Reviewing the contribution of the land use, land-use change and forestry sector to the Green Deal : final study.
Date: 2021-07-14
Institutions: Directorate-General for Climate Action
Subjects: EU Member State, EU environmental policy, European forestry policy, adaptation to climate change, climate change policy, environmental monitoring, information analysis, land use, reduction of gas emissions, sustainable forest management

Reviewing the Contribution of the 
Land Use, Land-use Change and 
Forestry Sector to the Green Deal 

Final Study 

July 2021 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUROPEAN COMMISSION 

Directorate-General for Climate Action 
Directorate C — Climate Strategy, Governance and Emissions from non-trading sectors 
Unit C.3 — Land Use and Finance for Innovation 

Contact: Valeria Forlin 

E-mail:  CLIMA-LULUCF@ec.europa.eu; Valeria.FORLIN@ec.europa.eu 

European Commission 
B-1049 Brussels

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUROPEAN COMMISSION 

Reviewing the Contribution of the 
Land Use, Land-use Change and 
Forestry Sector to the Green Deal 

Final Study 

2021 

Directorate-General for Climate Action  
LULUCF review study 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Manuscript completed in July 2021 

Autho rs:  Asger  Strange  Olesen  (COWI),  Tomasz  Kowalczewski  (COWI),  Karolina  Kenney  (COWI),  Valentin 
Bellassen,  Neil  Bird 
(Technopolis),  Samuel 
Leistner (Technopolis), Costanza Tiriduzzi (Technopolis), Margrethe Dahll Steinert (Technopolis), Susanna Gionfra 
(Technopolis) 

(Exergia),  Moritz  von  Unger 

(Silvestrum);  Derek  Eaton 

LEGAL NOTICE 

The information and views set out in this study are those of the authors and do not necessarily reflect the official opinion  of 
the Commission. The Commission does not guarantee the accuracy of the data included in this study. Neither the Commission 
nor any person acting on the Commission’s behalf may be held responsible for the use which may be made of the information 
contained therein. 

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ISBN 978-92-76-38968-2 

doi: 10.2834/201100 

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 REVIEWING THE CONTRIBUTION OF THE LAND USE, LAND-USE CHANGE AND FORESTRY 
SECTOR TO THE GREEN DEAL 

Table of Contents 

1.  Executive Summary .................................................................................... 11 

1.1. Introduction ..................................................................................................... 11 

1.2. Analysis of key topic areas ............................................................................. 12 

1.3. Workshops ...................................................................................................... 14 

1.4. Open Public Consultation ............................................................................... 14 

1.5. Policies and Measures related to LULUCF in Member States until 2020 ....... 15 

1.6. Conclusions .................................................................................................... 16 

1.7. Introduction ..................................................................................................... 19 

1.8. Analyse des thématiques ................................................................................ 20 

1.9. Ateliers ............................................................................................................ 22 

1.10. Consultation Publique Ouverte ...................................................................... 23 

1.11. Politiques et mesures relatives au secteur UTCATF dans les États Membres 
jusqu’en 2020 ........................................................................................................ 24 

1.12. Conclusions ................................................................................................... 25 

2.  Synthesis Report on Topic Notes .............................................................. 28 

2.1. Introduction ..................................................................................................... 28 

2.2. Background .................................................................................................... 29 

2.3. Topic Note Overview ...................................................................................... 31 

2.4. Conclusion ..................................................................................................... 37 

3.  Topic Note #1: The Decline of the Forest Carbon Sink and its Drivers .. 39 

3.1. Introduction ..................................................................................................... 41 

3.2. Current situation ............................................................................................. 41 

3.3. The greenhouse gas inventory ....................................................................... 42 

3.4. Future scenarios ............................................................................................ 51 

3.5. Conclusion and summary ............................................................................... 54 

3.6. References ..................................................................................................... 56 

4.  Topic Note #2: Soil Carbon: Current Trends and Challenges ................. 57 

4.1. Introduction ..................................................................................................... 58 

4.2. Current situation ............................................................................................. 58 

4.3. Problem drivers .............................................................................................. 58 

4.4. Problems ........................................................................................................ 60 

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4.5. Concluding remarks ....................................................................................... 71 

4.6. References ..................................................................................................... 72 

5.  Topic Note #3: Externalities and Missing Markets ................................... 74 

5.1. Introduction ..................................................................................................... 75 

5.2. Problem Drivers ............................................................................................. 75 

5.3. Problems ........................................................................................................ 81 

5.4. Concluding remarks ....................................................................................... 89 

5.5. References ..................................................................................................... 92 

6.  Topic Note #4: Vision for 2050 ................................................................... 96 

6.1. Introduction: The Land Sector in a Climate Neutral Europe ............................ 96 

6.2. Trends and Drivers......................................................................................... 97 

6.3. Emissions and removal ranges for the land use sector .................................. 97 

6.4. Climate governance and policy design for climate neutrality in 2050 ............. 99 

6.5. Policy shift ...................................................................................................... 99 

6.6. Shifting scopes ............................................................................................. 100 

6.7. Targets and incentives ................................................................................. 101 

6.8. Enablers: The road to 2050 .......................................................................... 104 

6.9. References ................................................................................................... 106 

7.  Topic Note #5: Improve Reporting ........................................................... 107 

7.1. Introduction ................................................................................................... 109 

7.2. Current situation and trajectory .................................................................... 109 

7.3. Problem drivers ............................................................................................ 111 

7.4. Problems ...................................................................................................... 114 

7.5. Goals ............................................................................................................ 116 

7.6. Incentives to improve monitoring .................................................................. 117 

8.  Topic Note #6: Amend the LULUCF Accounting Rules to Make the No-Debit 
Rule More Stringent ......................................................................................... 128 

8.1. Introduction ................................................................................................... 129 

8.2. Goals ............................................................................................................ 132 

8.3. Options to change the LULUCF accounting rules ........................................ 135 

8.4. Increasing stringency of benchmarks for 2030 ............................................. 138 

8.5. Forest Reference Level accounting improvements before 2030 .................. 139 

8.6. Harvested Wood Products ........................................................................... 144 

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8.7. Avoiding double counting and additionality issues of voluntary schemes or 
initiatives ............................................................................................................. 145 

8.8. References ................................................................................................... 148 

9.  Topic Note #7: Governance of LULUCF Flexibility ................................. 150 

9.1. Introducing Flexibility .................................................................................... 152 

9.2. Problem drivers: Uneven conditions ............................................................ 153 

9.3. References ................................................................................................... 163 

10.  Workshop I Report: LULUCF Reporting and Accounting Approaches  165 

10.1. Overview ..................................................................................................... 165 

10.2. Workshop Objectives .................................................................................. 165 

10.3. Introduction ................................................................................................. 165 

10.4. Participants ................................................................................................. 166 

10.5. Welcome and setting the scene .................................................................. 166 

10.6. Part 1: LULUCF Accounting ....................................................................... 167 

10.7. Forest Reference Level .............................................................................. 173 

10.8. Part 2: LULUCF Reporting .......................................................................... 180 

10.9. Part 3: Policy options .................................................................................. 190 

10.10. Summary ................................................................................................... 191 

11.  Workshop II Report: The Role of Agriculture and Land-use Sectors in a 
Climate Neutral EU in 2050 .............................................................................. 192 

11.1. Overview ...................................................................................................... 192 

11.2. Workshop Objectives .................................................................................. 192 

11.3. Introduction ................................................................................................. 192 

11.4. Participants ................................................................................................. 193 

11.5. Welcome and setting the scene .................................................................. 193 

11.6. Keynote #1: Carbon farming in the EU: Pilots and potentials ...................... 195 

11.7. Keynote #2: Ongoing work to support the design of an EU carbon removals 
certification mechanism....................................................................................... 196 

11.8. Inspirational speeches ................................................................................. 198 

11.9. Panel discussion ......................................................................................... 203 

11.10. Closing remarks ......................................................................................... 205 

12.  Workshop III Report: gathering Ideas on the Next Steps for Carbon 
Farming ............................................................................................................. 206 

12.1. Overview ..................................................................................................... 206 

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12.2. Workshop objectives ................................................................................... 206 

12.3. Introduction ................................................................................................. 206 

12.4. Participants ................................................................................................. 206 

12.5. Welcome and setting the scene .................................................................. 207 

12.6. Main takeaways of breakout rooms ............................................................ 208 

13.  Workshop IV Report: Carbon Farming in the CAP Strategic Plans ...... 218 

13.1. Overview ..................................................................................................... 218 

13.2. Workshop objectives ................................................................................... 218 

13.3. Introduction ................................................................................................. 218 

13.4. Participants ................................................................................................. 219 

13.5. Welcome and setting the scene .................................................................. 220 

13.6. Part 1: Carbon farming as a new business model ...................................... 224 

13.7. Part 2: Lessons learned from existing carbon farming projects .................. 231 

13.8. Q&A and closing remarks ........................................................................... 234 

13.9. Survey analysis .......................................................................................... 234 

14.  Inception Impact Assessment Analysis .................................................. 243 

14.1. Introduction ................................................................................................. 243 

14.2. Results of IIA feedback consultation ........................................................... 244 

15.  Synopsis Report for the Analysis of the LULUCF Open Public Consultation

249 

15.1. Introduction ................................................................................................. 249 

15.2. Status of consultation and profile of respondents ....................................... 250 

15.3. Part I: Mobilising the mitigation and business potential of the land sector and 
the bioeconomy ................................................................................................... 251 

15.4. Part II: Overall policy approach ................................................................... 257 

15.5. Part III: Setting more ambitious rules for the Land Use, Land Use Change and 
Forestry sector .................................................................................................... 259 

15.6. Part IV: Links between land use and agriculture ......................................... 264 

16.  Synthesis Report on Article 10 Reports .................................................. 269 

16.1. Introduction ................................................................................................. 271 

16.2. Background ................................................................................................ 272 

16.3. Overview of the LULUCF Policies and Measures in the EU Member States
 ............................................................................................................................ 272 

16.4. Policies and Measures (PaMs) introduced by MS in LULUCF sector ......... 275 

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16.5. Potential mitigation actions for the 2021-2030 period ................................. 282 

16.6. Challenges and Solutions ........................................................................... 284 

16.7. Conclusion .................................................................................................. 287 

17.  Final Presentation ..................................................................................... 291 

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Abstract 
The study, "Reviewing the contribution of the Land use, Land-use Change and Forestry to the 
European Green Deal" informed the European Commission's DG Climate and Action in their 
development of an impact assessment for the revision of the LULUCF Regulation. The study 
consisted  of  several  key  inputs  and outputs  with the  backbone being the  analysis  of  seven 
fundamental  topics  within  the  LULUCF  sector.  These  topics  were  extended  into  short, 
informative notes that laid out the main problem drivers, problems, and goals within the context 
of improving the LULUCF sector's capacity to remove CO₂ from the atmosphere. They covered 
the forest and soil sink in the EU, the state of accounting and reporting, flexibilities between 
the LULUCF and the Effort Sharing Regulation (ESR), market mechanisms, and a forward look 
towards 2050. Alongside these topic notes, four workshops were conducted, the results of the 
open public consultation (OPC) on the LULUCF Regulation were analysed, and a synthesis of 
the Member States' policies and measures related to LULUCF (submitted pursuant to Article 
10 of the LULUCF Decision) was completed. All of these outputs then allowed for a holistic 
examination of the LULUCF sector by providing views from experts and civil society through 
research as well as collaboration through workshops and the OPC. 

Abstract 
L’étude  « Examen  de  la  contribution  du  secteur  de  l’utilisation  des  terres,  du  changement 
d’affectation des terres et de la foresterie au Green Deal Européen » a aidé la DG Climat et 
Action  de  la  Commission  Européenne  dans  son  développement  d’une  évaluation  d’impact 
pour  la révision  de  la Réglementation  du  secteur  UTCATF.  L’étude a consisté en  plusieurs 
contributions  et  résultats  principaux,  la  base  étant  l’analyse  de  sept  thèmes  fondamentaux 
dans  le  cadre  du  secteur  UTCATF.  Ces  thèmes  ont  été  exprimés  à  l’aide  de  brèves  notes 
informatives  qui  présentaient  les  principaux  facteurs  problématiques,  les  problèmes  et  les 
objectifs dans le contexte d’une amélioration de la capacité du secteur UTCATF à éliminer le 
CO2 de l’atmosphère. Ils portaient sur la forêt et les sols en tant que puits de carbone au sein 
de  l’UE,  l’état  de  la  comptabilité  et  de  l’établissement  des  rapports,  les  flexibilités  entre  le 
secteur  UTCATF  et  la  Réglementation  concernant  la  répartition  des  efforts  (ESR),  les 
mécanismes  du  marché  et  une  prospective  pour  2050.  En  plus  de  ces  notes  thématiques, 
quatre ateliers ont été conduits, les résultats de la consultation publique ouverte (CPO) sur la 
réglementation du secteur UTCATF ont été analysés et une synthèse des politiques et des 
mesures des États Membres liées au secteur UTCATF (soumises conformément à l’Article 10 
de la Décision UTCATF) a été effectuée. Tous ces résultats ont ensuite permis un examen 
holistique du secteur UTCATF en fournissant des points de vue d’experts et de la société civile 
à travers une recherche ainsi qu’une collaboration à travers des ateliers et la CPO. 

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1. Executive Summary 

1.1. Introduction  

The European Union's target to achieve climate neutrality by 2050 is an ambitious target that 
surpasses the goals set out by any other global entity. Following the 2015 Paris Agreement 
and the subsequent steps taken by the European Council and the European Parliament, the 
path  has  been  set  towards  reaching  a  net-zero  EU  where  any  residual  emissions  are  fully 
balanced by CO₂ removals. Yet this cannot be done without an effective and robust Land Use, 
Land-Use Change and Forestry (LULUCF) sector. Figure 1 shows the projections for the EU 
in  achieving  climate  neutrality  with  a  key  progress  point  being  in  achieving  55%  emission 
reductions  by  2030.  It  is  clear  that  LULUCF  is  key  to  balance  the  remaining  EU  emissions 
towards 2050 and beyond. 

Figure 1: GHG pathways for sectors towards 2050. 

As part of the newly established reduction targets, DG Climate Action (DG Clima) has initiated 
the  process  of  revising  the  LULUCF  regulation  through  a  legislative  proposal,  which  is 
expected to be adopted in July 2021. In parallel, the European Commission has initiated the 
revision  of  other  climate  change-related  policy  acts.  The 
Impact  Assessment  (IA) 
accompanying  the  legislative  proposal  amending  the  LULUCF  Regulation  will  explain  the 
problems  addressed  by  the  revision,  its  objectives,  the  available  policy  options,  and  their 
impacts. The  revision  is  necessary  to find the most  effective set  of  policy  tools  required for 
achieving  the  higher  net  emission reduction  target.  In  parallel  with the  works  on  the  impact 
assessment,  an  open  public  consultation  was  undertaken  to  support  this  process.  Figure  2 
depicts  a  brief  timeline  for  the  EU  policy  regarding  the  revision  of  the  LULUCF  Regulation, 
within the context of the present project.  

