REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL EU and the Paris Climate Agreement: Taking stock of progress at Katowice COP (required under Article 21 of Regulation (EU) No 525/2013 of the European Parliament and of the Council of 21 May 2013 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)
Date: 2018-10-26
Institutions: Directorate-General for Climate Action, European Commission
Subjects: EU Emissions Trading Scheme, EU Member State, European Union, adaptation to climate change, climate change, environmental cooperation, greenhouse gas, international agreement, land use, reduction of gas emissions

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 26.10.2018  COM(2018) 716 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL EU and the Paris Climate Agreement: Taking stock of progress at Katowice COP         (required under Article 21 of Regulation (EU) No 525/2013 of the European Parliament and of the Council of 21 May 2013 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)       {SWD(2018) 453 final}  
 
 
Climate action progress report  

Contents 

1  Meeting the EU’s international commitments ................................................................................. 1 

2 

EU ETS emissions ........................................................................................................................... 2 

2.1 

2.2 

EU ETS emissions in 2017 ...................................................................................................... 2 

Revision of the regulatory framework of the EU ETS ............................................................ 3 

3 

‘Effort-sharing’ emissions ............................................................................................................... 5 

3.1 

Emissions developments at EU level ...................................................................................... 5 

3.2  Member States’ compliance with the Effort-Sharing Decision ............................................... 7 

3.3 

Towards 2020 and 2030 .......................................................................................................... 8 

4 

Land use, land-use change and forestry......................................................................................... 10 

5  Developing EU legislation ............................................................................................................ 12 

5.1 

5.2 

5.3 

5.4 

5.5 

Road transport ....................................................................................................................... 12 

Energy efficiency and renewable energy............................................................................... 13 

Governance of the Energy Union .......................................................................................... 13 

F-gas Regulation .................................................................................................................... 14 

Circular economy .................................................................................................................. 14 

6  Climate finance .............................................................................................................................. 15 

6.1 

6.2 

6.3 

Revenues from the auctioning of EU ETS allowances .......................................................... 15 

LIFE ...................................................................................................................................... 15 

NER 300 ................................................................................................................................ 16 

6.4  Mainstreaming climate policies into the EU budget ............................................................. 17 

7  Adapting to climate change ........................................................................................................... 18 

8 

International climate cooperation .................................................................................................. 19 

8.1 

8.2 

Global action ......................................................................................................................... 19 

Aviation ................................................................................................................................. 20 

8.3  Maritime policy ..................................................................................................................... 21 

8.4 

8.5 

8.6 

8.7 

ETS-linking with Switzerland ............................................................................................... 21 

International carbon markets ................................................................................................. 22 

Voluntary action – Marrakesh Partnership on Global Climate Action.................................. 22 

Supporting developing countries ........................................................................................... 23 

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1  Meeting the EU’s international commitments  

In 2018, the EU adopted legislation that will enable it to deliver on its commitment to reduce 
its greenhouse gas (GHG) emissions by at least 40 % by 2030 as compared with 1990. It also 
raised the level of its ambition on renewable energy and energy efficiency. Together, if fully 
implemented, it is estimated to result in a cut in EU emissions of around 45 % by 2030. 

Under currently implemented policies, emissions in 2030 are projected to be 30 % below the 
1990 level (based on projections from the Member States, mostly from March 2017). In order 
to  meet  their  obligations  under  the  new  legislation,  Member  States  will  therefore  have  to 
formulate policies and measures to reduce emissions further. 

The EU remains on track to reach its 2020 target of reducing GHG emissions by 20 % from 
1990 levels. In 2017, EU GHG emissions were down by 22 %, according to preliminary data 
(covering  emissions  from  international  aviation,  but  not  emissions  and  removals  from  land 
use,  land-use  change  and  forestry  (LULUCF)).  As  Member  States’  projections  indicate  that 
emissions will decrease further, the EU expects to meet its 2020 target.  

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7 000

6 000

5 000

4 000

3 000

2 000

1 000

0 000

2020-target:  
minus 20 % 
vs. 1990 

2017-emissions:  
minus 22 %  
vs. 1990 

2030-target:  
minus 40 % 
vs. 1990 

1990

1995

2000

2005

2010

2015

2020

2025

2030

Total EU greenhouse gas emissions (historical)

Total EU greenhouse gas emissions (projection with existing measures)

2020 and 2030 targets

Figure 1:  
2018-2030) (Mt CO2-eq.) and GHG reduction targets.1 

Total  EU  GHG  emissions  (historical  emissions  1990-2017,  projected  emissions 

In  2017,  emissions  were  0.6 %  higher  than  in  2016,  according  to  preliminary  data.  The 
increase  came  mainly  in  the  transport  sector  and  industry.  However,  the  decoupling  of 
economic  activity  from  GHG  emissions  continued  as  the  growth  in  emissions  was 
significantly lower than the economic growth. The GHG emission intensity of the economy, 
defined as the ratio between emissions and GDP, fell to a record low of 315 g CO2-eq. / EUR, 

1 The projections were submitted by Member States, mostly in March 2017, with 2015 as the latest available 
data. 

1 

 
 
 
                                                           
 
 
 
which is half the 1990 level. Between 1990 and 2017, the EU’s combined GDP grew by 58 
%, while total GHG emissions decreased by 22 %. 

160

140

120

100

80

60

40

20

0

0
0
1
=
0
9
9
1
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e
d
n

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GHG emissions

GDP

GHG intensity

1990

1995

2000

2005

2010

2015

Figure 2:   The EU's GHG emissions, real GDP and GHG emission intensity (1990 = 100).2 

2  EU ETS emissions  

The EU emissions trading system (EU ETS) covers approximately 11 000 power stations and 
manufacturing plants, and aviation within and between the participating countries.  

2.1  EU ETS emissions in 2017 

In 2017, emissions from installations covered by the EU ETS are estimated to have increased 
slightly (by 0.18 %) compared with  2016.3 The increase breaks  a downward trend since the 
start of phase 3 in 2013 and can be explained by 2.4 % growth in real GDP, which is higher 
than in any year since the beginning of the current trading period. 

The  increase  was  driven  mainly  by  industry,  whereas  emissions  from  the  power  sector  fell 
slightly.  Verified  aviation  emissions  continued  to  grow,  reaching  64.2 Mt CO2  in  2017,  a 
4.5 % increase from 2016. 

Exchanges of international credits for EU allowances have declined to a very low level. Over 
phases  2  (2008-2012)  and  3  (from  2013),  a  total  of  1.49  billion  were  used  or  exchanged  to 
offset EU ETS emissions. In phase 3, about 436 million had been used by June 2018 (about 
11.5 million in 2017 alone). As from 2021, it will no longer be possible to use international 
credits to comply with EU ETS obligations.  

2  GDP data: Ameco / ECFIN / World Bank. Estimates gap-filled by EEA.  
3  Based on the information recorded in the Union Registry. 

2 

 
 
 
 
                                                           
 
 
 
 
2.2  Revision of the regulatory framework of the EU ETS  

On 9 November 2017, the European Parliament  and Council reached provisional  agreement 
on  revising  the  EU  ETS,  mainly  for  the  period  after  2020.  The  revised  ETS  Directive  was 
published  on  14  March  2018.4  Among  other  things,  it  reduces  the  emissions  cap  further  by 
raising the linear reduction factor to 2.2 % a year as of 2021. This means that, between 2021 
and  2030,  emissions  will  be  cut  by  48 Mt CO2-eq.  a  year,  as  compared  with  38 Mt  in  the 
current trading phase, thus keeping the EU ETS on track to meet its 43 % reduction target by 
2030.  As  shown  in  figure  3,  Member  States'  own  projections,  dating  from  2017  for  most 
Member States, show a smaller decrease in emissions than required by the ETS.  

