IS AFFECTED BY THE INITIATIVE AND HOW ......................... 16 

ANNEX 4: ANALYTICAL MODELS AND MODEL-BASED SCENARIOS USED IN 

PREPARING THE IMPACT ASSESSMENT ......................................................... 17 

ANNEX 5: ACCOUNTING RULES................................................................................ 30 

ANNEX 6:  SYNTHESIS OF MEMBER STATES REPORT ON LULUCF 

INFORMATION ACTION (ARTICLE 10 OF DECISION 529/2013) ................... 47 

1 

 
 
 
 
 
 
 
 
 
 
ANNEX  1:  PROCEDURAL  INFORMATION  CONCERNING  THE  PROCESS  TO  PREPARE  THE  IMPACT 
ASSESSMENT  REPORT  AND  THE  RELATED  INITIATIVE,  INCLUDING  EXTERNAL  EXPERTISE  AND 
CONTRACTS 

Organisation and timing  

Preparations  of  the  Impact  Assessment  formally  started  in  January  2015,  following  the  2014 
October Conclusions of the European Council on the 2030 climate and energy policy framework 
for the European Union  and the adoption of the Commission Work Programme for 2015. This IA 
builds  significantly  on  the  impact  assessment  for  the  Commission  proposal  for  a  policy 
framework for climate and energy in the period from 2020 up to 2030.79  

An  Inter-service  Steering  Group  (ISG)  on  climate  change  aspects  of  agriculture  and  land  use, 
land use change and forestry was established in January 2015, which steered the work on the IA 
up to its finalisation.  

The ISG met 8 times for the purposes of discussing and preparing this IA. After discussions in the 
ISG,  a  roadmap  for  the  initiative  "Addressing  greenhouse  gas  emissions  from  agriculture  and 
LULUCF in the context of the 2030 EU climate and energy framework" was adopted in March 
2015. The final draft IA was submitted to the ISG group on 20 April 2016. 

Chaired  by  the  Secretariat-General  (SG),  the  impact  assessment  work  was  led  by  DG  Climate 
Action (CLIMA). Given the many links of the dossier with agriculture and land use, DG AGRI 
made  substantial  contributions  to  the  work  of  this  ISG.  Furthermore,  as  a  result  of  various 
Administrative Arrangements on LULUCF and JRC's high level of expertise on many of the very 
technical  issues,  JRC  ISPRA  provided  at  various  times  valuable  input  to  the  discussions  in  the 
ISG with thematic slide sets.  

Moreover,  the  following  DGs  and  services  were  invited  to  the  Steering  Group:  Legal  Service 
(SJ),  Competition  (COMP),  Economic  and  Financial  Affairs  (ECFIN),  Energy  (ENER), 
Environment (ENV), Internal Market, Industry, Entrepreneurship and SMEs (GROW), Mobility 
and  Transport  (MOVE),  Regional  Policy  (REGIO),  Research  and  Innovation  (RTD),  Taxation 
and Customs Union (TAXUD), Trade (TRADE). 

Consultation of the Regulatory Scrutiny Board 

In light of the Regulatory Scrutiny Board's Positive Opinion, and comments communicated on 02 
June 2016, the following improvements were made to the Impact Assessment report: 

  The need for early and timely regulation was strengthened, noting the context and timing 
of the international action and placing the proposal more specifically in the context of the 

79 SWD (2014) 15 final, Impact Assessment of the Communication "A policy framework for climate and energy in 
the period from 2020 up to 2030" 

2 

 
 
                                                 
follow-up  to  the  Paris  Agreement  and  the  Commission's  2050  Low  Carbon  Economy 
Roadmap.  This  explanation  underscores  the  longer  term  step-wise  process,  needed  to 
align the inclusion of Land Use, Land Use Change, and Forestry sector (LULUCF) in EU 
climate policy as a result of the Paris Agreement outcome. 

  The  explanation  and  description  of  problem/driver/solutions  logic  was  re-structured  to 
ensure that the reader will more effectively access the narrative of the problem hierarchy. 
Additionally, more explanation was given of why the focus and emphasis of the report is 
on the functioning of flexibilities between LULUCF and the reduction commitments for 
the non-ETS sectors.  

  The sections of the report on problem-drivers have been strengthened to demonstrate that 
the key issue needing to be addressed concerns the gap created by lack of Kyoto Protocol 
governance post-2020 and the subsequent risk of unbalanced implementation.  

  The  description  and  explanation  of  baseline  information  was  also  improved  to  better 
facilitate the understanding of  which elements would be drawn from the existing Kyoto 
Protocol framework.  

  Further  explanation  was  given  to  clarify  that  the  primary  basis  for  dimensioning  the 
flexibility options assessed is the proportion of the agriculture non-CO2 emissions in each 
Member  State's  non-ETS  emission  profile;  by  contrast  it  has  been  highlighted  that 
flexibility options are not limited to use by that sector.  

  The  chapter  on  objectives,  and  consequently  the  analysis  of  options,  was  adjusted  and 
improved, taking into account remarks from the Board concerning the need for these to be 
more related to the specific and operational aspects of the proposal. 

Evidence and external expertise used 

The quantitative assessment of future impacts in the EU is consistent with the analysis undertaken 
for the 2030 framework proposal. The Commission contracted the National Technical University 
of Athens, IIASA and EuroCare to model EU scenarios. The energy system and CO2 emission 
modelling is based on the PRIMES model. The non-CO2 GHG emission modelling is based on 
the  GAINS  model.  Agricultural  non-CO2  emissions  are  assessed  with  the  CAPRI  modelling 
framework. The modelling of LULUCF emission related to forests is based on the GLOBIOM-
G4M models. See Annex 4 for more detail on the modelling framework.  

List of other contracts examined for the purposes of the Impact Assessment 

DG CLIMA 

ClimWood2030 (Climate benefits of material substitution by forest biomass and harvested 
wood products: Perspective 2030) 

The  project  will  provide  reliable  data  and  analysis  on  the  overall  climate  change  mitigation 
potential associated with the use of forest biomass in the EU. The analysis will take into account 
the renewable energy policy targets and the role of carbon in general in harvested wood products 

3 

 
 
(HWP).  The  timeframe  of  the  study  will  be  1960-2030,  in  order  to  inform  EU  and  Member 
States' policies related to climate change mitigation in relevant activities. 

EU  CLIMIT  II  (Development  and  application  of  EU  economy-wide  climate  mitigation 
modelling capacity) 

The objective is to update and improve quantitative tools used for the assessment of scenarios and 
policy options for further developing the Climate and Energy package and other climate relevant 
policies  in  the  medium  (up  to  2020/2030)  and  long  term  (up  to  2050),  including  economic, 
environmental  and  social  impacts,  both  for  the  EU  and  individual  EU  Member  States  and 
candidate countries.  The models include PRIMES, CAPRI, GAINS (non-CO2) and GLOBIUM-
G4M (LULUCF). The models can be used for assessment of the impacts of measures of policy 
options in the 2030 climate and energy framework. (See Annex 4 for more details.) 

Effective  performance  of  tools  for  climate  action  policy  -  meta-review  of  CAP 
mainstreaming  

Effective performance of tools for climate action policy - meta-review of Common Agricultural 
Policy  (CAP)  mainstreaming.  Specific  contract  number  340202/2014/688088/SER/CLIMA.A.2 
implementing Framework Contract CLIMA.A.4/FRA/2011/0027  

Tool for Cropland and Grazing land accounting/number management 

This  service  request  covers  the  inception,  design,  prototyping  and  implementation  of  a  data 
analysis  tool  for  compiling  and  exploring  historical  datasets,  incoming  data,  trends  and  future 
scenarios of the AFOLU sector. 

Agriculture and LULUCF in the 2030 Framework  

Assessment of the impacts of the Paris Agreement on LULUCF and the Agriculture sector in the 
2030  Framework:  Specific  Contract  No  340202/2015/715996/CLIMA.A.2  (Implementing 
Framework Contract CLIMA.A4/FRA/2011/0027) 

LULUCF Accounting 

This project, carried out in 2013-2014 by the JRC under an Administrative arrangement with DG 
CLIMA,  is divided into two lots: 

• 
• 

Lot 1 – Assistance to Informal Dialogue and support to the SBSTA/ADP analysis 
Lot 2 – Cropland and Grassland management data needs. 

 LULUCF 2030  

The aim of the project is to support the EC on the following two issues: 

1) 
Implementation  of  the  EU  LULUCF  Decision  529/2013,  especially  with  regard  to 
evaluating the estimates reported by MS on carbon stock changes in Cropland Management and 
Grazing  land  Management,  and  recommendations  to  help  MS  on  the  gradual  improvement  of 
reporting of emission estimates for these activities. 

4 

 
 
Contribution to specific elements of the IA on the inclusion of the land use sector in the 

2)  
2030 EU climate and energy policy. 

Report publication reference: JRC102498 

Biomass supply and demand 

Overarching study on the provision of data and analysis on biomass supply and demand by the 
JRC on a long-term basis. 

DG AGRI 

EcAMPA (Economic assessment of GHG mitigation policy options for EU agriculture) and 
follow-up project (EcAMPA2)  

The  aim  of  the  project  is  to  apply  the  CAPRI  model  to  provide  quantitative  analysis  of  GHG 
mitigation policy options for agriculture. In the frame of the project a workshop will be organised 
on technological GHG emission mitigation options in agriculture. 

Reference:Pérez Domínguez, I., T. Fellmann, F. Weiss, P. Witzke, J. Barreiro-Hurlé, M. 
Himics,  T.  Jansson,  G.  Salputra,  A.  Leip  (2016):  An  economic  assessment  of  GHG 
mitigation  policy  options  for  EU  agriculture  (EcAMPA  2).  JRC  Science  for  Policy 
Report,  Publications  Office  of  the  European  Union,  Luxembourg,  EUR27973  EN, 
doi:10.2791/843461. 

CAPRESE  (Carbon  preservation  and  sequestration  in  agricultural  soils  –  Options  and 
implications for agricultural production)  

The project reviewed potential climate change mitigation actions in relation to agricultural soils 
across  the  EU  and  assessed  their  potential  impact  in  relation  to  organic  carbon  levels  in 
agricultural soils at MS and EU level. The impact of selected measures on production patterns for 
different agricultural products in terms of a shift of overall production and regional changes (at 
EU and national level) were analysed. 

Reference:  CArbon  PREservation  and  SEquestration  in  agricultural  soils  –  options  and 
implications for agricultural production: Report of Task 6: Policy options and monitoring 
tools for carbon preservation and sequestration in agricultural soils. (JRC88294) 

Author(s): Arwyn Jones, Vincenzo Angileri, Francesca Bampa, Marco Bertaglia, Andrej 
Ceglar, Maria Espinosa, Sergio Gomez y Palom, Giacomo Grassi, Adrien Leip, Philippe 
Loudjani,  Emanuela  Lugato,  Luca  Montanarella  Stefan  Niemeyer,  Guna  Salputra, 
Benjamin Van Doorslaer 

AVEMAC  (Assessing  agriculture  vulnerabilities  for  the  design  of  effective  measures  for 
adaptation to climate change)  

The study provides a literature overview of vulnerabilities and adaptation measures in agriculture. 
Based on a biophysical model, levels of production were projected for priority crops under future 
climate  change  scenarios.  The  vulnerability  of  EU  agricultural  systems  to  climate  change  was 
assessed  and  mapped.  Future  resource  inputs  affected  by  climate  change  (in  particular  water 

5 

 
availability),  production  and  output  characteristics  were  identified.  Proposals  for  follow  up 
actions in support of decisions for selecting policy measures for adaptation were made.  

http://ec.europa.eu/agriculture/external-studies/avemac_en.htm  

Medium-term prospects for EU agricultural markets and income  

This  annual report presents the medium-term outlook for the major  EU agricultural commodity 
markets  (arable  crops,  biofuels,  meat  and  dairy  products)  and  agricultural  income  in  the  next 
decade.  This  analysis  is  based  on  expert  opinions  and  an  agro-economic  model  used  by  DG 
AGRI. It is accompanied by an uncertainty analysis in order to quantify potential variations of the 
results stemming in particular from fluctuations in the macroeconomic environment and yields of 
the main crops. 

Agrifood2030  

Developing  strategies  for  the  agri-food  sector  and  supporting  policies  to  cope  with  these 
challenges are strongly depending on the future context such as  the overall development of the 
global  economy,  but  also  specific  aspects  society  will  focus  on.  The  AgriFood2030  project, 
building  on  initiatives  analysing  these  questions  at  global  scale  such  as  AgMIP  (von  Lampe, 
2014), draws on a foresight approach for the European agri-food system where narrative stories 
describing in a qualitative  way coherent future development paths  are mapped  into quantitative 
the 
scenarios  for  (bio)-economic  simulation  modelling.  The  specific  contribution  of 
AgriFood2030 project to the global studies is twofold. Firstly, it complements a broader global 
view  provided  by  these  initiatives  with  a  detailed  one  for  Europe,  especially  with  regard  to 
regional detail. Secondly, it analyses in detail possible sectoral EU policies and initiatives fitting 
to the narratives. 

Report on Sustainable Forest Management Criteria and Indicators  

The Communication on a New EU Forest Strategy COM(2013)659 states that the Commission, 
in  close  cooperation  with  Member  States  and  stakeholders,  should  identify  by  the  end  of  2014 
"objective, ambitious and demonstrable sustainable forest management (SFM) criteria that can be 
applied in different policy contexts such as climate change, bioenergy or bioeconomy, regardless 
of the end use of biomass". The corresponding indicators should be applicable for the purpose of 
different  EU  policies  when  there  is  a  need  to  refer  to  sustainable  forest  management  and  its 
means  of  evidence.  This  approach  would  ensure  that  assurances  of  sustainability  for  all  forests 
and their products (including forest biomass), could follow a coherent set of requirements and use 
the same evidence base regardless of end use. The work is connected to the energy and climate 
change policy framework in the horizon of 2030 in so far as the identification of indicators for the 
sustainable management of forest is required under these policies. 

The  starting  point  for  this  exercise  are  the  existing  criteria and  indicators  of  Sustainable  Forest 
Management (SFM) as e.g. provided for by work carried out under FOREST EUROPE and other 
relevant policies, regulations and tools in place, and the analysis of their application in the EU. 
The outcome of this WG will be a report by June 2015 that will be discussed in both the Standing 
Forestry Committee and the Advisory Committee on Forestry and Cork. 

6 

 
 
ANNEX 2 STAKEHOLDER CONSULTATION ON "ADDRESSING GREENHOUSE GAS EMISSIONS FROM 
AGRICULTURE  AND  LULUCF  IN  THE  CONTEXT  OF  THE  2030  EU  CLIMATE  AND  ENERGY 
FRAMEWORK" 

Profile of respondents 

Between  March  and  June  2015,  the  European  Commission  conducted  a  public  consultation  on 
how best to address emissions from agriculture, forestry and other land use in the context of the 
2030  EU  climate  and  energy  policy  framework,  following  its  endorsement  by  the  European 
Council in October 2014. It sought input on the impact of existing policies in terms of reducing 
emissions from the land use, land-use change and forestry (LULUCF) sector and three potential 
policy options for integrating LULUCF into the climate and energy framework. 

The consultation was open for 12 weeks, from 26 March to 18 June 2015. Most stakeholders used 
the online questionnaire to submit views. In total, 138 contributions were received.  

Table A2.1   Respondents’ profile 

35 

O
G
N

50
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Replies were received from public authorities in AT, BE, CZ, DK, EE, ES, FI, FR, HU, IE, IT, 
LV, MT, NL, NO, PL, PT, RO and UK. In the case of several countries, responses were received 
from a number of public authorities, including regional entities. 

The majority of non-governmental organisations were environmental NGOs, but replies were also 
received from organisations working on food safety, farming and youth issues. 

Respondents in the ‘business/trade association’ group fell into five broad categories: agricultural 
producers,  forest  producers,  forest  product  users,  bioenergy  (biogas  and  biomass)  associations 
and other industry representatives. 

7 

 
 
 
 
 
 
 
All responses, except for a few where the respondents asked for confidentiality, were published 
on the consultation website:    
http://ec.europa.eu/clima/consultations/articles/0026_en.htm 

Analysis by stakeholder group 

An  analysis  was  carried  out  on  the  basis  of  the  stakeholder  categories,  focusing  on  the  three 
largest  categories  of  respondents:  governments/public  authorities,  NGOs  and  business 
associations. 

Governments and regulatory authorities 

Almost  all  answers  emphasised  the  (geographical,  biophysical,  historical,  economic,  etc.) 
differences  among  Member  States,  which  are  considered  more  significant  for  agriculture  and 
forestry  than  for  other  sectors.  Many  Member  States  gave  constructive  answers  regarding 
mitigation  measures  in  agriculture,  though  recalling  the  ‘lower  mitigation  potential’  (October 
2014  Council  conclusions)  and  stressing  the  need  to  incentivise  climate  action  via  supportive 
policies under the common agriculture policy (CAP). 

Several  Member  States  believed  that  setting  national  targets  for  LULUCF  would  be  very 
challenging,  with  a  few  proposing  possible  criteria  for  differentiation.  Some  expressed  a 
preference for having an EU-level target only. 

Accounting is seen as key by many. There is broad satisfaction with the current rules, but many 
Member States expressed openness to discussing improvements (e.g. land-based accounting, base 
years). 

Flexibility typically received support, though some Member States expressed concerns as regards 
the level of ambition in other sectors and/or the environmental quality of LULUCF credits. 

Many Member States had yet to settle on a preferred option. Those that expressed a preference 
tended more towards option 1 (four Member States) and option 3 (five). One Member State could 
support  either  option  1  or  3.  Three  Member  States  expressed  more  interest  in  option  2.  All 
underlined that these choices are preliminary and that they needed more information. 

Agriculture, forestry trade/business associations 

This  was  the  most  varied  group  of  stakeholders;  it  included  agricultural  producers,  forest 
producers, forest product users, bioenergy (biogas and biomass) associations and other industry 
representatives. Our analysis identified a few common themes and looked at views specific to the 
sub-categories within this stakeholder group. 

Stakeholders predict that food and energy issues will gain in importance by 2030, but this is not 
reflected  in  an  expectation  of  an  increased  share  of  GHG  emissions.  Nevertheless,  there  is 
considered  to  be  no  need  ‘for  multiple  objectives  to  compete’;  rather,  the  challenge  is  to 
maximise  outputs  and  integrate  bio-economy  chains  more  effectively.  Forest  and  agricultural 
producers call for increases in wood mobilisation/agricultural production. 

8 

 
Mitigation  measures  mentioned  explicitly  include  active  forest  management  and  better  nutrient 
management in agriculture, with the caveat that support would be needed to incentivise action. 

Producer associations express the opinion that strong regulation on efficient countries would be 
‘unfair’  and  that  reduction  targets  should  therefore  not  be  linked  to  absolute  emissions  but  to 
carbon efficiency (per unit of output). Early action was mentioned several times as a factor to be 
taken into account. 

A number of stakeholders consider that the EU’s role should be to disseminate best practice on 
greenhouse gas (GHG) mitigation in forests, leaving stakeholders to decide what specific action 
to  take  and  what  tools  to  use.  Others  argued  that  legislation  should  be  ‘material  neutral’  and 
should  not  prescribe  specific  materials  or  technology  to  achieve  objectives.  A  considerable 
number of submissions are categorical in stating that CH4 and N2O emissions are ‘biological’ and 
thus  ‘unavoidable’.  EU  policy-makers  are  warned  to  avoid  leakage/relocation  of  production 
outside the EU. 

Forest producers believe that high costs for their industry already limit opportunities to compete 
in the market against other materials; combined with a lack of incentives, this means wood is not 
being  mobilised  and  the  full  mitigation  potential  of  forests  is  not  being  exploited.  Forest 
management reference levels should, in the view of some, ‘be set nationally’. LULUCF rules are 
considered ‘unfair’ on (forest) biomass producers, because they focus too much on maintaining 
the forest sink, thereby limiting the use of wood. 

On options, forestry interests seem most aligned with option 1, with a perceived risk that options 
2 and 3 mean that ‘emissions in other sectors could be offset by measures in forestry’ and would 
limit  use  of  wood  products.  One  farmers’  union  also  clearly  preferred  option  1.  Agricultural 
producer and bioenergy organisations often prefer option 2, with refinements, and a smaller but 
still significant grouping see option 3 as the way to reduce administrative burden. 