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Figure 2. Timeline of EU policy after the Green Deal leading to the revision of the LULUCF Regulation. 

The project "Reviewing the contribution of the Land Use, Land-use Change and Forestry sector 
to the Green Deal" was designed to support DG Clima in the process of developing the impact 
assessment. The study delivered arguments and knowledge to inform the preparation of the 
impact assessment of the revision of the LULUCF Regulation. The project experts provided 
factual input and policy analysis within specific pathways to support the Commission’s work; 
while these inputs have been thoroughly discussed with the Commission, the views expressed 
in the final study do not represent the views of the Commission but only those of the authors.  

The project covered a total of four tasks. Task 1 involved selecting seven key topics areas to 
explore within the LULUCF sector, mainly focussing on the problems, problem drivers and the 
goals. These topics were selected through a heavy ideation process and in consultation with 
the  Commission.  Task  2  undertook  the  organisation  of  four  online  workshops  on  thematics 
related  to  the  LULUCF  context,  in  order  to  gather  ideas  and  solutions  from  relevant 
stakeholders  to  possible  key  barriers.  Within  this  task,  a  summary  of  the  feedback  to  the 
Inception  Impact  Assessment  and  a  statistical  analysis  and  overview  of  the  Open  Public 
Consultation for the LULUCF Regulation were also conducted. Task 3 summarized the third 
and final submission of Member States' reports under Article 10 of the LULUCF Decision; in 
total, 24 reports were analysed. Task 4 provided a presentation that integrated the conclusions 
across the three tasks and specifically along the seven topic areas presented in Task 1. 

1.2. Analysis of key topic areas 

The  main  aim  of  the  seven  topic  notes  covered  in  Task  1  (sections  2  –  9)  was  to  provide 
expertise for the development of the impact assessment as well as create an overview of the 
main roadblocks affecting the LULUCF Regulation. The topic notes were discussed in detail 
with the Commission during the onset and duration of the project in order to deliver the best 
possible  support  and  necessary  information  to  the  development  process  of  the  impact 
assessment. 

The  need  for  an  increasing  carbon  sink  in  the  LULUCF  sector  is  clearly  presented  in  the 
projections  towards  2050  (Figure  1).  While  the  Commission’s  projected  scenarios  see  a 
potential to increase the carbon sink, there are still few obstacles to increasing the contribution 
of the LULUCF sector to the overall EU reduction target. These problems are evaluated across 
the seven topic notes developed under Task 1 of this study. The identified problems are: 

1.  Current  accounting  rules  only  require  a  preservation of  the  carbon sink  at the  same 
level as they would be under management practices applied before 2009. Due to the 
general ageing of forests, the rules create space for the MS to report reductions of the 
carbon sink without incurring any debits.  

2.  Within the current framework of climate change policies, it is possible to use LULUCF 
allowances to comply with Effort Sharing Regulation (ESR) obligations. Flexibilities in 
their current state do not create a strong incentive for more measures to be established 
by MS to increase the carbon sink as it is.  

3.  The state of policy on agriculture covers emissions from fertilisers, animal production 
and land within different pieces of legislation, creating a confusing policy framework. 
On the other hand, the CAP is a far-reaching piece of legislation that affects the whole 
agriculture  sector.  A  more  integrated  approach  would  be  useful  to  link  emissions 
caused by land management to other emissions released by agriculture production.  

4.  Monitoring Reporting and Verification (MRV) of greenhouse gas (GHG) emissions is 
not  yet  granular  enough  in  most  MS  to  pick  up  the  effect  of  major  carbon  storing 
practices (e.g. wetland restoration, agroforestry, …), let alone the impacts of measures 
taken at the individual level, which undermines effective monitoring and policy-making. 

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These  main  challenges  led  to  an  assessment  of  seven  main  topics  to  cover  the  problems 
addressed above. The seven topics fit into four broad themes and provided different goals and 
solutions to address the problems presented above. These sub-groups are presented in Table 
1 below. 

Table 1: Topic Notes and their sub-groups as covered under Task 1 of this study. 

Description 

Themes 

Problem 
Oriented 

Topic 
Note 
Forests 

Soils 

Explores the drivers behind the recent decline in forest carbon sinks, which is 
identified as one of the main problems that the design and implementation of 
LULUCF policies must address. 
Presents the current trends in soil carbon changes in the EU, how they are 
reported in national GHG inventories and the potential of best management 
practices to protect and enhance soil carbon stocks in the EU. 
Sets out options to improve the LULUCF inventories of the MS. 

Reporting & 
Accounting  

Policy 
Framework 

Reporting 
Accounting  Proposes a set of accounting solutions, some of which would constitute a radical 

shift in accounting practices whereas others would be improvements within the 
current system, thus being able to be implemented short-term.   
Indicates potential areas of improvement for introducing market-based 
incentives linked to land-based carbon removals. 

Missing 
markets 
Flexibilities  Discusses EU flexibility approaches on land use, land-use change and forestry 

Vision 

Vision 
2050 

(LULUCF) that could help trigger a list of short-term actions to enhance the long-
term contribution from the sector towards achieving the climate neutrality target 
for 2050. 
Explores the potential for LULUCF's contribution to the European Green Deal's 
target of net neutrality by 2050. 

The  topic  notes  outlined  above  cover  the  entire  scope  of  the  LULUCF  sector  including  its 
strengths and challenges. The topic notes under Task 1 underpinned the study in its entirety 
and acted as the backbone to the other tasks, in particular the analysis of the Art. 10 reports. 

As regard the first theme, the analysis identified the drivers of the declining sink in both forests 
and soils in the EU, highlighting that this problem needs to be addressed rapidly in order to 
prevent its further exacerbation. 

With  regard  to  the  second  theme,  the  analysis  pointed  at  ways  in  which  current  LULUCF 
Monitoring, Reporting and Verification systems could be improved. In the case of soil carbon, 
for  example,  proper  monitoring  should  lead  to  a  more  realistic  view  of  the  land  sectors.  In 
addition, ways to simplify the LULUCF accounting rules were proposed.  

Within the third theme, as regards the policy framework, the presence of market externalities 
highlight  the  need  for  robust  incentives  for  landowners  to  engage  in  climate  action.  The 
structural changes presented involve significant future research and development in order to 
remove the current barriers (e.g. monitoring individual performance). As there are not many 
substantial price signals already in place for the carbon market, there is room for improvement 
in this regard.  

With regard to flexibilities with the ESR,  there are several key considerations that will have an 
impact  on  future  flexibility  mechanisms.  The  experts  presented  sixteen  different  options, 
including  :  offsetting  sector-specific  emissions  from  LULUCF  within  MS;  creating  an 
Agriculture,  Forestry  and  other  Land-use  (AFOLU)  flexibility;  both  seller  and  buyer  side 
solutions regarding compliance conditionality and emissions trajectory; strategic use of ESR 
and  ETS  proceeds;  creation  of  a  project-based  incentive  mechanism  and  compliance  and 
crediting for livestock farming.   

Finally, as regards the fourth theme, the vision towards 2050 provides a key forward-looking 
view within the wider EU climate policy framework, explaining how the climate policy arena will 
encompass in the coming years a three-fold climate purpose:  

  Reducing GHG emissions to the absolute minimum  

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  Producing biomass as biomaterial substitute and as feedstock to generate bioenergy 

  Generating sufficient carbon sink capabilities and “land mitigation units” (LMUs) 

The main conclusion from this part of the study is that by the end of 2050, the overall policy 
approach to the LULUCF sector could substantially change. By strengthening data availability 
as well as by creating incentives for climate action among landowners, the sector can reach 
its full  potential. The  study  suggests  an  array  of short-term  and  long-term  options  delivered 
within  the  topic  notes  to  support  the  role  of  the  LULUCF  sector  in  the  achievement  of  the 
climate neutrality target by 2050. 

1.3. Workshops  

Over  the  course  of  the  project  period,  four  workshops  (sections  10  –  13)  were  undertaken 
within  Task  2  in  order  to  allow  for  stakeholders  to  communicate  and  collaborate  on  topics 
related to land  use  policies in the  EU. The four workshop topics  were  planned out  with the 
Commission in order to gather key insights that can help to inform future policies related to 
LULUCF as well as the regulation itself. The four topics and their objectives are presented in 
the table below.  

Workshop  

Description 

Table 2: Overview of topics covered in workshops. 

LULUCF Reporting & 
Accounting approaches 

The objective was to introduce and initiate discussions on future policy 
design in the LULUCF sector, in the context of the impact assessment. 

The role of agriculture 
and land use sectors in a 
climate neutral EU in 
2050  

The objective was to extract information on the role of the land-use 
sectors in contributing to a climate neutral EU in 2050. The main topics 
were the vision for 2050 and the role of farmers, private markets, and 
data and technology. 

Gathering ideas on the 
next steps for carbon 
farming 

The goal of this workshop was to gain information on the next steps for 
carbon farming. The topics in the workshop were linkages between 
biodiversity and carbon removals, monitoring carbon removals, and 
policy framework. 

Carbon farming in the CAP 
Strategic Plans  

The objective of the workshop was to explore design options for 
Carbon Farming schemes within the CAP Strategic Plans.   

The main takeaways from the workshops were focused on the financial aspects of the sector, 
among other things. The first workshop concluded that there need to be more stringent targets 
for  the  LULUCF  sector,  particularly  in  proportion  to  MS  capacity  to  increase  the  sink  cost 
efficiently. The second workshop advocated for an EU wide carbon farming initiative as well 
as better financial incentives. The third workshop suggested to bring down costs of monitoring 
of soil organic carbon as well as to make sure farmers are well supported in terms of advisory 
services. The last workshop presented numerous options for carbon farming within the CAP 
Strategic Plans, highlighting its potential also based on existing projects.  

1.4. Open Public Consultation 

The analysis of the replies to the Open Public Consultation (OPC) (section 15) on the revision 
of the LULUCF Regulation was also part of Task 2. The OPC brought about several insights 
from stakeholders and relevant actors across the EU. 235 responses were evaluated across 
22 MS with a majority being from EU citizens, followed by business associations and NGOs. 
The OPC covered 13 questions split up into four sub-categories: 

5.  Mobilisation of the mitigation and business potential of the land sector 

6.  The overall policy approaches 

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7.  Setting more ambitious rules for the LULUCF sector 

8.  Links between land use and agriculture 

Some interesting conclusions can be drawn from the OPC. However, it is important to note 
that the open comments provided by stakeholders are highly correlated to their affiliation. In 
this regard, the replies to the questions are presented below, but many more open comments 
were submitted with additional suggestions and conclusions.  

The main drivers for the decline in the land-based carbon sink were identified in the conversion 
of carbon-rich land (deforestation, draining of wetland or peatland), land take and soil sealing 
(expansion  of  built-up  and  artificial  areas).  The  policy  approach  which  was  most  frequently 
selected as either important or very important was an improved EU framework on monitoring, 
reporting,  and  verifying  emissions  and  removals.  This  is  in  line  with  findings  from  other 
deliverables of this study. The most frequently selected areas in which the EU should focus on 
efforts to enhance the carbon sink were afforestation, reforestation and forest restoration.  

With regard to policy and finance, respondents stressed the importance of subsidies to improve 
climate action in the sector. This is also in line with the conclusions from the other deliverables 
within this project. For the policy approach, a strengthened LULUCF Regulation in line with the 
2030 Climate Target Plan had the most responses. In addition, when asked if there should be 
more stringent targets than the current "no-debit" rule, 52% of the respondents were in favour, 
although differences emerged across stakeholder groups. The private sector was split nearly 
in half on whether more stringent targets should be imposed while academic institutions and 
environmental organisations were clearly in favour.  

The last interesting conclusion from the OPC was on the Forest Reference Level (FRL): while 
most  respondents  proposed  to  discontinue  the  use  of  FRL,  some  replied  that  they  would 
continue its use with some modifications regarding the harmonisation of the methodology for 
MS.  

1.5. Policies  and  Measures  related  to  LULUCF  in  Member 

States until 2020 

The  Art.  10  reports  (section  16)  submitted  by  24  MS1  provide  a  window  into  the  state  of 
LULUCF action within the EU. Knowing these actions can then help to direct policy approaches 
and help to harmonise and create consistency with regard to data, for example. Many MS have 
highly effective and innovative LULUCF policies and measures (PaMs), yet there is still room 
for improvement as the EU rules for the sector could be strengthened significantly. Five main 
challenges were presented by MS in their reports that can be used to inform further LULUCF 
policy actions: 

1.  Decreasing  sink  or  increasing  emissions  in  a  given  LULUCF  sector  over  significant 

period (DK, AT, BG, CY, FI, HU, IE, LV, LT, MT, NL, SK and ES) 

2.  EU's maturing and ageing forests sequester carbon but at a decreasing rate (EE, IE, 

LV, SI, DK and SK) 

3.  Data fluctuations and gaps (BE, FI, EL, LU, MT, PL, SI, and FR) 

4.  Abandoned land (particularly in Central and Eastern European countries) (EE, LV, MT, 

HR and LT) 

5.  Nutrient management problems leading to unproductive soils (EE, MT, PL, and ES) 

1  Portugal  and  the  Czech  Republic  did  not  submit  their  third  Art.  10  reports  and  Germany  submitted  past  the  deadline  to  be 
included into the synthesis report.  

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There  are  several  ways  in  which  the Art.  10 reports  can  set  the  path for  a  continued  focus 
on LULUCF. One of the main conclusions from the reports is the importance of the post-2020 
Common Agricultural Policy that will be in effect starting in 2023. The CAP covers a majority 
of  the  agricultural PaMs cited  across  the  MS  and  is  a  vital  source  of  finance. With  the  new 
CAP's  objectives of  increasing  the  climate  ambition,  there could be  a distinct  change in the 
way that MS manage their land. Figure 3 shows the breakdown of policy instruments from 398 
PaMs presented in the 24 reports.  

Figure 3. Main policy instruments from per the MS PaMs. 