The revised Directive addresses the surplus of allowances that has built up since 2009, mainly 
as a result of the economic crisis and the use of international credits to offset emissions in the 
EU. Over the last three years, the surplus has been declining steadily, by almost half a billion 
allowances, see figure 3. This is in part thanks to the backloading of allowances.5 However, it 
remains substantial: currently over 1.6 billion allowances.6  

4      Directive  (EU)  2018/410  of  the  European  Parliament  and  of  the  Council  of  14  March  2018  amending 
Directive  2003/87/EC  to  enhance  cost-effective  emission  reductions  and  low-carbon  investments,  and 
Decision (EU) 2015/1814 (OJ L 76, 19.3.2018, p. 3–27). 

5   Backloading  refers  to  a  short-term  measure  to  postpone  the  auctioning  of  900  million  allowances  from 

2014-2016 to 2019-2020. 

6    The Commission published the most recent surplus information in May 2018: 

https://ec.europa.eu/clima/sites/clima/files/ets/reform/docs/c_2018_2801_en.pdf 

3 

 
 
 
 
 
                                                           
 
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Phase 1 

Phase 2 

Phase 3 

Phase 4 

2 500

2 000

1 500

1 000

 500

 0

- 500

Aviation (verified emissions)
Combustion (sum of Member States' projections)
Combustion* (verified emissions)
Cap phase 3
Surplus of allowances

*Combustion refers to activity 20 "combustion of fuels" in the EUTL.   

Other industrial installations (sum of Member States' projections)
Other industrial installations (verified emissions)
Cap phase 2
Cap phase 4

Verified ETS emissions 2005-2017, projected ETS emissions 2018-2030, ETS cap 

Figure 3:  
phases 2, 3 and 4, and accumulated surplus of ETS allowances 2008-2017 (Mt CO2-eq.). The 
chart shows verified ETS emissions with the sectoral and geographical scope of ETS in the 
relevant year and can therefore not be read as a time series before 2013. Aviation is included in 
the cap for 2012-2017.7  

The Directive also addresses the surplus by strengthening the market stability reserve (MSR), 
which will start operating on 1 January 2019. The MSR cuts the surplus by reducing auction 
volumes  if  it  exceeds  833  million  allowances,  which  is  presently  the  case.  The  Directive 
makes two main changes to the functioning of the MSR: 

 

the percentage of the surplus to be placed in the reserve from 2019 to 2023 will be 
doubled from the initially agreed 12 % to 24 %, i.e. the surplus will be reduced more 
quickly; and 

 

from  2023,  MSR  holdings  exceeding  the  previous  year’s  auction  volume  will  no 
longer be valid.  

In practice, this means that, every year until 2023, the Commission will calculate how many 
allowances  are  in  circulation  (the  surplus)  and  reduce  the  auction  supply  by  24 %  of  that 
number.8  If  the  surplus  falls  below  400  million  allowances,  the  MSR  will  start  releasing 
allowances back onto the market.  

7 The split between combustion and other industrial installations is an estimate. Sources: Verified ETS emissions 
2005-2017 (ETS data viewer/ EUTL). Projected emissions 2018-2030: Sum of Member States projections with 
existing measures (EEA).  
8   A detailed explanation on the composition of the surplus and the methodology for calculating it year-on-year 
is available in the latest (2018) Commission Communication calculating the 2017 surplus: 
https://ec.europa.eu/clima/sites/clima/files/ets/reform/docs/c_2018_2801_en.pdf 

4 

 
 
 
                                                           
 
 
As  a  result,  from  January  to  August  2019,  almost  265  million  allowances  (16 %  of  the 
surplus)9 will not be auctioned but instead be put into the MSR. Some 40 % fewer allowances 
will  be  auctioned  than  in  the  corresponding  period  in  2018.  In  short,  the  MSR  reduces  the 
surplus by lowering the supply of allowances to the market.  

3 

‘Effort-sharing’ emissions  

Emissions  from  most  sectors  not  included  in  the  EU  ETS,  such  as  transport,  buildings, 
agriculture  (non  CO2-emissions)  and  waste,  are  covered  by  the  EU’s  ‘effort-sharing’ 
legislation.  The  Effort-Sharing  Decision10  (ESD)  sets  national  emissions  targets  for  2020, 
expressed  as  percentage  changes  from  2005  levels.  Member  States  must  respect  annual 
emissions limits from 2013 to 2020.   

In the Effort-Sharing Regulation11 (ESR), adopted in May 2018, EU leaders’ commitment to 
reducing emissions in effort-sharing sectors by 30 % by 2030 is translated – on the basis of 
fairness, cost-effectiveness and environmental integrity – into binding annual GHG emissions 
reductions for each Member State for 2021–2030. 

The ESR recognises that Member States’ ability to take action varies and it sets differentiated 
national  targets  that  primarily  reflect  per  capita  GDP.  The  2030  targets  range  from  0 % 
to -40 % compared with 2005 levels.  

The  ESR  maintains  the  forms  of  flexibility  that  exist  under  the  current  ESD  (e.g. banking, 
borrowing, buying and selling of emission allocations between Member States), except for the 
use  of  international  credits,  which  will  not  be  allowed  after  2020.  In  addition,  eligible 
Member States will be allowed to use a limited number of ETS allowances, and all Member 
States  will be allowed to use a limited amount of emissions removals in land-use sectors to 
meet part of their targets.  

3.1  Emissions developments at EU level 

Emissions  covered  by  the  ESD  were  11 %  lower  in  2017  than  in  2005.  The  EU  thus 
over-achieved  by  4  percentage  points  (pp)  its  interim  target  of  a  7 %  reduction.  Since  the 
system  was  launched  in  2013,  EU-wide  emissions  have  been  significantly  below  the  total 
limit  each  year.  This  led  to  a  cumulative  surplus  of  annual  emission  allocations  (AEAs)  of 
about 1 023 Mt CO2-eq. in 2013-2017, which corresponds to around 35 % of 2005 emissions.  

9   24 % in 12 months is equivalent to 16 % in eight months. 
10  Decision No 406/2009/EC of the European Parliament and of the Council of 23 April 2009 on the effort of the 
Member States to reduce their greenhouse gas emissions to meet the Community's greenhouse gas emission 
reduction commitments up to 2020 (OJ L 140, 5.06.2009, p.136).  
11 Regulation (EU) 2018/842 of the European Parliament and of the Council of 30 May 2018 on binding annual 
greenhouse gas emission reductions by Member States from 2021 to 2030 contributing to climate action to 
meet  commitments  under  the  Paris  Agreement  and  amending  Regulation  (EU)  No  525/2013  (OJ L 156, 
19.6.2018, p. 26). 

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3 000

2 500

2 000

1 500

1 000

 500

 0

Transport

Industry

Buildings (projections)

Waste (projections)

Cumulative surplus of AEAs

Buildings

Waste

Agriculture (projections)

AEAs 2013-2020

Agriculture

Transport (projections)

Industry (projections)

Estimated AEAs 2021-2030

Figure 4:   Emissions covered by the scope of the effort-sharing legislation 2005-2030 and AEAs 

(Mt CO2-eq.)12 

According  to  national  projections  based  on  existing  measures,  emissions  in  2020  should  be 
16 % below the 2005 level, exceeding the 2020 target of a 10 % reduction. In 2030, emissions 
are projected to be 21 % lower than in 2005. To achieve the 2030 target of a 30 % reduction 
from the 2005 level, additional measures will therefore be necessary.  