Non-governmental organisations 

NGOs emphasise as principal objectives the conservation of carbon stocks and biodiversity, and 
enhanced  mitigation  in  agriculture.  Bioenergy/biomass  is  often  seen  as  a  driver  of  emissions. 
Some  urge  stronger  sustainability  criteria,  while  others  would  simply  cap  bioenergy 
production/use.  Leakage  and  indirect  land-use  change  are  also  brought up  by  some.  In  general, 
stakeholders  in  this  group  call  for  more  definitive  EU  policy  on  climate  change  mitigation  in 
agriculture and forestry, and on soils. 

The  CAP  receives  widespread  and  strong  criticism  from  this  stakeholder  group.  According  to 
some,  it  does  not  provide  sufficient  incentives  for  mitigation,  while  others  see  it  as  ‘the  main 
obstacle’ to mitigation measures in agriculture (e.g. due to untargeted subsidies, thereby driving 
overproduction) and suffering from weak environmental provisions. 

A number of NGOs explicitly call for binding national targets for LULUCF. Many are opposed to 
flexibility  between  LULUCF  and  other  sectors,  arguing  that  it  would  weaken  ambition  in  the 
latter, and question the environmental integrity and additionality of LULUCF credits.   

9 

 
Option 1 is the most popular (13 replies), mostly due to fears on the flexibility issue. Those who 
do not choose option 1 often mention that it does not provide sufficient incentives for sustainable 
forest management and the enhancement of sinks. 

Analysis of responses to highlighted questions 

Many  respondents  identified  accounting  rules  as  key  to  the  environmental  integrity  of  the 
scheme.  This  cross-cutting  issue  was  clearly  highlighted  in  the  stakeholder  questionnaire.  The 
section below contains more detailed analysis of answers to question 6 (How could the present 
rules be improved?) and responses as to the preferred policy option (question 8). 

Responses on accounting rules (question 6) 

For  some  Member  State  respondents,  the  rules  in  Decision  No 529/2013/EU  provide  clear 
incentives  and  policy  signals  for  investment  in  mitigation.  The  Decision  should  be  the  starting 
point for the new framework, which should account for all LULUCF activities. 

With  the  current  net-net  accounting  approach  for  cropland  and  grassland  management,  credits 
often  relate  more  to  land-use  change  than  to  actual  carbon  stock  evolution  on  the  land  parcel. 
Moreover,  the  outcome  in  terms  of  credits  and  debits  in  the  commitment  period  is  largely 
determined by areas of cropland and grassland in 1990, rather than changes in soil carbon content 
during  the  period.  Some  respondents  suggest  that  this  should  be  reviewed  to  eliminate  any 
potential  adverse  effects.  A  reference  period  based  on  a  five-year  average  and  a  more  recent 
period around 2005 could be used (rather than a single reference year), while taking into account 
relevant past mitigation efforts. 

In  forest  management,  some  forestry  organisations  argue  that  the  complicated  accounting  rules 
resulting  from  the  Kyoto  negotiations  should  be  replaced  by  a  simpler  and  more  transparent 
approach  reflecting  biophysical  conditions,  so  that  accounting  rules  do  not  allow  forest  sink  to 
generate debits. Others are generally satisfied with the current approach of using projected forest 
management reference levels, although this will need to be confirmed in coming years, when the 
projected levels can be compared with actual emissions/removals. Forest management reference 
levels would need to be updated for the 2021-2030 period. 

Other  respondents  consider  that  Member  States  should  account  for  all anthropogenic  emissions 
and  removals  from  a  historical  base  year  or  period  (not  from  projected  reference  levels,  as  is 
currently  the  case  in  forest  management).  The  idea  of  accounting  against  a  commitment  period 
(not annually) received wide support. 

With accounting becoming mandatory for cropland and grazing land management from 2020 in 
the  EU,  some  NGO  respondents  would  like  accounting  rules  also  to  become  mandatory  after 
2020  for  other  non-forest  LULUCF  activities,  especially  wetland  drainage  and  rewetting 
(currently voluntary). 

For  some  respondents,  LULUCF  and  agriculture  should  be  treated  coherently  to  reflect  key 
linkages  between  the  sectors  and  improve  cost-effectiveness.  Monitoring  and  reporting  of 
LULUCF  and  agriculture  should  be  enhanced  by  introducing  benchmarks  for  performance  and 
harmonised rules to improve comparability and verification. For example, criteria could be put in 

10 

 
place  to  ensure  that  carbon  sequestration  does  not  undermine  other  objectives  such  as 
biodiversity. Environmental criteria could act as thresholds, i.e. if the environmental criteria are 
not met, a credit cannot count. Coordinated planning, reporting and presentation of information 
under  the  LULUCF  Decision  and  the  Monitoring  Mechanism  Regulation  could  promote 
long-term policy coherence between linked sectors (e.g. agriculture and waste). 

Another  possible  improvement  could  be  to  switch  to  a  land-based  approach  in  line  with  the 
United Nations Framework Convention on Climate Change (UNFCCC), rather than an activity-
based  approach  as  under  the  Kyoto  Protocol  (KP).  This  could  ensure  more  comprehensive 
coverage  of  emissions  and  removals,  simplify  reporting  and  accounting,  and  increase  the 
comparability  of  accounting  data  with  those  of  non-KP  countries.  In  any  event,  any  proposed 
changes  to  the  existing  rules  should  take  account  of  developments  regarding  international 
agreements and accounting options. 

Responses on the preferred policy option (question 8) 

There was a certain amount of interest shown in all options, and also in combinations of options. 
Roughly half of the respondents in each stakeholder category expressed no clear preference for 
any option.   

Table A2.2.   Preferred options 

Preferred option (excluding blank answers) 

20% 

17% 

34% 

Option 1 - LULUCF
Pillar
Option 2 - Land-
use sector pillar
Option 3 - ESD

A combination of
options
No preference

10% 

19% 

Some  respondents  chose  a  specific  option,  but  underlined  conditions  under  which  they  would 
consider  it  truly  acceptable.  Others pointed to  a  combination  of  options  as  a  way  of  specifying 
conditions  or  a  mix  of  approaches  that  would  make  a  specific  option  acceptable.  Respondents’ 
assumptions  on  the  cross-cutting  issues  (accounting,  targets  and  flexibility)  are  critical  to 
understanding  what  approach  they  prefer.  As  a  consequence,  simply  identifying  how  many 
stakeholders  favoured  which  option  can  be  misleading.  Also,  a  review  of  responses  to  this 

11 

 
 
 
consultation  does  not  provide  a  statistically  representative  picture  of  the  EU  –  some  Member 
States and sectoral organisations were over- or under-represented. 

Option 1 — the LULUCF pillar: Maintain non-CO2 agriculture sector emissions in a potential 
future  effort-sharing  decision  and  further  develop  a  LULUCF  sectoral  policy  approach 
separately 

Slightly over a third of the respondents were in favour of keeping LULUCF as a separate pillar 
within the climate  and energy framework, which  makes option 1 the preferred option for those 
respondents that replied to this question. Option 1 received strong support from the majority of 
the environmental and climate NGOs and from the forestry sector and is also the option preferred 
by some agriculture organisations and at least four Member States. It was also supported to some 
extent by other interest groups, including one research institute and one SME. 

One  of  the  main  advantages  put  forward  by  these  respondents  is  that  option  1  would  ensure 
continuity  with  the  approach  followed  to  date  to  reporting  and  accounting  for  LULUCF 
emissions and removals and is therefore the most easily operational option in the short term. It 
would  allow  the  LULUCF  sector  to  be  addressed  independently,  taking  into  account  the 
specificities  of  the  sector,  thereby  enabling  the  development  of  sector-specific  policies,  targets 
and accounting rules. 

Some respondents indicate that the annual accounting cycle that applies to sectors covered by the 
effort-sharing decision (ESD) would not be appropriate for the LULUCF sector, as it could lead 
to errors in the annual accounts. 

Several  respondents,  including  NGOs,  one  agricultural  organisation  and  one  Member  State, 
consider  that  option  1  would  contribute  best  to  maintaining  environmental  integrity.  These 
respondents deem it important that the current carbon sink represented by LULUCF is not used to 
offset emissions in other ESD sectors. 

Respondents  from  all  interest  groups  also  indicated  a  number  of  disadvantages  of  option  1.  It 
would involve maintaining a divided approach to emissions/removals from agriculture and other 
land  uses.  For  some  respondents,  it  would  thus  have  limited  policy  coherence.  A  number  of 
respondents  from  various  interest  groups  (sector  organisations,  academics,  Member  States) 
assumed that  there would be no flexibility between  the  LULUCF pillar  and other  ESD sectors. 
According  to  some  respondents,  this  would  entail  higher  marginal  abatement  costs  in  the 
LULUCF sector and/or in the ESD. 

Beyond  the  potential  implications  for  marginal  abatement  costs,  some  NGOs  fear  that  option 1 
would  not  provide  actors  in  the  LULUCF  sector  with  sufficient  incentive  for  enhanced 
mitigation. 

Option  2  —  Land-use  sector  pillar:  Merging  LULUCF  and  agricultural  non-CO2  emissions 
into one new independent pillar of the EU’s climate policy 

Slightly under a fifth of respondents who identified a preferred option were in favour of merging 
LULUCF  and  agricultural  non-CO2  emissions  into  a  separate  pillar.  This  option  is  more  often 

12 

 
supported by stakeholders in the agriculture sector. It is also supported by three  Member States 
(subject to certain conditions) and a few individual businesses and research institutes. 

The  advantages  put  forward  by  respondents  in  favour  of  option  2  underline  the  integrated  and 
holistic approach for agriculture and the forestry sector. Option 2 could promote the development 
of  a  coherent  mitigation  policy  and  a  long-term  policy  vision.  For  agricultural  activities,  the 
merger  of  all  emissions/removals  into  one  pillar  could  ensure  better  alignment  with  existing 
agricultural policies and facilitate the use of the CAP as a means of promoting climate mitigation 
action  in  the  sector.  This  in  turn  could  improve  the  visibility  of  the  issue  and  encourage 
farmers/foresters to maximise carbon stocks on their land. 

According to some farmers’ organisations and Member States with limited agriculture mitigation 
potential,  option  2  would  enable  the  implementation  of  cost-effective  solutions.  On  the  other 
hand, other respondents, notably environmental NGOs, argue against this flexibility/trade-off. 

Option  2  would  also  have  several  disadvantages.  It  would  require  a  substantial  overhaul  of 
current  EU  climate  policy.  A  number  of  Member  States,  NGOs  and  industry  respondents 
anticipate that target-setting for the agriculture and forestry sectors, especially establishing an ex 
ante target, would raise considerable difficulties given the complexity of merging two different 
emission sources. This could also result in major accounting uncertainty. As with option 1, some 
Member  States,  researchers,  agricultural  and  industry  sector  respondents  note  that, in  principle, 
the  creation  of  a  sector-specific  target  reduces  flexibility  between  sectors  and  therefore  the 
potential cost-effectiveness of mitigation measures and actions. 

Other issues raised include the fact that the  withdrawal of agricultural emissions from the ESD 
could  be  criticised  as  a  retrograde  step  in  the  EU’s  commitment  vis-à-vis  the  international 
community  and  that  removing  non-CO2  agricultural  emissions  from  the  ESD  could  lead  to  the 
loss of close links between the agriculture and waste sectors under the ESD. 

Option 3 — Effort sharing: Include the LULUCF sector in a potential future ESD 

Overall, approximately 10 % of respondents were in favour of integrating the LULUCF sector in 
a future ESD. 

Option 3 is considered by a wide range of respondents to constitute the most coherent approach to 
GHG reduction targets, since it would integrate all relevant sectors under the ESD. In addition, it 
is the only option that would consider agricultural and wood supply chain emissions together. For 
some  respondents,  this  should  encourage  a  more  integrated  and  systemic  approach  to  climate 
mitigation in these supply chains. 

Some Member States and researchers suggest that option 3 could constitute a good approach to 
the issue  of  accounting  for  biomass use  for  energy.  Under  Intergovernmental  Panel on  Climate 
Change  (IPCC)  rules,  CO2  emissions  from  biomass  combustion  are  not  added  to  energy 
emissions,  on  the  assumption  that  related  carbon  stock  changes  are  captured  in  the  LULUCF 
sector by a respective decrease in carbon stocks. For several respondents, this is seen as leading 
to  major  gaps  in  biomass  emission  accounting  and  option  3  would  be  a  means  of  creating  the 
necessary linkages. 

13 

 
Option  3 is considered by  many as  providing the  greatest  flexibility to achieve the ESD target. 
Some Member States are of the view that the combined treatment of ESD and LULUCF would 
offer  them  the  flexibility  they  need  to  achieve  their  overall  target  in  the  most  cost-effective 
manner. 

For other respondents, one of the main disadvantages associated with option 3 is the risk that the 
carbon sink represented by the LULUCF sector would be used systematically to offset emissions 
in  other  ESD  sectors,  thereby  undermining  the  general  objective  of  the  climate  and  energy 
framework. 

Respondents from the forestry sector are typically concerned that option 3 would put additional 
pressure  on  forests  to  play  a  carbon  sequestration  role  in  the  EU.  This  would  constrain  the 
development of the forestry sector in terms of wood production for biomass. 

For some respondents, it would be detrimental if the LULUCF target under option 3 were to be 
calculated according to the current ESD criteria (GDP  per capita), as this would not reflect the 
real potential contribution of LULUCF at Member State level. 

Some  also  highlight  that  option  3  could  create  a  greater  level  of  uncertainty  in  view  of  the 
variability in emissions observed in the LULUCF sector and the absence of a robust and stable 
accounting system for forestry in particular. Respondents from all groups (researchers, Member 
States, NGOs, sectoral organisations) further stress the substantial methodological and accounting 
issues posed by option 3. 

Stakeholder responses suggesting a combination of options 

A number of respondents proposed a combination of options as their preferred approach. 

Respondents in favour of a combination of options 1 and 2 stress the need to address LULUCF 
independently.  While  option  2  is  appealing  in  that  it  would  embrace  different  aspects  of 
agricultural  land  management,  respondents  recognise  the  technical  challenges  of  such  an 
approach. 

The combination of option 1 with option 3 is deemed to combine the advantages of option 1  — 
mitigation policy measures and action and specific accounting rules adapted to LULUCF — with 
those of option 3, especially the flexibility and the cost-effective mitigation solutions expected to 
come from the incorporation of LULUCF in the ESD target. 

A few environmental and climate NGOs believe that, under all options, it is forest management 
that  raises  most  difficulties.  Accordingly,  they  believe  that  forest  management  should  be 
separated  from  other  LULUCF  sectors  and  dealt  with  independently,  while  non-CO2  emissions 
from  agriculture  and  the  remaining  LULUCF  activities  (cropland  management,  grazing  land 
management and wetland drainage and rewetting) should be integrated into the ESD. 

Summary of the ‘Agriculture and LULUCF in the 2030 EU Climate and Energy 
Framework’ stakeholder workshop (Brussels, 14-15 September) 

The workshop took place in a positive atmosphere, with substantial debate on outstanding issues. 
There  was  a  very  high  turnout  of  registered  participants  and  several  last-minute  arrivals, 

14 

 
including Member State permanent representations, ministries and other regulatory agencies (AT, 
BE, CZ, DE, DK, EE, ES, FI, FR, HU, IE, LT, LV, LU, MT, NL, PL, PT, RO, SE, SK, UK + 
CH,  NO);  forestry  and  farmers’  associations  (EU  state  forests,  EU  forest  owners,  COPA-
COGECA, etc.); business associations (European Paper Industries, European Biogas Association, 
Cement  Association,  etc.);  environmental  NGOs  (Climate  Action  Network,  EEB,  etc.);  think-
tanks and academia. 

Some key messages emerging from the workshop were: 

  There was broad agreement that accounting rules are strongly linked to environmental integrity. 
Particularly intense discussion took place on forest management and on the risk that it may flood 
non-ETS sectors with credits unless stringent reference levels are determined; 

  Significant  support  was  voiced  for  simplification,  modernisation  and  land-based  accounting. 
There  was  general  acceptance  of  current  accounting  rules  for  harvested  wood  products  and 
agricultural non-CO2 gases. Policy design should increase transparency on how carbon/biomass is 
moved between sectors and Member States; 

  Views  on  flexibility  ranged  from  demanding  unlimited  flexibility  to  considering  flexibility  as  a 

threat to ambition (environmental NGOs); 

  On  burden  sharing,  GDP  per  capita  was  seen  as  an  insufficient  basis  for  LULUCF  due  to  the 
uneven distribution of natural potential; regulation should ensure a level playing-field; the need 
to recognise improvements in efficiency (carbon intensity) was emphasised; 

 

In  terms  of  barriers,  the  lack  of  the  right  incentives  (also  in  the  CAP)  and  the  lack  of  EU 
competence in forest issues were recurring themes. Imports/exports (competitiveness, trade and 
accounting issues) were mentioned as problematic areas; 

  A  cautious  coalition  of  diverse  (non-Member  State)  stakeholders  emerged  around  option  1 

(LULUCF separate pillar), but there was no consensus on what exactly it would entail; 

  Several  participants  called  for  enhanced  communication  on  the  co-benefits  of  mitigation 

measures for adaptation, e.g. in terms of farmers becoming more resilient; and  

  Expectation was expressed that the Commission would deliver a coordinated non-ETS proposal 

in a reasonable timeframe (2016). 

The  event  began  with  opening  comments  and  high-level  statements  from  DG  CLIMA  and  DG 
AGRI. A high-level panel discussion followed, with the participation of Pekka Pesonen (COPA-
COGECA),  Piotr  Borkowski  (EUSTAFOR),  Dr  Aljoscha  Requardt  (CEPF),  Pieter  De  Pous 
(EEB),  Marco  Mensick  (CEPI)  and  Jan  Stambasky  (European  Biogas  Association).  The 
workshop continued with break-out group discussions around key topics from the consultation, as 
follows: 

G1)   Cropland/grassland/peatlands/soil and nutrient management; 

G2)   Livestock systems; 

G3)   Forest management; and 

G4)   Biomass/Energy/Industry nexus. 

In  each  group,  discussion  was  structured  around  the  same  four  main  questions.  On  Day  2, 
external  contractors  presented  the  outcome  of  studies  on  mitigation  potential  in  agriculture  and 
LULUCF. 

15 

 
ANNEX 3.  WHO IS AFFECTED BY THE INITIATIVE AND HOW  

The issue at hand is related to the EU mitigation efforts in general and how agriculture, land use 
and forestry can contribute to the increased ambition of the EU's 2030 emission reduction target.  

While farmers and foresters are key actors in the implementation of climate action on land, the 
preceding discussion has shown how the EU has already successfully protected carbon stores and 
reduced emissions in a key sector without directly targeting individual actors. Consistent with this 
past  experience,  the  proposed  legal  instrument  is  addressed  at  Member  States  (and  to  be 
implemented at national level) rather than the small and medium enterprises which comprise the 
millions  of  farm  and  forestry  holdings  across  the  EU.  Furthermore,  it  builds  on  existing 
legislation  which  already  takes  this  approach,  in  particular  Decision  529/2013/EU  and  will 
therefore not imply a system change but only taking a next step in further integrating this sector 
into the EU's domestic mitigation framework.  

Changes  to  the  existing  accounting  framework,  as  consequence  of  including  LULUCF  into  the 
EU's  domestic 2030 reduction target, and any related needs to  adjust  monitoring and reporting, 
may  potentially  introduce  impacts.  These  impacts  are  likely  to  be  most  felt  by  Member  State 
administrations  responsible  for  greenhouse  gas  inventories,  and  the  Commission  services 
responsible for coordinating and verifying the information. Potentially affected public institutions 
include  statistical  offices,  agricultural,  climate,  energy  and  environmental  authorities,  agencies 
dealing with zoning and territorial planning, as well as universities and research institutes.  

The costs of carrying out these activities are incurred by the public budget. It is not expected that 
private actors would face additional data requirements.  

Altogether,  the  impact  of  the  post-2020  changes  is  expected  to  be  very  limited,  because  the 
relevant  accounting  rules  already  have  been  set  up  with  LULUCF  Decision  529/2013/EU. 
Member  States  are  thus  already  developing  enhanced  systems  to  account  for  emissions  and 
removals for forestry and agricultural land in order to accurately include emissions and removals 
in  the  national  greenhouse  gas  inventories,  and  thus  be  compliant  with  existing  legislation. 
Moreover,  several  of  the  accounting  options  discussed  in  the  IA  would  entail  a  reduction  of 
administrative burden for Member States. Administrative costs do not differ significantly under 
the main policy options as accounting rules are assumed to be the same in all cases. At the same 
time, reduced administrative burden will deliver a positive impact through the streamlining of the 
currently  existing  parallel  reporting  systems  (under  Kyoto  Protocol  and  under  the  Convention) 
into one. 