Focussing on the types of actions that have the most uptake across the EU can help paint a 
picture  for  the  sector  going  forward. Nutrient,  tillage  and  water  management,  forest 
management, and biodiversity/conservation  measures were  the  most  common  type  of 
intervention among MS. Forest management interventions typically were cited within the scope 
of  improving  timber  production  and  sustainable  harvest,  indicating a  strong  tie  between 
economic  objectives  as  well  as  environmental  ones. Nutrient, 
tillage,  and  water 
management PaMs were almost entirely financed under the CAP, most often through the Rural 
Development  Programmes.  The  connection  between  improving  rural  or  landowner  incomes 
and climate action is an clear pathway to effective policies at both national and EU level. This 
confirms  also  a  conclusion  from  the  OPC,  as  subsidies  and  a  carbon  farming  were  both 
mentioned as necessary to build on an effective and sustainable carbon sink.  

What  can  be  gleaned  from  the  analysis  of  the  Art.  10  reports  is  that  through  specific 
consideration  of  the  challenges  mentioned  above,  the  LULUCF  sector  will  effectively  help 
balancing the emissions by and potentially before 2050. It is clear that there is expertise on the 
sector across MS, yet policy measures and support need to be improved for landowners to 
feel supported financially. Through short-term actions such as strengthening data collection as 
well as through the implementation of focused PaMs in certain areas (i.e. Central and Eastern 
European countries) the sector can reach its full potential.  

1.6. Conclusions 

The complexities of the LULUCF sector should not be ignored and each of the sections of the 
study  attempted  to  examine  the  state  of  the  sector  from  a  different  angle.  While  many 
stakeholders with different affiliations (i.e. experts, public authorities, private actors, etc.) were 
involved through each step of the process, there were some points of consensus. Wrapping 
up the variety of deliverables and analyses conducted within this study and combining it into 
key  policy  advice  is  a  difficult  task.  Nevertheless,  there  are  some  conclusions  that  can  be 
drawn from each deliverable that overlap in the long run. The table below presents a short list 
of  conclusions  from  the  deliverables  and  analyses  that  were  covered  by  the  scope  of  this 
project. 

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Table 3: Solutions based on the deliverables within the context of this study. 

Solution 

Better MRV 

Expert 
Analysis 
√ 

Public 
Feedback 
√ 

Member State Art. 10 
Reports 
√ 

Simplification of accounting 

Prioritise mitigation potential of 
forests 

Importance of CAP 

Alter rules regarding flexibilities 
in ESR 

Support to landowners  

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

To properly track land removals and emissions, the MRV system must be improved. The Art. 
10 reports were highly differentiated in their reporting methods and showed that consistency 
is needed to see the whole picture. In addition, a large part of the first workshop was dedicated 
to MRV, and the debate showed the importance of this topic. From the OPC, one suggestion 
was to use high resolution and wall-to-wall imagery as a way to create a more homogenous 
level of tracking land-use changes. The expert views even concluded that the monitoring of 
soil organic carbon is the "most critical blind spot of land-related climate policy." In addition, 
the  analysis  of  accounting  methods  highlighted  the  need  to  re-evaluate  the  accounting 
approach and perhaps implement a gross-net accounting approach where there is no baseline 
(in  other  words,  targets  would  be  based  on  all  emissions  and  removals  reported  in  the 
inventory). Both the OPC and the expert analysis discussed this topic at great length and there 
is  no  one-size-fits-all  solution.  A  combination  of  approaches  (net-net  and  gross-net)  is  one 
option to allow for more elasticity.  

The  mitigation  potential  of  forests  is  intertwined  into  all  parts  of  the  study  and  both  the 
magnitude  of  PaMs  in  the  Art.  10  reports  related  to  forest  management  as  well  as  the 
responses  in  the  OPC  show  how  necessary  it  is  to  preserve  and  improve  the  forest  sink 
capacity. It was mentioned in the final workshop as well that the amount of forestland that is 
outside managed or productive forests is minimal in some MS. The pressure from forest-based 
bioenergy is one of the main causes of the decreasing sink and is a highly important topic to 
consider in policy discussions going forward.  

One of the workshops was entirely dedicated to the CAP Strategic Plans and the future for a 
carbon farming  initiative,  because there  is  a  clear  path forward  under  the  new  CAP.  It  is  of 
utmost importance to create a future CAP that has a strong focus on climate action alongside 
financial incentives for landowners to act. The CAP has been a central tool for the EU since its 
implementation, and its overall objective of rural income support has and will shift towards a 
'greener'  focus.  While  rural  development  is  still  vital,  there  is  a  way  to  ensure  both  that 
livelihoods are valued, and environmental practices are encouraged.  

One  of  the  policy  options  presented  in  the  Inception  Impact  Assessment  and  in  the  OPC 
(following  the  options  outlined  in  the  Climate  Target  Plan  Communication)  presented  a 
strengthening of the flexibility in the ESR, which is one of the main topics within Task 1 of this 

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project. In the OPC, this option received significant criticism with some stakeholders wanting 
to fully remove flexibility with the ESR and establish a separate LULUCF target. Many voiced 
the concern that this would lead to inaction in the ESR through enabling offsetting, ultimately 
encouraging emissions in the long run. Regardless, the current flexibility in the ESR needs to 
be reconsidered carefully.  

Support  to  landowners  should  be  carefully  designed  to  avoid  perverse  incentivise.  In  that 
regard, the EU Carbon Farming initiative should be seen as mechanism to encourage climate-
friendly nature-based solutions. Carbon farming in relation to the design of the CAP starting in 
2023  was  the  theme  covered  by  the  final  workshop.  The  high  attendance  to this  workshop 
highlighted the key interest in the interaction between the existing and future possibilities to 
provide incentives to land managers.  

To conclude, this project arrived at three main conclusions:  

1.  The LULUCF sector has great potential for contributing to the achievement of a 2050 
climate neutral economy. However, there are two main areas where the sink needs to 
be improved: in forests and soils. There is strong evidence that the carbon sink in EU 
forests  is  decreasing,  and  this  trend  won't  reverse.  This  is  mainly  due  to  a  higher 
reliance  on  forest-based  bioenergy  as  well  as  ageing  forest  stands.  It  is  clear  that 
without intensive measures like reforestation and afforestation as well as active forest 
management, the amount of available removals will decrease in the next 20 years. It 
should  also  be  underlined  that  carbon  removals  in  soils  are  expensive  to  monitor. 
Further, in the absence of strong policy incentives to monitor and increase soil carbon 
storage, there is an important shortfall of soil carbon data, both at the EU and MS level.  

2.  There are possible solutions in simplifying the accounting methodologies that will allow 
for  a  more  accurate  and  fair  allocation  of  the  carbon  removals  in  the  MS  accounts. 
Similarly,  there  are  clearly  available  solutions  aimed  at  improving  the  reporting 
accuracy, however this would require, among other things, additional involvement from 
the research community. This will help MS to improve the accuracy and transparency 
of reported values.  

3.  There are appropriate actions available to increase carbon storage in the land sector. 
The recently published technical Handbook on Carbon Farming2 as well as an existing 
interest in the topic provides a good starting point for further upscaling and uptake of 
carbon farming initiatives leading to carbon sequestration and storage.  

2 EU Commission. (2021). Setting up and implementing result-based carbon farming mechanisms in the EU: Technical guidance handbook. 
https://op.europa.eu/en/publication-detail/-/publication/10acfd66-a740-11eb-9585-01aa75ed71a1/language-en  

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1.7. Introduction 

L’objectif de l’Union Européenne d’atteindre la neutralité climatique d’ici à 2050 est un objectif 
ambitieux qui dépasse les objectifs imposés par d’autres entités globales. Suite à l’Accord de 
Paris  de  2015  et  aux  étapes  suivantes  mises  en  œuvre  par  le  Conseil  Européen  et  le 
Parlement Européen, le chemin a été tracé en direction d’un zéro net de l’UE, lorsque toutes 
les  émissions  résiduelles  seront  entièrement  compensées  par  des  éliminations  de  CO2. 
Cependant,  cela  ne  peut  pas  être  fait  sans  un  solide  secteur  d’utilisation  des  terres,  de 
changement  d’affectation  des  terres  et  de  foresterie  (UTCATF).  La  Figure  4  montre  les 
projections pour la réalisation par l’UE de la neutralité climatique, un jalon important consistant 
à atteindre 55 % de réduction des émissions d’ici 2030. Il est clair que le secteur UTCATF est 
crucial pour compenser les émissions résiduelles de l’UE d’ici à 2050 et au-delà. 

Figure 4: Trajectoires GES pour les secteurs d’ici 2050. 

Dans  le  cadre  des  objectifs  de  réduction  nouvellement  établis,  la  DG  Climate  Action  (DG 
Clima) a initié le processus de révision de la réglementation du secteur UTCATF à travers une 
proposition  législative  qui  devrait  être  adoptée  en  juillet  2021.  En  parallèle,  la  Commission 
Européenne a initié la révision d’autres lois d’orientations relatives au changement climatique. 
L’évaluation d’impact (IA) accompagnant la proposition législative amendant la réglementation 
du secteur UTCATF expliquera les problèmes abordés par la révision, ses objectifs, les options 
politiques  disponibles  et  leurs  impacts.  La  révision  est  nécessaire  pour  trouver  l’ensemble 
d’outils politiques le plus efficace permettant d’atteindre l’objectif de réduction d’émissions net 
le plus élevé possible. Parallèlement aux travaux sur l’évaluation d’impact, une consultation 
publique  ouverte  a  été  entreprise  pour  soutenir  de  processus.  La  Figure  5  représente  une 
brève chronologie de la politique de l’UE concernant la révision de la réglementation du secteur 
UTCATF dans le contexte du présent projet. 

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Figure 5. Chronologie de la politique de l’UE après le Green Deal menant à la révision de la réglementation du secteur 
UTCATF. 

Le  projet  « Examen  de  la  contribution  du  secteur  de  l’utilisation  des terres,  du  changement 
d’affectation des terres et de la foresterie au Green Deal » a été conçu pour soutenir la DG 
Clima  dans  le  processus  de  développement  de  l’évaluation  d’impact.  L’étude  a  donné  des 
arguments et permis d’acquérir des connaissances permettant la préparation de l’évaluation 
d’impact de la révision de la réglementation du secteur UTCATF. Les experts du projet ont 
fourni  des  données  factuelles  et  une  analyse  des  politiques  dans  le  cadre  de  trajectoires 
spécifiques  pour  soutenir  le  travail  de  la  Commission;  bien  que  ces  données  aient  été 
discutées  en  détail  avec  la  Commission,  les  opinions  exprimées  dans  l’étude  finale  ne 
représentent pas les opinions de la Commission mais uniquement celles des auteurs. 

Le  projet  a  couvert  un  total  de  quatre  tâches.  La  Tâche  1  a  impliqué  la  sélection  de  sept 
thématiques  principales  dans  le  secteur  UTCATF,  se  concentrant  principalement  sur  les 
problèmes, les facteurs problématiques et les objectifs. Ces thématiques ont été sélectionnées 
à l’aide d’un processus exigeant d’idéation et en consultation avec la Commission. La Tâche 
2  a  consisté  à  entreprendre  l’organisation  de  quatre  ateliers  en  ligne  sur  des  thématiques 
relatives  au  contexte  du  secteur  UTCATF,  afin  de  collecter  des  idées  et  des  solutions 
d’intervenants importants concernant les principaux obstacles. Dans le cadre de cette tâche, 
un résumé du retour à l’évaluation d’impact de lancement et une analyse statistique et une 
vue  d’ensemble  de  la  consultation  publique  ouverte  pour  la  réglementation  du  secteur 
UTCATF ont également été réalisés. La Tâche 3 a permis de résumer la troisième et dernière 
soumission  des  rapports  des  États  Membres  selon  l’Article  10  de  la  Décision  du  secteur 
UTCATF ;  au total,  24  rapports  ont  été  analysés.  La Tâche  4  a fourni  une  présentation qui 
intégrait  les  conclusions  des  trois  tâches  et  plus  spécifiquement  les  sept  thématiques 
présentées lors de la Tâche 1. 

1.8. Analyse des thématiques 

Le principal objectif des sept notes thématiques concernées par la Tâche 1 était de fournir une 
expertise  pour  le  développement  de  l’évaluation  d’impact  ainsi  que  d’obtenir  une  vue 
d’ensemble  des  principaux  obstacles  affectant  la  réglementation  du  secteur  UTCATF.  Les 
notes thématiques ont été discutées en détail avec la Commission pendant la mise en place 
et la durée du projet afin de fournir le meilleur soutien possible et les informations nécessaires 
pour le processus de développement de l’évaluation d’impact. 

La  nécessité  d’un  puits  de  carbone  plus  important  dans  le  secteur  UTCATF  est  clairement 
présenté  dans  les  projections  jusqu’à  2050  (Figure  4).  Bien  que  les  scenarii  prévus  par  la 
Commission voient un potentiel d’augmentation du puits de carbone, il existe encore quelques 
obstacles  à  l’augmentation  de  la  contribution  du  secteur  UTCATF  à  l’objectif  général  de 
réduction de l’UE. Ces problèmes sont évalués dans les sept notes thématiques développées 
lors de la Tâche 1 de cette étude. Les problèmes identifiés sont : 

1.  Les règles de comptabilité actuelles nécessitent seulement une préservation du puits 
de carbone au même niveau que selon les pratiques de gestion appliquées avant 2009. 
Du fait du vieillissement général des forêts, les règles permettent aux EM de rapporter 
des réductions du puits de carbone sans encourir aucun débit. 

2.  Dans  le  cadre  actuel  des  politiques  de  lutte  contre  le  changement  climatique,  il  est 
possible  d’utiliser  les  compensations  du  secteur  UTCATF  pour  être  conforme  aux 
obligations  de  la  Réglementation  de  la  répartition  des  Efforts  (ESR).  Les  flexibilités 
dans leur état actuel n’incitent pas fortement les EM à appliquer plus de mesures afin 
d’augmenter le puits de carbone tel qu’il est. 

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3.  L’état  de  la  politique  agricole  couvre  les  émissions  provenant  des  fertilisants,  de  la 
production animale et des terres dans le cadre de différents textes de lois, créant ainsi 
un cadre politique confus. D’autre part, la PAC est un texte de loi d’une grande portée 
qui affecte tout le secteur agricole. Une approche plus intégrée serait utile pour relier 
les émissions causées par la gestion des terres à d’autres émissions produites par la 
production agricole. 

4.  Le système de surveillance, d’établissement de rapports et de vérification (MRV) des 
émissions de gaz à effet de serre (GES) n’est pas encore assez détaillé dans la plupart 
des  EM  pour  profiter  de  l’effet  des  principales  pratiques  d’agriculture  carbonée  (par 
exemple  la  restauration  des  zones  humides,  l’agroforesterie…),  sans  parler  des 
impacts des mesures prises individuellement, qui empêchent la mise en place d’une 
surveillance et d’une action politique efficaces. 