Preliminary 2017 data indicate that ESD emissions increased from 2016 to 2017 for the third 
consecutive  year  (by  0.8 %).  Since  the  ESD  came  into  effect  in  2013,  transport  emissions 
have risen by 7 % and emissions from agriculture by 2 %, while those from other sectors have 
decreased.   

Transport  emissions  covered  by  the  ESD  were  slightly  lower  in  2017  than  in  2005. 
Emissions from road transport have gone up as demand for mobility has grown throughout the 
1990s  until  2007.  After  a  few  years  of  decline,  transport  emissions  increased  again  since 
2014. Towards 2030, with existing policies a marginal decrease is projected. In view of these 
trends, the Commission has proposed a set of targeted regulatory actions for this sector (see 
section 5.1). Transport emissions make up 36 % of emissions covered by the ESD. 

Emissions  from  energy  use  in  buildings  show  some  year-to-year  variation  due  to 
weather-related changes in heating demand. However, they were 16 % lower in 2017 than in 
2005 and the downward trend is projected to continue in the period to 2030.  

Emissions from  agriculture were at  a similar level  in  2017 as in  2005 and are projected to 
remain stable in the period to 2030, with existing policies.  

12 The sector here summarised as 'industry' aggregates ESD emissions of energy supply, manufacturing and 
product use, i.e. inventory source categories 1.A1., 1.A.2, 1.B, 1.C and 2. 

6 

 
 
 
                                                           
 
 
Emissions  from  waste  management  decreased  by  32 %  between  2005  and  2017,  and  the 
steep downward trend is projected to continue.  

ESD emissions from industry and other sectors were 12 % lower in 2017 than in 2005 and 
are projected to continue to fall.  

Methane emissions have fallen steadily; in 2016, they were 38 % lower than in 1990, thanks 
partly to existing EU policies, notably the common agricultural policy and waste legislation. 
Methane emissions from agriculture (half of all methane emissions come from livestock) have 
fallen  by  22 %  since  1990  and  those  from  waste  management  by  45 %.  The  new  waste 
legislation  adopted  in  May  201813  will  lead  to  further  decreases  in  emissions  from  waste 
management  as  it  introduces  ambitious  landfilling  targets  and  restrictions,  as  well  as 
mandatory separate collection of bio-waste. 

Lower levels of coal mining and post-mining activities from energy production have led to a 
56 % reduction in methane emissions from energy production since 1990.  

On the other hand, EU emissions of greenhouse impacting fluorinated gases (F-gases) rose by 
69 %  between  1990  and  2016.  This  is  due  to  increased  use  of  hydrofluorocarbons  (HFCs), 
mainly  as  substitutes  for  ozone-depleting  substances.  HFCs  are  used  in  various  sectors  and 
applications,  including  as  refrigerants  in  refrigeration,  air-conditioning  and  heat  pump 
equipment; as blowing agents for foams; as solvents; and in fire extinguishers and aerosols.  

While  emissions  of  other  F-gases  (PFCs  and  SF6)  have  decreased  since  1990,  F-gases  still 
account for 2.7 % of all EU GHG emissions. Through the F-gas Regulation, the EU has taken 
steps to reduce emissions of F-gases (see section 5.4). 

3.2  Member States’ compliance with the Effort-Sharing Decision  

All 28 Member States complied with their ESD obligations in 2013-2015. Malta exceeded its 
AEAs  in  each  of  the  years  in  question,  but  covered  the  deficit  by  purchasing  AEAs  from 
Bulgaria. Sweden did not use its full allocation and cancelled the surplus  AEAs to enhance 
the environmental integrity of the system as a whole. All other Member States banked their 
surplus allocations for use in later years. No international credits from the clean development 
mechanism (CDM) or joint implementation were used to comply with ESD obligations.  

The compliance cycle for 2016 is ongoing. Malta, Finland, Poland, Ireland, Germany and 
Belgium  exceeded  their  AEAs  and  will  have  to  use  flexibilities  to  ensure  compliance.  For 
Belgium,  Finland,  Germany,  Ireland  and  Poland,  this  was  the  first  time  and  they  may  use 
surplus  AEAs  banked  from  previous  years.  Malta  has  exceeded  its  AEAs  every  year  since 
2013 and will again need to purchase AEAs and/or international project credits. 

The cumulative surplus of AEAs per Member State for 2013-2016 is shown in Figure 5. 

13 http://europa.eu/rapid/press-release_IP-18-3846_en.htm  

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EU-28

32 % 

Malta*
Finland
Lithuania
Germany
Luxembourg
Austria
Poland
Belgium
Czech Republic
Latvia
United Kingdom
Estonia
Ireland
Denmark
Romania
France
Italy
Spain
Slovenia
Netherlands
Bulgaria*
Sweden*
Slovakia
Portugal
Greece
Hungary
Croatia
Cyprus

-46 % 

4 % 

10 % 
11 % 

16 % 
16 % 
16 % 
16 % 
18 % 
20 % 
20 % 
21 % 
21 % 
25 % 
27 % 
31 % 
41 % 
44 % 
52 % 
54 % 
58 % 
61 % 
76 % 
81 % 
94 % 
100 % 
105 % 
183 % 

2 % 

-50 %

0 %

50 %

100 %

150 %

200 %

Cumulative surplus of AEAs
Sweden: cumulative surplus of AEAs, deleted
Bulgaria, Malta: traded AEAs

Figure 5:  

Cumulative surplus of AEAs as percentage of 2005 emissions, 2013-2016. 

Preliminary  data  for  2017  show  that  most  Member  States’  emissions  were  lower  than  their 
AEAs.  In  nine  cases  (Greece,  Slovakia,  Croatia,  Romania,  Hungary,  Portugal,  Sweden, 
the Netherlands and Slovenia), emissions were 10 pp or more lower14.  

It  is  estimated  that  Malta,  Germany,  Ireland,  Austria,  Cyprus,  Poland  and  Finland 
exceeded their AEAs, as did Bulgaria, Estonia and Lithuania, but by less than 1 pp (according 
to preliminary data). 

3.3  Towards 2020 and 2030 

The  new  Regulation  on  the  governance  of  the  Energy  Union  (see  section 5.3)  requires  the 
Member  States  to  draw  up  national  energy  and  climate  plans  setting  out  their  policies  and 
measures  for  the  period  to  2030.  On  the  basis  of  existing  measures,  three  Member  States 
(Hungary, Portugal and Greece) project to over-achieve their 2030 targets and five others are 

14 The percentage points represent the difference between emissions and AEAs expressed as percentage change 
from 2005 base year emissions.  

8 

 
 
 
                                                           
broadly on track. This means that most will need to step up their efforts. Figure 6 shows the 
gaps between projected emissions and 2030 ESR targets.  