16 

 
ANNEX  4.  ANALYTICAL  MODELS  AND  MODEL-BASED  SCENARIOS  USED  IN  PREPARING  THE 
IMPACT ASSESSMENT  

The  model  suite  used  for  this  impact  assessment  has  a  successful  record  of  use  in  the 
Commission's climate policy impact assessments – it is the same model suite as used for the 2030 
climate and energy policy framework. The models and their linkages are briefly described in the 
following subsections. Detailed model descriptions can  be found  on the DG  CLIMA website80. 
This modelling Annex is based on the counterpart in the ESD Impact Assessment.  

The models cover all GHG emissions and removals: 

  Emissions:  CO2  emissions  from  energy  and  processes  (PRIMES),  CH4,  N2O,  fluorinated 
greenhouse  gases  (GAINS),  CO2  emissions from  LULUCF  (GLOBIOM-G4M),  air  pollution 
SO2, NOx, PM2.5-PM10, ground level ozone, VOC, NH3 (GAINS) 

  Emission reduction and removals: structural changes and technologies in the energy system 
and  industrial  processes  (PRIMES),  technological  non-CO2  emission  reduction  measures 
(GAINS), changes in land use (GLOBIOM-G4M-CAPRI) 

  Time horizon: 1990 to 2050 (5-year time steps) 

  Geography: individually all EU Member States, EU candidate countries and, where relevant 

Norway, Switzerland and Bosnia and Herzegovina 

  Impacts:  on  energy,  transport,  industry,  agriculture,  forestry,  land  use,  atmospheric 
dispersion,  health,  ecosystems  (acidification,  eutrophication),  macro-economy  with  multiple 
sectors, employment and social welfare 

  Split  ETS  –ESD:    with  split  ETS-ESD  calibrated  on  the  basis  of  the  existing  scope  for  the 

period 2005-2050. This leads  

Related to this last element, to ensure modelling consistency over time, the scope of the ESD and 
ETS is kept constant over the time horizon 2005-2050 which means that historic ESD estimates 
need  to  be  updated  to  reflect  changes  in  the  coverage  in  the  ESD.  These  include  notably  the 
impact of the expansions in  scope of the ETS, notably in 2013 the inclusion of some industrial 
process CO2, N2O and PFC emissions as well as the inclusion of RO, BG and HR in the ETS 
after 2005 (with no monitored ETS data available for 2005 to estimate the exact split ETS-ESD).  

This recalibration of historic split in 2005 ESD-ETS emissions, to take into account these scope 
extension afterwards, is based on an estimation method developed by the EEA81, also taking into 
account most recent UNFCCC and ETS inventory submissions (for the 2016 Reference this was 
the  inventory  as  submitted  in  2015).  This  allows  presenting  a  meaningful  emission  trend  over 
time within the ETS and ESD.  

80 http://ec.europa.eu/clima/policies/strategies/analysis/models/index_en.htm  
81  See  the  EEA  ETS  data  viewer  (http://www.eea.europa.eu/data-and-maps/data/data-viewers/emissions-trading-
viewer) and accompanying documentation. 

17 

 
                                                 
It  can  be  noted  that  this  approach  is  different  from  the  approach  in  the  ESD  legislation  for 
instance in relation to how AEA allocation was reduced due to extension of scope of the ETS in 
2013  or  the  impact  of  recent  inventory  changes.  This  may  lead  to  some  difference  in  2005 
emissions  between  those  used  in  modelling  exercise,  and  those  used  as  base  year  for  setting 
targets in the ESD.  

Overview of model inter-linkages 

The  models  are  linked  with  each  other  in  formally-defined  ways  to  ensure  consistency  in  the 
building of scenarios, as shown graphically below.   

Figure 9: Inter-linkages between models 

Source: DG CLIMA based on E3MLab/ICCS82 

PRIMES 

The PRIMES model is an EU energy system model which simulates energy consumption and the 
energy supply system. It is a partial equilibrium modelling system that simulates energy market 
equilibrium in the European Union and each of its Member States. This includes consistent EU 
carbon price trajectories. 

82 http://ec.europa.eu/clima/policies/strategies/analysis/models/index_en.htm 

18 

 
 
 
                                                 
Decision  making  behaviour  is  forward  looking  and  grounded  in  micro  economic  theory.  The 
model  also  represents  in  explicit  and  detailed  way  energy  demand,  supply  and  emission 
abatement technologies, and includes technology vintages. 

The core model is complemented by a set of sub-modules, of which the transport sector module 
and  the  biomass  supply  module  are  described  below  separately  in  more  detail.  Industrial  non-
energy related CO2 emissions are covered by a sub-module so that total CO2 emissions can be 
projected. The model proceeds in five year steps and is for the years 2000 to 2010 calibrated to 
Eurostat data. 

The PRIMES model is suitable for analysing the impacts of different sets of climate, energy and 
transport  policies  on  the  energy  system  as  a  whole,  notably  on  the  fuel  mix,  CO2  emissions, 
investment  needs  and  energy  purchases  as  well  as  overall  system  costs.  It  is  also  suitable  for 
analysing  the  interaction  of  policies  on  combating  climate  change,  promotion  of  energy 
efficiency  and  renewables.  Through  the  formalised  linkages  with  GAINS  non-CO2  emission 
results  and  cost  curves,  it  also  covers  total  GHG  emissions  and  total  ESD  sector  emissions.  It 
provides details on the Member State level, showing differential impacts across Member States. 

PRIMES has been used for the analysis underpinning the Commission's proposal on the EU 2020 
targets (including energy efficiency), the Low Carbon Economy and Energy 2050 Roadmaps as 
well as the 2030 policy framework for climate and energy.  

PRIMES  is  a  private  model  and  has  been  developed  and  is  maintained  by  E3MLab/ICCS  of 
National Technical University of Athens83 in the context of a series of research programmes co-
financed by the European Commission. 

The model has been successfully peer reviewed84, most recently in 201185.   

PRIMES-TREMOVE 

The PRIMES-TREMOVE Transport Model projects the evolution of demand for passengers and 
freight  transport  by  transport  mode  and  transport  mean.  It  is  essentially  a  dynamic  system  of 
multi-agent choices under several constraints, which are not necessarily binding simultaneously. 
The  model  consists  of  two  main  modules,  the  transport  demand  allocation  module  and  the 
technology  choice  and  equipment  operation  module.  The  two  modules  interact  with  each  other 
and are solved simultaneously.  

The  projection  includes  details  for  a  large  number  of  transport  means,  technologies  and  fuels, 
including  conventional  and  alternative  types,  and  their  penetration  in  various  transport  market 
segments.  It  also  includes  details  about  greenhouse  gas  and  air  pollution  emissions,  as  well  as 
impacts on external costs of congestion, noise and accidents. 

83 http://www.e3mlab.National Technical University of Athens.gr/e3mlab/  
84 http://ec.europa.eu/clima/policies/strategies/analysis/models/docs/primes_model_2013-2014_en.pdf. 
85 https://ec.europa.eu/energy/sites/ener/files/documents/sec_2011_1569_2.pdf  

19 

 
                                                 
PRIMES Biomass Supply 

The biomass system model is linked with the PRIMES energy system model for Europe and can 
be either solved as a satellite model through a closed-loop process or as a stand-alone model. 

It  is  an  economic  supply  model  that  computes  the  optimal  use  of  biomass/waste  resources  and 
investment  in  secondary  and  final  transformation,  so  as  to  meet  a  given  demand  of  final 
biomass/waste  energy  products,  projected  to  the  future  by  the  rest  of  the  PRIMES  model.  The 
biomass supply model determines the consumer prices of the final biomass/waste products used 
for  energy  purposes  and  also  the  consumption  of  other  energy  products  in  the  production, 
transportation  and  processing  of  the  biomass/waste  products.  The  model  also  reflects  the 
sustainability criteria currently in place and can be used for reflecting policies facilitating the use 
of  renewable  energy  sources.  After  cross  check  of  input  data  and  draft  results,  results  of  the 
biomass supply model are used to ensure consistency between PRIMES, CAPRI and GLOBIOM 
bioenergy modelling.  

The  PRIMES  biomass  supply  model  is  private  and  has  been  developed  and  is  maintained  by 
E3MLab/ICCS of National Technical University of Athens86. 

GAINS 

The  GAINS  (Greenhouse  gas  and  Air  Pollution  Information  and  Simulation)  model  is  an 
integrated assessment model of air pollutant and greenhouse gas emissions and their interactions. 
GAINS brings together data on economic development, the structure, control potential and costs 
of emission sources and the formation and dispersion of pollutants in the atmosphere. 

In addition to the projection and mitigation of greenhouse gas emissions at detailed sub-sectorial 
level,  GAINS  assesses  air  pollution  impacts  on  human  health  from  fine  particulate  matter  and 
ground-level  ozone,  vegetation  damage  caused  by  ground-level  ozone,  the  acidification  of 
terrestrial and aquatic ecosystems and excess nitrogen deposition of soils. 

Model uses include the projection of non-CO2 GHG emissions and air pollutant emissions for EU 
Reference scenario and policy scenarios, calibrated to UNFCCC emission data as historical data 
source. This allows for an assessment, per Member State, of the (technical) options and emission 
potential  for  non-CO2  emissions.  Health  and  environmental  co-benefits  of  climate  and  energy 
policies such as energy efficiency can also be assessed. 

The  GAINS  model  is  accessible  for  expert  users  through  a  model  interface87  and  has  been 
developed  and  is  maintained  by  the  International  Institute  of  Applied  Systems  Analysis88.  The 
underlying  algorithms  are  described  in  publicly  available  literature.  The  source  code  is  not 
disclosed. GAINS and its predecessor RAINS have been peer reviewed multiple times, in 2004, 
2009 and 2011.  

86  http://www.e3mlab.National Technical University of Athens.gr/e3mlab/ 
87 http://gains.iiasa.ac.at/models/  
88 http://www.iiasa.ac.at/  

20 

 
                                                 
GLOBIOM-G4M 

The  Global  Biosphere  Management  Model  (GLOBIOM)  is  a  global  recursive  dynamic  partial 
equilibrium  model  integrating  the  agricultural,  bioenergy  and  forestry  sectors  with  the  aim  to 
provide policy analysis on global issues concerning land use competition between the major land-
based  production  sectors.  Agricultural  and  forestry  production  as  well  as  bioenergy  production 
are modelled in a detailed way accounting for about 20 globally most important crops, a range of 
livestock  production  activities,  forestry  commodities  as  well  as  different  energy  transformation 
pathways. 

GLOBIOM  covers  28  (or  50)  world  regions.  The  disaggregation  of  the  EU  into  individual 
countries has been performed only recently. 

Model  uses  include  the  projection  of  emissions  from  land  use,  land  use  change  and  forestry 
(LULUCF)  for  EU  Reference  scenario  and  policy  scenarios.  For  the  forestry  sector,  emissions 
and removals are projected by the Global Forestry Model (G4M), a geographically explicit agent-
based model that assesses afforestation-deforestation-forest management decisions. GLOBIOM-
G4M is  also used  in  the  Impact Assessment for  agriculture and LULUCF to assess the options 
(afforestation, deforestation, forest management, cropland and grassland management) and costs 
of enhancing the LULUCF sink for each Member State. 

The  GLOBIOM-G4M  is  a  private  model  and  has  been  developed  and  is  maintained  by  the 
International Institute of Applied Systems Analysis.89  

GEM-E3 

The  GEM-E3  (World  and  Europe)  model 
is  an  applied  general  equilibrium  model, 
simultaneously representing the whole world economy, its major regions and the 28 EU Member 
States, linked through endogenous bilateral trade flows and environmental flows. 

GEM-E3  aims  at  covering  the  interactions  between  the  economy,  the  energy  system  and  the 
environment. It is a comprehensive model of the economy, the productive sectors, consumption, 
price formation of commodities, labour and capital, investment and dynamic growth. The model 
is  dynamic,  recursive  over  time,  driven  by  accumulation  of capital  and equipment.  Technology 
progress  is  explicitly  represented  in  the  production  function.  It  is  updated  regularly  using  the 
latest revisions of the GTAP database and Eurostat statistics for the EU Member States. 

It is updated regularly using the latest revisions of the GTAP database and Eurostat statistics for 
the EU Member States. 

The  GEM-E3  model  has  been  developed  and  is  maintained  by  E3MLab/ICCS  of  National 
Technical  University  of  Athens90,  JRC-IPTS91  and  others.  It  is  documented  in  detail  but  the 
specific versions are private.  

89 http://www.iiasa.ac.at/  
90  http://www.e3mlab.National Technical University of Athens.gr/e3mlab/ 
91 https://ec.europa.eu/jrc/en/institutes/ipts  

21 

 
                                                 
The model has been used by E3MLab/ICCS to provide the macro assumptions for the Reference 
scenario  and  for  the  policy  scenarios.  It  has  also  been  used  by  JRC-IPTS  to  assess 
macroeconomic impacts of target setting based on GDP per capita.  

Prometheus 

PROMETHEUS  is  a  fully  stochastic  world  energy  model  used  for  assessing  uncertainties  and 
risks  associated  with  the  main  energy  aggregates  including  uncertainties  associated  with 
economic  growth  and  resource  endowment  as  well  as  the  impact  of  policy  actions.  The  model 
projects endogenously to the future the world  energy prices, supply, demand  and emissions  for 
ten world regions. 

World  fossil  fuel  price  trajectories  are  used  as  import  price  assumptions  for  EU  Reference 
scenario and for policy scenario modelling. 

The Prometheus model is private and has been developed and is maintained by E3MLab/ICCS of 
National Technical University of Athens.92 

CAPRI 

CAPRI  is  an  open  source  economic  partial  equilibrium  model  developed  by  European 
Commission research funds. Operational since more than a decade, it supports decision making 
related to the Common Agricultural Policy and Environmental policy related to agriculture based 
on sound scientific quantitative analysis.  

CAPRI  is  only  viable  due  to  its  pan-European  network  of  researchers  which  based  on  an  open 
source approach tender together for projects, develop and maintain the model, apply it for policy 
impact  assessment,  write  scientific  publications  and  consult  clients  based  on  its  results.  It  has 
been the basis of numerous peer reviewed publications. 

The  model  has  been  used  to  provide  consistent  agricultural  activity  projections  for  the  EU 
Reference scenario 2016s. It is also used in the LULUCF impact assessment.  

The  CAPRI  model  is  an  open  source  model  which  has  been  developed  and  is  maintained  by 
Eurocare GmbH93, JRC, and other partners of the CAPRI network.  

The EU Reference scenario 2016 

Scenario design, consultation process and quality assurance 

Building an EU Reference scenario is a regular exercise by the Commission. It is coordinated by 
DGs  ENER,  CLIMA  and  MOVE  in  association  with  the  JRC,  and  the  involvement  of  other 
services via a specific inter-service group.  

The Reference scenario 2016 (REF2016) has been developed building on a modelling framework 
transport),  GAINS  and 
including  as  core  models  PRIMES  (PRIMES-TREMOVE  for 

92  http://www.e3mlab.National Technical University of Athens.gr/e3mlab/ 
93 http://www.eurocare-bonn.de/  

22 

 
                                                 
GLOBIOM-G4M  and  as  supporting  models  GEM-E3,  PROMETHEUS,  PRIMES  Biomass 
supply and CAPRI (see prior section for details).  

Member States were consulted throughout the development process through a specific Reference 
scenario expert group which met three times during the development of REF2016. Member States 
provided  information  about  adopted  national  policies  via  a  specific  questionnaire,  key 
assumptions have been discussed and in each modelling step, draft Member State specific results 
were  sent for consultation. Comments of Member  States  were addressed to  the extent  possible, 
keeping in mind the need for overall comparability and consistency of the results. 

Quality of modelling results was assured by using state of the art modelling tools, detailed checks 
of  assumptions  and  results  by  the  coordinating  Commission  services  as  well  as  by  the  country 
specific comments by Member States.  

REF2016  projects  EU  and  Member  States  energy,  transport  and  GHG  emission-related 
developments  up  to  2050,  given  current  global  and  EU  market  trends  and  adopted  EU  and 
Member States' energy, transport, climate and related relevant policies.  

"Adopted policies" refer to those that have been cast in legislation in the EU or in MS (with a cut-
off  date  end  of  201494).  Therefore  the  binding  2020  targets  are  assumed  to  be  reached  in  the 
projection. This concerns GHG emission reduction targets (both for the EU ETS as well as ESD 
sectors) as well as RES targets, including RES in transport.  

However, policies which are not yet legally implemented, e.g. those necessary to implement the 
2030 energy and climate framework, are not part of REF201695. On this basis, REF2016 can help 
identify  areas  where  the  current  policy  framework  falls  short  of  reaching  the  EU's  climate  and 
energy  objectives96.  Notably,  REF2016  shows  that  current  policy  and  market  conditions  will 
deliver neither our 2030 targets nor our long-term 2050 decarbonisation goal.  

REF2016  provides  projections,  not  forecasts.  Unlike  forecasts,  projections  do  not  make 
predictions  about  what  the  future  will  be.  They  rather  indicate  what  would  happen  if  the 
assumptions  which  underpin  the  projection  actually  occur.  Still,  the  scenario  allows  for  a 
consistent approach in the assessment of energy and climate trends across the EU and its Member 
States.   

94 
In  addition,  amendments  to  two  Directives  only  adopted  in  the  beginning  of  2015  were  also  considered. 
This  concerns  notably  the  ILUC  amendment  to  the  RES  directive  and  the  Market  Stability  Reserve  Decision 
amending the ETS Directive. 
95  
For  the  period  after  2020,  policies  are  included  that  are  part  of  the  EU  acquis,  as  well  as  important 
investments  that  are  part  of  Member  States'  national  energy  plans.  For  instance,  ETS  with  the  Market  Stability 
Reserve is included in REF16, but not the Commission's proposal for a change in the linear reduction factor post-
2020. New near-zero energy buildings after 2020  - as defined in the Energy Performance of Buildings Directive  - 
continue  to  be  built,  as  well  as  energy  labelling  continues.  Member  States  also  gave  input  on  planned  energy 
investments, particularly in nuclear energy.  
96  
Each new update of the Reference scenario models the projected impact of policy adopted up to the relevant 
cut-off date. Therefore, differences between two consecutive Reference scenarios , e.g. between the one from 2013 
and  REF2016,  can  be  explained  by  the  implications  of  policies  adopted  in  the  meantime  as  well  as  by  changed 
economic and technological trends trends. 

23 

 
                                                 
The  report  "EU  Energy,  Transport  and  GHG  Emissions  Trends  to  2050  -  Reference  Scenario 
2016"97  describes  the  inputs  and  results  in  detail.  This  section  summarises  the  main  messages 
derived from it, especially those relevant for the Energy Union framework.   

Main assumptions 

The  projections  are  based  on  a  set  of  assumptions,  including  on  population  growth, 
macroeconomic and oil price developments, technology improvements and policies. 

Macroeconomic assumptions 

In  REF2016,  the  population  projections  draw  on  the  European  Population  Projections 
(EUROPOP  2013)  by  Eurostat.    The  key  drivers  for  demographic  change  are:  higher  life 
expectancy, convergence in the fertility rates across Member States in the long term, and inward 
migration. The EU28 population is expected to grow by 0.2% per year during 2010-2030 (0.1% 
for 2010-2050), to 516 million in 2030 (522 million by 2050). Elderly people, aged 65 or more, 
would account for 24% of the total population by 2030 (28% by 2050) as opposed to 18% today.  

GDP  projections  mirror  the  joint  work  of  DG  ECFIN  and  the  Economic  Policy  Committee, 
presented in the 2015 Ageing Report98. The average EU GDP growth rate is projected to remain 
relatively low at 1.2% per year for 2010-2020, down from 1.9% per year during 1995-2010. In 
the medium to long term, higher expected growth rates (1.4% per year for 2020-2030 and 1.5% 
per  year  for  2030-2050)  are  taking  account  of  the  catching  up  potential  of  countries  with 
relatively low GDP per capita, assuming convergence to a total factor productivity growth rate of 
1% in the long run. 

Sectoral  activity  projections  are  derived  in  a  consistent  way  from  these  macroeconomic 
assumptions,  using  the  macro-economic  modelling  tool  GEM  E3  as  well  as  econometric 
estimates for global demand for energy intensive industries.  