Ces principaux problèmes ont conduit à une évaluation de sept thématiques principales afin 
de couvrir les problèmes mentionnés ci-dessus. Les sept thématiques s’intègrent dans 
quatre thèmes larges et ont permis de fournir différents objectifs et solutions afin de résoudre 
les problèmes présentés ci-dessus. Ces sous-groupes sont présentés dans le Tableau 4 ci-
dessous. 

Tableau 4: Notes thématiques et leurs sous-groupes telles que couvertes selon la Tâche 1 de cette étude. 

Thèmes 

Note 

Description 

Axe 
problème 

thématique 
Forêts 

Sols 

Établissement 

Établissement 

de rapports & 

de rapports 

Comptabilité 

Comptabilité 

Explore les facteurs derrière la diminution récente des puits de carbone 
forestiers, qui est identifiée comme un des principaux problèmes que la 
conception et la mise en œuvre de politiques UTCATF doit résoudre. 
Présente les tendances actuelles des changements du carbone du sol dans l’UE, 
comment ils sont rapportés dans les inventaires GES nationaux et le potentiel 
des meilleures pratiques de gestion afin de protéger et d’augmenter les stocks 
de carbone des sols dans l’UE. 
Expose des options pour améliorer les inventaires UTCATF des EM. 

Propose un ensemble de solutions comptables dont certaines constitueraient un 
changement radical des pratiques de comptabilité tandis que d’autres seraient 
des améliorations dans le cadre du système actuel, tout en pouvant être mises 
en place à court terme. 
Indique des domaines potentiels d’amélioration pour l’introduction d’incitations  
basées sur le marché, relatives aux éliminations terrestres du carbone. 

Marchés 
manquants 
Flexibilités  Discute des approches de flexibilité de l’UE concernant l’utilisation des terres, le 
changement d’affectation des terres et la foresterie (UTCATF) qui pourrait aider 
à déclencher une liste d’actions à court terme afin d’augmenter la contribution à 
long terme du secteur, afin de parvenir à la neutralité climatique d’ici à 2050. 
Explore le potentiel de la contribution de l’UTCATF à l’objectif du Green Deal 
européen d’une neutralité nette d’ici à 2050. 

Vision 
2050 

Cadre 
politique 

Vision 

Les notes thématiques mentionnées ci-dessus couvrent toute l’étendue du secteur UTCATF, 
y compris ses forces et ses difficultés. Les notes thématiques de la Tâche 1 ont soutenu l’étude 
dans  son  ensemble  et  ont  agi  comme  une  ossature  pour  les  autres  tâches,  en  particulier 
l’analyse des rapports selon l’Art. 10. 

En  ce qui  concerne  le  premier  thème,  l’analyse  a identifié les facteurs  de  la  diminution  du 
puits à la fois dans les forêts et les sols dans l’UE, en soulignant que ce problème doit être 
résolu rapidement afin d’empêcher sa future aggravation. 

En ce qui concerne le deuxième thème, l’analyse a fait ressortir des façons dont les systèmes 
actuels  de  surveillance,  d’établissement  de  rapports  et  de  vérification  du  secteur  UTCATF 
pourraient  être  améliorés.  Dans  le  cas  du  carbone  du  sol,  par  exemple,  une  surveillance 

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appropriée permettrait d’obtenir une vision plus réaliste des domaines fonciers. En outre, des 
façons d’améliorer les règles de comptabilité du secteur UTCATF ont été proposées. 

Dans  le  cadre  du  troisième  thème,  en  ce  qui  concerne  le  cadre  politique,  la  présence 
d’externalités du marché souligne la nécessité d’inciter fortement les propriétaires à engager 
une action climatique. Les changements structurels présentés impliquent de la recherche et 
du développement significatifs dans l’avenir afin d’éliminer les obstacles actuels (par exemple 
la surveillance des performances individuelles). Comme il n’existe encore pas beaucoup de 
signaux  de  prix  déjà  mis  en  place  pour  le  marché  du  carbone,  il  existe  une  marge 
d’amélioration à cet égard. 

En ce qui concerne les flexibilités avec l’ESR, il y a plusieurs considérations importantes qui 
auront  un  impact  sur  les  futurs  mécanismes  de  flexibilité.  Les  experts  ont  présenté  seize 
options différentes, y compris : la compensation des émissions spécifiques au secteur par le 
secteur UTCATF dans les EM ; la création d’une flexibilité du secteur de l’agriculture, de la 
foresterie et autre utilisation des terres (AFOLU) ; des solutions des deux côtés, vendeur et 
acheteur,  concernant  les  conditions  de  conformité  et  la  trajectoire  des  émissions ;  une 
utilisation stratégique des revenus ESR et ETS ; la création d’un mécanisme d’incitation basé 
sur un projet, la conformité et l’attribution de crédits pour l’élevage de bétail. 

Enfin,  en  ce  qui  concerne  le  quatrième  thème,  la  vision  d’ici  à  2050  fournit  une  vision 
prospective dans le cadre plus large de la politique de l’UE concernant le climat, en expliquant 
comment la politique climatique prendra en compte, dans les prochaines années, un objectif 
climatique triple : 

 

réduction des émissions de GES au minimum absolu 

  production de biomasse en tant que substitut au biomatériau et en tant que matière 

première pour générer de la bioénergie 

  génération de capacités de captage de carbone suffisantes et « d’unités d’atténuation 

des terres » (LMU) 

La principale conclusion de cette partie de l’étude est que, d’ici à la fin de 2050, l’approche 
politique  globale  du  secteur  UTCATF  pourrait  changer  substantiellement.  En  renforçant  la 
disponibilité des données ainsi qu’en créant des incitations pour une action climatique de la 
part des propriétaires terriens, le secteur peut réaliser tout son potentiel. L’étude suggère un 
ensemble d’options à court terme et à long terme fournies dans le cadre des notes thématiques 
pour  renforcer  le  rôle  du  secteur  UTCATF  dans  la  réalisation  de  l’objectif  de  neutralité 
climatique d’ici à 2050. 

1.9. Ateliers 

Au cours de la période du projet, quatre ateliers ont été entrepris dans le cadre de la Tâche 2 
afin de permettre aux intervenants de communiquer et de collaborer sur des thématiques liées 
aux  politiques  d’utilisation  des  terres  dans  l’UE.  Les  quatre  thématiques  d’ateliers  ont  été 
planifiées avec la Commission afin d’obtenir des idées cruciales pouvant aider à concevoir de 
futures politiques liées au secteur UTCATF ainsi que la réglementation elle-même. Les quatre 
thématiques et leurs objectifs sont présentés dans le tableau ci-dessous. 

Table 5 : Vue d’ensemble des thématiques couvertes lors des ateliers. 

Atelier 

Description 

Approches d’établissement 
de Rapports & 
Comptabilité du secteur 
UTCATF 
Le rôle des secteurs de 

L’objectif était d’introduire et d’initier des discussions sur la conception 
d’une future politique dans le secteur UTCATF, dans le contexte de 
l’évaluation d’impact. 

L’objectif était d’obtenir des informations sur contribution des secteurs 

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 REVIEWING THE CONTRIBUTION OF THE LAND USE, LAND-USE CHANGE AND FORESTRY 
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l’agriculture et de 
l’utilisation des terres 
dans une UE 
climatiquement neutre en 
2050 
Collecte d’idées 
concernant les étapes 
suivantes pour 
l’agriculture carbonée 
Agriculture carbonée dans 
les Plans Stratégiques de 
la PAC 

de l’utilisation des terres à une UE climatiquement neutre en 2050. Les 
principaux thèmes étaient la vision pour 2050 et le rôle des 
agriculteurs, des marchés privés, des données et de la technologie. 

Le but de cet atelier était d’obtenir des informations sur les étapes 
suivantes pour la culture carbonée. Les thèmes de l’atelier étaient les 
liens entre la biodiversité et les éliminations du carbone, la surveillance 
des éliminations du carbone et le cadre politique. 
L’objectif de l’atelier était d’explorer des options de conception de 
programmes d’Agriculture Carbonée dans le cadre des Plans 
Stratégiques de la PAC. 

Les points importants à retenir des ateliers étaient concentrés sur les aspects financiers du 
secteur, parmi d’autres choses. Le premier atelier a conclu qu’il était nécessaire d’avoir des 
objectifs plus stricts pour le secteur UTCATF, particulièrement en proportion de la capacité de 
l’EM à augmenter la rentabilité du puits. Le deuxième atelier a plaidé pour une large initiative 
d’agriculture carbonée ainsi que pour de meilleures incitations financières. Le troisième atelier 
a suggéré de réduire les coûts de la surveillance du carbone organique du sol et de s’assurer 
que les agriculteurs sont bien soutenus en termes de conseils. Le dernier atelier a présenté 
de nombreuses options pour l’agriculture carbonée dans le cadre des Plans Stratégiques de 
la PAC, soulignant son potentiel, également sur la base de projets existants. 

1.10. Consultation Publique Ouverte 

L’analyse  des  réponses  à  la  Consultation  Publique  Ouverte  (CPO)  sur  la  révision  de  la 
réglementation du secteur UTCATF faisait également partie de la Tâche 2. La CPO a apporté 
plusieurs idées des intervenants et des acteurs importants dans toute l’UE. 235 réponses ont 
été évaluées dans 22 EM, une majorité provenant de citoyens de l’UE, suivies d’associations 
professionnelles  et  d’ONG.  La  CPO  comprenait  13  questions  divises  en  quatre  sous-
catégories : 

1.  Mobilisation du potentiel d’atténuation et d’activité du secteur foncier 

2.  Les approches politiques globales 

3.  L’imposition de plus de règles ambitieuses pour le secteur UTCATF 

4.  Liens entre l’utilisation des terres et l’agriculture 

Quelques conclusions intéressantes peuvent être tirées de la CPO. Cependant, il est important 
de  noter que les  commentaires  ouverts fournis  par  les  intervenants  sont fortement corrélés 
avec leur affiliation. À cet égard, les réponses aux questions sont présentées ci-dessous, mais 
de  nombreux  commentaires  ouverts  ont  été  soumis  avec  des  suggestions  et  conclusions 
supplémentaires. 

Les  principaux  facteurs du  déclin du  puits  de  carbone  basé  sur  les terres  ont  été  identifiés 
comme  étant  la conversion de terres  riches  en  carbone (déforestation,  drainage des  zones 
humides ou des tourbières), l’artificialisation et l’imperméabilisation des sols (expansion des 
zones  construites  et  habitées).  L’approche  politique  qui  a  été  la  plus  fréquemment  choisie 
comme  étant  soit  importante  soit  très  importante  était  un  meilleur  encadrement  européen 
concernant la surveillance, l’établissement des rapports et la vérification des émissions et des 
éliminations. Cela est conforme aux conclusions d’autres parties de cette étude. Les zones les 
plus fréquemment choisies dans lesquelles l’UE devrait concentrer ses efforts pour renforcer 
le puits de carbone étaient le boisement, le reboisement et la restauration des forêts. 

En  ce  qui  concerne  la  politique  et  les  finances,  les  personnes  interrogées  ont  souligné 
l’importance  des  subventions  pour  améliorer  l’action  climatique  dans  le  secteur.  Cela  est 
également  conforme  aux  conclusions  des  autres  parties  de  ce  projet.  Pour  l’approche 
politique, une réglementation du secteur UTCATF renforcée conforme au Plan des Objectifs 

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Climatiques 2030 a obtenu le plus de réponses. En outre, lorsqu’on leur a demandé s’il devait 
y avoir des d’objectifs plus stricts que l’actuelle règle « pas de débit », 52 % des personnes 
interrogées  ont  répondu  oui,  bien  que  des  différences  aient  émergé  parmi  les  groupes 
d’intervenants. Le secteur privé était divisé en deux parties presque égales sur le fait que des 
objectifs plus stricts devaient ou non être imposés tandis que les institutions académiques et 
les organisations environnementales étaient clairement pour. 

La dernière conclusion intéressante de la CPO était sur le niveau de référence pour les forêts 
(FRL) : tandis que la plupart des personnes interrogées ont proposé d’arrêter l’utilisation du 
FRL,  certaines  ont  répondu qu’elles  continueraient  de  l’utiliser  avec  certaines  modifications 
concernant l’harmonisation de la méthodologie pour les EM. 

1.11. Politiques et mesures relatives au secteur UTCATF dans 

les États Membres jusqu’en 2020 

Les rapports selon l’Art. 10 soumis par 24 EM3 fournissent un aperçu de l’état de l’action du 
secteur UTCATF dans l’UE. Connaître ces actions peut ensuite aider à orienter les approches 
politiques  et  permettre  d’harmoniser  et  de  créer  une  cohérence  en  ce  qui  concerne  les 
données,  par  exemple.  Plusieurs  EM  ont  des  politiques  et  mesures  UTCATF  hautement 
efficaces et innovantes, mais il y a toujours une marge d’amélioration, car les règles de l’UE 
pour  le  secteur  pourraient  être  renforcées  significativement.  Cinq  défis  majeurs  ont  été 
présentés par les EM dans leurs rapports, qui peuvent être utilisés pour documenter d’autres 
actions politiques concernant le secteur UTCATF : 

1.  Puits en diminution ou émissions en augmentation dans un secteur UTCATF donné 

sur une période significative (DK, AT, BG, CY, FI, HU, IE, LV, LT, MT, NL, SK et ES) 

2.  Les  forêts  matures  et  vieillissantes  de  l’UE  capturent  le  carbone  mais  à  un  taux  en 

diminution (EE, IE, LV, SI, DK et SK) 

3.  Fluctuation des données et lacunes (BE, FI, EL, LU, MT, PL, SI, et FR) 

4.  Terres abandonnées (particulièrement dans les pays d’Europe Centrale et de l’Est)(EE, 

LV, MT, HR et LT) 

5.  Problèmes de gestion de nutriments conduisant à des sols improductifs (EE, MT, PL, 

et ES) 

Il existe plusieurs manières dont les rapports selon l’Art. 10 peuvent tracer le chemin vers un 
focus permanent sur le secteur UTCATF. Une des principales conclusions des rapports est 
l’importance de la Politique Agricole Commune post-2020, qui entrera en vigueur en 2023. La 
PAC couvre une majorité des politiques et mesures citées par les EM et il s’agit d’une source 
vitale  de  financements.  Avec  les  nouveaux  objectifs  de  la  PAC  de  renforcer  les  ambitions 
climatiques, il pourrait y avoir un net changement dans la manière dont les EM gèrent leurs 
terres. La Figure 6 montre la répartition des instruments politiques à partir des 398 politiques 
et mesures présentés dans les 24 rapports. 

3 Le Portugal et la République tchèque n’ont pas soumis leurs rapports selon l’Art. 10 et l’Allemagne l’a soumis après l’échéance 
et son rapport n’a donc pas pu être inclus dans le rapport de synthèse.  