Hungary

Portugal

Greece

Croatia

Sweden

Slovakia

Slovenia

Bulgaria

Czech Republic

Netherlands

United Kingdom

Italy

France

Spain

Poland

Romania

Austria

Lithuania

Denmark

Germany

Finland

Latvia

Luxembourg

Belgium

Estonia

Ireland

Malta

Cyprus

-11 

-7 

-7 

-1 

0 

0 

0 

1 

2 

5 

7 

8 

9 

10 

10 

12 

15 

15 

15 

16 

17 

19 

20 

21 

26 

31 

46 

47 

-20

-10

0

10

20

30

40

50

60

Percentage points difference between ESR targets and projected emissions in 2030 

Figure 6:   Gaps between 2030 ESR targets and projected emissions (percentage points).15 
(Negative values indicate over-achievement of targets; positive values indicate a 
deficit).  

Most Member States are expected to reach their 2020 ESD targets, but (according to national 
projections) eight may not: Ireland has projected that it may miss its target by 20 pp, while 
Cyprus  and  Malta  may  miss  theirs  by  12 pp  and  11 pp  respectively.  Belgium,  Germany, 
Luxembourg, Austria and Finland may also fall short, but by smaller margins.  

Cyprus  has  projected  that  it  may  miss  its  targets  for  2020  and  2030,  by  large  margins.  As 
shown in figure 6, with existing measures Cyprus projects to miss its 2030 target by 47 pp. 
However, Cyprus has projected that with additional measures, the gap may be reduced to 17 
pp. Transport emissions are of special concern, as they are increasing.  

Also Malta has projected that it may miss both targets by large margins. In addition to rising 
emissions  from  road  transport,  HFC  emissions  have  been  rising  sharply,  mainly  because  of 

15 ESR targets and projected emissions expressed in percentage change from 2005 base year emissions.  

9 

 
 
 
                                                           
increased demand for air-conditioning. In May 2018, as part of the European Semester annual 
cycle  of  economic  coordination,  Malta  was  urged  to  set  targets  and  implement  measures  to 
reduce  congestion  and  GHG  emissions  from  transport  substantially  by  2025,  allowing  for 
periodic monitoring of progress.  

Ireland has projected that it will miss both its 2020 and 2030 targets, with existing measures. 
It  has  banked  its  surplus  allocations  from  2013-2015,  but  this  is  not  expected  to  cover  the 
deficit in 2016-2020. In particular, transport emissions have increased sharply and the rise is 
projected  to  continue  until  2025.  In  the  2018  European  Semester,  it  was  recommended  that 
Ireland should ensure effective implementation of the national development plan, inter alia in 
terms of clean energy, transport and housing. 

Also Belgium and Luxembourg has projected to miss both targets with existing measures. In 
the European Semester,  it was recommended that  Belgium should invest  in  new or existing 
transport infrastructure and improve incentives to use collective and low-emission transport.  

In Luxembourg, about half of the GHG emissions come from road transport. In the European 
Semester, it was highlighted that Luxembourg’s transport fuel taxes are among the lowest in 
the EU and that the most urgent challenge is to complete and upgrade rail infrastructures. 

With  existing  policies,  also  Estonia,  Latvia,  Finland,  Germany,  Denmark,  Lithuania, 
Austria, Romania, Poland and Spain have projected to miss their 2030 targets by more than 
10 pp. All Member States projected to miss the 2030 targets are expected to set out in their 
national energy and climate plans (under the Governance Regulation) how they will seek to 
fulfil their obligations, in particular through new or strengthened policies and measures. 

4  Land use, land-use change and forestry  

In  May  2018,  the  EU  adopted  the  LULUCF  Regulation,16  which  integrates  emissions  and 
removals from land into the 2030 climate and energy framework. This is in line with the Paris 
Agreement,  which  points  to  the  critical  role  of  land  use  in  reaching  long-term  climate 
mitigation objectives.  

The LULUCF Regulation establishes the EU’s commitment for 2021-2030 to result in no net 
emissions  from  the  accounted  scope  of  the  regulation.  Its  scope  covers  all  managed  land, 
including  forest,  cropland,  grassland  and  (by  2026)  wetland.  It  simplifies  and  upgrades  the 
accounting  methodology  under  the  Kyoto  Protocol  and  Decision  No 529/2013/EU.  It  also 
establishes  a  new  EU  governance  process  for  monitoring  how  Member  States  calculate 
emissions and removals from activity in their forests.  

At present,  the EU’s land stores more emissions than it emits  and the  LULUCF Regulation 
focuses on creating incentives at least to preserve this situation. It requires each Member State 

16   Regulation (EU) 2018/841 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  in  the  2030  climate  and  energy 
framework, and amending Regulation (EU) No 525/2013 and Decision 529/2013/EU (OJ L 156, 19.6.2018, 
p. 1). 

10 

 
 
                                                           
to ensure that accounted emissions from land use are entirely compensated by an equivalent 
removal of CO2 from the atmosphere through action in the sector. This ‘no-debit rule’ means 
that  Member  States  have  to  offset  emissions  from  deforestation,  for  instance  by  equivalent 
carbon sinks from afforestation or improving the sustainable management of existing forests. 
The rules allow Member States some flexibility, e.g. if a Member State has net removals from 
land use and forestry, it will be able to transfer those quantities to other Member States to help 
them meet  the 'no-debit-rule'. Similarly, Member States can compensate  any shortfall in  the 
LULUCF sector with AEAs they receive under the ESR. 

.

q
e
-
2
O
C
t

M

100

50

0

-50

-100

-150

-200

Afforestation /
Reforestation

Deforestation

Forest Management

Cropland Management

Grazing Land Management

Revegetation

Total

2013

2014

2015

2016

Figure 7:  
Preliminary accounted emissions and removals for activities reported under  the 
Kyoto Protocol, second commitment period, EU-28. (Forest Management credits are capped and 
presented as yearly averages when the total Forest Management credits of the considered period 
exceed the simulated cap over the same period.) 

Member  States  had  already  partly  undertaken  this  commitment  individually  for  the  second 
commitment period under the Kyoto Protocol (2013-2020). The EU’s ‘reported’ quantities 
under  the  Protocol  for  2013-2016  (i.e. total  of  emissions  and  removals  for  each  activity) 
produce an annual average sink of -384.4 Mt CO2-eq. Its ‘accounted’ debits and credits per 
activity  for  the  same  period  produce  an  average  sink  of  -115.7  Mt  CO2-eq.17  Reported  net 
removals  fell  from  -394.4  to  -366.4  Mt  CO2-eq.  and  accounted  net  credits  from  -120.9 
to  -106.5 Mt CO2-eq.  These  quantities  for  the  EU  include  ‘elected  activities’  under  the  KP: 
seven Member States chose cropland management, six chose grazing land management, one 
chose  revegetation  and  one  chose  wetland  drainage  and  rewetting,  but  has  yet  to  provide 
quantifications. 

There are noticeable patterns in  GHG inventories and their accounts at  Member State level, 
although these are preliminary and are adjusted  at  the end of the accounting period in  2020 
under LULUCF rules. Denmark and Ireland show net reported emissions, mainly as a result 
of  high  emissions  from  cropland  management  (Denmark)  and  grazing  land  management 

17   The  differences  between  ‘reported’  emissions  and  removals  and  ‘accounted’  debits  and  credits  under  the 

Kyoto Protocol are explained in the Staff Working Document accompanying the report.  