Fossil fuel price assumptions 

Oil prices have fallen by more than 70% since mid-2014, reaching 35 $/barrel for Brent crude oil 
at  the  end  of  February  2016.    The  collapse  of  oil  prices  has  been  driven  by  low  demand  and 
sustained oversupply, due in particular to tight oil from North America and to the decision of the 
Organization  of  Petroleum  Exporting  Countries  (OPEC)  countries  not  to  cut  their  output  to 
rebalance the market. REF2016 considers a gradual adjustment process with reduced investments 
in  upstream  productive  capacities  by  non-OPEC  countries.  Quota  discipline  is  assumed  to 
gradually  improve  among  OPEC  members.  Thus,  oil  price  is  projected  to  reach  87  $/barrel  in 
2020 (in year 2013-prices). Beyond 2020, as a result of persistent demand growth in non-OECD 
countries  driven  by  economic  growth  and  the  increasing  number  of  passenger  cars,  oil  price 
would  rise  to  113  $/barrel  by  2030  and  130  $/barrel  by  2050.  This  price  trend  resulting  from 

97  
98  
for the EU28 Member States (2013-2060), European Economy 3/2015 

https://ec.europa.eu/energy/en/statistics/energy-trends-2050  
European Commission/ DG ECFIN (2015): The 2015 Ageing Report: Economic and budgetary projections 

24 

 
                                                 
PROMETHEUS  modelling is in  line with  other reference sources  such as  the 2015 IEA  World 
Energy Outlook. 

For the assessment of policy scenarios  for this impact assessment no specific sensitivities  were 
prepared with respect to oil and gas price developments. Still, it can be recalled that lower fossil 
fuel price assumptions tend to decrease energy system costs and to increase energy consumption 
and CO2 emissions not covered by the ETS. The magnitude of the change would depend on the 
price elasticity and on the share of taxation, like excise duties, in consumer prices. Conversely, 
costs for emission mitigation could slightly increase. For transport, the changes would be limited 
(depending on the magnitude of the change in the oil price) due to the high share of excise duties 
in the consumer prices but they are still expected to lead to some higher energy consumption and 
CO2  emissions.  Different  fossil  price  assumptions  are  however  unlikely  to  lead  to  significantly 
different  impacts  across  Member  States,  which  is  important  when  discussing  target  setting  for 
instance in the context of cost efficiency concerns within the group of Member States with a GDP 
per capita above EU average. 

Technoeconomic assumptions 

In  terms  of  technological  developments,  input  assumptions  are  based  on  a  wide  range  of 
sources99,  with  estimates  on  technological  costs  across  main  types  of  energy  equipment,  from 
power  generation  to  heating  systems  and  appliances.  In  addition,  it  should  be  recalled  that  the 
PRIMES  model  (and  other  models  where  relevant)  take  into  account  technological  progress, 
based on economies of scale effects and learning-by-doing.  

In terms of technological developments relevant to the transport sector, battery costs for electric 
vehicles  and  plug-in  hybrids  are  assumed  to  go  down  to  320-360  $/kWh  by  2030  and  270-295 
$/kWh  by  2050;  further  improvements  in  the  efficiency  of  both  spark  ignition  gasoline  and 
compression ignition diesel are assumed to  take place. In  addition, the market share of internal 
combustion  engine  (ICE)  electric  hybrids  is  expected  to  increase  due  to  their  lower  fuel 
consumption compared to conventional ICE vehicles. 

For  the  techno-economic  assumptions  in  the  projection  of  non-CO2  GHG  emissions,  see  the 
detailed technical documentation100. In general, technological progress in this domain is strongly 
linked to regulation; hence Reference scenario assumptions are conservative. 

Technology  assumptions  are  based  on  extensive  literature  review  and  have  been  peer-reviewed 
by the Commission services, notably the Joint Research Centre of the European Commission.  

Specific policy assumptions 

99  
Those  include,  among  others,  the  European  Commission  Joint  Research  Centre,  notably  for  power 
generation costs or identification of Best Available Technologies, or MURE, ICARUS or ODYSSEE for the demand 
sectors.  
100  Höglund-Isaksson,  L.,  W.  Winiwarter,  P.  Purohit,  A.  Gomez-Sanabria  (2016):  Non-CO2  greenhouse  gas 
emissions  in  the  EU-28  from  2005  to  2050:  GAINS  2016  Reference  scenario,  International  Institute  for  Applied 
Systems Analysis (IIASA). 

25 

 
                                                 
Following  the  above  described  policy  modelling  approach,  the  key  policies  included  in  the 
REF2016 relevant for this impact assessment are101:  

  The  Effort  Sharing  Decision  (406/2009/EC)  is  assumed  to  be  implemented,  i.e.  ESD  GHG 
emission reductions at EU level in 2020 need to reach at least -10% compared to 2005 levels. 
It turned out that no specific policy incentives in addition to adopted EU and national policies 
were  needed  to  achieve  the  EU  level  target.  National  ESD  targets  need  not  be  achieved 
domestically given the existing flexibilities (e.g. transfers between Member States). 

  The  EU  Emissions  Trading  System  (Directive  2003/87/EC  and  its  amendments)  is  fully 
reflected  in  the  modelling,  including  the  linear  reduction  factor  of  1.74%  for  stationary 
installations and the recently adopted Market Stability Reserve102  

  The  Energy  Efficiency  Directive  (EED)  and  the  Energy  Performance  of  Buildings  Directive 
(EPBD) are reflected, including Member States' specific obligations as regards energy savings 
obligation and buildings codes. 

  Ecodesign and Energy Labelling Directives and Regulations are also reflected.   

  CO2  standards  for  cars  and  vans  regulations  (Regulation  (EC)  No  443/2009,  amended  by 
Regulation EU No 333/2014 and Regulation (EU) No 510/2011, amended by Regulation EU 
253/2014);  CO2  standards  for  cars  are  assumed  to  be  95gCO2/km  as  of  2021  and  for  vans 
147gCO2/km in line with current legislation. Standards are assumed constant after 2020/2021. 

  The  Renewable  Energy  Directive  (Directive  2009/28/EC)  and  Fuel  Quality  Directive 
(Directive 2009/30/EC) including ILUC amendment (Directive (EU) 2015/1513): achievement 
of the legally binding RES target for  2020 (including  10% RES in  transport target) for each 
MS, taking into account the use of flexibility mechanisms when relevant as well as of the cap 
on the amount of food or feed based biofuels (7%). Member States' specific renewable energy 
policies for the heating and cooling sector are also reflected where relevant.  

  Directive on the deployment of alternative fuels infrastructure (Directive 2009/30/EC) 

  The  Waste  Management  Framework  Directive  (Directive  2008/98/EC)  and  in  particular  the 
Landfill  Directive  (Directive  1999/31/EC)  which  contribute  to  a  significant  reduction  of 
emissions from waste. 

  The  revised  F-gas  Regulation  (Regulation  517/2014)  strengthens  existing  measures  and 
introduces  a  number  of  far-reaching  changes,  notably  limiting  the  total  amount  of  the  most 
important F-gases that can be sold in the EU from 2015 onwards and phasing them down in 
steps to one-fifth of 2014 sales in 2030, and banning the use of F-gases in many new types of 
equipment where less harmful alternatives are widely available.  

  The impacts of the Reforms of the Common Agricultural Policy are taken into account,  e.g. 

the milk quota abolition. 

101 For a more comprehensive discussion see the Reference scenario report 
102 Decision EU) 2015/1814 concerning the establishment and operation of a market stability reserve for the Union 

greenhouse gas emission trading scheme and amending Directive 2003/87/EC 

26 

 
                                                 
Relevant  national  policies,  for  instance  on  the  promotion  of  renewable  energy,  on  fuel  and 
vehicle taxation or national building codes, are taken into account.  

Summary of main results103 

Non-CO2 emissions and their share in agriculture 

Non-CO2  emissions  (CH4,  N2O  and  F-Gases),  account  currently  (2013)  for  18%  of  total  EU 
GHG emissions (excluding LULUCF).  They have decreased significantly (32%) between 1990 
and  2013.  They  are  expected  to  further  decrease  by  29%  below  2005  levels  in  2030,  and  to 
stagnate later on. CH4 emissions – which have the largest share in this aggregate - are projected 
to decrease above average (33% due to declining trends in fossil fuel production, improvements 
in  gas  distribution  and  waste  management)  and  N2O  emissions  fall  below  average  (17%)  until 
2030,  both  remaining  flat  thereafter.  F-Gases  would  reduce  by  half  between  2005  and  2030, 
largely driven by EU and Member State's policies (i.e. the 2014 F-gas regulation and mobile air 
conditioning  directive);  F-gases  would  increase  somewhat  between  2030  and  2050  in  line  with 
economic  developments.  Except  for  a  very  minor  fraction  from  some  specific  industries,  non-
CO2 emissions fall under the ESD. 

Figure 10: Non CO2 GHG emissions 

.

q
e
2

O
C
t

M

1000

900

800

700

600

500

400

300

200

100

0

Other

AC & refrigeration

Wastewater

Waste

Industry

Energy

Agriculture

5
0
0
2

0
1
0
2

5
1
0
2

0
2
0
2

5
2
0
2

0
3
0
2

5
3
0
2

0
4
0
2

5
4
0
2

0
5
0
2

Source: GAINS 

The sectoral non-CO2 emission trends and their drivers vary per sector:  

Agriculture is responsible for about half of all non-CO2 emissions and is expected to increase its 
share  in  total  non-CO2  until  2030.  While  the  agricultural  non-CO2  emissions  have  reduced  by 

103 For a summary of main results for all sectors, please see ESD IA Annex 8.4. 

27 

 
 
 
                                                 
 
 
 
22% between 1990 and 2013, they are projected to roughly stabilize at current levels as a result of 
different trends which compensate each other, such as decreasing herd sizes (both of dairy cows 
and  of  non-dairy  cattle)  but  increasing  milk  yields.  Slightly  reduced  use  of  mineral  fertilizer 
through improved efficiency (2% less in 2030 than in 2005) leads to corresponding reductions in 
N2O emissions from soils. Improved manure management (e.g. through anaerobic digestion) also 
delivers  minor  emission  reductions.  The  Common  Agricultural  Policy  influences  livestock 
numbers/intensities and the Nitrogen Directive and the Water Framework Directive impact on the 
use of fertilizer.  

Summary of findings for LULUCF 

The EU28 Land Use Land Use Change and Forestry (LULUCF) sector is at present a net carbon 
sink which has been sequestering annually around -345 Mt CO2 over the past decade according to 
the UNFCCC inventory data104. In the Reference scenario 2016, the LULUCF sink is expected to 
decline  in  the  future  to  -288  Mt  CO2  eq  in  2030  from  -299  Mt  CO2  eq.  in  2005  and  decreases 
further  after  2030.  This  decline  is  driven  partly  by  the  increase  in  timber  demand  (partially  a 
result  of  the  increase  in  bioenergy  demand  that  is  expected  in  order  to  reach  the  Renewable 
Energy targets in 2020. It is the result of changes in different land use activities of which changes 
in  the  forest  sector  are  the  most  important.  Figure  11  shows  the  projection  of  the  total  EU28 
LULUCF  sink  in  the  Reference  scenario  2016  and  the  contribution  from  different  land  use 
activities.  

At present, the carbon sink in managed forests (-373 Mt CO2 eq. in 2010), without applying any 
accounting  rules,  is  the  main  contributor  to  the  LULUCF  sink.  The  forest  management  sink  is 
driven  by  the  balance  of  forest  harvest  and  forest  increment  rates  (accumulation  of  carbon  in 
forest  biomass  as  a  result  of  growth  of  the  trees  with  the  age).  Forest  harvest  is  projected  to 
increase  over  time  from  516  million  m3  in  2005  to  565  million  m3  in  2030  due  to  growing 
demand for wood for material uses and energy production. As a consequence, the carbon sink in 
managed forests declines by 32% until 2030. This decline in the managed forests carbon sink is 
partially compensated by a rising carbon sink from afforestation and decreasing emissions from 
deforestation.  Increasing  demand  for  biomass  drives  wood  prices  up  which  results  in  increased 
income  of  forest  owners  which  reduce  deforestation  to  maintain  forest  area.  Consequently, 
emissions  from  deforestation  continue  to  decline,  in  line  with  past  trends,  from  63  Mt  CO2  in 
2005 to 20 Mt CO2 eq. in 2030. Carbon sequestration from afforested areas increases steadily to 
99 Mt CO2 eq. by 2030, as new forests are continuously, though at slower rate, being established. 
In  addition,  young  forests  that  were  established  over  the  last  20  years  get  into  a  phase  of  high 
biomass production. 

Activities in the agricultural sector (cropland and grassland) have a smaller impact on the total 
LULUCF  sink  compared  to  the  forest  sector.  Still,  net  carbon  emissions  from  cropland  are 
projected  to  decline  by  some  18%  by  2030  compared  to  2005  as  soils  converge  towards  soil 
carbon  equilibrium  over  time.  In  addition,  perennial  crops  (miscanthus,  switchgrass  and  short 
rotation  coppice)  that  typically  sequester  additional  carbon  in  soil  and  biomass  contribute  to 
decreasing  cropland  emissions.  By  2030,  0.9  Mha  of  perennial  crops  are  expected  to  be 

104 http://www.unfccc.int 

28 

 
                                                 
cultivated.  The  grassland  sink  increases  by  50%    (from  2005)  in  2030  and  stabilizes  at  -19  Mt 
CO2  eq.  thereafter  as  land  continues  to  be  converted  to  grassland  e.g.  through  cropland 
abandonment. 

Figure 11: Development of the EU28 emissions/removals in the LULUCF sector in Mt CO2 
until 2050 

Source: GLOBIOM-G4M 

29 

 
 
 
 
ANNEX 5: ACCOUNTING RULES  

Introduction 

It  is  widely  acknowledged  that  reporting  and  accounting  for  emissions  and  removals  in  the 
LULUCF sector needs to be done carefully. This is a direct consequence of dealing with   natural 
greenhouse  gas  cycles,  which  are  more  difficult  to  measure  than  e.g.  emissions  from  industrial 
installations. 

CO2 emissions and removals in LULUCF mainly originate from gains and losses in the so-called 
LULUCF  pools  (living  biomass,  soil  organic  carbon  etc.),  belonging  to  different  land  cover 
categories (such as forest land, cropland, grassland etc.)  At the same time, agricultural practices 
on farms, such as burning of crop residues, fertilizer application, rice cultivation, and emissions 
related to livestock (enteric fermentation and manure management) mainly produce methane and 
nitrous oxide emissions. These belong to the category "agriculture".  

Figure Annex 5.1. Illustration of land uses that result in emissions and removals 

Source: own presentation, based on Iversen P., Lee D., and Rocha M., (2014) Understanding Land Use in 
the UNFCCC 

30 

 
 
 
 
As explained in Chapter 1 of this Impact Assessment, a key distinction needs to be made between 
"reported"  and  "accounted"  emissions  and  removals  in  LULUCF.  Contrary  to  other  sectors 
covered  by  the  ETS  and  the  ESD,  LULUCF  emissions  and  removals  are  subject  to  a  set  of 
accounting rules before they can be used towards compliance with targets. The main justification 
for the accounting approach in LULUCF is that a significant part of the removals associated with 
carbon  stocks  in  forests  and  soils  is  the  result  of  the  natural  greenhouse  gas  cycle.  While 
reporting concerns an inventory of all emissions and removals, accounting aims to identify those 
which are human induced and the result of additional action.  

As  illustrated  by  Figure  5.2,  the  result  of  this  distinction  between  "reported"  and  "accounted" 
emissions/removals leads to considerable difference when assessing performance with targets. In 
the Kyoto Protocol's first commitment period (2008-2012), for instance, the "reported" sink in the 
EU  remained  relatively  stable  at  around  300  Mt  CO2  a  year,  while  the  average  annual  level  of 
105, or just 
removals that could be used for accounting purposes was much smaller, i.e. 75 Mt CO2
1.6% of the average of EU total emissions in the same period.106   

Figure  Annex  5.2:  EU28  emissions  and  removals  in  LULUCF  1990-2012.  Reported  values 
are  represented  as  coloured  lines,  with  emissions  as  positive  and  removals  as  negative 
values; accounted values in the first commitment period (CP1) are shown as a green "box". 

Source: UNFCCC inventories, JRC compilation 

These accounting rules have evolved historically in the international negotiations under the logic 
of the Kyoto Protocol. The first set of these rules for the first commitment period (2008-2012) of 

Source: JRC 
http://www.eea.europa.eu/data-and-maps/data/data-viewers/greenhouse-gases-viewer 

105  
106  

31 

 
 
 
 
                                                 
the  Kyoto  Protocol  were  finalised  among  international  partners  in  2001,  formally  adopted  in 
2005.  Based  upon  this  experience,  a  set  of  improved  methodologies,  valid  for  the  second 
commitment  period  of  the  Kyoto  Protocol,  was  adopted  at  the  Durban  climate  conference  in 
2011. Rules  rely  heavily on  methodologies  developed under the aegis of the Intergovernmental 
Panel on Climate Change (IPCC). EU Member States have agreed to these accounting rules and 
they  have  been  transposed  into  EU  domestic  legislation  with  the  adoption  of  the  so-called 
"LULUCF decision" (529/2013). 

In addition and in order to comply with the reporting requirements agreed under  UNFCCC and 
the KP, rules for reporting LULUCF emissions and removals were set by Regulation 525/2013 on 
“A  Mechanism  for  Monitoring  and  Reporting  greenhouse  gas  emissions  (MMR)107.  Annual 
greenhouse gas inventories on emissions and removals by sinks need to be submitted both under 
the UNFCCC (Article 7 c) and under the Kyoto Protocol (Article 7d).  

The  second  commitment  period  of  the  Kyoto  Protocol  will  end  in  2020.  An  international 
agreement  on  the  post-2020  international  climate  framework  was  adopted  at  the  UN  climate 
conference in December 2015 (Paris Agreement). International principles and methods on how to 
include the associated emissions and removals in the post-2020 period will have to be discussed 
among  the  Parties  as  a  follow-up  to  Paris.    It  is  important  to  take  note  that  there  will  be  no 
obligation  to  continue  with  the  international  rules  on  LULUCF  defined  for  the  second 
commitment  period  of  the  Kyoto  Protocol.  Instead,  the  future  UNFCCC  system  governing 
emissions and removals from LULUCF will likely allow for larger heterogeneity in applied rules 
after 2020.108  

The principles behind the LULUCF accounting regime under the Kyoto Protocol endeavoured to 
respond to concerns that the use of LULUCF activities could undermine environmental integrity 
of  Parties'  reduction  commitments.  The  LULUCF  principles  agreed  under  the  KP  therefore 
underscore the need for sound science and consistent methodologies, as well as the importance of 
conserving biodiversity. They also specify that naturally-occurring removals, including those as a 
consequence of indirect anthropogenic effects, should be excluded from the system and that any 
re-release of greenhouse gases (e.g. through forest fires) must be promptly reported.   

In principle, the accounting rules to be applied post-2020 should a) build on rules already agreed 
with Member States in the domestic LULUCF Decision, b) be fit for purpose in the period 2021 
to  2030  (and  beyond),  and  c)  ensure  no  backsliding  in  terms  of  environmental  integrity,  i.e. 
protect existing sinks and reservoirs, and develop additional mitigation potential, at least as well 
as in previous periods.   

Consequently, reasonable scope exists for the EU to define, in accordance with its international 
statements  contained  in  the  INDC  of  March  2015,  the  accounting  LULUCF  framework  for  the 
foreseeable future. The main improvements evaluated in the Impact Assessment are: 

107  
This  Annex  of  the  impact  assessment  primarily  deals  with  the  changes  foreseen  for  accounting  rules, 
whereas possible changes to the MMR are not within the scope of the assessment. They will be addressed, at a later 
stage and together with the other non-ETS sectors, during the revision of the MMR for the post-2020 period. 
108 ICF/COWI study report 

32 

 
                                                 
  Move  to  an  accounting  system  based  upon  UNFCCC  reporting,  with  a  specific  option  for  land 

category transition period for afforested lands (30yrs instead of 20yrs) 
  Updating of the 1990 base year, to the 2005-7 period, for agricultural lands; 
  Replacement  of  the  Kyoto  Protocol  governance  and  common  approach  for  setting  Forest 

Reference Levels. 

The  impacts  of  these  changes  are  analysed  in  Chapter  5  of  the  IA.  Additionally,  this  Annex 
includes  

  More detailed explanations related to the changes outlined in Chapter 5, namely on moving to 

land-based accounting and on forest management accounting; 

  Additional  information  on  accounting  issues  which  require  only  modest  if  any  changes  at  all 
compared to the current LULUCF decision, in particular regarding the cap on forest management 
credits and the treatment of Harvested Wood Products. 