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 REVIEWING THE CONTRIBUTION OF THE LAND USE, LAND-USE CHANGE AND FORESTRY 
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Figure 6. Principaux instruments politiques provenant des politiques et mesures des EM. 

Le fait de se concentrer sur les types d’actions qui permettent l’absorption la plus importante 
dans l’UE peut aider à obtenir un aperçu de l’avenir du secteur. La gestion des nutriments, des 
labours et de l’eau, la gestion des forêts et les mesures de préservation de la biodiversité ont 
été le type d’intervention le plus courant parmi les EM. Les interventions de gestion des forêts 
ont souvent été citées pour l’amélioration de la production de bois et une exploitation durable, 
ce qui indique un fort lien entre les objectifs économiques et les objectifs environnementaux. 
Les politiques et mesures de gestion des nutriments, des labours et de l’eau ont été presque 
entièrement  financées  dans  le  cadre  de  la  PAC,  le  plus  souvent  par  l’intermédiaire  des 
Programmes  de  Développement  Ruraux.  Le  lien  entre  l’amélioration  des  revenus  ruraux  et 
des  propriétaires  terriens  et  l’action  climatique  est  clairement  une  voie  vers  des  politiques 
efficaces tant au niveau national et que de l’UE. Cela confirme également une conclusion de 
la  CPO  indiquant  que  des  subventions  et  une  agriculture  carbonée  étaient  mentionnées 
comme nécessaires pour établir un puits de carbone efficace et durable. 

Ce  qui  peut  être  conclu  de  l’analyse  des  rapports  selon  l’Art.  10  est  que,  en  considérant 
spécifiquement  les  problèmes  mentionnés  ci-dessus,  le  secteur  UTCATF  permettra  de 
compenser efficacement les émissions d’ici à 2050 et potentiellement avant. Il est clair qu’il 
existe une expertise dans ce secteur dans les EM, mais les mesures politiques et le soutien 
doivent être améliorés afin que les propriétaires terriens se sentent soutenus financièrement. 
Des actions à court terme telles que le renforcement de la collecte des données ainsi que la 
mise en place de politiques et mesures focalisées sur certaines régions (par exemple les pays 
d’Europe Centrale et de l’Est) permettront au secteur de réaliser pleinement son potentiel. 

1.12. Conclusions 

Les complexités du secteur UTCATF ne doivent pas être ignorées et chacune des sections de 
l’étude a tenté  d’examiner  l’état  du secteur  sous  un  angle différent.  Bien  que  de  nombreux 
intervenants  avec  différentes  affiliations  (par  exemple  des  experts,  des  autorités  publiques, 
des acteurs privés, etc.) aient été impliqués à chaque étape du processus, il y a eu quelques 
points de consensus. Récapituler la grande variété de résultats et d’analyses conduites dans 
le cadre de cette étude et les combien avec des conseils de politiques est une tâche exigeante. 
Néanmoins, certaines conclusions peuvent être tirées de chaque résultat, qui se superposent 
à la longue. Le tableau ci-dessous présente une courte liste de conclusions des résultats et 
des analyses qui ont été effectuées dans le cadre de ce projet. 

Table 6. Solutions basées sur les résultats dans le contexte de cette étude. 

Solution 

Analyse des 

Retour du 

Rapports des États 

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 REVIEWING THE CONTRIBUTION OF THE LAND USE, LAND-USE CHANGE AND FORESTRY 
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Un meilleur système MRV 

Simplification de la comptabilité 

Priorisation du potentiel 
d'atténuation des forêts 

Importance de la PAC 

Modification des règles concernant 
les flexibilités dans l’ESR 

Soutien aux propriétaires terriens 

experts 
√ 

public 
√ 

Membres selon l’Art. 10 
√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

√ 

Afin de suivre correctement les éliminations et les émissions des terres, le système MRV doit 
être amélioré. Les rapports selon l’Art. 10 étaient fortement contrastés en ce qui concerne les 
méthodes d’établissement de rapports et ont montré qu’une cohérence était nécessaire pour 
avoir  une  vue  d’ensemble.  En  outre,  une  grande  partie  du  premier  atelier  a  été  dédiée  au 
système  MRV  et  le  débat  a  montré  l’importance  de  cette  thématique.  Dans  la  CPO,  une 
suggestion était d’utiliser une imagerie à haute résolution et en continu afin de créer un niveau 
plus  homogène  de  suivi  des  changements  d’affectation  des  terres.  Les  experts  ont  même 
conclu  que  la  surveillance  du  carbone  organique  des  sols  était  « le  point  aveugle  le  plus 
critique  de  la  politique  climatique  liée  aux  terres ».  En  outre,  l’analyse  des  méthodes  de 
comptabilité a souligné la nécessité de réévaluer l’approche de comptabilité et peut-être de 
mettre en place une approche de comptabilité brut-net où il n’y aurait aucune ligne de base 
(en  d’autres  termes,  les  objectifs  seraient  basés  sur  toutes  les  émissions  et  éliminations 
rapportées  dans  l’inventaire).  La  CPO  et  l’analyse  des  experts  ont  permis  de  discuter 
longuement de cette problématique et il n’y a pas de solution universelle. Une combinaison 
d’approches (net-net et brut-net) est une option afin de permettre plus d’élasticité. 

Le  potentiel  d’atténuation  des  forêts  est  mentionné  dans  toutes  les  parties  de  l’étude  et 
l’amplitude des politiques et mesures dans les rapports selon l’Art. 10 relatifs à la gestion des 
forêts ainsi que les réponses dans la CPO montrent combien il est nécessaire de préserver et 
d’améliorer la capacité du puits forestier. Il a également été mentionné, dans l’atelier final, que 
la  quantité  de  terres  forestières  hors  des  forêts  gérées  ou  productives  est  minimale  dans 
certains EM. La pression de la bioénergie basée sur les forêts est une des causes principales 
de la diminution du puits et est une thématique importante à prendre en compte dans la suite 
des discussions concernant les politiques. 

Un  des  ateliers  était  entièrement  dédié  aux  Plans  Stratégiques  de  la  PAC  et  l’avenir  d’une 
initiative d’agriculture carbonée, car il existe clairement une voie qui est la nouvelle PAC. Il est 
d’une extrême importance de concevoir une future PAC avec un focus important sur l’action 
climatique et des incitations financières pour les propriétaires terriens. La PAC est, depuis sa 
mise en place, un outil central pour l’UE et son objectif global de soutien aux revenus ruraux 
s’oriente  et  s’orientera  vers  un  focus  « plus  vert ».  Bien  que  le  développement  rural  soit 
toujours vital, il existe un moyen de s’assurer à la fois que la subsistance soit garantie et que 
les pratiques environnementales soient encouragées. 

Une des options politiques présentées dans l’évaluation d’impact de lancement et dans la CPO 
(suite aux options soulignées dans la Communication du Plan des Objectifs Climatiques) était 
un  renforcement  de  la  flexibilité  dans  l’ESR,  qui  est  une  des  principales  thématiques  de  la 
Tâche  1  de  ce  projet.  Dans  la  CPO,  cette  option  a  obtenu  d’importantes  critiques,  certains 
intervenants  voulant  supprimer  complètement  la  flexibilité  avec  l’ESR  et  établir  un  objectif 
séparé pour le secteur UTCATF. De nombreux intervenants ont exprimé leur préoccupation 
qui cela conduirait à l’inaction dans le cadre de l’ESR du fait que la compensation est autorisée, 
ce  qui  encouragerait  finalement  les  émissions  à  long  terme.  Quoi  qu’il  en  soit,  la  flexibilité 
actuelle dans l’ESR doit être reconsidérée avec attention. 

Le soutien aux propriétaires terriens doit être conçu avec soin afin d’éviter des effets pervers. 
À  cet  égard,  l’initiative  d’agriculture  carbonée  de  l’UE  doit  être  vue  comme  un  mécanisme 

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permettant  d’encourager  des  solutions  naturelles  bénéfiques  pour  le  climat.  L’agriculture 
carbonée en lien avec la planification de la PAC démarrant en 2023 était le thème abordé par 
l’atelier  final.  La forte participation  à  cet  atelier  a  montré l’intérêt  pour  l’interaction  entre les 
possibilités existantes et futures d’incitations pour les gestionnaires fonciers. 

Pour conclure, ce projet est parvenu à trois conclusions principales : 

1.  Le secteur UTCATF a un grand potentiel pour une contribution à la réalisation d’une 
économie  climatiquement  neutre  en  2050.  Cependant,  il  existe  deux  domaines 
principaux où le puits doit être amélioré : les forêts et les sols. Des signes forts montrent 
que le puits de carbone dans l’UE est en diminution et cette tendance ne s’inverse pas. 
Cela est dû principalement à une dépendance plus forte à la bioénergie basée sur les 
forêts  ainsi  que  sur  le  vieillissement  des  forêts.  Il  est  clair  que,  sans  des  mesures 
intensives  comme  la  reforestation  et  le  boisement  ainsi  qu’une  gestion  active  des 
forêts, la quantité d’éliminations disponibles diminuera dans les 20 prochaines années. 
Il convient également de souligner que les éliminations de carbone dans les sols sont 
coûteuses  à  surveiller.  En  outre,  en  l’absence  de  fortes  politiques  d’incitation  pour 
surveiller  et  augmenter  le  stockage  du  carbone  dans  le  sol,  il  y  a  un  manque  de 
données concernant le carbone dans le sol, à la fois dans l’UE et au niveau des EM. 

2.  Les solutions possibles incluent la simplification des méthodologies de comptabilité qui 
permettra une allocation plus précise et plus juste des éliminations du carbone dans 
les  comptes  des  EM.  De  manière  similaire,  il  existe  des  solutions  clairement 
disponibles visant à améliorer l’exactitude des rapports, cependant cela nécessiterait, 
entre  autres  choses,  une  implication  supplémentaire  de  la  communauté  des 
chercheurs. Cela aidera les EM à améliorer la précision et la transparence des valeurs 
présentées. 

3. 

Il existe des actions appropriées disponibles pour augmenter le stockage du carbone 
dans le secteur foncier. Le Manuel Technique sur l’agriculture carbonée4, récemment 
publié, ainsi qu’un intérêt déjà existant pour cette thématique, fournissent un bon point 
de  départ  pour  le  renforcement  et  l’adoption  d’initiatives  d’agriculture  carbonée 
permettant la séquestration et le stockage du carbone. 

4 Commission UE. (2021). Élaboration et mise en œuvre de mécanismes d’agriculture carbonée basés sur les résultats dans l’UE: 
manuel d’assistance technique. 
https://op.europa.eu/en/publication-detail/-/publication/10acfd66-a740-11eb-9585-01aa75ed71a1/language-en  

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2. Synthesis Report on Topic Notes 

Abbreviations 
AFOLU 

Agriculture, Forestry and Other land-use 

CAP 

ESR 

Common Agriculture Policy  

Effort Sharing Regulation 

EU ETS 

European Union Emissions Trading Scheme 

FRLs 

Forest Reference Levels 

GHG 

Greenhouse Gas 

IA 

Impact Assessment 

LULUCF 

Land Use, Land-use Change and Forestry 

MRV 

Monitoring, Reporting and Verification 

NECPs 

National Energy and Climate Plans 

PA 

TN 

Paris Agreement 

Topic Note 

2.1. Introduction 

Over the course of the last decade, the European Union (EU) took a global lead on action to 
combat  climate  change.  The  evolution  of  policy  architecture  and  science-based  evidence 
revealed the need for urgent action towards reducing the global temperature to below 2˚C as 
well as reducing greenhouse gases (GHGs) in all sectors of the economy.  

First, the complex climate change policy package adopted in 2009 sets the target for a 20% 
GHG  reduction to  be  achieved  until  2020.  In  2015,  a global  stimulus,  the  Paris  Agreement 
(PA), urged parties to act more ambitiously regarding the reduction of CO2 as it is the only way 
to  mitigate  the  climate  change  crisis;  it  set  out  an  objective  to  achieve  a  balance  between 
anthropogenic emissions by sources and removals by sinks of GHGs in the second half of this 
century.  The  PA  set  out  a global  framework  to avoid  dangerous climate  change  by  limiting 
global warming to well below 2°C and pursuing efforts to limit it to 1.5°C. 

The EU response was the introduction of the 2030 climate and energy package that sets up a 
reduction  target  of  -40%  in  2030  compared  to  1990.  In  December  2019,  the  newly  elected 
President of the European Commission presented an even more rigorous policy initiative with 
an overarching objective to make Europe climate neutral in 2050. The European Green Deal 
set a minimum target of reductions of GHG emissions to at least 50% and toward 55% by 2030 
compared to 1990.  

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As part of the newly established reduction targets, DG Climate Action has initiated the process 
of  revising  the  Land  Use  Land-use  Change  and  Forestry  (LULUCF)  regulation,  which  is 
expected to be published in June 2021. In parallel, the European Commission has initiated the 
revisions  of  other  climate  change-related  policy  acts.  The  Impact  Assessment  (IA) 
accompanying the revision of the LULUCF Regulation will explain the problems addressed by 
the  revision,  its  objectives,  the  available  policy  options  and their  objectives.  The  revision  is 
necessary to find the most effective set of policy tools required for achieving the higher net 
emission reduction target. During the legislative procedure, an open public consultation was 
undertaken to support this process. The four legal acts subject to these consultations are:  

  EU Emissions Trading System (EU ETS) Directive 

  Effort Sharing Regulation (ESR) 

 

 LULUCF Regulation 

  CO2 standards for cars and vans Regulation (light-duty vehicles) 

The purpose of this study is to focus on the LULUCF Regulation and ultimately provide factual 
input as well as policy analysis within specific pathways to inform the Commission’s work. As 
part of Task 1, the study developed a set of seven topic notes (TNs) with a deep analysis of 
the current situation in the LULUCF sectors starting with problems of the decreasing carbon 
sink  in two  main  carbon  pools:  forests,  and  soils  (TN1  and TN2).  The  next  two  topic  notes 
cover the connection between LULUCF and currently available market-based incentives (TN3) 
and the vision for LULUCF towards 2050 (TN4). Experts also thoroughly analysed all of the 
elements  of  the  reporting  and  accounting  of  the  emissions  from  the  sector  and  looked  for 
options  for  improvements.  These  topic  notes  (TN5  and  TN6)  were  also  supported  by  the 
findings from the first of a series of four workshops conducted under Task 2 of this study. TN7 
focuses on options for the governance of flexibilities for LULUCF under the ESR. These seven 
topic notes can be treated as standalone documents.  

Topic Note   

Scope  

Table 7: Topic Notes and their respective scope. 