11 

 
 
 
                                                           
 
 
(Ireland).  Under  accounting  rules  for  the  Kyoto  Protocol  second  commitment  period, 
Belgium,  Bulgaria,  Cyprus,  Finland,  Latvia  and  the  Netherlands  show  net  debits  in  this 
preliminary  accounting  exercise.  Croatia,  Estonia,  Germany  and  Lithuania  show  increasing 
credits, while we see decreases for Greece and Portugal. Belgium, Bulgaria and Finland have 
decreasing  debits.  No  particular  trends  emerge  for  Austria,  the  Netherlands,  Romania, 
Slovakia and Slovenia. Trend reversals, with first increasing and then decreasing credits, are 
shown for Denmark, France, Hungary, Italy, Spain, Sweden and the United Kingdom. Ireland 
and Luxembourg show first decreasing and then increasing trends in credits. Other countries 
show  more  variable  account  results  with  likely  artefacts  related  to  the  continuous 
development (or even application) of Kyoto Protocol accounting methods.18  

While some generic factors or trends can be discerned at EU level – for example, continuing 
decrease  of  soil  organic  carbon  from  cropped  land  –  it  is  in  essence  only  now  that  the 
inventories  and  accounts  can  start  to  be  used  to  examine  causal  relationships  with  the 
LULUCF policies proposed at the start of the period. In particular, some estimation methods 
will need updating, following the systems and estimates review process that is ongoing under 
Decision 529/2013.  

5  Developing EU legislation 

Over  the  last  year,  the  EU  has  taken  several  legislative  steps  that  will  help  to  cut  its  GHG 
emissions.  In  addition  to  the revision of the ETS and the new Effort-Sharing  and  LULUCF 
Regulations  (see  sections 2-4),  there  have  been  important  developments  as  regards  road 
transport, energy and the governance of the Energy Union.  

5.1  Road transport  

In the last two years, the Commission has adopted three comprehensive packages of measures 
on mobility, aiming in particular to reduce emissions from road transport and implement the 
European strategy for low-emission mobility.19 

The Commission has presented a legislative proposal setting new CO2 emission standards for 
passenger  cars  and  vans20  in  the  EU  for  the  period  after  2020.  By  2025  and  2030 
respectively, average emissions from new cars and vans will have to be 15 % and 30 % lower 
than in 2021.  

The  Commission  has  also  put  forward  the  first  ever  standards  for  CO2  emissions  from  new 
lorries,21 which by 2025 will have to be on average 15 % lower than in 2019. For 2030, it has 
proposed  an  indicative  reduction  target  of  at  least  30 %  from  2019  levels.  This  initiative 

18   See  Staff  Working  Document  (country  fact  sheets)  for  data  by  Member  State  on  reported  emissions  and 

removals, and accounted debits and credits from LULUCF. 

19   https://ec.europa.eu/transport/themes/strategies/news/2016-07-20-decarbonisation_en  
20   https://ec.europa.eu/clima/policies/transport/vehicles/proposal_en  
21   https://ec.europa.eu/clima/policies/transport/vehicles/heavy_en  

12 

 
 
                                                           
complements  the  recent  Regulation  on  monitoring  and  reporting  CO2  emissions  and  fuel 
consumption from new heavy-duty vehicles. 

In  addition,  the  Commission  has  put  forward  a  comprehensive  action  plan  for  batteries,22 
enabling a competitive and sustainable battery ‘ecosystem’ in Europe, and an action plan for 
the trans-European deployment of alternative fuels infrastructure.23 

Finally, it has proposed the revision of three directives: 

 

 

 

the Eurovignette Directive,24 to promote smarter road-infrastructure charging; 

the  Clean  Vehicles  Directive,25  to  promote  clean  mobility  solutions  in  public 
procurement tenders; and 

the Combined Transport Directive,26 to promote the combined use of different modes 
(e.g. trucks and trains) for freight transport. 

5.2  Energy efficiency and renewable energy  

In June 2018, the Council, the European Parliament and the Commission reached provisional 
agreement on: 

 

 

the  Energy  Efficiency  Directive  –  this  sets  a  new  32.5 %  energy  efficiency  target 
for the EU for 2030, with a clause for upwards revision by 2023. It also extends the 
annual energy saving obligation beyond 2020; and  

the Renewable Energy Directive – this sets a new, binding, renewable energy target 
of 32 % for 2030, including a 2023 review clause for upward revision of the EU level 
target.  It  also improves the design and stability of support schemes for renewables; 
delivers real streamlining and reduction of administrative procedures; raises the level 
of  ambition  for  the  transport  and  heating/cooling  sectors;  and  includes  new  
sustainability  criteria    for  forest  biomass,  aimed  at  minimising  the  risk  of  using 
unsustainable feedstock for energy generation in the EU.  

The revised Directive on Energy Performance in Buildings, adopted in May 2018, includes 
measures  that  will  accelerate  the  rate  of  building  renovation  towards  more  energy-efficient 
systems and improve the energy performance of new buildings, making them smarter. 

5.3  Governance of the Energy Union 

Also  in  June  2018,  the  Council,  the  European  Parliament  and  the  Commission  reached 
provisional  agreement  on  a  Regulation  on  the  governance  of  the  Energy  Union.  The  new 

22   https://ec.europa.eu/transport/modes/road/news/2018-05-17-europe-on-the-move-3_en  
23   http://europa.eu/rapid/press-release_IP-14-1053_en.htm  
24   https://ec.europa.eu/transport/modes/road/news/2017-05-31-europe-on-the-move_en  
25   http://europa.eu/rapid/press-release_IP-17-4242_en.htm  
26   http://europa.eu/rapid/press-release_IP-17-4242_en.htm  

13 

 
 
                                                           
governance system will help to ensure that the EU and the Member States achieve their 2030 
goals as regards GHG emission reductions, renewables and energy efficiency. 

Member  States  will  prepare  national  energy  and  climate  plans  for  2021-2030  and  report  on 
their progress in implementing the plans, mostly every two years, while the Commission will 
monitor  the  progress  of  the  EU  as  a  whole.  The  EU  and  Member  States  will  also  prepare 
long-term strategies, covering a period of at least 30 years from 2020 onwards. 

The Regulation will incorporate the existing EU climate monitoring and reporting mechanism 
and update it in line with the Paris Agreement transparency requirements. 

5.4  F-gas Regulation  

The Regulation on F-gases27 provides for an EU-wide HFC phase-down from 2015 and other 
measures targeting emissions from F-gases, with the aim of cutting emissions by some 80 % 
by 2030 compared with 2014.  

Data for 2016 reported under the Regulation showed that the supply of F-gases decreased by 
2 %  in  terms  of  climate  impact  (CO2-equivalent),  but  increased  by  2 %  in  terms  of  mass. 
There was an over-achievement of 4 % against the maximum allowable supply under the HFC 
phase-down.28  This  reflects  a  shift  towards  gases  with  lower  global-warming  potential  and 
indicates that the Regulation is proving effective in reducing F-gas emissions. 

As  regards  implementation  of  the  Regulation,  in  2017  the  Commission  adopted  reports 
assessing  a  2022  requirement  to  avoid  highly  global-warming  HFCs  in  some  commercial 
refrigeration systems29 and assessing the quota allocation method for the phase-down.30  

5.5  Circular economy 
The transition towards a circular economy offers a clear contribution to the reduction of CO2 
emissions. One of the most recent deliverables of the EU Circular Economy Action Plan31, the 
EU Strategy for Plastics in a Circular Economy32 establishes a framework to improve plastic 
reuse and recycling and to boost the demand for recycled plastics. This will contribute to 
curbing CO2 emissions from plastics production and the incineration of plastic waste.  