Moving to a land-based accounting regime  

Under  the  current  international  climate  regime  information  related  to  emissions  and  removals 
from LULUCF may come from two sources:  

1) all parties have to provide information under the Convention and based on a Common 
Reporting Format (CRF);   

2) In addition, Parties under the Kyoto Protocol have to provide information on accounted 
emissions and removals for LULUCF (see Figure 5.3).  

UNFCCC  reporting  for  LULUCF  is  organized  by  land  use  categories  instead  of  activities  (on 
land) which are used as the reporting base under the KP. Activities and land use categories are 
similar but not directly equivalent. While an activity refers to the action associated with land use 
(for example, managing a forest, making wood products), a land category relates to the land cover 
(forest land). Land categories are therefore more readily identifiable, for example through remote 
sensing or earth observation, and mapping (for example, the extent of an arable field), whereas 
activities are usually reported in tabular statistics (hectares of cereals and production per year). 

Because  reporting  under  the  Convention  and  accounting  under  the  Kyoto  Protocol  is  based  on 
different elements, EU Member States currently have a high administrative burden in maintaining 
two parallel reporting systems. As the Kyoto Protocol will not continue beyond 2020, this double 
reporting could be eliminated. Most international parties use the land based categories under the 
Convention only; indeed it is the starting point already for some Member States. Moving to this 
system would make EU reporting more comparable with what other Parties do, and be simpler. 
However, as shown in Figure 5.3 it would require that accounting rules currently only applied to 
the activities under the KP are put as a layer on top of the reported figures under the Convention. 
If the EU moves to land based accounting in the post 2020 world, the columns on the right hand 
side of Figure 5.3. would become obsolete.  

33 

 
 
Figure  Annex  5.3:  Reporting  and  accounting  under  Kyoto  Protocol  and  the  UN  Climate 
Change Convention (UNFCCC) 

UNFCCC 

Kyoto Protocol/Decision 529/2013 

Reporting 

Land Use Categories 
(CRF Tables) 
e.g. "Forest Land remaining Forest 
Land" 

ACTIVITIES, e.g. 
-  Forest Management 
-  Afforestation, deforestation, reforestation 
-  Grassland and Cropland management 

Accounting 

LAND USE CATEGORIES 

AS BASIS FOR 

ACCOUNTING RULES 

Accounting rules defining  
      -      (mandatory) coverage, 

- 
- 

- 

benchmark for each activity 
rules for accounting emissions related 
to natural disturbances 
cap on forest credits etc. 

Emissions from land are strongly triggered by changes between one land category and another. 
Under  the  KP,  these  "land  use  changes"  are  part  of  the  relevant  activity;  under  the  UNFCCC 
reporting framework, they are specifically categorised, mostly as land transition categories (e.g. 
grassland  converted  to  cropland,  for  example),  except  for  Harvested  Wood  Products  and 
Revegetation.  

Table  5.4  illustrates  how  reported  activities  under  KP  correspond  to  land  categories  used  for 
reporting under the Convention. There are some differences between the systems. For example, if 
land is converted to another land use category, such as cropland converted to forest land, the land 
will  remain  in  this  transition  land  use  change  category  for  20  years  before  it  is  moved  to  the 
stable category forest land remaining forest land. This means that afforestation that took place in 
1990-1993 will in 2014 be reported as forest land remaining forest land, while under the Kyoto 
Protocol it would still be under (Article) 3.3 Afforestation. By analogy, conversions from Forest 
Land  to  other  categories  (under  the  Kyoto  Protocol,  Deforestation)  would  also  transition  in  the 
same 20 year cycle.  

Another example is that in order to correctly reflect KP accounting of cropland emissions, land 
use  change  categories  from  cropland  (for  example  to  settlements)  need  to  be  included. 
Consequently, the accounting framework on the UNFCCC reporting categories needs to include 
some categories linked to Settlements (cropland to wetlands, settlements, and other land). 

34 

 
 
 
 
 
Table Annex 5.4: correspondence of UNFCCC and KP categories 

Source: Understanding Land Use in the UNFCCC, Iverson et al 2014. Table 9 

To apply UNFCCC categories in the EU LULUCF framework, the correspondence table needs to 
be translated into the following nomenclature: 

'Afforested  land'  means  land-use  reported  as  categories  Cropland,  Grassland,  Wetlands, 
Settlements, and Other land converted to Forest Land. 

'Deforested  land'  means  land  use  reported  as  categories  Forest  Land  converted  to 
Cropland, Grassland, Wetlands, Settlements, and Other land.  

'Managed Forest Land'' means land use reported as the category Forest Land Remaining 
Forest Land, plus Harvested Wood Products.  

'Managed Cropland' means land use reported as categories Cropland Remaining Cropland 
and  Grassland,  Wetlands,  Settlements,  Other  Land  converted  to  Cropland  and  Cropland 
converted to Wetlands, Settlements and Other Land 

'Managed  Grassland'  means  land  use  reported  as  categories  Grassland  Remaining 
Grassland  and  Cropland,  Wetlands,  Settlements,  Other  land  converted  to  Grassland  and 
Grassland converted to Wetlands, Settlements and Other Land. 

'Settlements' means land use reported as categories Settlements remaining Settlements and 
Wetlands, Other Land converted to Settlements.  

'Other  Land'  means  land  use  reported  as  categories  Other  Land  remaining  Other  Land, 
Wetlands converted to Other Land, Settlements. 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

(7) 

35 

 
 
(8) 

'Managed Wetlands' means land use reported as categories Wetlands Remaining Wetlands 
and Settlements, Other Land converted to Wetlands. 

Table Annex 5.5: Correspondence between UNFCCC land use categories and KP activities, 
along with the accounting approach applied  

Legend / colour coding: 

Land accounting category 
Deforested Land 
Afforested Land 
Managed Forest Land 
Managed Cropland 
Managed Grassland 
Others, if elected 

Principle 
KP2 gross-net, 20yr transition 
KP2 gross-net, optional 20 or 30yr transition  
Against Forest Reference Levels (FRL, post-2020 method) 
net-net cf. 2005-2007 avg, transitions 20yrs 
net-net cf. 2005-2007 avg, transitions 20yrs 
net-net cf. 2005-2007 avg, transitions 20yrs 

Conclusion:  Moving  to  UNFCCC  land-based  accounting  would  result  in  administrative 
simplification for Member States, eliminating parallel reporting systems. Under current rules, the 
reporting and accounting obligations under the Kyoto Protocol follow an activity-based approach 
and exist in parallel with the reporting obligations for all developed countries (including Parties 
that are not signatories of the KP) under the UNFCCC, which follow a land-use based approach. 
Small,  but  significant  differences  in  the  approaches  make  the  conversion  between  the  two 
systems  complex.  By  eliminating  the  Kyoto  reporting  obligation,  only  one  reporting  system 
would need to be managed by Member States and reviewed by the Commission 

Box Annex 5.1: The wetland land category and the special case of peatlands 

Peatlands are hotspots of carbon capture and storage in natural landscapes, with a carbon density 
(in MtCO2e/ha) far higher than any other ecosystem.  Drained and degraded peatlands make up 
about  90%  of  soil  emissions  in  the  EU,  although  peatlands  only  occupy  6%  of  the  total 
agricultural  area.  EU  Emissions  from  drained  or  degraded  wetland  themselves  are  about 
15MtCO2/y, and stable since 1990. The bulk of wetland emissions are accounted under forest, 
grassland or cropland established on formerly drained wetland. The latter categories remain 
mandatory  under  EU  GHG  reporting  and  accounting,  since  conversion  to  wetland  from 
agriculture  and  forestry  were  already  accounted  for  under  respective  Kyoto  activities.  MSs  can 
also  chose  to  elect  e.g.  rewetting  of  drained  and  degraded  peatlands,  or  their  conversion  to 
settlements, as optional land use categories to be accounted relative to a 2005-2007 base period. 

36 

To:From:Forest Land FLFL-FLFL-CLFL-GLFL-WLFL-SLFL-OLCropland CLCL-FLCL-CLCL-GLCL-WLCL-SLCL-OLGrassland GLGL-FLGL-CLGL-GLGL-WLGL-SLGL-OLWetlands WLWL-FLWL-CLWL-GLWL-WLWL-SLWL-OLSettlements SLSL-FLSL-CLSL-GLSL-WLSL-SLSL-OLOther land OLOL-FLOL-CLOL-GLOL-WLOL-SLOL-OLWetlands WL1. Converting KP rules to UNFCC reporting baseOther land OLForest Land FLCropland CLGrassland GLSettlements SL 
 
 
Accounting approaches for forests 

Accounting  rules  are  frequently  described  using  two  terms  with  major  differences  in  the 
accounted result for different actions.  

The  Gross-net  approach  includes  in  the  accounts  the  full  sink  (or  source)  in  the  commitment 
period, with no comparison to a base year or reference. Note that this "gross" can in fact be a sum 
of emission and removals (which is the component referred to as "net"), for example the balance 
between land planted with trees, and deforested land. Since it is not a ratio, it must of course be 
an  absolute  result  (e.g.  tonnes).  Gross-Net  accounts  deliver  a  result  that  is  equal  to  all  net 
removals during the commitment period, or a in the figure below. Nevertheless, the additionality 
and incentives of "gross-net accounting" were subject to much criticism; during the preparation 
of the Durban Decision, there was general agreement on the need for improvement.   

By  contrast  the  Net-net  approach  would  compare  the  net  sink  (or  source)  in  the  commitment 
period with the corresponding same type of sink (or source) in a base year (or base period), for 
example  between  2001  and  2005.  The  numbers  compared  are  absolute  (i.e.  a  comparison  of 
change in flux, in tonnes) but the result can also be expressed as a ratio or percentage reduction 
(or  increase).  The  accounted  mitigation  is  computed  as  the  difference  between  the  removals 
during commitment period and the net removals in 1990 or c in the figure below. The reference 
may be a specific year, or the average of a period. 

Reference  levels  therefore  emerged  as  a  compromise  solution  between  gross-net  and  net-net 
accounting.  Based  on  feedback  in  the  stakeholder  consultation,  there  is  a  strong  rationale  for 
transparency  and 
continuing 
comparability across Member States' FRL. 

in  the  post-2020  period,  while 

this  approach 

improving 

Figure Annex 5.3: Illustration of the gross-net (a) and net-net/FRL accounting approaches 

Accounting for forestry and harvested wood products based on reference levels  

Kyoto  rules  permit  the  accounting  of  emissions  or  removals  from  forest  management  against 
projected forest reference levels, to exclude legacy management effects and other natural factors 
from  accounts.  The  actual  mitigation  performance  in  the  sector  is  compared  to  a  nationally 
determined forest reference  level. A Member State specific reference level for 2013-2020 is an 

37 

 
 
estimate of future removals or emissions. Some are based upon historic trends, others took policy 
implementation  into  account,  for  instance  harvest  rates.  Enhanced  (or  reduced)  mitigation  is 
calculated based on whether the actual performance in the sector differs from the reference level. 

The  Kyoto  Protocol  granted  a  significant  degree  of  choice  in  how  these  forward-looking 
estimates are calculated. Indeed the approaches applied by EU Member States varied to a great 
extent.  

Applicable  guidance109  for 
considerations: 

this  exercise  carried  out 

in  2011 

included 

the  following 

a)  Continuity with the treatment of forest management in previous commitment periods; 

b)  Contributing to biodiversity and sustainable use of natural resources; 

c)  Disclosure and limitation of assumptions on the future impact of past policies, defined as 

being implemented no later than December 2009; 

d)  Consistency over time with greenhouse gas inventories and relevant historical data; 

e)  Exclusion  of  certain  pools,  gases  or  removals  under  specific  conditions  (e.g.  resulting 

from elevated carbon dioxide concentrations or nitrogen deposition); 

f)  Provision of transparent, complete, consistent, comparable and accurate information. 

In  May  2011,  the  reference  levels  submitted  by  Kyoto  Protocol,  Parties  were  subject  to  a 
UNFCCC technical assessment in order to: 

•  Assess  whether  Parties  provided  transparent,  complete,  consistent,  comparable  and 

accurate information on the agreed elements; 

•  Assess whether the FMRL is consistent with the information provided; 

•  Provide technical recommendations to the Party. 

Under  existing  EU  legislation,  updated  reference  levels  for  forest  management  for  the  next 
accounting period shall be submitted no later than 31 Dec 2019 and comply  inter alia with the 
following:  

  exclude  the  effects  of  natural  and  country-specific  characteristics  (e.g.  legacy  in  forest  age-

 

structure); 
shall be identical to "those established by acts approved by the bodies of the UNFCCC or, in the 
absence of such acts, be calculated in accordance with the processes and methodologies set out 
in relevant UNFCCC decisions or agreements deriving from or succeeding them". 

Decision No 529/2013/EU assumed the supervision of the UNFCCC in revising reference levels. 
However, with the enactment of Nationally Determined Contributions and facilitative stocktakes 

109   UNFCCC Decision 2/CMP.6 

38 

 
 
                                                 
under the Paris Agreement, the process between 2020 and 2030 will not be the same as under the 
Kyoto Protocol anymore. 

Strengths and weaknesses of the reference level approach 

The approach seeks to accurately reflect the GHG emissions and removals from forest land ("as 
seen  from  the  atmosphere")  while  at  the  same  time  optimising  the  balance  and  flexibility 
between: 

 

Incentivizing  the  conservation  of  healthy  forest  stocks  and  future  growth  potential  (i.e. 
carbon sequestration in EU forests and soils) and their enhancement, 

  Sustainably  maximising  forest  productivity  (HWP  and  bioenergy)  as  an  alternative  to 
other  emission  and/or  imported  sources,  thereby  promoting  substitution  and  preventing 
unintended displacement/leakage effects, 

  Factoring  out  random  or  legacy  effects  such  as  age  class  structure  and  natural 
disturbances  (deemed  beyond  the  control  of  Member  States),  while  encouraging 
preventive  action  (e.g.  fire  prevention)  and  long  term  management  (e.g.  selection  of 
resilient tree species) in the face of emerging climate change impacts in EU forestry. 

In  addition,  the  long  term  goal  set  out  in  the  Paris  Agreement  aspires  to  achieve  a  balance 
between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the 
second  half  of  this  century.  This  aspirational  goal  specifically  concerns  global  forests  as  the 
major terrestrial sink. The RL approach can be consistent with these interdependent goals: 

 

 

 

It  addresses  additionality  and  incentives,  as  it  should  only  reward  mitigation  efforts 
beyond "business as usual", 

It addresses national circumstances (natural bio-geographic potential, effects of past forest 
management on forest ecosystems, etc.),  

It  can  help  outlining  intended  (medium/long  term)  forest  pathways,  beyond  relatively-
short commitment periods, consistent with long term goals. 

The environmental integrity and overall credibility of the approach, however, hinges on RL being 
a  correct  reflection  of  continued  "business  as  usual"  in  forestry  and  downstream  uses  of  forest 
products.  UNFCCC  technical  assessments  have  brought  to  light  a  diversity  of  approaches  in 
setting RL, which hindered comparability across Parties.  

Early experience from forest management reference levels in the 2nd commitment period  

Nearly  five  years  have  passed  since  the  projected  forest  reference  levels  for  the  EU  Member 
States for the period 2013 to 2020 were set. Inventory data under the second commitment period 
of  the  Kyoto  Protocol  is  still  only  complete  for  two  (2013,  2014)  out  of  eight  years.  From  a 
preliminary  assessment,  it  seems  that  there  is  a  significant  gap  between  the  projected  forest 
harvest  values  and  reported  data.  The  2016  Reference  projection,  as  well  as  early  results  from 
LULUCF inventories for the period 2011-2014 (Figure 5.12 and Figure 5.13), indicate notably 
lower  harvest  rates  than  expected  under  BAU.  The  earlier  expected  decrease  in  the  reported 
39 

 
forest  sink  does  not  yet  appear.  This  preliminary  assessment  suggests  that  for  the  EU28,  the 
reported  forest  management  sink  in  2013-2014  would  be  approximately  120  MtCO2/yr  greater 
than the reference level.110 

Figure  5.12:  Comparison  of  aggregated  gross  removals  1990-2013  in  EU  forest  land  sink 
(green line)  as  reported  by  Member  States in  2015  inventories,  the aggregate EU28  forest 
management  reference  level  (blue  line),  and  the  model  output  (red  line  2010-2020)  and 
historical data (red line 1990-2009) for Forest Management 

Source: UNFCCC inventories and EUCLIMIT modelling 

Figure 5.13 shows the same tendency from the point of view of harvest data, comparing EU-28 
forest harvest rates from different data sources. It should be noted, however, that there is still a 
possibility for a change in harvest data in the remaining years of the second commitment period.  

110   As  Croatia  was  not  yet  a  member  of  the  EU  in  2011,  it  is  not  included  in  some  of  the  aggregate  EU  FMRL 
calculations. Also note that these are reported values; accounted values are likely to be smaller as a result of the 
FM cap on credit generation.  

40 

 
 
 
 
                                                 
Figure  5.13:  Comparison  of  EU-28  forest  harvest  rates  (historical  and  projected)  from  
FAOSTAT (blue line) and from UNFCCC submission of forest management reference level 
(red line; FMRL), 2000-2020 

Source: FAOSTAT interpreted by JRC 

During the 2011 exercise for setting projected forest management reference levels, EU Member 
States followed two different routes:  

  14  Member  States)  had  their  reference  level  modelled  by  the  European  Commission  and  the 

Joint Research Centre, while  

  13  Member  States  modelled  the  reference  levels  on  their  own.  Table  Annex  5.7  shows  the 
difference observed so far regarding the assumed and observed harvest rates in the two groups. 
Altogether,  Member  States  which  modeled  FMRL  on  their  own  predicted  a  higher  increase  of 
harvest, and indeed increased harvest more (though not to the extent expected). 

As far as can be observed – and though consistency of reported data may improve towards 2020 -  
Table 5.7 shows that the harvest levels submitted in 2011 for 27 Member States are so far about 9 
percentage points (i.e. difference between 114% and 105%) higher than reported forest harvest. 
According  to  the  sensitivity  analysis  presented  in  Section  1.4.4,  (Table  4)  a  corresponding 
increase in accounted  forest  sink  of some 30 to 35MtCO2eq per year  may occur,  leaving aside 
HWP and possible technical corrections. 

41 

0(cid:9)100(cid:9)200(cid:9)300(cid:9)400(cid:9)500(cid:9)600(cid:9)700(cid:9)2000(cid:9)2002(cid:9)2004(cid:9)2006(cid:9)2008(cid:9)2010(cid:9)2012(cid:9)2014(cid:9)2016(cid:9)2018(cid:9)2020(cid:9)HARVEST,(cid:9)Millions(cid:9)m3(cid:9)FAOSTAT(cid:9)corrected(cid:9)FMRL(cid:9)submission(cid:9)(2011)(cid:9) 
 
Table  Annex  5.7:  Difference  between  expected  and  observed  EU  harvest  in  2013-2014, 
grouped by modelling approach (as submitted in 2011 under UNFCCC FMRL review). 

Source: European Commission/JRC, 2016 

The forest sink has so far remained steady in EU27 (350-400MtCO2/y), whereas it was projected 
in  2011  to  decrease  by  120MtCO2/y,  by  2020.  This  could  potentially  generate  80-85MtCO2 
credits  per  year  in  2013  and  2014  (subject  to  uncertainties  due  to  future  technical  corrections, 
emission trends etc.), limited by the 3.5% cap on these credits.  

Accounting for Harvested Wood Products (HWP) 

Under  the  Kyoto  regime,  Member  States  must  include  emissions  and  removals  resulting  from 
changes in the HWP pool, in the context of the forest management activity, based on the IPCC 
production  approach.  HWP  are  therefore  accounted  (and  capped)  relative  to  the  Forest 
Management Reference Level in which a projected value for HWP is included. 

The  European  Union  has  defined  a  cumulative  reference  level  in  CP2  of  314  MtCO2/y  with  a 
contribution of HWP of 53 MtCO2/y (i.e. 17%). Additional EU mitigation potential in HWP is 
estimated to be 10-15 MtCO2/y between 2020 and 2030, assuming current EU and MS bioenergy 
targets are met.111 In the longer run, if solar and wind energy grew faster or if e.g. short rotation 
coppice  developed  rapidly,  there  would  be  more  opportunities  to  develop  cascade  use  and  to 
enhance the importance of HWP, especially as material substitution becomes more relevant than 
mitigation in saturated forests112. 