TN1: The Decline in the 
Forest Sink and its 
Drivers 

Explores the drivers behind the recent decline in forest carbon sinks, which is 
identified as one of the main problems that the design and implementation of 
LULUCF policies must address.   

TN2: Soil Carbon: 
Current Trends and 
Challenges 

Presents the current trends in soil carbon changes in Europe, how they are 
reported in national greenhouse gas inventories (GHGs) and the potential of best 
management practices to protect and enhance soil carbon stocks in the EU.  

TN3: Externalities and 
Missing Markets  

TN4: Vision for 2050 

TN5: Improve Reporting 

TN6: Amend the 
LULUCF Accounting 
Rules to make the No-
Debit Rule More 
Stringent  

Sets out options to improve the LULUCF inventories of the MS.  

Proposes a suite of accounting solutions, some of which would constitute a radical 
shift in accounting practices whereas others are merely improvements within the 
current system, which could be implemented short term.    
Indicates potential areas of improvement for introducing market-based incentives 
linked to land-based carbon removals.  

Discusses EU flexibility approaches on land use, land-use change and forestry 
(LULUCF) that could help trigger a list of short-term actions to enhance the long-
term contribution from the sector towards achieving the climate neutrality target for 
2050.  

TN7: Governance of 
LULUCF Flexibilities 

Explores the potential for LULUCF's contribution to the European Green Deal's 
target of net neutrality by 2050.  

2.2. Background 

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The  LULUCF  sector  is  gaining  increasing  importance  in the  political  context,  as  it  is  slowly 
becoming  the  key  sector  to  provide  the  carbon  removals  needed  to  achieve  the  long-term 
target  of  climate  neutrality  until  2050.  There  is  a  desire  to  capitalise  on  the  phenomena  of 
removing CO2 from the atmosphere and storing it in biological tissue. Since 1990, the base 
year for all GHG estimates, the EU has been absorbing more CO2 than emitting in this sector 
- positioning the EU as a carbon sink. However, the tendency is showing a negative direction 
and based on projections from the Member States (MS) this negative trend is set to continue 
for the next decade.  

The obvious interest for policymakers is for the current carbon sequestration to be maintained 
and increased for the sake of mitigating climate change but also in supporting the strategic 
direction of the EU. Therefore, there is an urgent need for the carbon sink to be significantly 
increased  by  2030  to  be  on  track  for  climate  neutrality  in  2050.  Unfortunately,  the  actual 
performance of the LULUCF sector is strongly led by natural forces, which human activities 
can only support and steer.  

Thus,  the  capacity  of the  land-use  sector to  sequester  carbon  cannot  be  taken for granted. 
Effective policy incentives and action on the ground are needed. 

The  European  Commission  and  the  MS  agree  on  a  common  effort  to  transform  the  EU 
economy  to  become  climate  neutral  until  2050.  However,  such  an  ambitious  objective  has 
elements that need to be taken into consideration. One such element is the fact that, even if 
emissions from many economic processes are reduced or become zero, there would still be 
certain  amounts  of  emissions,  e.g.  from  fertilizers,  some  natural  processes  occurring  for 
example  in  the  cement  manufacturing  or  other  leaks  in  the  climate  change  policy  regime. 
Therefore, a key solution to mitigate such emission outputs would be the removals that are 
reported in the LULUCF sector.  

Figure  7  below  visualizes the trajectory  of change  towards  2050  and  clearly  shows  to  what 
extent the carbon removal is expected to be achieved and by which measure. It is also safe to 
expect the demand for removal units to grow after 2050.  

Figure 7: Pathway to climate neutrality; Source: European Commission, 2021  

The projections quite clearly illuminate the need for an effective carbon sink in the LULUCF 
sector.  While  the  Commission’s  projected  scenarios  estimate  the  potential  to  increase  the 
reported carbon sink, there are still a few problems blocking the increase of the contribution of 
the LULUCF sector to the overall EU reduction target. These identified problems are further 
evaluated across the seven topic notes developed under Task 1 of this study. The identified 
problems are:  

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  The current LULUCF accounting rules only require MS to preserve the carbon sink at 
the same level as it would be if the management practices applied before 2009 were 
continued. As a consequence of the general ageing of forests, the current rules create 
space for MS to report reductions of the carbon sink without incurring any debits.  

  The  current  architecture  of  climate  change  policies  creates  a  possibility  to  use  the 
LULUCF  allowances  surplus  to  comply  with  the  obligations  set  by  the  ESR. 
Nevertheless, such flexibility does not create a strong incentive for additional measures 
to be implemented by MS to increase the carbon sink.  

  The agriculture sector is a source of emissions from different areas of its activity, like 
land-based  emissions  but  also  the  emissions  caused  by  fertilisers  and  animal 
production.  The  current  climate  policy  framework  covers  those  emissions  under 
different pieces of legislation. On the other hand, the CAP is a far-reaching piece of 
legislation that affects the whole agriculture sector. Therefore, the aim is to propose a 
more integrated climate approach for the land sector by linking the emissions caused 
by  land  management  and  other  emissions  released  by  agriculture  production.  This 
could lead to the establishment of a climate-neutral land sector already in 2035.  

  Climate  change  policy  is  based  on  proper,  consistent  and  transparent  Monitoring 
Reporting and Verification (MRV) of GHG emissions. Currently, the MRV system is not 
yet granular enough in most MS to pick up the effect of major carbon storing practices 
(eg. wetland restoration, agroforestry, …), let alone the impacts of measures taken at 
the individual actor, which undermines effective monitoring and policy-making. 

These main points led to initiating the process of investigations into all the identified problems 
through an in-depth analysis. It was agreed to assess sevem main topics to cover the problems 
addressed above (see Table 7).  

2.3. Topic Note Overview 

The main aim of the topic notes was to deliver the arguments and knowledge to inform the 
preparation  of  the  impact  assessment.  The  topic  notes  were  developed  during  the  whole 
duration of the project and were discussed in detail with the Commission in order to deliver the 
best  possible  support  and  necessary  information  to  the  IA  development  process.  The 
description of the topic notes can be found in Table 7 and they are further grouped together in 
the following figure. 

Figure 8: Grouping of Topic Notes into four themes. 

From Figure 8 the seven topic notes were classified into three groupings, namely Problem-
Oriented (1, and 2), Reporting & Accounting (5 and 6), Policy Framework (3, and 7) and Vision 
(4). Topic notes also can be grouped into short term (5, 6) and long-term (4) actions. Where 

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the proposed solution for reporting and accounting and on market is a short-term action and 
assessment  of  flexibilities  between  other  climate  change  policies,  the  vision  towards  2050 
would be a long-term action. Each of the topic notes was designed to be able to stand alone 
as a short but very comprehensive document that serves as a basis for inputs to the legislative 
documents together with a sound scientific background. Each of the topic notes outlines the 
main problems and drivers and, in some of them, proposes a set of potential solutions, both 
short and long-term. Also, the topic notes were designed to serve as a comprehensive report 
as  they  are  linked  altogether,  creating  a  all-inclusive  picture  of  the  LULUCF  sector  and  its 
peculiarities and challenges. 

2.3.1. Problem Oriented – Forests  

Based on the recent LULUCF inventories, the project team developed the first two topic notes 
under  soils  (TN2)  and  forestry  (TN1).  The  two  main  carbon  reservoirs  namely  forests  and 
organic soils were taken under evaluation for two reasons: 

4.  These carbon pools are the largest and 

5.  recent projections show the sink in these reservoirs is decreasing. 

In TN1, experts looked into the forestry sector in the whole EU. Based on the review of the 
available literature evaluating the current conditions of the forests stands, age class structure, 
the changes caused by climate change, and harvesting rates, the note concluded that since 
about 2013, the annual sink on forest land remaining forest land in European forests has been 
decreasing at roughly 12,000 kt CO2 / year. This is occurring even though the area of forests 
within the EU is stable or even slightly growing; with the exception of Sweden, Slovenia and 
Portugal, the forest area in all of the EU MS has increased by a net increase of nearly 10% 
from 1990 to 2019.5 

The  majority  of  this  change  is  due  to  the  increasing  harvests  for  bioenergy.  The  trends  in 
bioenergy  have  shown  rather  sporadic  patterns  but  the  harvests  can  still  be  linked  to  a 
decreasing sink. Emissions from afforestation and deforestation play less of a role in the total 
of the LULUCF sink in comparison to the forest lands remaining forest lands category. Yet, 
afforestation has decreased since 2010, most prominently in the Atlantic and Mediterranean 
regions  of  the  EU  with  the  largest  agricultural  areas.  The  last  main  contribution  to  the 
decreasing sink has been a decrease in the living gains for forests such that forest capacity 
for absorbing carbon has become lower, partially due to ageing EU forests.  

TN1 identified four main  problem  drivers  based on  the  trends outlined above:  (1)  ageing  of 
forests;  (2)  sensitivity  to  droughts  and  fires  and  storms  due  to  climate  change;  (3)  forest 
management practices and (4) a decline in afforestation. In particular, it should be underlined 
that  forests  are  put  under  more  stress  due  to  the  changing  climatic  conditions.  A  higher 
frequency of droughts, fires, storms, and floods can exacerbate the already sensitive forests 
and  make  them  even  more  sensitive.  These  changes  are  partly  beyond  human  control, 
however, adaptation action in forests should be an immediate priority.  

Both TN1 and the referenced scenario studies suggest that if nothing happens, or if less than 
substantial improvements happen, then the situation will only worsen over the next 30 years. 
Only comprehensive regulatory changes can reverse this trend. The root causes of the trends 
in  sinks  essentially  can  be  traced  back  to  a  lack  of  financial  incentives  for  landowners  to 
prioritize  climate  friendly  forest  management  and  afforestation/reforestation  activities.  More 
sustainable alternatives to short-term bioenergy need to be developed to restore and improve 
the forest carbon sink.  

5 Forests in the EU, (2019). https://ec.europa.eu/eurostat/statistics-
explained/index.php/Forests,_forestry_and_logging#Forests_in_the_EU 

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2.3.2. Problem Oriented – Soils  

The second largest carbon pool is organic soil, yet this carbon reservoir is given less attention 
in  studies  and  research  than  the  forest  carbon  pool.  It  must  be  highlighted  that  most  stock 
changes in European soils are currently not being monitored, which is the most critical blind 
spot of land-related climate policy as reported by the authors of TN2.  

According  to  the  analysis  in  TN2,  if  soil  carbon  was  properly  monitored  all  over  the  EU, 
additional  emissions  of  the  order  of  70  MtCO2/yr  could  appear  in  croplands,  and  additional 
removals  of  the  same  order  of  magnitude  could  appear  in  grasslands  and  forests.  Drained 
organic  soils  are  better  monitored  than  mineral  soils  but  there  is  still  significant  room  for 
improvement; drained organic soils report emissions of 100 MtCO₂/yr concentrated in only 5% 
of total land area.  

There are several problems that climate change policies need to address urgently with regard 
to  soil  carbon  and  its  on-site  measurement.  First,  reported  data  has  large  gaps  and  large 
uncertainty. MS based on their national research and estimation publish data that are on the 
different level of granularity to present the current condition of soil carbon. In addition, different 
tiers of reporting are applied by Member states. The uncertainty is due to different levels/tiers 
that MS use while estimating the carbon content in the soils. The Tier 1 method ignores carbon 
stock changes in mineral soils. The Tier 2 method generally applies an appropriate emission 
factor (depending on the soil type and climate region) to estimate the stock changes resulting 
from  conversions  between  pre-defined  management  types.  Tier  3  includes  either  soil 
inventories6 or a soil model (e.g. Yasso, C-Tool). Tier 3 turns out to be largely inaccurate in the 
case of soils, as demonstrated in TN2. 

In mineral soils, the area that is properly reported is estimated to be at most around 37% of 
EU  cropland.  For  grassland  and  forest  soils,  the  reporting gaps  are  even  larger.  In  organic 
soils,  many  MS  are  using  Tier  1  methods,  yet  the  best  potential  for  proper  estimations 
according to the authors of TN2 is developing a country-specific measurement-based emission 
factor (Tier 2 approach).  

While many large carbon gains and losses go unreported, TN2 also brings some analyses of 
potential measures that support protecting and increasing the carbon content in soils. Many of 
these measures are not captured by most GHG inventories. Those measures are:  

  Agroforestry 

  Cover crops 

  Substituting maize with grass 

  Wetland/peatland restoration 

The conclusion for this TN is that soil carbon is expensive to monitor in the absence of strong 
policy  incentives.  Incentives  should  be  created  to  encourage  increasing  carbon  storage 
through  key  measures  (e.g.  agroforestry,  cover  crops)  being  mindful  that  there  is  a  critical 
shortfall on data, both at the EU and MS level. As a result, reporting of soil carbon is the blind 
spot of current EU LULUCF policy. Further solutions to this blind spot can be found in TN5 on 
reporting as well as in TN6 on accounting.  

2.3.3. Short-term solution – Reporting  

The topic notes in the Reporting & Accounting category (TN5 and TN6) represent short-term 
solutions to the problems set out within TN1 and TN2 on forests and soils. These are short-

6 Meaning in detail: soil carbon content is repeatedly measured over a large number of sample plots across the country or a soil 
model which is often based on half-decay factors and carbon transfers between different organic matter pools 

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term  solutions  as  they  can  result  in  positive  impacts  in  the  short-term  and  if  the  solutions 
presented within are implemented results will be seen rather quickly. 

The  first  topic  note  (TN5)  focuses  on  the  analysis  of  the  current  GHG  reporting  process. 
Information about emissions is provided by MS in the form of reports that are concluding the 
work of experts who calculated emissions based on very detailed data on yield and productivity 
in forests and crops and observed variability. The reporting is done based on strict international 
guidelines7  that  are  in  line  with  the  UNFCCC  process.  In  other  words,  the  EU  system  of 
reporting of the LULUCF is aligned with the one under UNFCCC. However, this process has 
some  challenges  that  can  be  addressed  in  the  context  of  the  revision  of  the  LULUCF 
Regulation.  

Even though the current reporting framework is constantly improving and adapting, many gaps 
have an unquantified impact on overall LULUCF estimates. The LULUCF reporting is highly 
dependent  on  field  data,  a  lot  of  which  is  collected  autonomously  by  MS  with  limited  EU 
coordination.  The  result  is  data  that  is  heterogeneous  and  incomplete.  TN5  describes  the 
current  state  of  reporting  and  points  out  problem  drivers  such  as  lack  of  resources,  lack  of 
incentives for better reporting, and lack of direct connection between reporting and the political 
and economic sectors.  