Furthermore, the implementation of the recently adopted waste legislation has the potential to 
bring significant reduction of GHG emissions. For instance, it will help to tackle the 
emissions derived from food waste since the new legislation includes the development of a 
methodology for measuring food waste. 

27   Regulation (EU) No 517/2014 of the European Parliament and of the Council of 16 April 2014 on fluorinated 

greenhouse gases and repealing Regulation (EC) No 842/2006 (OJ L 150, 20.5.2014, p. 195). 

28    Fluorinated  greenhouse  gases  2017  –  data  reported  by  companies  on  the  production,  import,  export  and 
destruction  of  fluorinated  greenhouse  gases  in  the  European  Union,  2007-2016,  European  Environment 
Agency. 

29  COM(2017) 5230 final of 4 August 2017. 
30  COM(2017) 377 final of 13 July 2017. 
31  COM/2015/0614 final 
32  COM/2018/028 final  

14 

 
 
                                                           
6  Climate finance  

6.1  Revenues from the auctioning of EU ETS allowances 

In 2017, Member States earned EUR 5.6 billion from the auctioning of EU ETS allowances, 
EUR 1.8 billion  more  than  in  2016.  Approximately  80 %  of  the  revenues  from  2013-2017 
were used, or their use is planned, for climate and energy purposes. Member States  reported 
that most of the revenues would be used for domestic and EU purposes.  

6 000

5 000

n
o

i
l
l
i

m
R
U
E

4 000

3 000

2 000

1 000

 0

Not used for climate and energy
purposes or use not reported

Total used for international
climate and energy purposes

Total used for domestic and EU
climate and energy purposes

2013

2014

2015

2016

2017

Figure 8:   Use of revenues from auctioning of ETS allowances, 2013-2017 (EUR million) 

Of revenues used domestically, the biggest amounts were spent on renewable energy, energy 
efficiency and sustainable transport.  

1,4 

1,2 

1,6 

5,8 

5,5 

Renewable energy

Energy efficiency

Sustainable
transport

R&D

Other domestic / EU
uses

Figure 9:   Domestic use of revenues from auctioning of ETS allowances, 2013-2017 

(EUR billion) 

6.2  LIFE  

The LIFE programme is the EU’s funding instrument for the environment and climate action; 
it  co-finances  projects  with  European  added  value.  The  total  budget  for  funding  projects  in 

15 

 
 
 
 
 
 
 
 
2014-2017  amounts  to  EUR  1.1  billion  under  the  sub-programme  for  environment  and 
EUR 0.36 billion under the sub-programme for climate action. 

LIFE Climate Action supports mitigation and adaptation projects, and climate governance and 
information. Beneficiaries from 23 Member States have been awarded funding, with Italy and 
Spain attracting the most.   

The  LIFE  HEROTILE  project  has  developed  innovative  types  of 
roof tile able to increase their underlay ventilation and thus improve 
buildings’ energy behaviour. Interlocking elements on the terracotta 
surface allow air in but keep rain out.  

Depending  on  the  weather,  the  added  ventilation  can  reduce  the 
amount  of  energy  needed  to  keep  living  spaces  fresh  and 
comfortable,  in  particular  in  the  Mediterranean  region  where 
climate  change  is  driving  temperatures  to  new  extremes.  The 
carbon  footprint  of  building  space  cooling  is  reduced  by  around 
50 %  in  comparison  with  a  standard  pitched  roof.  The  tiles  will 
soon be coming onto the market.  

The  project  has  been  awarded  EUR  1.4  million  in  EU  funding 
through LIFE.  

6.3  NER 300  

NER 300 is one of the world’s largest funding programmes for innovative low-carbon energy 
demonstration projects. Some 39 projects in renewable energy and carbon capture and storage 
in 20 different Member States have been awarded EUR 2.1 billion in funding from the auction 
of 300 million ETS allowances. 

Six projects have gone into operation, while 11 have reached final investment decision stage. 
The projects in operation represent EUR 2.463 billion of total investments, against NER 300 
awards of EUR 260 million. They generate 3.1 TWh eq. of renewable electricity a year, which 
results in annual savings of 1.3 Mt CO2. 

Following  the  revision  of  the  EU  ETS  directive,  an  Innovation  Fund  will  be  created  and  is 
planned  to  start  operating  in  2020.  It  will  build  on  experience  from  the  existing  NER  300 
programme, but will have a broader scope.  

16 

 
 
 
Nordsee One is a 332 MW offshore wind project built between December 2015 and December 2017. 
It  is  one  of  the  first  projects  successfully  to  deploy  a  6 MW  wind  turbine  on  a  giant  monopile 
foundation. The turbines are equipped with various innovative features, including stronger bearings 
and  blades  designed  to  harvest  more  wind  and  therefore  increase  power  output.  The  project  is 
designed to sell power to approximately 400 000 households for at least 25 years.  

It has been awarded EUR 70 million NER 300 programme funding. 

6.4  Mainstreaming climate policies into the EU budget  

The  EU  set  out  to  spend  an  average  of  at  least  20 %  of  its  budget  on  climate-relevant 
expenditure in 2014-2020. The latest available data show that such expenditure accounted for 
20.1 % of the budget in 2017.33 On average, the budget trend would deliver EUR 206 billion 
(19.3 % of the budget) under the current multiannual financial framework (MFF).  

Building on this success, on 2 May 2018 the Commission proposed a more ambitious target of 
25 % of expenditure contributing to climate objectives under the next (2021-2027) MFF. 34 

33   SEC(2018) 250; http://ec.europa.eu/budget/biblio/documents/2019/2019_en.cfm 
34   https://ec.europa.eu/commission/publications/factsheets-long-term-budget-proposals_en  

17 

 
 
 
                                                           
n
o

i
l
l
i

m
R
U
E

35 000

30 000

25 000

20 000

15 000

10 000

5 000

 0

21,7 % 

20,3 % 

19,9 % 

20,3 % 

20,0 % 

17,9 % 

14,1 % 

25 %

20 %

15 %

10 %

5 %

0 %

2014

2015

2016

2017

2018

2019

2020

Horizon 2020

Connecting Europe Facility

European Rural Development Fund

Cohesion Fund

European Agricultural Guarantee Fund

European Agricultural Fund for Rural Development

Others

Share of climate relevant spending in EU budget

Figure 10: Climate-relevant spending in the EU budget, 2014-2020 (EUR million).  

7  Adapting to climate change  

Good  progress  has  been  achieved  in  the  context  of  the  EU  Adaptation  Strategy,  which  was 
adopted in 2013 to prepare Member States for current and future climate impacts:  

  25 Member States now have a national adaptation strategy;35  

  climate action has been integrated into EU funding instruments; and  

  adaptation is now also fully integrated into the Covenant of Mayors, with more than 
1 000 cities in Europe committed to enhancing their resilience and 40% of cities with 
more than 150 000 inhabitants having adopted adaptation plans.  

The  Strategy  has  undergone  thorough  evaluation,  which  concludes  that  it  remains  highly 
relevant and is quite coherent with policies at other levels of governance, although less so as 
regards international policies. A mix of qualitative and quantitative assessment found that it 
was effective, although more work needs to be done to: 

 

implement and monitor national strategies; 

  promote local action and ecosystem-based adaptation; 

  bridge newly emerging knowledge gaps; 

 

complete  mainstreaming  in  EU  policy,  including  into  disaster  risk  reduction,  trade, 
maritime, fisheries and public health;  

 

address territorial and social differences in vulnerability to climate change; and 

35   Latvia, Croatia and Bulgaria are still working on their strategies.  

18 

 
 
 
 
                                                           
 
 
 

foster the use of insurance and financial instruments in adaptation.  