Under  Convention  reporting,  Member  States  are  in  principle  free  not  to  use  the  Production 
Approach.  If  all  countries  applied  the  same  IPCC  methodological  approach,  they  would  all  be 
equivalent  in  accounting  terms.  If,  on  the  contrary,  different  countries  use  different  HWP 
approaches,  virtual  sinks  or  double  accounting  may  occur.  Since  currently,  the  production 
approach is used by most Member States, it is recommended to maintain this approach post-2020 
so that EU reporting and EU accounting of HWP is made fully consistent. 

111 ClimWood study, 2016 
112 As reflected in the 2013 Revised Supplementary Methods and Good Practice Guidance Arising from the Kyoto 
Protocol 

42 

 
 
 
  
 
 
                                                 
Forest management credit cap and compensation rule 

Removals from forest management may be used to compensate for emissions in other LULUCF 
categories. With a view to the uncertainties associated with the reference level approach, it was 
agreed  for  the  second  Commitment  Period  to  limit  this  possibility:  credits  from  forest 
management are only allowed up to 3.5% of 1990 total emissions (without LULUCF) to balance 
emissions  from  other  LULUCF  activities.    Debits  from  the  same  activity  are  not  capped. 
Compliance  risks  related  to  inter-annual  variation  and  natural  disasters  are  addressed  in  the 
context of provisions on natural disturbances.   

International discussions preceding the introduction of the current cap are described in detail in 
Annex  2  of  the  impact  assessment  accompanying  the  LULUCF  Decision.113  The  description 
highlights the alternatives discussed at that time, and the analysis on how the different cap levels 
could affect individual Member States. It was deduced from this analysis that in case of decreased 
harvest  rates,  a  few  forest-rich  countries  with  low  levels  of  historical  industrialisation  and/or 
emissions in 1990 (Latvia, Sweden, Finland) may exceed their cap on credits.  

In  discussions  with  Member  States,  various  alternatives  have  emerged.  Table  Annex  5.8 
summarises the alternatives discussed, highlighting possible impacts.    

In the following tables, all options are assessed showing 

  Credit/debit generation potential in the second commitment period of the Kyoto Protocol 

for each Member State under the different options,  

  Distributive impacts,  
  National compliance risk.  

113 SWD (2012) 41 

43 

 
 
 
                                                 
Table Annex 5.8: Options regarding the credit cap  

Change in rules 

Impact 

C0 Status quo 

3.5% cap  

Slight compliance risk for a limited number of MS  

C1  Modify  the 
cap 

Replace current 3,5 % cap 
by a cap based on -10% 
harvest (relative to FRL)  

- Could better reflect national forest circumstances;  
- Distributive impacts: would be favourable for certain MS, but 
it would expose other MS to compliance risks (see table 5.9) 

C2  Modify  the 
cap 

Replace current 3,5 % cap 
by a cap in proportion of the 
national forest area 

- Could better reflect national forest circumstances;  
- Distributive impacts: would be favourable for certain MS, but 
it would expose other MS to compliance risks (see table 5.9) 

C3  Re-establish 
the 
compensation 
rule 

In KP1, a Member State that 
incurred land use change 
debits (from deforestation), 
could compensate these 
from the forest management 
sink, up to 
33MtCO2/year114. 

-  This  rule  (repealed  in  KP2)  could  completely  offset  all 
deforestation  emissions  in  most  Member  States,  provided  they 
have sufficient sink in managed forests; 
-  Emissions  from  deforestation  and  afforestation  would  get 
neutralised post-2020, whereas they are fully accounted in KP2. 

Consider 
a 

as 

C4 
HWP 
separate 
category 
distinct 
forest 
accounting) 

(i.e. 
from 
land 

The land reporting category 
FL-FL would be accounted 
against the FRL with 
instantaneous oxidation, 
while 
HWP would be accounted 
separately and would not be 
subject to the 3,5% cap 

-  Uncapped  HWP  credits  could  provide  additional  credits  to 
countries  that  increase  their  HWP  stocks,  especially  forest-rich 
countries with low levels of historical industrialisation;  
-  Distributive  impacts:  might  expose  other  MS  to  compliance 
risks (see table 5.10) 
-  Would  incentivize  mitigation  in  HWP  beyond  cap,  thus 
encouraging  substitution,  energy  and  resource  efficiency  in  the 
bio-economy.  

In  the  absence  of  adopted  Forest  Reference  Levels  for  the  period  2021-2030,  the  credit/debit 
generation  potential  is  assessed  for  the  current  commitment  period  (2013-2020),  only  with  the 
purpose of facilitating the comparison of options.  

114 Annex to UNFCCC Decision 16/CMP.1, paragraph 10 of section C. 

44 

 
 
 
 
 
 
 
                                                 
Table Annex 5.9:  Distributive impacts  of  options regarding the  credit cap, based on early 
KP2  reports  and  JRC  projections,  illustrative  calculation  for  the  period  2013-2020,  in 
MtCO2/year 

Member States 

C0 Status quo 
(3.5% cap)  

C1 Modified cap 
based on a 10% 
reduction in 
projected harvest 
rates 

C2 Modified cap 
based on forest 
area, assuming EU 
cap at 197 
MtCO2/year 

C3 
Compensation 
rule 

Austria 
Belgium 
Bulgaria 
Croatia 
Cyprus 
Czech R. 
Denmark 
Estonia 
Finland 
France 
Germany 
Greece 
Hungary 
Ireland 
Italy 
Latvia 
Lithuania 
Luxembourg 
Malta 
Netherlands 
Poland 
Portugal 
Romania 
Slovakia 
Slovenia 
Spain 
Sweden 
United Kingdom 
EU 28 

-2.7 
-5 
-3.8 
-1.1 
-0.2 
-6.9 
-2.5 
-1.4 
-2.5 
-19.6 
-43.7 
-3.7 
-3.4 
-1.9 
-18.2 
-0.9 
-1.7 
-0.5 
-0.1 
-7.4 
-16.3 
-2.1 
-8.7 
-2.6 
-0.6 
-9.9 
-2.5 
-27.4 
-197 

Source: European Commission/JRC, 2016 

-2.5 
-0.6 
-0.8 
-1.1 
0 
-2.3 
-0.2 
-1.4 
-8.7 
-3 
-5.3 
-0.4 
-0.8 
-0.7 
-2 
-1.8 
-0.8 
0 
0 
-0.1 
-4.9 
-1.8 
-3.1 
-1.3 
-0.4 
-8 
-9.3 
-1.5 
-63 

-4.8 
-0.9 
-4.6 
-2.9 
-0.2 
-3.2 
-0.7 
-2.8 
-27.3 
-28.2 
-13.8 
-4.2 
-2.4 
-0.6 
-9.7 
-3.9 
-2.6 
-0.1 
0 
-0.4 
-10.9 
-4.9 
-8.6 
-2.5 
-1.4 
-17.9 
-34.6 
-3 
-197 

-33 
-33 
-33 
-33 
-33 
-33 
-33 
-33 
-33 
-33 
-33 
-33 
-33 
-33 
-33 
-33 
-33 
-33 
-33 
-33 
-33 
-33 
-33 
-33 
-33 
-33 
-33 
-33 
-924 

45 

 
 
 
 
Table  Annex  5.10:  Distributive  impacts  of  HWP  as  a  separate  category  (Option  C4),  in 
MtCO2/year, illustrative calculation for the period 2013-2020115  

CREDITS (-) or 
DEBITS (+)  
before capping 

A) Forest 
Credits/ 
Debits 

B) HWP 
Credits/ 
Debits 

C) Cap 
3.5% 
1990 

Total credits for Forest Management 
[=forest plus HWP]  
after capping 

D) forest and 
HWP capped 
together 

E) only forest 
capped, HWP 
accounted 
separately 

F) 
Difference 
(=E-D) 

-6.0 
-4.5 
-2.1 
-10.9 
-36.0 
-0.5 
-1.8 
0.3 
-12.2 
4.5 
-4.4 
-8.1 
-5.4 
-8.4 
-1.9 
4.3 
-19.0 
-4.8 

2.9 
1.9 
0.3 
-4.3 
18.0 
-0.3 
-0.6 
-0.3 
-1.6 
0.4 
-0.6 
-0.2 
0.3 
0.0 
-0.7 
2.1 
1.6 
1.6 

-2.7 
-6.9 
-1.4 
-2.5 
-43.7 
-3.7 
-3.4 
-1.9 
-18.2 
-0.9 
-1.7 
-16.3 
-2.1 
-8.7 
-2.6 
-9.9 
-2.5 
-27.4 

-116.9 

20.4 

-156.5 

-2.7 
-2.6 
-1.4 
-2.5 
-17.9 
-0.8 
-2.4 
0.1 
-13.8 
4.8 
-1.7 
-8.3 
-2.1 
-8.4 
-2.6 
6.4 
-2.5 
-3.3 

-61.8 

0.2 
-2.6 
-1.2 
-6.8 
-17.9 
-0.8 
-2.4 
0.1 
-13.8 
4.8 
-2.3 
-8.3 
-1.8 
-8.4 
-2.7 
6.4 
-1.0 
-3.3 

-61.7 

2.9 
0.0 
0.3 
-4.3 
0.0 
0.0 
0.0 
0.0 
0.0 
0.0 
-0.6 
0.0 
0.3 
0.0 
-0.1 
0.0 
1.6 
0.0 

0.1 

Member 
State 

AT 
CZ 
EE 
FI 
DE 
EL 
HU 
IE 
IT 
LV 
LT 
PL 
PT 
RO 
SK 
ES 
SE 
UK 
Total for 
18 MS 

Source: European Commission/JRC, 2016 

115 Calculations are based on MS FMRL (with or without HWP) and National Inventory Data 2014 for 18 Member 
States where these were available  

46 

 
 
 
 
 
                                                 
ANNEX  6.    SYNTHESIS  OF  MEMBER  STATES  REPORT  ON  LULUCF  INFORMATION  ACTION 
(ARTICLE 10 OF DECISION 529/2013)  

Executive summary 

LULUCF is the last key sector of the economy not covered by EU climate policies and emissions 
reduction 
targets.  The  current  EU  provisions  on  LULUCF  until  2020  (in  Decision 
No 529/2013/EU)116  aim  to  integrate  the  accounting  rules  for  the  sector  under  the  UNFCCC 
Kyoto Protocol (KP) into EU law for the 2013-2020 accounting period and thereafter. 

To prepare for the potential inclusion of the LULUCF sector in the Union’s emission reduction 
targets  in  the  post-2020  accounting  period,  the  Decision  aims  to  harmonise  and  improve 
monitoring and reporting, particularly for the emissions and removals associated with agricultural 
land-use activities of which the Member States have less experience. 

An array of implementation options is critical to the success of mitigation efforts in the areas of 
LULUCF, so the Decision requires Member States to transmit information to the Commission on 
action that they plan to take to increase removals and reduce emissions of GHG from activities 
relating  to  forests  and  agricultural  land  use.  Under  Article  10(1)  and (2),  Member  States  must 
submit  information  on  their  most  relevant  current  and  future  LULUCF  action  for  all  activities 
referred to in Article 3(1), (2) and (3). 

This  summary  report  brings  together  information  from  the  Article  10  reporting  exercise.  The 
process was initiated with the first phase of Member State reporting, which is to be followed by a 
mid-term (end of 2016) and final report (end of 2020). 

By  21  June  2016,  27  Member  States  had  provided  information  on  their  current  and  future 
LULUCF action, setting out nationally determined measures to limit or reduce emissions and to 
maintain or increase removals in the LULUCF sector. 

The reporting exercise provided an opportunity to: 

 

raise awareness among stakeholders in each Member State; 

  stimulate  collective  learning  between  Member  States  and  the  Commission,  enabling  the 
sharing of efforts and developments, and consolidating and documenting experience; 

 

identify  information  and  knowledge  gaps  as  regards  effective  ways  of  implementing 
LULUCF action and quantifying its impact; 

  enhance  the  standardisation  and  quality  of  national  information,  strategies  or  plans  on 

LULUCF action; and 

 

facilitate swift improvement of information relating to mandatory accounting for cropland 
and grazing land management and the optional activities.  

116  Decision No 529/2013/EU of the European Parliament and of the Council of 21 May 2013 on accounting rules on 
greenhouse  gas  emissions  and  removals  resulting  from  activities  relating  to  land  use,  land-use  change  and 
forestry and on information concerning actions relating to those activities (OJ L 165, 18.6.2013, p. 80). 

47 

 
 
                                                 
Outline 

LULUCF is the last key sector of the economy not covered by EU climate policies and emission 
reduction 
targets.  The  current  EU  provisions  on  LULUCF  until  2020  (in  Decision 
No 529/2013/EU) aim to integrate the accounting rules for the sector under the UNFCCC/KP into 
EU law for the 2013-2020 accounting period and thereafter. The Decision entered into force on 8 
July 2013 and provides that: 

 

 

‘in  the  context  of  moving  to  a  competitive  low-carbon  economy  in  2050,  all  land  use 
should be considered in a holistic manner and LULUCF should be addressed within the 
Union’s climate policy’;117 and  

‘Member  States  are  encouraged  to  use  these  estimates  to  identify  key  categories  and 
develop country-specific Tier 2 and Tier 3 key methodologies for the robust and accurate 
estimation of emissions and removals’.118 

To prepare for the potential inclusion of the LULUCF sector in the Union’s emission reduction 
targets  in  the  post-2020  accounting  period,  the  Decision  aims  to  harmonise  and  improve 
monitoring and reporting, particularly for the emissions and removals associated with agricultural 
land-use activities of which Member States have less experience. 

An array of implementation options is critical to the success of mitigation efforts in the areas of 
LULUCF, so the Decision requires Member States to transmit information to the Commission on 
action that they plan to take to increase removals and reduce emissions of GHG from activities 
relating  to  forests  and  agricultural  land  use.  Under  Article  10(1)  and (2),  Member  States  must 
submit  information  on  their  most  relevant  current  and  future  LULUCF  action  for  all  LULUCF 
activities  referred  to  in  Article  3(1),  (2)  and  (3).  Article 10(4)  further  requires  them  to  submit 
progress reports on LULUCF action halfway through and by the end of each accounting period. 

Guidance  was  developed  to  assist  Member  States  to  report  in  such  a  way  that  information  on 
LULUCF action could: 

  ensure  linkages  are  made  to  other  national  strategies  and  plans  associated  with 

cross-sectoral and climate policies; 

  use and build on information available or under preparation within Member States’ land-

use, forestry and/or agriculture policies; 

 

identify  and  indicate  potential  synergies  in  existing  spatial  land  data  and  information 
collection methods which should be available in Member States; 

  be adaptable to the varying needs and situations in different Member States; and 

  ensure  compatibility  with  current  KP  reporting  and  accounting  processes,  the  latest 

UNFCCC reporting requirements and IPCC methodologies. 

Member States were presented with several options as regards the format of the reports, but these 
were expected to be based on a particular framework to ensure that all necessary information was 
included. The underlying idea was to generate information that could be reviewed and compared 
at EU level, in the form of a strategy covering national LULUCF action or a plan on low carbon 

117  Recital 2 of Decision No 529/2013/EU. 
118  Article 3(2)(b) of Decision No 529/2013/EU. 

48 

 
                                                 
development  (or  other  related  issues)  that  would  cover  all  related  LULUCF  activities.  The 
framework was as follows: 

1.  Context and background: this includes an overview of information on: 

a.  the national situation in relation to land use and policy frameworks in place; and 

b.  communication  and  collaboration  between  government  departments  and  with 

stakeholders; 

2.  Technical  information:  on  past  trends  and  projections  of  emissions  and  removals,  and 

estimates of mitigation potential; 

3.  Policy information:  

a.  the most appropriate measures to increase removals and reduce emissions; and  

b.  the associated policies that can help ensure that these measures are taken up and 

implemented; and 

4.  Timetable 

for 

the 
implementation  of  the  most  appropriate  measures  identified  to  increase  removals  and 
reduce emissions. 

implementation:  setting  out 

the  proposed 

timetable 

for 

This  report  compiles  information  from  the  Member  States’  reports  on  context  and  background, 
technical  and  policy  information.  It  does  not  discuss  the  timetable  for  implementation.  Best  or 
interesting  practices  are  highlighted  in  each  section  of  the  report.  Two  separate  sections 
summarise  the  information  relating  to  forests  and  agriculture  land.  A  list  by  Member  State  of 
identified  actions  with  mitigation  potential  is  annexed.  A  second  annex  contains  the  Member 
States’ reports. 

Information on context and background provided by Article 10 reports 

The  EU  LULUCF  sector  is  a  net  sink  that  removes  from  the  atmosphere  a  volume  of  GHGs 
equivalent to a significant proportion of the EU’s total GHG emissions. LULUCF activities cause 
anthropogenic emissions and removals of GHGs as a consequence of changes in the quantity of 
carbon  stored  in  vegetation  and  soils,  and  emissions  of  non-CO2  GHGs.  The  increased 
sustainable  use  of  harvested  wood  products  can  substantially  limit  emissions  and  enhance 
removals of GHGs. 

The Member States’ Article 10 reports are based on a variety of sources. Most Member States use 
information provided and assessed under KP Decision 2/CMP7, national communications to the 
UNFCCC,  information  officially  reported  under  Article 3(2)  of  the  LULUCF  Decision,  forest 
management  reference  level  submission,  national  strategies  and  the  National  Emission  Ceiling 
Directive (2001/81/EC). Account was also taken of information compiled in the context of other 
EU  policies,  e.g. rural  development  programmes.  The  reports  build  on  consultations  and 
cooperation between relevant stakeholders within the national administration implementing CAP 
instruments  (rural  development  programmes  (RDPs)  under  CAP  2nd  pillar,  implementation  of 
measures  under  CAP  1st  Pillar,  cross-compliance  standards  for  good  agricultural  and 
environmental  condition  (GAEC),  the  Integrated  Administration  and  Control  System  (IACS)), 
national research institutes,  statistical  departments, national (rural)  networks and, in the case of 
Italy, other stakeholders (see Box 1 below). 

49 

 
Some countries, such as Denmark, the UK and the Netherlands, established short- or long-term 
objectives for a low carbon economy and LULUCF. Denmark plans to achieve a 40 % reduction 
in GHG emissions by 2020 (as compared with 1990), including for LULUCF, and has set a target 
to double its forest area by 2089. In the UK, the Climate Change Act 2008 provides for five-year 
carbon  budgets,  including  for  LULUCF,  to  reduce  emissions  by  at  least  80 %  by  2050.  The 
Carbon  Plan  details  how  the  UK  will  meet  current  and  future  legislated  budgets.  The  UK  has 
established projections of LULUCF sectoral emissions up to 2050 in support of the requirement 
for  carbon  budgets.  Setting  long-term  goals  and  integrating  LULUCF  action  in  strategies  and 
plans  to  achieve  them  allows  for  the  provision  of  better  quantified  data,  and  a  clearer  view  of 
trends  in  LULUCF  emissions  and  the  sector’s  contribution  to  the  overall  effort  to  reduce 
emissions. 

Box 1:   Enhanced communication and stakeholder consultation (from scientific experts to 
national  authorities,  networks  of  stakeholders  such  as  the  national  rural  network 
and interested parties) — Italy 

Given the broad range of stakeholders involved in developing land-use policy and designing and 
implementing  action,  enhanced  communication  and  consultation  was  necessary  to  ensure  a 
certain level of technical understanding. Italy started by calling on expert opinion to formulate a 
White  paper  on  climate  change  and  the  rural  sector  and  raise  awareness  in  the  community. 
Stakeholders  were  informed  through  publication  in  sectoral  magazines.  Taking  advantage  of 
existing  structures  and  its  capacity  to  mobilise  existing  networks  of  stakeholders,  the  national 
rural  network  organised  a  workshop  (funded  by  the  EAFRD)  on  the  theme  of  efficient  use  of 
resources and the transition to a low-carbon economy in the food industry for the 2014-20 RDPs 
in  Italy.  Taking  advantage  of  the  other  ongoing  process  of  preparations  for  structural  fund 
partnership  programming,  consultations  also  took  place  on  the  objectives  Supporting  the  shift 
towards  a  low-carbon  economy  in  all  sectors  and  Promoting  climate  change  adaptation,  risk 
prevention  and  management.  A  national  expert  panel  was  formed  with  the  involvement  of 
relevant  experts  and  main  stakeholders  from  the  Ministry  of  Environment,  the  Ministry  of 
Agriculture,  Food  and  Forestry  Policies,  ISMEA,  ISPRA,  CRA  and  university  representatives. 
The  regions  managing  2014-2020  RDPs  were  asked  to  provide  technical  and  financial 
information on new strategic climate measures. 