The main problem drivers in reporting are that LULUCF MRV is very resource intensive and 
MS do not have a strong enough incentive to improve the quality of the LULUCF reporting. In 
addition, the scarcity of data creates a distinct blind spot in LULUCF reporting (as highlighted 
in TN2). The authors of TN5 proposed 20 different solutions and ideas to mitigate the identified 
problems. They grouped them into four categories: (1) common requirements for soil reporting; 
(2) reporting-based solutions; (3) non-technical solutions (process, mandate and skills) and (4) 
communication-related ones. These concrete solutions provide options for the Commission to 
address and potentially overcome the challenges currently in place.  

The proposed ideas were also discussed during the first workshop organised under Task 2 of 
the project and held in November 2020.  

2.3.4. Short-term solutions – Accounting  

Under the current EU legislation, adopted in May 2018, the MS are subject to the "no-debit" 
rule,  meaning  that  accounted  emissions  from  LULUCF  must  be  balanced  by  an  equivalent 
amount  of  accounted removals  of  CO₂ from the  atmosphere  in the  2021  to  2030  period.  In 
TN6, experts investigated the possible options for amending the LULUCF accounting rules to 
make the no-debit rule more stringent. The accounting is the process where the reported data 
are compared against benchmarks for compliance with the legal obligations.  

The current accounting approach for the LULUCF sector is the result of years of negotiation 
under the UNFCCC and serves the basic purpose of regulating how a sector excluded from 
the economy-wide targets can contribute to target compliance under certain conditions. The 
system  is  complicated  and  represents  several  political  compromises  on  integrity  and 
completeness.  Due  to  its  purpose  and  history,  the  sector  offers  very  few  incentives  for 
increasing  sinks,  and  only  at  the  level  of  parties  or  in the  case  of  the  EU  at  MS  level.  The 
current system with its shortcomings was furthermore designed for incremental, i.e. 5-10 year 
emission reduction targets. With the goal for the EU to be climate neutral by 2050, a different 
accounting practice for the LULUCF sector is possible, where target compliance, understood 
as annual balance between emissions and removals, is based on reported numbers for all land 
categories in the sector.  

The authors of TN6 have come to the conclusion that the current system is not ready for such 
a drastic change. Therefore, the two options that were investigated were to improve the current 

7 IPCC Guidelines for National Greenhouse Gas Inventories.  

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system in view of increased ambition for 2030 and describe a radical change in accounting 
framework that could potentially work in 2050.  

Experts have looked into possibilities to strengthen the current rules aiming for more removals 
to be accounted from the LULUCF Sector to be achieved even before 2030. The most thought-
provoking solution presented in the TN was focused on the establishment of national targets. 
This however would require agreeing on a set of indicators to ensure that all MS can contribute 
equally in a fair manner.  

Experts  also  looked  into  the  potential  of  setting  a  national  removal  target  as  well  as  the 
quantitative potential for  the  net-storage  of carbon  in Harvested Wood Product (HWP)  use. 
The last solutions that were examined were improvements on Forest Reference Levels (FRLs) 
to be implemented already before 2030. Based on previous experience, however, this would 
require extensive time and resources. 

With the 2050 goal of climate neutrality, the EU should strive for target-based accounting for 
all LULUCF categories. This is the simplest accounting system and is similar to what is applied 
to other sectors. It is fully transparent and allows for the clear establishment of EU-wide targets 
for LULUCF and the evaluation of MS’ (and eventually landowner) progress towards specified 
targets. 

2.3.5. Policy Framework – Externalities  

The  three topic  notes related  to  the  broader  policy  framework  are TN3  on externalities and 
missing market forces, TN7 on strengthening the linkages between the ESR and LULUCF. 

The first  of  these topic notes (TN3)  presents  a set  of  large-scale drivers  that  are  related to 
landowner's  willingness  and  ability  to  respond  to  climate  incentives.  The  current  incentives 
within the EU for uptake of environmental measures are not strong enough, resulting in the 
problems highlighted in TN1 and TN2. Many barriers still in place prevent the transformation 
of  the  EU  land-based  sector  into  a  market-based  one  such  that  landowners  can  be 
compensated for their removals.  

The main issue presented in several of the problem drivers within the TN is the lack of clear, 
common price signals that promote climate action. In creating both pre-2030 policy proposals 
and looking forward towards the long-term 2050 policy visions, the drivers then culminate in 
several  problems  that  need  to  be  addressed.  The  topic  note  defined  eight  problem  drivers 
related to the lack of internalisation of externalities and pricing of the climate mitigation benefits 
at the level of the individual landowner. The most important problem drivers were a) no revenue 
from climate mitigation (or other ecosystem services); b) no value assigned to carbon assets, 
and hence no incentive to protect and c) no clear price signals from consumers and other end 
users. Also, the authors pointed out the fact that forest rotations range from 40 to 150 years, 
which confers substantial inertia to forest management and its responsiveness to price signals. 

From  these  drivers,  the  main  problems  identified  include  the  fact  that  past  technology 
adoptions  have  resulted  in  significant  GHG  emission  reductions  but  remain  costly  and 
prohibitive  to  farmers  in  the  long-term  and  prior  to  adoption.  High  debt  levels,  absence  of 
carbon revenue streams, increasing costs of climate risks and limitations in responsiveness to 
certain incentives make structural change difficult. Landowners are resistant as a consequence 
of their business constraints, not their values. The ramifications needs to be understood and 
addressed by future EU land use policies for the 2050 to succeed.   

These problems presented can be further addressed through a combination of short- and long-
term policy action, alongside research and development.  There are five main solutions to both 
structural barriers (two proposed solutions) and to the risk-oriented problems (three proposed 
solutions): 

1.  Research into carbon assets in agriculture and forestry  

2.  CAP support and result based incentives 

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3.  More and better MRB and data on soil carbon 

4.  Removing barriers for Carbon Farming 

5.  Test Carbon Removal Certificates early  

2.3.6. Policy Framework – Governance of flexibilities 

In  TN7,  experts  investigated  the  linkages  between  LULUCF  Regulation  and  the  ESR.  The 
authors focused on the overall governance of the LULUCF Flexibilities.  

The flexibility in this context is understood as the transfer of accountable mitigation outcomes 
(removals) or allowances across MS and between sectors with different GHG targets, which 
can reduce compliance costs. From this understanding of flexibility also follows that for actors 
under  the  same  target,  flexibility  is assumed  to  be  full and  unrestricted unless  specifically 
restricted. Flexibility can be classified on a scale from full-unrestricted liquidity on the one end 
to compartmentalized and ring-fenced sectors on the other. The MS-based system creates the 
obligation for a MS level target with no transfer allowed. Between the two extremes, there is a 
wide  range  of  possible  restricted  flexibility  options,  and  the  TN  considers  which  types  of 
flexibility will be appropriate in a 2030 LULUCF governance system.  

In the topic note, experts identified four main problems of the current mechanisms, which are: 

1.  Variability of sinks and sources makes certain types of flexibility unattractive. In other 
words, currently, the LULUCF sector is only a potential supplier of mitigation gains but 
is not fully utilized due to fluctuation and lack of certainty of data. 

2.  Uncertainty  around  accounting  rules  for  compliance  overrules  incentives  for  use  of 

flexibility as it is a serious barrier for planning.  

3.  Absence  of  demand  and  use  of  mitigation  outcomes  limits  potential  of  intra-sector 
flexibility.  The given  limits  and conditions to use the  removals  undermines  the  inter-
sector and MS flexibility. 

4.  Land  use  mitigation  outcomes  have  low  credibility  and  trust.  This  option  is  often 

considered as a perverse incentive.  

From  these  problems,  the  authors  analysed  the  potential  solutions  and  ways  to  govern  the 
flexibilities among the climate-change-policy pillars. Sixteen different options were presented 
that  attempt  to  address  the  overarching  problems.  These  solutions  include  among  others: 
offsetting sector-specific emissions from LULUCF within MS; creating an Agriculture, Forestry 
and  other  Land-use  (AFOLU)  flexibility;  both  seller  and  buyer  side  solutions  regarding 
compliance  conditionality  and  emissions  trajectory;  creation  of  a  project-based  incentive 
mechanism and compliance and crediting for livestock farming. These solutions and problems 
presented are highly technical but increased flexibility tied to conditions on quality would create 
an incentive to invest in and improve quality and transparency of reporting.  

2.3.7. Vision  

TN4 could be treated as the most inspirational as it contains a collection of visionary views on 
the  future  of  climate  change  policy  and  LUUCF  sector.  It  is  based  on  the  current  set  of 
information available for the future of LULUCF. The key importance lies in the capability for the 
AFOLU sector to enhance its capacity to remove carbon from the atmosphere. The climate 
policy arena will in the coming years shift its attention to (i) boosting biomass production and 
negative emissions and (ii) providing a sustainable system delivering carbon removals where 
needed.  

The TN attempted to provide a sweeping look towards the future of climate policy and was 
structured  by  trends  and  drivers,  climate  governance  and  policy  design  and  then  the  road 
towards 2050 taking into account the enablers and the barriers in place. One of the potential 

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scenarios from the topic note was the possibility for a split sector such that AFOLU could be 
separated from EU ETS and ESR. The TN also explores the transfer of responsibility in target 
setting as well as the elements that would be required under specific targets. In general, TN4 
aims to show a future where financial incentives for carbon sequestration would be significant 
such that the some of the current market-based problems outlined in TN3 could be eliminated. 
The need for improving technology as well as data is highlighted here, but there is significant 
promise  with  regard  to  the  LULUCF  sector  as  long  as  the  regulatory  framework  is  strong 
enough. 

2.4. Conclusion  

The  topic  notes  outlined  above cover  the  entire breadth  of the  LULUCF sector  including  its 
strengths and challenges. The assessment of which the topic notes are part of, initiated by the 
Commission, aims to provide a clear overview in order for the LULUCF Regulation to reach its 
full potential and pave the way towards the 2050 target of climate neutrality. These topic notes 
present the most recent updates as well as a high-level of knowledge on the current LULUCF 
policy  construction  as  well  as  the  peculiarities  of  the  LULUCF  sector.  These  options  were 
researched and thoroughly discussed through close collaboration between experts as well as 
with the Commission in order to come up with tangible actions. 

First and foremost, a declining sink for both forests and soils in the EU needs to be addressed 
as  quickly  as  possible  to  prevent  exacerbation  of  the  problem,  but  the  topic  notes,  for  this 
reason, provide both short and long-term policy options for the EU and the MS. The first two 
topic notes simply present the state of the sector and set the scene for the other six and the 
conclusions they present.   

As is clear from the data on a decreasing sink presented in TN1 and TN2, current LULUCF 
MRV  might  need  to  be  adjusted.  In  the  case  of  soil  carbon,  for  example  (TN2),  proper 
monitoring can lead to a realistic view of the land sectors. New emissions and removals in the 
order of 70 Mt CO₂/year in croplands and grasslands/forests, respectively, could appear. The 
solutions outlined in TN5 and TN6 from improving reporting and then further, accounting, are 
the first step towards a robust and effective LULUCF sector.  

Topic notes 3 and 7 present highly technical policy-related problem drivers, problems, goals 
and  solutions.  Across  these,  a  common  theme  is  the  need  for  robust  incentives  towards 
landowners  such  that  their  capacity  for  climate  action  is  improved.  For  TN3,  the  structural 
changes presented involve significant future research and development in order to remove the 
current barriers. As there are not many substantial price signals already in place for the carbon 
market, there is room for improvement in this regard. For TN7, increasing flexibilities within the 
ESR might have positive potential for LULUCF, yet there are still several key barriers identified 
that will have an impact on future flexibility mechanisms. These barriers, though, correspond 
to multiple solutions presented by the experts that may improve the future of flexibilities offered 
to MS.  

TN4 gives a forward-looking view within the wider EU climate policy framework and how the 
AFOLU  sector  could  be  factored  in.  The  Commission  foresees  that  the  new  AFOLU  sector 
could  "become  rapidly  climate-neutral  by  around  2035  in  a  cost-effective  manner,  and 
subsequently generate more removals than greenhouse gas emissions."8 In order to achieve 
this,  though,  the  authors  of  the  TN  stress  the  importance  of  a  functional  monitoring  and 
certification  process,  which  also  will  support  the  potential  for  a  carbon  removal  certification 
system  where  landowners  can  be  compensated  for  their  removals.  This  topic  note  was 
speculative and presented multiple scenarios that could occur towards 2050.  

8 COM(2020) https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52020DC0562  

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The main conclusion from this task and the topic notes presented is that by the end of 2050, 
the overall logistics of the policy-approach to the LULUCF sector could substantially change. 
Through strengthening the data in the sector as well as the incentives for climate action among 
landowners, the sector can reach its full potential. The LULUCF potential as a key sink within 
the European Green Deal's target of climate neutrality by 2050 can be realized, with the array 
of short-term and long-term options delivered within the seven topic notes.   

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3. Topic Note #1: The Decline of the Forest Carbon Sink 

and its Drivers 

Glossary 
Term 

Afforestation 

Carbon sink 

Carbon stock 

Deforestation 

Definition 

Planting of new forests on lands that historically have not contained forests. In the 
UNFCCC national inventory, this is category 4.A.2. 

UNFCCC (2021) 
Any process, activity or mechanism, which removes carbons from the atmosphere. 
Forests  and  other  vegetation  are  considered  sinks  because  they  remove  carbon 
dioxide through photosynthesis. 

UNFCCC (2021) 
The absolute quantity of carbon held within a pool at a specified time. The units of 
measurement are mass. 

