COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on binding annual greenhouse gas emission reductions by Member States from 2021 to 2030 for a resilient Energy Union and to meet commitments under the Paris Agreement 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 Member State, EU emission allowance, EU environmental policy, Kyoto Protocol, adaptation to climate change, climate change, environmental monitoring, greenhouse gas, pollution control, reduction of gas emissions

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   EUROPEAN COMMISSION  Brussels, 20.7.2016  SWD(2016) 248 final   COMMISSION STAFF WORKING DOCUMENT  EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT  Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL  on binding annual greenhouse gas emission reductions by Member States from 2021 to 2030 for a resilient Energy Union and to meet commitments under the Paris Agreement 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) 482 final} {SWD(2016) 247 final}  
 
 
Executive Summary Sheet 

Impact  assessment  on  Proposal  for  a  Regulation  on  binding  annual  greenhouse  gas  emission  reductions  by 
Member  States  from  2021  to  2030  for  a  resilient  Energy  Union  and  to  meet  commitments  under  the  Paris 
Agreement 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 

A. Need for action 

Why? What is the problem being addressed?  
The EU has committed itself in the Paris Agreement to a target of an at least 40% domestic reduction in 
greenhouse gas (GHG) emissions by 2030 compared to 1990. For the sectors outside of the EU 
Emissions Trading System (non-ETS) the Commission proposed a target of -30% by 2030 compared to 
2005. With current policies alone it cannot be expected that this will be reached. The European Council 
in its October 2014 conclusions has mandated the Commission to translate the EU target into national 
targets.  
What is this initiative expected to achieve?  
The objective is to achieve 30% GHG reductions in the non-ETS compared to 2005, in a manner that is 
fair  for  Member  States  given  their  different  capacities,  while  ensuring  cost  efficiency  and 
environmental integrity at EU level. 
What is the value added of action at the EU level?  
The EU and its Member States participate jointly in the implementation of the Paris Agreement. Joint 
action allows the EU to address issues of both equity and efficiency, while reaching an ambitious 
environmental goal. Articles 191 to 193 of the TFEU confirm EU competencies in the area of climate 
change. 

B. Solutions 

What  legislative  and  non-legislative  policy  options  have  been  considered?  Is  there  a  preferred 
choice or not? Why?  
Since 2013, national targets for sectors outside the ETS are set in the so called Effort Sharing Decision 
(ESD). The European Council confirmed to continue with this instrument to regulate GHG reductions 
in the EU also for the period 2021-2030. Following the guidance this impact assessment looks at how 
(i) to set targets at Member State level in a fair manner corresponding to the GDP per capita and taking 
into account cost efficiency, and (ii) to improve existing and new flexibilities that ensure targets can be 
met cost efficiently while reducing administrative burden. New flexibilities include a limited link with 
the land use sector as well as a limited one off flexibility from the ETS into the non-ETS. 
Who supports which option?  
The  European  Council  has  provided  detailed  guidance  on  the  policy  options  to  be  analysed.  Many 
stakeholders  emphasised  environmental  integrity  to  ensure  the  EU  effectively  meets  its  2030  GHG 
target.   

C. Impacts of the preferred option 

What are the benefits of the preferred option (if any, otherwise main ones)?                                        
Setting non-ETS targets based on GDP per capita addresses Member States' primary concern of 
fairness. The foreseen further target adjustments for high income Member States, as well as the 
improvement of existing and new flexibilities allows for a cost efficient achievement of the target. In 
order to ensure overall environmental integrity, flexibilities need to be limited avoiding 

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underachievement of the EU's international commitment to at least 40% domestic GHG emissions 
reductions compared to 1990 by 2030. 

What are the costs of the preferred option (if any, otherwise main ones)?  
The  costs  related  to  the  achievement  of  the  EU  GHG  wide  reduction  target,  including  the  target  to 
reduce  GHG  by  30%  in  the  non-ETS,  was  assessed  in  depth  in  the  previous  impact  assessment 
accompanying the proposal for 'A policy framework for climate and energy in the period from 2020 up 
to 2030'1. It was estimated that a domestic 40% reduction of GHG emissions would lead to additional 
energy  system  costs  of  0.15–0.54%  compared  to  GDP  in  2030.  This  impact  assessment  looks  at  the 
distributional impacts, especially to what extent Member State non-ETS targets determined on the basis 
of GDP per capita deviate from the cost efficient potential to reduce emissions in sectors covered by 
the ESD and to what extent flexibilities or target adjustments can help in minimising these deviations.  
How will businesses, SMEs and micro-enterprises be affected?  
There are no direct reporting obligations or other administrative consequences for businesses, SMEs or 
micro-enterprises.  Depending  on  the  nature  and  scope  of  any  national  and  EU  measures  to  reduce 
emissions, businesses will be indirectly affected. Any such effects will need to be assessed within those 
specific policy proposals. 
Will there be significant impacts on national budgets and administrations?  
The  proposal  for  national  target  setting  will  reduce  cost  impacts  for  low  income  Member  States 
compared  to  a  proposal  that  would  base  targets  solely  on  cost  efficiency.  The  proposal  foresees 
enhanced flexibility to ensure that costs for high income Member States will also remain limited. Much 
less frequent compliance checks are recommended, i.e. every five years instead of annually, that will 
significantly reduce the administrative burden for both Member States and the European Commission 
Will there be other significant impacts?  
Further impacts will depend on the national policies and measures chosen in each specific country. 

When will the policy be reviewed?  
In line with the Paris Agreement, five-yearly reviews are recommended starting in 2024. 

D. Follow up 

1 SWD 2014 (15) final 

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