Technical information 

Ensuring linkage to current KP reporting and accounting processes, and to up-to-date 
UNFCCC methodologies 

A total of 26 countries used outputs and structures set up for existing processes to inform their 
Article  10  reports,  e.g. estimates  of  LULUCF  emissions/removals  in  the  national  inventories 
submitted  under  the  UNFCCC  and  the  KP.  Work  is  still  ongoing  in  a  majority  of  countries  to 
determine  the  most  appropriate  data  sources  and  methodologies  for  projections.  Some  are 
examining the possibility of setting up new structures and information collection. 

50 

 
 
Box 2:   Method for establishing projections for emissions and removals for the accounting 

period — Slovakia 

The  LULUCF  emission  and  removal  projections  were  based  on  Slovakia’s  2007-2013  RDP, 
taking into account the national forest programme (NFP) and the NFP action plan for 2009 2013. 
Emission and sink projections consider three scenarios (without measures, with existing measures 
and with additional measures) and projection parameters (area of managed forest). The base year 
for  projection  was  2010.  The  ‘additional  measures’  correspond  to  measures  provided  for  since 
2010. The 2007-2013 RDP can be considered as the main instrument for mitigation measures, of 
which the following were reflected in the scenario: 

 

 

 

 

afforestation of 800 ha of low productive soil with fast-growing trees and the first afforestation of 
600 ha of agricultural land by 2015; 

grassing of 50 000 ha of arable land by 2015; 

afforestation of 23 000 ha of agricultural land by 2020; and 

the effect of Forest Focus (Regulation (EC) No 2152/2003) on forest fire estimates (risk of forest fires 
reduced to 90 % of 2000-2003 level). 

As  regards  the  computation  method,  calculations  were  based  on  the  IPCC  Good  practice 
guidance  for  land  use,  land-use  change  and  forestry,  2003.  GHG  calculations  were  performed 
according  to  the  procedures  referred  to  in  chapter 3  and  sub-chapters  3.2  (Forest  land),  3.3 
(Cropland), 3.4 (Grassland), 3.6 (Settlements) and 3.7 (Other land). The values of the emission 
factors and conversion/expansion factors used for the projections are identical to those applied in 
the  2012  LULUCF  emission  inventories,  as  published  in  Slovakia’s  2014  National  Inventory 
Report. 

Box 3:   Method for establishing projections for emissions and removals for the accounting 

period — United Kingdom  

The  UK  produced  four  initial  policy  scenarios  based  on  historical  data  from  the  2014  GHG 
inventory (covering the period 1990 to 2012):  

• 

• 

• 

• 

business as usual (BAU); 

high emissions; 

moderate emissions; and  

low emissions.  

Alternative  versions  of  the  non‐BAU  scenarios  were  modified  to  include  continuing  cropland‐
grassland rotations (‘churn’). 

The BAU scenario continues the 2010 afforestation rate from the present to 2050: this represents 
a ‘without additional policy and measures’ scenario for the forest management reference level 
reporting  under  the  Kyoto  Protocol  second  commitment  period.  The  BAU  scenario  used  the 
moderate emissions scenario assumptions for all other activities.  

51 

 
In the high emissions scenario, the policy priority is to increase food production and there is 
less of a focus on bioenergy crops and forestry (exploring the highest level of emissions that the 
sector  might  produce),  reflecting  currently  funded  policies  but  assuming  a  continuation  of  the 
current level of publically funded afforestation beyond the expiry of the current CAP programme.  

The moderate emissions scenario (with measures — includes the impact of all the UK’s planned 
policies  and  measures  if  they  are  fully  adopted  and  implemented)  uses  land-use  change, 
afforestation  and  deforestation  rates  midway  between  the  high  and  low  scenario  rates.  The  UK 
believes  that  this  scenario  is  likely  to  reflect  future  policy  aspiration.  It  should  be  noted  that  a 
number of policies and measures are facilitated by government, but explicitly require action and 
funding from outside government. These policies and measures and their projected CO2e savings 
are detailed in chapter 5 of the UK report.  

The  low  emission  scenario  (with  additional  measures)  emphasises  bioenergy  crop  production 
and  woodland  creation  and  includes  policies  and  measures  which  have  been  adopted  and 
implemented to mitigate climate change, and potential additional policies and measures that are 
planned for that purpose. 

Past EU-level emissions and removals 

According  to  the  information  in  the  Article  10  reports,  the  LULUCF  sector  (either  UNFCCC 
categories or KP activities depending on the submitted data) is a net sink in 22 Member States 
and  a  net  source  in  five  (Austria,  Denmark,  Estonia,  Germany  and  the  Netherlands).119  No 
conclusions can be drawn at EU level, as aggregation of the information in the Article 10 reports 
has  proven  difficult,  due  to  its  heterogeneity.  Some  countries  provided  descriptive,  schematic 
(diagrams),  partial  or  no  information  for  their  aggregated  past  emissions  and  removals,  or 
incomplete sub-category information. 

A  total  of  23  countries  provided  at  least  one  figure  for  past  (until  2013)  GHG  emissions  and 
removals  for  at  least  one  key  category  and  key  land  management  type  (Austria,  Belgium, 
Bulgaria,  Cyprus  (FM  only),  Czech  Republic,  Denmark,  Estonia,  Finland,  France,  Germany, 
Hungary,  Ireland,  Italy,  Malta,  the  Netherlands,  Poland,  Romania,  Slovakia,  Slovenia,  Spain, 
Sweden and the UK). Hungary, Latvia and Lithuania provided only total LULUCF figures for the 
past and projections. 

Some  21  Member  States  provided  quantitative  projections  for  one  or  more  categories  (Austria, 
Belgium,  Bulgaria,  Cyprus  (total  LULUCF  and  FM),  the  Czech  Republic,  Denmark,  Estonia, 
Finland, France, Germany, Greece (only AR/D), Hungary (only at total LULUCF level), Ireland, 
Italy, the Netherlands, Poland, Romania, Slovakia, Slovenia, Spain, Sweden and the UK). 

Of  those,  12  provided  projections  for  a  2020  horizon  (Austria,  Bulgaria,  Cyprus,  Finland, 
Germany, Greece, Luxembourg, the Netherlands, Poland, Romania, Spain and Sweden), Hungary 
for  a  2025  horizon  and  10  others  at  least  until  2030  (Belgium,  the  Czech  Republic,  Denmark, 
Estonia, France — 2035, Ireland, Italy, Slovakia, Slovenia, the UK – 2050). 

119  No data for Luxembourg or Portugal. 

52 

 
                                                 
In all, 20 countries provided figures for their LULUCF sector situation in 2020 or 2030. Of these, 
five  will  see  their  net  sink  increase  by  2030:  Slovakia  (increase  in  all  scenarios),  France  (the 
‘additional  measures’  scenario  results  in  an  increase),  Hungary,  Lithuania  and  the  UK  (which 
expects its sink to be increasing by 2030 and decreasing by 2050). LULUCF is projected to be a 
net source in 2020/2030 in Austria (as of 2015, with forest land becoming a source; these are the 
only  modelled  data  provided,  as  all  other  categories  replicate  2012  data),  Belgium,  Estonia  (if 
forest  harvest  rates  increase  as  modelled)  and  Latvia  (due  to  increasing  felling  rates,  the  age 
structure of the forests and conversion of forest land to cropland and settlements), and Slovenia 
somewhat  later  than  2030.  LULUCF  is  already  a  source,  and  is  expected  to  remain  so,  for 
Germany and the Netherlands. The remaining 11 countries project a stable or declining net sink 
for LULUCF. 

Policy approach and identification of mitigation potential 

Building on linkages to other national strategies and plans associated with cross-sectoral 
and climate policies or with information available or under preparation under Member 
States’ land use policies. 

The  degree  of  linking  other  national  strategies  and  plans  associated  with  cross-sectoral  and 
climate policies varies among Member States. All Member States used information generated for 
the  partnership  agreement  for  the  new  (2014-2020)  Structural  Funds  programming  and  for  the 
RDPs.  This  allowed  for  better  coordination  and  awareness-raising  among  stakeholders  within 
national  administrations,  local  authorities,  bodies  implementing  EU  funds  and  other  interested 
parties. 

Policies and other reporting requirements mentioned by Member States include: 

  EU climate policy, UNFCCC and KP requirements, e.g.: 

– 

low carbon development strategies (prepared under the Regulation (EU) No 525/2013 
and required by 9 January 2015); 

–  national communications to the UNFCCC;120 

– 

forest management reference level submissions;121 

–  National Emission Ceiling Directive (2001/81/EC); 

  National policies, strategies and plans 

–  setting long-term goals for their economies and LULUCF; 

–  sectoral (relating to forestry, wetlands, agriculture); 

  CAP, e.g. 

–  RDPs under CAP 2nd pillar;122  

– 

implementation of measures under CAP 1st pillar;123 

120  6th national communications to the UNFCCC. 
121  Guidelines  for  the  submission  of  information  on  forest  management  reference  levels  in  Annex  II  to  Decision 

2/CMP.6 (Land use, land-use change and forestry). 

122  Regulation (EU) No 1305/2013 on EAFRD support for rural development; Delegated Act C(2014) 1460. 

53 

 
                                                 
–  cross-compliance standards for GAEC; 

– 

IACS;124 

  other policies that affect land use, e.g.: 

  Nitrates Directive;125  

  programmes of measures within river basin management plans; 

  cross-sectoral EU policies, e.g.: 

the Inspire Directive;126 

– 
–  green growth strategies;127 and 
–  national renewable energy action plans.128 

Box 4:  Evaluation of mitigation impact of past policies (forest measures implemented in 

the 2007-2013 RDP) – Latvia 

The initial evaluation of the implementation of the 2007-2013 RDP was carried out at the end of 
2010  by  the  State  Institute  of  Agrarian  Economics  (Lazdiņš,  2010).  It  reported  that  climate 
change mitigation measures had been implemented in 14 490 ha of forest in 160 municipalities in 
Latvia. 

The average annual removals of CO2 in living biomass due to climate change mitigation projects 
in 2007-2010 were 9.7 kilotonnes CO2 and average annual removals of CO2 in dead wood were 
1.1  kt  (10.8  kt  CO2  annually  in  total).  Total  additional  removals  of  CO2  in  living  biomass  will 
reach  about  922.6  kt  and  in  dead  biomass  102.0 kt  during  the  rotation  (1 024 kt  CO2  in  total). 
Average CO2 removals per rotation are 0.5 kt CO2. 

The most efficient climate change mitigation measure is afforestation of farmland (85 % of total 
additional CO2 removals; see Figure 9). If calculated as impact per area unit, this has about the 
same impact as thinning and reconstructing forest stands on naturally afforested lands (583 t and 
573 t  ha-1 CO2  respectively)  in  a  forest  management  cycle.  Support  for  forest  regeneration  has 
relatively  less  of  an  impact  on  additional  CO2  removals  (56 t  ha-1  CO2).  The  evaluation  of  the 
preliminary results of the GHG impact of the 2007-2013 RDP demonstrated the predominance of 
the forestry-related measures, especially thinning and reconstruction of naturally afforested land. 

When creating linkages to other national strategies and plans associated with cross-sectoral and 
climate  policies,  an  important  first  step  taken  by  some  countries  is  to  identify  existing  and 
additional  LULUCF  action  with  mitigation  potential  and  quantify  its  costs  and  effects.  Other 
countries are planning to do this in the future. Latvia is the only country that provided quantified 

123  Regulation  (EU)  No  1307/2013  establishing  rules  for  direct  payments  to  farmers  under  CAP  support  schemes; 

Delegated Act C(2014) 1476. 

124  Regulation  (EU)  No  1306/2013  on  the  financing,  management  and  monitoring  of  the  CAP;  Delegated  Act  for 

IACS (C(2014) 1459). 

125  Directive 91/676/EEC concerning the protection of waters against pollution caused by nitrates from agricultural 

sources. 

126  INSPIRE Directive (2007/2/EC). 
127  In line with the EU 2020 strategy and inspired by the OECD’s Green Growth Strategy. 
128  Prepared by Member States under Article 4 of the Renewable Energy Directive (2009/28/EC). 

54 

 
                                                                                                                                                              
figures  for  the  mitigation  impact  of  past  policies  on  forests  (Box  4).  Sharing  experiences  and 
harmonising  methodologies  in  this  field  could  help  the  remaining  countries  to  speed  up  their 
efforts. 

Identifying the mitigation potential of LULUCF action 

Denmark, France, Italy, Latvia, Spain, Sweden and the UK identified the mitigation potential of 
various LULUCF measures; examples of their approaches and results are presented below. 

The  UK  analyses  annually  the  potential  to  limit  or  reduce  emissions  and  maintain  or  increase 
removals from the LULUCF sector. This allows the government to assess the mitigation potential 
of  LULUCF  activities  while  identifying  where  further  measures  or  action  is  required  in  the 
ongoing  quest  to  reduce  GHG  emissions  from  the  sector.  Up-to-date  information  on  mitigation 
potential is useful in making a quantitative assessment of measures that are already implemented 
or planned, e.g. using a bottom-up marginal abatement cost curve (MACC) approach for setting 
an appropriate carbon budget. MACCs detail the abatement potential from a suite of technically 
feasible  mitigation  measures and define their  relative cost-effectiveness. The use  of a reference 
carbon  price  allows  measures  to  be  considered  from  a  notional  cost-benefit  perspective  and 
provides a threshold for defining an efficient budget (i.e. those measures delivering mitigation at 
a  unit  cost  less  than  the  chosen  reference  price).  There  are,  however,  some  weaknesses  in  a 
MACC-based  approach,  since  it  can  be  difficult  to  value  all  policy  co-benefits  of  abatement 
measures, particularly those relating to social and environmental objectives. The UK government 
continues to develop a comprehensive analysis, using this approach, for the mitigation potential 
of LULUCF activities in order to inform various policy initiatives. 

France identified a number of mitigation actions based on a literature review and set quantified 
objectives to be achieved by 2035 to preserve permanent pastures, agro-forestry systems, hedges 
and agro-ecologic infrastructure, soil cover and increase of organic matter in soils. 

The  Netherlands  quantified  the  mitigation  potential  of  LULUCF  actions  for  selected  measures 
relating to cropland and grazing land management: 

In Italy, the mitigation potential of various crop systems was analysed, focusing on biophysical-
technical,  economic  and  market  potential  on  the  basis  of  several  national  studies  and  research 
papers. A quantitative assessment of factors was carried out for each of the three Italian climatic 
regions. On this basis, the soil organic carbon at equilibrium was estimated for each management 
practice and geographical zone. 
55 

Measure Max. potential Implementation of measure Realistic sequestration Max. per ha  kton CO2 / year % kton CO2 / year kg CO2 / ha / year Reduced tillage 475 50 238 608 No-tillage 912 20 182 1167 Catch crop/green manure 311 50 156 398 Improvement of crop rotation 942 20 188 1205 Leave crop residues on the fields 628 20 126 803 Management of field edges 145 40 58 186 Grassland renovation 710 30 213 3586 Total of realistic combinations 2,270  790 2,316   
 
The  mitigation  potential/impact  of  LULUCF  actions  was  described  qualitatively  according  to 
production  system:  ordinary  agriculture,  sustainable  agriculture,  agriculture  with  conservation 
practices, organic farming, set-aside, greening, ordinary grazing land, managed grazing land and 
improved grazing land. 

Box 5:  Identification  of  mitigation  measures,  quantification  of  mitigation  potential  and 

cost in LULUCF for comparison with other sectors – Spain, Denmark and Sweden 

Spain analysed the mitigation potential and cost-efficiency of the agriculture and livestock sector 
in order to select the most cost-efficient measures with mitigation potential across other sectors 
such  as  transport,  residential  waste,  HFC  non-ETS  industrial  sector.  On  the  basis  of  the 
assessment  of  potential  and  cost-efficiency,  some  measures  stood  out,  such  as  ‘no  tillage’, 
training  in  the  more  efficient  use  of  fertilisers,  using  biomass  from  permanent  woody  crops 
instead of burning it (since it has negative MACCs. The mitigation potential, cost and MACCs of 
these measures are calculated in the annex to Hoja de ruta de los sectores difusos a 2020 (road 
map for non-ETS sectors up to 2020).129 Additional measures taking into account sink potentials 
will be analysed in the forthcoming update of the road map. 

129  http://www.magrama.gob.es/es/cambio-climatico/planes-y-estrategias/Hoja_de_Ruta_2020_tcm7-351528.pdf 

(executive 
medidas/HojaRuta2020_Fichas_tcm7-358623.pdf (fact sheets for measures) 

summary) 

and 

http://www.magrama.gob.es/es/cambio-climatico/temas/mitigacion-politicas-y-

56 

 
 
 
                                                 
Denmark analysed potential additional mitigation measures and produced a Catalogue of Danish 
climate  change  mitigation  measures  —  reduction  potentials  and  costs  of  climate  change 
mitigation measures.130 

The  Swedish  Board  of  Agriculture  estimated  the  potential  to  reduce  the  GHG  emissions  from 
Swedish  agriculture  to  2050,  as  part  of  the  government  position  on  developing  a  road  map 
towards an emissions-neutral Sweden by 2050.131 The measures analysed concern CO2 emissions 
from cultivated mineral soils, organic soils and grasslands, and include measures such as adding 
organic material (e.g. animal manure, residue from biogas production or straw) to soils, rewetting 
wetlands and increasing the tree coverage of grasslands. 

Extending  the  analysis  to  other  types  of  measure  and  practice  could  deliver  new  mitigation 
actions in LULUCF. 

Box 6:  Potential and appropriate measures to reduce emissions via substitution — Sweden 

Sweden  has  also  looked  into  the  potential  and  appropriate  measures  to  reduce  emissions  by 
substituting fuel and products by bioenergy and wood products. It did so in a qualitative manner 
but  sees  a  strong  potential,  postulating  that  such  substitution  contributes  to  large  emission 
reductions.  There  is  further  potential  for  cost-efficient  emission  reductions  through  the 
substitution of fossil fuels, e.g. in transport and industry sectors, and increased use of wood for 
multi-storey houses and bridges can reduce emissions from metal-reinforced concrete. 

Box 7:  Projections of impacts of measures — Latvia 

Latvia  has  worked  on  projecting  the  results  of  implementing  the  proposed  measures.  The 
LULUCF  climate  change  mitigation  measures  to  be  implemented  in  Latvia  are  selected  on  the 
basis  of  consultations  with  NGOs  and  taking  into  account  national  circumstances,  in  order  to 
pursue the mitigation potential and contribute to implementation of other policies and ecosystem 
services, such as biological diversity and water protection. 

Latvia  has  started  to  elaborate  the  scientific  and  strategic  background  through  various  research 
programmes with national and extra-national (e.g. EEA Financial Mechanism) funding relating to 
agricultural GHG mitigation and adaptation to climate change. It has been able to estimate the net 
impact of proposed measures (see summary table below) at 12 136 kt CO2, excluding the forest 
fire prevention system; over the total affected area (185 kha), the average annual impact is 1.4 t 
CO2 ha-1 (256 kt CO2 eq. year-1 in all affected areas. The most efficient measure is afforestation 
(486 kt CO2 eq. year-1), but its total impact still has to be evaluated. According to Tier 1-based 
methodology, the duration of the impact of the measures in cropland is 20-30 years; according to 
Tier 1- and Tier 2-based methodology, the duration of the impact in forest land is 76-102 years 
(Eggleston et al., 2006). Most (66 %) of the impact is expected after 2030, due to the long-lasting 
effect  of  the  measures  in  affected  forest  lands.  The  mean  annual  impact  is  calculated  as  an 
average (total impact divided by duration of the measure). 

130  http://www.ens.dk/sites/ens.dk/files/policy/danish-climate-energy-policy/dk_climate_change_mitigation_uk.pdf 
131  Swedish Board of Agriculture, A climate-friendly agriculture in 2050, report 2012:35 (in Swedish). 

57 

 
 
                                                 
58 

 
 
 
Summary of forest-related information 

Past removals and emission 

Forest land is a sink in Austria, Bulgaria, Cyprus, the Czech Republic, Estonia, Germany, France, 
Latvia, Malta, the Netherlands, Spain and the UK. Afforestation and reforestation activities are a 
sink  and  deforestation  a  source  in  all  countries  that  provided  data  on  past  emissions  (Austria, 
Czech  Republic,  Denmark  (source  in  2012),  Estonia,  Finland,  Hungary,  Ireland,  Italy,  the 
Netherlands, Poland, Romania, Slovakia, Sweden and the UK). 