The Strategy seems efficient, involving administrative costs only for the Commission, and it 
brings clear added value at EU level.  

LIFE@Urban  Roofs  is  encouraging  real-estate  developers  and  building  owners  to  invest  in 
climate-change  adaptation.  This  new  approach  sees  local  government  acting  as  a  stimulator  and 
facilitator. The project promotes the use of multifunctional roofs that have greater benefits for property 
owners  than  traditional  green  roofs.  These  will  combine  several  types  of  infrastructure:  green  (to 
reduce  the  urban  heat-island  effect  and  support  biodiversity),  blue  (water  storage),  yellow  (energy 
generation) and red (social use).  

The project has been awarded EUR 3.3 million EU funding through LIFE.  

8 

International climate cooperation 

8.1  Global action  

In  the  Paris  Agreement,  countries  made  mitigation  pledges  (‘nationally  determined 
contributions’  –  NDCs)  for  the  period  to  2030.  Achieving  the  targets  of  the  NDCs36  would 
lead to global emissions peaking at 51 Gt CO2-eq. per year (53 Gt CO2-eq. excluding sinks) 
as early as 2025, while leading to a temperature rise of around 3 °C.37 

While the EU has set its 2030 targets in line with a 2 °C pathway and will probably continue 
to  have  the  lowest  GHG  emission  intensity  per  GDP  among  the  G20  countries  by  2030,38 
accelerated  decarbonisation  is  required  from  other  countries,  in  particular  major  economies 
whose  GHG  emissions  continue  to  rise,  to  actually  limit  the  temperature  increase  to  well 
below 2 °C (or 1.5 °C).  

The first milestone for climate action is the 2020 deadline for achieving the ‘Cancún pledges’ 
(from  the  2010  Cancún  Climate  Conference).  According  to  UNEP’s  Emissions  gap 

36   Includes conditional and unconditional pledges and achievement of the US NDC.  
37   European Commission, Joint Research Centre; 

http://publications.jrc.ec.europa.eu/repository/bitstream/JRC107944/kjna28798enn(1).pdf  

38   Emissions gap report 2016: a UNEP synthesis report:  

https://europa.eu/capacity4dev/unep/document/emissions-gap-report-2016-unep-synthesis-report  

19 

 
 
 
                                                           
 
 
report 2017,39 G20 countries (which generate around three quarters of global GHG emissions) 
are on track collectively to reach the mid-range of these pledges. The EU is on track to meet 
its  pledge  without  any  international  offsets,  along  with  China,  India  and  Japan.  Australia, 
Brazil and Russia are also on track, according to most estimates. 

Individual  pledges  represent  very  different  levels  of  mitigation  effort.40  Using  a  more 
comparative  metric,  the  EU  was  the  least  emission-intense  G20  economy  in  2012,  when  it 
emitted 0.26 t CO2-eq. per USD 1 000.41 

70

60

50

40

30

20

10

r
y
/
.

q
e
2
O
C
t
G

GHG/GDP 1990-2015 
-1.7 %/yr 

-4.3 %/yr 

B2°C
INDC
Reference
History

-2.1 %/yr 

-3.3 %/yr 

-6.9 %/yr 

Reference 

INDC 

B2°C 

°C 

5

4

3

2

1

0
1990

2000

2010

2020

2030

2040

2050

0
2020 2040 2060 2080 2100

Figure 11:  World emissions (Gt CO2-eq.) and percentage change in emissions intensity per unit 

of GDP (lhs). Global average temperature change (rhs).42 

8.2  Aviation 

In  June  2018,  with  support  from  all  EU  Member  States  represented,  the  International  Civil 
Aviation Organisation (ICAO) Council adopted standards and recommended practices as part 
of  its  carbon  offsetting  and  reduction  scheme  for  international  aviation  (CORSIA).  The 
objective  of  CORSIA  is  to  stabilise  international  aviation  emissions  at  2020  levels. 
Participation  is  voluntary  for  the  first  six  years.  The  EU  and  its  Member  States  continue  to 
participate in the ICAO work to make the scheme fully operational. 

Since 2012, the EU has tackled aviation emissions through the EU ETS. Given the outcome 
of the 2016 ICAO Assembly on CORSIA, it decided to extend the temporary scope reduction 

39   https://wedocs.unep.org/handle/20.500.11822/22070  
40   The  EU’s  target  reduction  is  20 %  from  1990  levels,  Japan’s  is  3.8 %  from  2005  levels,  China’s  pledge 
involves a 40-45 % reduction in  CO2 intensity by 2020 and increases in  forest stock and the  proportion of 
non-fossil  sources  in  primary  energy  consumption,  and  India’s  a  20-25 %  reduction  in  emissions  intensity 
(excluding agriculture) compared with 2005. 

41  Emission database for global atmospheric research (EDGAR); 

http://edgar.jrc.ec.europa.eu/overview.php?v=CO2andGHG1970-2016&dst=GHGgdp&sort=des9  
42  The analysis was based on the indicative nationally determined contributions (INDCs), now NDCs. Source: 
Kitous, A., Keramidas, K., Vandyck, T., Saveyn, B., Van Dingenen, R., Spadaro, J., Holland, M. ,  
Global Energy and Climate Outlook 2017: How climate policies improve air quality - Global energy  
trends and ancillary benefits of the Paris Agreement, EUR 28798 EN, Publications Office of the European 
Union, Luxembourg , 2017 

20 

 
 
 
 
 
   
 
  
 
 
                                                           
 
 
 
of  the  EU  ETS  for  aviation  until  the  end  of  202343  and  to  prepare  to  implement  a  global 
market-based measure from 2021.  

ETS  emissions  from  aircraft  operators  amounted  to  64.2 Mt CO2-eq.  in  2017.  Based  on  a 
comparative  calculation,  aviation  emissions  in  2017  were  4.5 %  higher  than  in  2016.  This 
includes  more  than  250  commercial  aircraft  companies  that  were  based  outside  the  EU  but 
operated flights within the European Economic Area.  

The EU ETS currently only applies to intra-EEA flights, in respect of which aviation's overall 
impact on the global climate, including through non-CO2 emissions or effects, is considerably 
higher  than  the  CO2  component  alone.  It  has  been  estimated  that  the  non-CO2  radiative 
forcing effects were 2-4 times those of CO2, which gives a range of 120-250 million tonnes 
CO2-equivalent  for  aviation’s  total  impacts  from  intra-EEA  activities44.  This  leaves  aside 
cirrus  related  effects,  but  these  are  considered  to  be  lower  in  respect  of  short  haul  flights 
which are common for flights within the EEA.  

Total  emissions  from  aviation  represented  approximately  4 %  of  all  EU  GHG  emissions  in 
2017 and have almost doubled since 1990. Most come from international aviation (including 
intra-EEA flights).  

8.3  Maritime policy  

In  April  2018,  the  International  Maritime  Organisation  (IMO)  agreed  an  initial  strategy  to 
reduce GHG emissions from international shipping. This contains a reduction objective of at 
least  50 %  by  2050,  compared  with  2008  levels,  with  a  view  to  full  decarbonisation  of  the 
sector  as  soon  as  possible  in  this  century.  It  also  includes  a  comprehensive  list  of  possible 
reduction measures, including short-term measures. However, an action plan still needs to be 
agreed to ensure delivery of the strategy.  