Forest management (FM) is a sink in Belgium, Bulgaria, Cyprus, the Czech Republic, Denmark, 
Estonia,  Finland,  France,  Ireland,  Italy,  Malta,  the  Netherlands,  Poland,  Romania,  Slovakia, 
Slovenia, Spain, Sweden and the UK. It has been a source in Austria since 2013. No information 
was extracted for Croatia, Greece, Germany, Latvia, Lithuania, Luxembourg, Malta or Portugal. 

When looking at afforestation, reforestation and deforestation (ARD) as a whole, the combined 
activities are a source for five countries: Finland, France, the Netherlands, Romania and Sweden. 

As regards projections, ARD remains a sink in Austria, the Czech Republic, Denmark, Ireland, 
Slovakia, Poland, Spain and the UK. It is expected to become a source in Estonia with additional 
measures  (harvest  rate  increases)  and  to  remain  a  source  in  France,  the  Netherlands,  Romania, 
Slovenia  and  Sweden.  No  information  was  extracted  for  Belgium,  Bulgaria,  Croatia,  Cyprus, 
Germany, Greece, Latvia, Lithuania, Luxembourg or Portugal. 

Denmark and Poland will see their future emissions (2020 or 2030) from deforestation fall below 
their  2012  emissions.  Emissions  from  Ireland,  while  slight,  are  expected  almost  to  double  by 
2030  and  those  from  the  Netherlands  by  2020.  Slovenia  is  expecting  a  very  large  (750 %) 
increase  in  emissions  by  2030  in  this  sector.  Sweden’s  emissions  will  decrease  from  its  2012 
figure  but  will  remain  higher  than  the  1990-2010  average.  France  and  Austria  are  expecting 
increases of the source from this sector. 

Forest  management  is  expected  to  remain  a  sink  in  Belgium,  Cyprus,  the  Czech  Republic, 
Denmark,  Estonia  ("with  existing  measures"),  Finland,  France,  Italy,  Malta,  the  Netherlands, 
Poland, Romania, Slovakia, Slovenia, Spain, Sweden and the UK. It will be a source in Austria 
(50 %  increase  by  2020),  Estonia  with  additional  measures  (harvest  rate  increases),  Germany, 
Greece  and  Ireland.  In  Denmark,  the  sink  will  get  close  to  0  as  of  2013  and  it  is  expected  to 
decrease in France (‘with additional measures’ scenario), the Netherlands, Poland, Slovenia and 
the  UK.  Slovakia  is  expecting  a  significant  increase  in  its  sink  by  2030.  The  Czech  Republic, 
Denmark,  Estonia,  Ireland,  Slovakia,  Slovenia  and  the  UK  provided  data  up  to  2030.  No 
information  was  extracted  for  Bulgaria,  Croatia,  Hungary,  Latvia,  Lithuania,  Luxembourg  or 
Portugal.   

Forest  land  will  be  a  decreasing  sink  in  the  UK  (maturity  of  forests  and  low  afforestation);  in 
France  it  will  be  an  increasing  sink  in  a  ‘no  measures’  scenario,  but  decreasing  in  a  ‘with 
measures’ scenario. 

59 

 
Policy framework and relevant action (as reported by Member States) 

For forest land, all countries identify national policies as policy frameworks, and relevant action 
includes state aid and/or RDPs, e.g. in Austria and the UK. Denmark, Ireland, Hungary, Poland 
and the UK have set afforestation targets for 2020 or later, e.g. Poland has set a target to increase 
forest cover to 30 % by 2020 (national afforestation programme), to be implemented via state aid 
or RDPs, and Ireland would like to increase its forest coverage from 11 % currently to 18 % by 
2046 via a state aid programme. Other examples of current and planned action include: 

 

 

legislation forbidding the burning of full-value wood; 

 sustainable  forest  management:  harvesting  at  a  percentage  of  the  annual  increment, 
optimising  tree  species  composition,  use  of  forest  management  plans  and  monitoring  of 
forests, tending and thinning, thus enhancing production of goods and services in existing 
forests; 

  protecting  existing  forests  against  natural  disturbances  via  national  programmes  and 

RDPs; 

  mobilisation and better utilisation of biomass / enhancing the production and consumption 
of wood products, thus promoting the substitution of GHG-intensive materials with wood; 

 

 

 

replacing fossil energy with bioenergy, including from harvesting residues; 

replacing GHG-intensive materials with harvested wood products; 

training for the use of wood in buildings; and 

  national adaptation plan — specific measure to adapt forests and prepare wood industries 

for climate change. 

Identification of mitigation potential 

Croatia, France, Romania, Slovakia and the UK provided views on mitigation potential in forest 
land.  Latvia  provided  a  list  of  suitable  mitigation  actions  in  agriculture  and  forestry  and 
quantified their impact (see Box 7). 

Romania sees a  very large potential  in  afforestation of degraded  and marginal  agricultural land 
and Croatia sees this measure as having the most significant impact on mitigation and adaptation. 
Afforestation of agricultural land is included in some RDPs. 

Slovakia sees some potential for increasing GHG removals in relation to forestry activities via the 
afforestation of agricultural land with low productivity and/or on steep slopes, support for agro-
forestry and extension of wood production on agricultural land (cropland, grassland) for energy 
purposes. 

The  UK  sees  most  of  the  mitigation  potential  abatement  identified  in  the  GHG  inventory 
projections arising from woodland creation (KP activities A and R). The nature of the woodland 
planted determines the level of abatement, the timeframe over which abatement is delivered and 
the  contribution  to  abatement  delivered  in  other  sectors,  inter  alia  by  providing  a  renewable 
energy feedstock. Unmanaged woodland, particularly on productive sites, will generally make the 
largest  contribution  to  LULUCF  removals.  Reducing  deforestation  and  focusing  forest 
management on increasing carbon stocks could deliver additional abatement, as well as including 
measures  aimed  at  making  forests  more  resilient  to  climate  change.  The  UK  quantified  the 

60 

 
mitigation  potential  of  woodland  creation  (AR),  reduced  deforestation  (D)  and  improved 
management (FM). In order to achieve the abatement potential of the afforestation in the middle 
scenario, significant private sector investments will be required to supplement RDP grant aid in 
the  UK.  Policy  measures  are  used  to  reduce  deforestation  in  the  UK  and  a  strong  regulatory 
framework  means  that  rates  of  deforestation are  relatively  low.  Most  deforestation results  from 
ecological requirements to restore open habitat and a balancing mechanism is in place to ensure 
that  there  is  no  risk  of  net  deforestation;  the  mechanism  requires  compensatory  planting  where 
non-priority sites are subject to conversion. 

In  England,  55 %  of  woodlands  have  management  plans.  The  government’s  forestry  and 
woodlands  policy  statement  seeks to  bring  80 %  of  the  woodland resource into management  in 
the  long  term,  to  contribute  to  multiple  objectives  and  provide  opportunities  for  the 
implementation  of  climate  change  adaptation  measures.  The  UK  finds  that,  while  reducing  the 
level  of  management  (i.e.  harvesting)  would  lead  to  GHG  abatement  in  the  short  term,  other 
policy objectives would not be delivered and it is highly likely that England’s woodlands would 
become  less  resilient  to  pest  and  disease  outbreaks  and  the  impacts  of  climate  change,  placing 
large carbon stocks at significant risk of being returned to the atmosphere. 

France  mentions  10  national  plans/strategies  that  deliver  on  multiple  objectives:  substitution  of 
energy and materials, carbon storage in wood products and in above- and below-ground biomass. 
France has recognised carbon storage, among other things, as a public good (d’interêt general), 
created a fund for action on forests and woods, a framework for wood  mobilisation by forester 
groups,  a  plan  for  forest  industries,  and  included  the  use  of  wood  products  in  training  for 
professional builders, etc. France stresses the importance of looking at the mitigation potential in 
forests and wood products in the broader sense by looking at all associated movements of GHGs 
in  a long-term perspective. Increasing the above- and below-ground  biomass is only  one of the 
parameters  to  keep  in  mind.  The  country  points  out  the  need  to  develop  substitute  effects  for 
forests  (energy  substitution  and  material  substitution),  as  in  the  long  term  forested  area  cannot 
increase  indefinitely  (France  argues  that  it  is  already  stabilising  in  some  EU  countries).  France 
sees  a  risk  in  having  large  stocks  of  carbon  stored  in  forests  as  climate  change  could  have  a 
highly  destabilising  impact  on  forestry  systems.  Forest  management  plays  an  important  role  in 
reducing this risk. 

Frances  sees  a  need  for  policies  on  substituting  material  and  energy  by  wood  products  and 
increasing productive potential for the provision of wood, carbon storage in wood products and 
the productive capacity of forests and carbon storage, and for support studies and research. 

Summary of agriculture-related information 

Past removals and emissions 

Cropland (as reported under UNFCCC) and cropland management (CM): 16 countries provided 
data on past emissions and removals: Austria, Belgium, Bulgaria, the Czech Republic, Denmark, 
Estonia, Germany, Greece, Ireland, Italy, the Netherlands, Malta, Romania, Slovakia, Spain and 
Sweden.  Five  countries  (Italy,  Greece,  Romania,  Slovakia  and  Spain)  reported  only  removals 
from this sector; Ireland shows an alternation between sink and source, with average emissions 

61 

 
close to zero over the 1990-2012 period; the remaining countries show emissions. Cropland is a 
source for France and the UK. 

On  grassland  (as  reported  under  UNFCCC)  and  grazing  land  management  (GM),  13  countries 
(Austria, Belgium, Bulgaria, the Czech Republic, Denmark, Germany, Greece, Ireland, Italy, the 
Netherlands,  Romania,  Slovakia,  Spain  and  Sweden)  provided  data  on  past  emissions  and 
removals.  Denmark,  Germany,  the  Netherlands  and  Spain  are  countries  that  show  emissions. 
Grassland is an increasing sink in France and the UK and a source in Estonia. 

Projections 

A total of 12 countries (Austria, the Czech Republic, Denmark, Estonia, Germany, Greece, Italy, 
Romania,  Malta,  Slovakia,  Spain  and  Sweden)  provided  projections  for  cropland  or  cropland 
management,  of  which  Italy,  Greece,  Romania,  Slovakia  and  Spain  project  removals  (as  in  the 
current  period).  The  sink  is  expected  to  be  halved  for  Italy  by  2030  and  more  than  halved  for 
Romania  by  2020.  Spain  is  the  only  country  projecting  an  increase  of  its  sink  by  2020  (by  +/-
35 % in relation to 2012). Austria is projecting to reduce its emissions by half by 2020, Malta by 
30 % and the remaining countries that provided data project relative stability in their pool/sink. 
Five  countries  provide  projections  at  a  2030  horizon:  Denmark,  Italy,  Slovakia,  the  Czech 
Republic and Estonia (the two latter  countries not  modelled). Cropland is a declining source in 
the UK. 

Of the 11 countries that provided grassland or grazing land management projections, Austria is 
the  only  one  that  expects  a  reversal  from  removals  to  emissions  in  2020.  Malta  is  expecting  a 
tripling  of  its  sink  by  2020  and  the  remaining  countries  expect  stable  emissions  or  removals. 
Austria,  Denmark  and  Spain  expect  emissions  and  the  Czech  Republic,  Estonia,  Greece,  Italy, 
Malta, Romania, Slovakia and Sweden removals. The Czech Republic, Denmark, Estonia, Italy 
and Slovakia provided projections at least at a 2030 horizon. Grassland is projected to be a sink in 
the UK due to reduced conversion of cropland to grassland. In France, grassland is expected to be 
an increasing sink in the ‘with additional measures’ scenario. 

Policy framework and relevant action (as reported by Member States) 

All  reports  identify  CAP  1st  pillar,  including  GAEC  and  greening,  and  2nd  pillar  (RDPs)  as 
current climate action policies. 

France  and  the  UK  have  national  policies/strategies  in  place  that  also  contribute  specifically  to 
climate change mitigation in soils. Some of the action to implement these polices is financed via 
CAP 1st or 2nd pillar, e.g. setting up agroforestry systems, soil works, reducing mineral fertiliser 
use, organic production systems and increasing protein-rich cultures (France). 

In Austria, agricultural production primarily contributes to climate change with its CH4 and N2O 
emissions.  Austrian  GHG  emissions  from  agricultural  activities  show  a  decreasing  trend  of 
12.4 % from 1990 until 2012. The main factors were a steady decline in the number of animals 
(particularly  dairy  cows)  and  the  consequent  significant  reduction  in  manure  disposal  needs. 
Mainly  thanks  to  the  Austrian  RDP,  in  particular  its  agri-environmental  programme,  the  use  of 
mineral  fertiliser  also  declined  considerably.  RDP  measures  also  contribute  to  increasing  the 
share of renewable energy and carbon sequestration in the LULUCF sector. 
62 

 
Austria  uses  vocational  training  and  information  to  increase  the  competitiveness  of  agricultural 
enterprises and raise awareness on nature conservation and environmental protection. A measure 
to enhance the ‘human potential’ of the people working in agriculture and forestry was set up to 
train  700 000  farmers  and  foresters  in  2007-2013.  In  the  first  three  years,  around  200 000 
stakeholders  took  part  in  the  training  courses.  Another  measure  seeks  to  enhance  the  technical 
know-how  of  economic  agents  and  in  turn  the  quality  of  life  and  diversification  in  the  rural 
economy. 

Identification of suitable mitigation actions 

Some  examples  are  provided  below  from  eight  countries  that  have  provided  a  list  of  relevant 
mitigation actions in agriculture. 

Recognising the importance of GHG mitigation in agriculture, Latvia has started to elaborate a 
scientific  and  strategic  background  through  various  research  programmes,  with  national  or 
international  (e.g.  EEA  Financial  Mechanism)  funding,  on  agricultural  GHG  mitigation  and 
adaptation to climate change. Research results will be delivered in the coming years, but currently 
Latvia has no nationally developed cost-effective agricultural GHG mitigation strategy and is still 
developing its knowledge base in quantifying measures’ GHG abatement potential. 

The  UK  provided  semi-quantitative  (less  than  zero,  zero,  low  to  medium,  high)  mitigation 
potential of cropland management and grassland management measures. It identified converting 
cropland  from  annual  tillage  crops  to  perennial  crops,  fallow  and  set  aside  as  having  positive 
mitigation  potential  (low  to  medium),  increasing  manure,  fertiliser  and  crop  residue  (low)  and 
intensification of pasture on mineral soils (zero to low — unknown). There are constraints on the 
use  of  these  practices  in  the  UK  and  the  increased  emissions  of  N2O  as  a  result  of  increased 
nutrient inputs needs to be considered. 

France  identifies  mitigation  action  on  the  basis  of  a  literature  review:  maintaining  permanent 
pastures  and  increasing  the  productivity  of  less  productive  pastures  (grassland  management), 
stopping soil sealing, developing agro-forestry systems and hedges, agro-ecological practices on 
soil  cover,  simplified  soil  tillage,  longer  crop  rotation  periods,  greater  use  of  grass-based 
livestock systems and grass valorisation efforts, and developing bio-based products as a substitute 
for GHG-intensive energy and materials. 

Latvia  provided  a  list  of  relevant  mitigation  actions  in  agriculture  and  forestry  and  quantified 
their impact (see Box 7). 

Wetlands, peatland and re-vegetation 

The following policies and actions are in place in various Member States: 

  Austria currently has 126 000 ha of wetlands, which are classified as Ramsar areas. The 
nature  protection  laws  stipulate  that  wetlands,  in  particular  its  habitats  and  organisms, 
have to be protected; 

  Belgium  —  in  Wallonia,  the  Forest  Code  (Decree  of  15  July  2008)  has  introduced  a 
number  of  constraints  in  favour  of  forest  conservation  and  the  maintenance  of  ligneous 

63 

 
materials and carbon, including a limitation on drainage (which encourages maintenance 
of organic matter); 

  Germany — various measures are in place, including peatland protection and restoration, 
reduction  in  peat  harvesting  and  the  use  of  peat  substitutes  in  horticulture  and 
paludiculture; 

  Denmark — a set-aside scheme for organic soils is under consideration for 2014-2017; 
DKK 165 million  is  dedicated  to  the  initiative.  The  intention  is  to  ensure  biodiversity, 
reduce nitrogen leakage to water bodies and reduce GHG emissions. The reduction effect 
is  heavily  dependent  on  the  biophysical  specifications  of  the  areas  chosen  for  the  set-
aside; 

  Malta — various wetlands have been identified and are protected under the Environment 
and Development Planning Act, having been designated as bird sanctuaries, special areas 
of  conservation  (under  the  Habitats  Directive)  and  water  bodies  (under  the  Water 
Framework  Directive).  Malta  has  two  Ramsar  sites,  Għadira  and  is-Simar  (both  coastal 
wetlands and bird sanctuaries); 

  Netherlands  —  CAP  1st  pillar  and  RDPs,  which  include  a  measure  on  meadow  bird 
management to raise groundwater level in peat pasture areas and prevent further loss of 
permanent grassland; 

  Poland — limiting fertilisation, the number of dates for cutting operations or the intensity 
of  grazing  in  environmentally  valuable  areas,  including  moss  bogs,  tall-sedge  rushes, 
Molinion and Cnidion meadows, semi-natural wet meadows, semi-natural fresh meadows, 
Nardus  grasslands,  salt  marshes  and  other  natural  sites,  such  as  different  types  of  peat-
bog. In the areas covered by this package, ploughing, rolling and fertilisation are banned 
(or substantially restricted); 

  Romania — a rural development measure is in place on the protection of soils with high 

content of organic matter, including by restoration of wetlands; 

  Slovakia — a number of documents set out objectives and measures on the maintenance, 
protection,  management,  sustainable  use,  restoration  and  renaturation  of  wetlands;  the 
latter  is  also  taken  into  account  in  the  preparation  of  new  strategic  documents 
(e.g. national strategy for invasive alien species, 2015-2020 RDP); 

  Sweden  —  measures  to  stop  drainage  and  stimulate  restoration  of  wetland;  around 
1.5 million ha have been drained in Sweden to increase agricultural or forest production; 
and 

  UK — peatland restoration (rewetting) has been identified as a measure to reduce GHG 

emissions, although the degree of abatement is still being investigated. 

Concluding remarks 

The reporting exercise under Article 10 of the LULUCF Decision raised national administrators’ 
and stakeholders’ awareness of LULUCF action and highlighted information and knowledge gaps 
as  regards  effective  means  of  implementation  and  quantifying  its  effects.  It  provided  an 
opportunity to: 

 

raise awareness among stakeholders in the Member States; 

  stimulate  collective  learning  between  Member  States  and  the  Commission,  enabling  the 
sharing of efforts and developments, and consolidating and documenting experience; 

64 

 
 

identify  information  and  knowledge  gaps  as  regard  effective  means  of  implementing 
LULUCF action and quantifying its effects; 

  enhance  the  quality  and  standardisation  of  national  information,  strategies  or  plans  on 

LULUCF action; and 

 

facilitate  speedy  progress  in  improving  information  on  mandatory  accounting  for  CM, 
GM, WDR and RV. 

The first phase of the process is to be followed by a mid-term (end of 2016) and final report (end 
of 2020). The latter will report on the implementation of LULUCF mitigation action and provide 
an opportunity to pass on new knowledge that will have become available by December 2016 as 
regards effective means of implementing it and quantifying its effects. 

Reporting timetable (Article 10 of Decision No 529/2013/EU) 

Milestone date 
1 July 2014 

Alternatively: 
9 January 2015 

December 

December 

31 
2016 
31 
2020 

Phase 

Start of process 

Milestone requirement 
First submission of Article 10(2) information  
First  submission  for  Member  States  who  opt  to 
low-carbon 
include  Article  10 
development plans under the MMR Regulation 

information 

in 

Mid-term review  

Progress reports on implementing LULUCF action 

End of period review  

Progress reports on implementing LULUCF action 

The  above  progress  reports  form  only  part  of  the  reporting  obligations  in  Decision 
No 529/2013/EU.  A  series  of  reports  on  estimated  emissions  is  also  to  be  submitted  under 
Article 3(2), the timing of which is intended to facilitate action to improve data availability and 
quality.  For  example,  information  gathered  under  Article  10  should  help  improve  systems  for 
reporting emissions and removals under CM and GM in preparation for mandatory reporting for 
agricultural land as of 2022. 

The  process  will  continue  with  the  Article 10(4)  report  on  implementation  of  LULUCF  action 
(due  in  December  2016),  which  will  provide  Member  States  with  an  opportunity  to  add 
information not present in the 2014 report. 

The Commission will consider issuing additional guidance in the second half of 2016 on updating 
the Member State Article 10(4) reports. 

65