At EU level, the first obligations as regards monitoring and reporting shipping emissions on 
the basis of the MRV Shipping Regulation45 took effect on 31 August 2017, when monitoring 
plans  were  due  to  be  completed  and  submitted  to  verifiers.  Emissions  monitoring  and 
reporting  on  the  basis  of  the  plans  started  in  January  2018.  The  Commission  is  currently 
working on an amendment to align the Regulation with the data collection system agreed by 
the IMO in 2017. 

8.4  ETS-linking with Switzerland  

In  November  2017,  the  EU  and  Switzerland  signed  an  agreement  to  link  their  emissions 
trading systems – the first such agreement between two parties to the Paris Agreement. The 

43   Regulation  (EU)  2017/2392  of  the  European  Parliament  and  the  Council  of  13  December  2017  amending 
Directive  2003/87/EC  to  continue  current  limitations  of  scope  for  aviation  activities  and  to  prepare  to 
implement a global market-based measure from 2021 (OJ L 350, 29.12.2017, p. 7). 

44   Directive 2008/101/EC, recital 19, at https://eur-lex.europa.eu/legal- 
content/EN/TXT/?uri=celex%3A32008L0101 
45   Regulation  (EU)  2015/757  of  the  European  Parliament  and  of  the  Council  of  29  April  2015  on  the 
monitoring,  reporting  and  verification  of  carbon  dioxide  emissions  from  maritime  transport,  and  amending 
Directive 2009/16/EC (OJ L 123, 19.5.2015, p. 55). 

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parties will exchange their instruments  of ratification once  all the conditions  for linking  are 
met and the agreement will enter into force on 1 January of the following year. 

8.5 

International carbon markets 

The  EU  is  actively  participating  in  UN  Framework  Convention  on  Climate  Change 
(UNFCCC)  negotiations  on  the  aspects  of  the  ‘Paris  rule  book’  relating  to  international 
cooperation on markets. It has a continuing interest in securing implementation of a robust set 
of  accounting  rules  and  an  ambitious  market  mechanism  to  prevent  current  efforts  being 
undermined by double counting and promote broader, more ambitious action.  

The  Commission  is  stepping  up  its  cooperation  with  the  Chinese  authorities  on  emission 
trading and carbon markets, with a view to helping them set up a well-functioning emissions 
trading  system  at  national  level.  A  memorandum  of  understanding  signed  at  the  EU-China 
Summit in July 2018 will form a solid basis for further such cooperation. A new project will 
help to build up emissions trading capacities in China.  

The  Commission  is  also  supporting  the  bottom-up  development  of  robust  carbon  market 
instruments.  The  Florence  Process  brings  together  policymakers  (from  California,  Canada, 
China,  the  EU  and  New  Zealand),  academics  and  NGO  representatives  to  learn  from  each 
other and cooperate more closely to build robust carbon markets. Other initiatives in this area 
include  the  Partnership  for  Market  Readiness  (PMR)  and  the  International  Carbon  Action 
Partnership (ICAP). 

8.6  Voluntary action – Marrakesh Partnership on Global Climate Action 

In response to the Paris Agreement call to mobilise non-state actors (business, cities, citizens, 
international civil society, etc.), the EU is supporting a number of flagship initiatives such as 
Mission  Innovation,  the  Global  Covenant  of  Mayors  on  Climate  and  Energy  (through  the 
Regional  Covenants),  the  10-Year  Framework  of  Programmes  on  Sustainable  Consumption 
and  Production  (10YFP/One  Planet  network),  the  Partnership  for  Action  on  the  Green 
Economy  (PAGE), the  NDC Partnership, Renewable Energy  for Africa, 4/1000  for Climate 
Smart Agriculture and InsuResilience. Systematic tracking tools are being devised to measure 
their impact on emissions reductions and resilience. Globally these efforts are organised under 
the Marrakesh Partnership on Global Climate Action.  

The Yearbook of Global Climate Action46 and UNEP’s Emissions gap report 2017 show that 
global  climate  action  could  deliver  additional  emissions  reductions  (compared  with  the 
NDCs) of 1.6-4 Gt CO2  annually in  2020, increasing to  5-10 Gt CO2 by  2030, which would 
contribute  significantly  to  closing  the  gap.  Looking  at  transnational  initiatives  only, 
Roelfsema et al. (2017)47 identify an additional global impact of 1-3 Gt CO2-eq. in 2030.  

46   unfccc.int/tools/GCA_Yearbook/GCA_Yearbook2017.pdf  

47   https://doi.org/10.1016/j.gloenvcha.2017.11.001  

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Europe is one of the most developed regions in terms of registered non-state climate action: of 
the  cooperative  initiatives  registered  on  the  UNFCCC  NAZCA  platform  (Non-state  Actor 
Zone for Climate Action – an online portal to visualize collective action), 54% are European.  

Since 2017, the Covenant of Mayors in Europe has been a member of the Global Covenant of 
Mayors  for  Climate  and  Energy,  which  brings  together  the  world’s  two  main  initiatives  of 
cities  and  local  governments  (the  Covenant  of  Mayors  and  the  Compact  of  Mayors)  to 
advance  their  transition  to  low-emission  and  climate-resilient  cities,  which  also  brings 
benefits to the overall economy and has a global impact.  

8.7  Supporting developing countries  

The  EU  and  its  Member  States  are  the  world’s  biggest  providers  of  official  development 
assistance  to  developing  countries,  delivering  EUR  75.74  billion  in  2017.  In  particular,  the 
support provided by the EU, the European Investment Bank (EIB) and the Member States to 
help  developing  countries tackle  climate  change  has almost  doubled in nominal  terms  since 
2013. The EU and its Members States are the largest contributors to the Green Climate Fund 
(GCF) with a total of USD 4.7 billion committed, accounting for almost half of the USD 10.3 
billion of total pledges during the initial resource mobilisation. 

 In  2017,  the  EU  and  the  African  Union  (AU)  launched  the  AU-EU  Research  and 
Innovation  Partnership  on  Climate  Change  and  Sustainable  Energy,  which  is  built 
around  three  main  areas  of  cooperation:  climate  services,  renewable  energy  and  energy 
efficiency.  

The  EU  is  financing  many  programmes  and  initiatives  that  focus  on  adaptation  and 
mitigation,  in  particular  the  needs  of  the  most  vulnerable  developing  countries.  New 
developments in the past year have included the launch of the EU External Investment Plan, 
which  encourages  investment  in  developing  countries  in  Africa  and  the  EU  Neighbourhood 
region  and is  tailored to the specific needs of developing countries. The  EU  Electrification 
Financing  Initiative  (EUR  115  million)  aims  to  support  investments  that  increase  and 
improve access to modern, affordable and sustainable energy services.  

The  Global  Climate  Change  Alliance  Plus  is  an  EU  climate  flagship  initiative.  One  key 
priority  is  to  support  the  formulation  and  implementation  of  concrete,  integrated  sectoral 
climate-change  adaptation  and  mitigation  strategies.  In  2015-2017,  it  provided  around 
EUR 100 million,  inter  alia  through  a  multi-country  programme  for  the  Pacific  islands,  to 
support 13 countries in their climate adaptation efforts. 

In  2018,  the  EU  launched  a  new  EUR  20  million  programme  to  support  its  strategic 
partnerships  for  the  implementation  of  the  Paris  Agreement  in  major  economies  (mainly 
non-European members of the G20 and Iran). 

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