(Karsenty et al., 2003) 
Conversion of forest to non-forest. In the UNFCCC national inventories, this appears 
as an entry in each land category (e.g. forest land to cropland) 

fast-out, slow-in 
paradigm 

forest land remaining 
forest land (FL-FL) 

Harvest residues 
Harvested wood 
products (HWP) 

UNFCCC (2021) 
The concept that a forest disturbance generally creates an emission, or loss of carbon 
stocks, in the year of the disturbance and that the emission is recovered over many 
years through net primary productivity (NEP) 
In  the  UNFCCC  national  inventories,  this  is  category  4.A.1.  It  is  the  net  emissions 
from  forestland.  It  is  includes  living  losses  minus  living  gains  plus  net  changes  in 
carbon stocks in dead organic matter and soils 
The unused portion of forest removals that remains in the forest after harvest 
The products that result from forest harvesting. In the UNFCCC national inventories, 
distinctions are made between paper, particleboard and solid wood products due to 
their  different  lifetimes.  Biomass  used  for  energy  purposes  is  not  a  harvest  wood 

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HWP gains 

HWP losses 
Living gains, net 
ecosystem productivity 
(NEP) 
Living losses 

LULUCF sector 

National forest action 
plans (NFAP) 
Necromass, dead 
organic matter 
Net primary 
productivity (NPP) 
Removals 
Roundwood 

Steady-state, sink 
saturation 

product 
The increase in the HWP pool due to new HWP. They are equivalent to removals 
from forests (see living losses) for HWP. 
The decrease in the HWP pool due to the decay of existing HWP 
the gross uptake of biomass by the forest minus respiration 
(FAO, 2012) 

The losses of living forest biomass dues to mortality, harvest. Harvest includes 
losses for bioenergy and harvest wood products. The latter is recorded in the 
UNFCCC national inventories as HWP gains. 
A greenhouse gas inventory sector that covers emissions and removals of 
greenhouse gases resulting from direct human-induced land use, land-use change 
and forestry activities. 
UNFCCC (2021) 

Forest biomass that is in the process of decomposition. It includes dead wood, litter 
and soil organic carbon 
the gross uptake of biomass by the forest minus losses due to mortality. 
(FAO, 2012) 
Biomass removed from the forest for harvested wood products and bioenergy 
Wood in its natural state as felled, with or without bark. It may be round, split, 
roughly squared or in other forms. 
Biological sinks will eventually level-off and subsequently declined to zero (hereafter 
referred as “sink saturation”) whereby no further C will be removed from the 
atmosphere. 
(Canadell et al., 2007) 

Abstract 
The note focuses on the current situation of the forest carbon sink in the EU, the causes of the 
recent sink decrease. The regrowth period from 1960-2005 started to reverse in 2005 due to 
a combination of problems. Since about 2013, the annual sink on forest land remaining forest 
land (FL-FL) has been decreasing at roughly 12 000 kt CO2 / year. In general, all regions show 
this trend to varying amounts. The majority of the change in living losses since 2013 is due to 
increasing removals for bioenergy. Emissions from afforestation and deforestation play less of 
a role in the total LULUCF sink than FL-FL. Afforestation has, however, also decreased since 
2010. 

Both  this  topic  note  and  referenced  scenario  studies  suggest  that  only  comprehensive 
regulatory changes can reverse these trends. If nothing happens, or if less than substantial 
improvements happen, then the situation will only worsen the next 30 years. 

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3.1. Introduction 

This topic note explores the potential for making the design and implementation of LULUCF 
policies more effective by increasing the CO₂-absorption by forests – also called forest carbon 
sinks. The note focuses on the current situation of forest carbon sink in the EU and the causes 
of the recent sink decrease. This exploration is a part of the Commission's investigation into 
how climate, energy, transport and other sector-specific policies could interact to achieve an 
increased GHG reduction target. 

The analysis is carried out and presented in accordance with the Better Regulation Guidelines 
conditioning  the  need  to  (newly)  regulate  on  necessity  and  proportionality  and  focusing  on 
clear and specific results suitable as input to a possible future impact assessment to support 
a possible revision of the LULUCF implementation. In Chapter 3, we discuss the trend of the 
declining forest carbon sink (problem). In Chapter 4, we identify the drivers for this adverse 
trend. In Chapter 5, future opportunity scenarios are presented.   

3.2. Current situation 

The  importance of  limiting  deforestation,  engaging  in reforestation and afforestation,  and  of 
enabling  sustainable  forest  management  for  long-term  climate  action  is  widely  understood. 
However, it is less known that the overall forest carbon sink across the EU is shrinking and 
that  efforts  to  enhance  forest  carbon  sinks  are  met  with  obstacles.  This  chapter  gives  an 
overview of the most significant trends. 

Historically, the EU’s forest carbon sink had grown alongside net ecosystem productivity (NEP) 
and net primary productivity (NPP) (Bellassen et al. 2011) throughout the second half of the 
20th century (see Figure 9 below). This long growth period had followed a period where the 
post-war reconstruction took a large toll on the forest reserves (Nabuurs et al. 2013).  

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Figure 9: Simulated reconstruction of net ecosystem productivity (NEP), net primary productivity (NPP) and heterotrophic 
respiration (HP) in the EU 25. Six scenarios are presented for NEP simulation (a) and two only for NPP and HR (b). Source: 
Bellassen et al. 2011. 

The  regrowth  period  from  1960-2005  started  to  reverse  in  2005  due  to  a  combination  of 
problems and drivers. These problems and drivers will be further described in this chapter 3. 

3.3. The greenhouse gas inventory 

Since 1990, the changes in the LULUCF sector, including the carbon sink, have been captured 
in the EUl greenhouse gas inventory. For the entire LULUCF sector (Figure 10), it provided a 
roughly constant annual sink of 360 000 kt CO2 from 2000 to 2013. However, since 2013 the 
sink has diminished in strength to 304 000 kt CO2 by 2018.  

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Figure 10: Annual greenhouse gas emissions (1990 – 2018) from LULUCF. Source: Self-calculation based on MS GHGI-data 
extracted from the 2020 reporting at UNFCCC. 

ATL - Atlantic: Belgium, Denmark, France, Ireland, Netherlands 
CON – Continental: Austria, Bulgaria, Czech Republic, Germany, Hungary, Poland, Romania, Slovakia, Slovenia 
MED - Mediterranean: Croatia, Greece, Italy, Portugal, Spain 
SCAN - Scandinavia: Estonia, Finland, Latvia, Lithuania, Sweden 

1.  The emissions come from five broad categories: 

2.  Forest land remaining forest land (FL-FL), 

3.  Afforestation and deforestation (ARD), 

4.  Wetland draining and rewetting (WL), 

5.  Cropland remaining cropland (CL-CL), and 

6.  Grassland remaining grassland (GL-GL). 

In this section, a brief description of the trends in the first two categories will be made. The last 
three categories are covered in topic note 2. 

3.3.1.1.  Forest land remaining forest land 

Forestland remaining forestland (FL-FL) Figure 11 contributes the most of all land categories 
to the LULUCF sink. It provides the EU with an annual sink of between 350 000 and 400 000 
kt CO2. However, since about 2013, the FL-FL annual sink has been decreasing at roughly 12 
000 kt CO2 / year. In general, all regions show this trend to varying amounts. 

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Figure 11: Annual greenhouse gas emissions (1990 – 2018) from forestland remaining forestland. EU: Total in the EU. ATL: 
Atlantic. CON: Continental. MED: Mediterranean. SCAN: Scandinavian. Source: Self-calculation based on MS GHGI-data 
extracted from the 2020 reporting at UNFCCC. 

Figure 12: The relationship of emissions for FL-FL to gross annual increment and emissions from bioenergy and HWP gains. 

Using  the  terminology  of  the  national  inventory  one  can  approximate  that  the  carbon stock 
changes in FL-FL equal the living gains of the forest minus the losses due to the fraction of 
biomass removed for bioenergy from solid biofuels , HWP  and harvest residues entering other 
forest pools (i.e. deadwood, litter) if one assumes that  

1.  mortality and decay of necromass (i.e. deadwood, litter) are roughly constant, and 

2.  Wastes from processing of roundwood are used for bioenergy. 

Hence one may be able to separate the contributions of the change in FL-FL to changes in the 
living gains (i.e. sequestration), and losses due to harvesting activities if MS report living gains 
and living losses. The EU does report both living gains and losses, but unfortunately many MS 
report on net living gains (i.e. living gains minus living losses) and the actual living losses must 
be modelled from additional information on amounts of forest bioenergy, and HWP gains. 

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The results for the EU are shown in Figure 13. 

Figure 13: Annual greenhouse gas emissions (1990 – 2018) from living gains and losses for the EU. Source: EU GHGI-data 
extracted from the 2020 report at UNFCCC. 

This graph shows that during the period 1990 – 2018: 

1.  Living losses (i.e. removals) have increased relatively constantly from 1990 to 2013 at 
3 000 kt CO2 / year. However, since 2013, the rate of increasing removals has been 
about 12 000 kt CO2 / year. 

2.  Living gains on the other hand have become more negative (i.e. more sequestration). 
From 1990 to 2010, the trend in living gains was about -3 000 kt CO2 / year. However, 
since 2010, the amount of living gains has remained roughly stable. 

The living losses can be broken into its components: 

1.  Removals for HWP – which are equivalent to HWP gains 

2.  Removals for bioenergy and 

3.  Harvest residuals recorded as losses of deadwood and litter 

Breaking the living losses into its components (Figure 14) one sees that the majority of the 
change in living losses since 2013 is due to increasing removals for bioenergy. 

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Figure 14: Components of living losses in the EU from 1990 – 2018. Source: Self-calculation based on EU GHGI-data 
extracted from the 2020 reporting at UNFCCC. 

Figure 15: Annual greenhouse gas emissions (1990 – 2018) from living gains and losses by region. It is important to note that a) 
the model to produce these diagrams is not very robust and b) the sum of the regional results may not equal the EU values. 
Source: Self-calculation based on MS GHGI-data extracted from the 2020 report at UNFCCC. 

A regional breakdown of FL-FL, living gains and losses is provided in Figure 15. This diagram 
shows that in the Mediterranean and Scandinavian lands the trend in living gains has remained 
constant,  and  that  the  weakening  of  the  forest  sink  (i.e.  living  gains)  is  occurring  mostly  in 
Atlantic  and Continental regions. Trend  in living  losses  show  particularly  an  increase in  the 
continental region from 2000 – 2005 but this region has been relatively stable since then. The 
region showing the largest change in trends since 2013 is in Scandinavia. 

Figure 16: Components of living losses in the EU from 1990 – 2018 by region. It is important to note that a) the model to 
produce these diagrams is not very robust and b) the sum of the regional results may not equal the EU values. Source: Self-
calculation based on MS GHGI-data extracted from the 2020 report at UNFCCC. 

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Figure  16  shows  that  the  changes  in  bioenergy  production  are  mostly  responsible  for  the 
changes in trends in living losses. In the continental region, there was an increase in removals 
for HWP from 1990 to 2005. After the economic crisis in (2008 – 2010), there has been little 
change in HWP production. The trend in removals for HWP in Scandinavia has been relatively 
constant  of  the  entire  1990  –  2018  period.  The  trends  in  living  losses  due  to  removals 
bioenergy show a more complicated pattern: 

4.  In the Continental region, there was a strong increasing trend from 1990 to 2005, but 
since  2013  the  removals  for  bioenergy  have  remained  roughly  constant  (with  the 
exception of 2018) 

5.  In  the  Scandinavian  region,  initially  a  strong  increasing  trend  (1990  –  2005)  was 
followed  by  a  period  of  stagnation.  However,  since  2010,  there  has  been  a  second 
strong increasing trend in removals for bioenergy. 

The  economic  crisis  in 2008-2010  caused  a decrease in living  losses for bioenergy  in both 
these regions, presumably due to overall less energy demand. 

3.3.1.2.  Afforestation and deforestation 

As seen in Figure 17, emissions from afforestation and deforestation play less of a role in the 
total LULUCF sink than FL-FL. Annual emissions from deforestation have remained relatively 
constant  fluctuating  between  25  000  and  40  000  kt  CO2/year.  Annual  sequestration  (i.e. 
negative emissions) from afforestation, on the other hand, increased from 1990 – 2010, due 
to more land converted from non-forest to forestland. However, this trend has reversed since 
2010, and sequestration from afforestation have shown a sharp decrease in recent years. 

Figure 17: Annual greenhouse gas emissions (1990 – 2018) from lands convert to forest land (afforestation) and forest land 
converted to cropland, grassland, settlements and other land (deforestation). Source: Self-calculation based on MS GHGI-data 
extracted from the 2020 reporting at UNFCCC. 

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Figure 18: Annual greenhouse gas emissions (1990 – 2018) from lands convert to forest land (afforestation) and forest land 
converted to cropland, grassland, settlements and other land (deforestation) by region. Source: Self-calculation 
based on MS GHGI-data extracted from the 2020 reporting at UNFCCC. 

On a regional basis, one can see that all regions are showing a strong change in the trend of 
afforestation starting in 2010. This change is most apparent in the Atlantic and Mediterranean 
regions. These are the regions with the largest agricultural areas. 

3.3.2. Key drivers 

Historically, the EU has had a relatively large forest carbon sink. During the reconstruction after 
the two World Wars, the demand for wood increased significantly, leading to a deforestation 
which released a significant part of the carbon stored the below ground in deforested areas. 
Not much of the carbon in these deforested areas has yet been restored. More recently, the 
search for alternatives to fossil fuels has led to the use of the renewable biomass as a fuel. 
This is another key driver to slow down the replenishment of the forest sinks in the EU following 
the 50 years’ depletion period. The slowing growth in the EU’s forest carbon sink is mainly due 
to reduced  afforestation  activities,  a  decrease  in  living  gains  across  the  forest  stock,  and  – 
most importantly – an uptake in removal activities for forest-based bioenergy production.  

Table 8:   A summary of the changes in LULUCF emissions from 2013 to 2018 in the EU. A few notes: 

1: In this table, an emission is a positive value and a sequestration (or negative emissions) is a negative value. 

2: The change in the total value from 2013 to 2018 is positive (i.e. an emission), and since the total value is 

negative, this is a negative change in the sink (-16%). 

3: CL: cropland, GL: grassland, S: settlements, OL: other lands. These categories are shown excluding 

deforestation and draining because these items are included in deforestation and wetland respectively. 

Source: Self-calculation based on MS GHGI-data extracted from the 2020 reporting at UNFCCC. 

2013 

2018 

2018-2013 

[kt CO2] 

[kt CO2] 

[kt CO2] 

Afforestation/Reforestation 

-54 643 

-41 366 

13 277 

Deforestation 

33 202 

31 162 

-2 040 

HWP 

FL-FL 

Living gains 

Living losses 

-31 159 

-44 621 

-13 462 

-398 158 

-333 623 

64 535 

-789 928 

-782 630 

7 298 

428 326 

488 109 

59 783 

Removals for HWP 

181 697 

197 740 

16 043 

Removals for forest-based bioenergy  253 668 

296 007 

42 339 

Deadwood + Litter 

-7 039 

-5 637 

1 402 

Other pools 

-36 556 

-39 102 

-2 546 

WL 

16 527 

15 849 

-677 

CL (excl. deforestation and draining) 

54 857 

48 705 

-6 152 

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GL (excl. deforestation and draining) 

-11 531 

-10 767 

764 

S (excl. deforestation and draining) 

27 816 

30 913 

3 098 

OL (excl. deforestation and draining) 

-836 

-710 

126 

LULUCF Total with HWP 

-363 926 

-304 457 

59 470 

Forest-based bioenergy (Imported) 

248 384 

222 857 

Forest-based bioenergy (Total) 

502 052 

518 864 

As  shown  in  Table  8the  LULUCF  sink  including  HWP  decreased  by  59,470  kt  CO2  from  -
363,926 to -304,457 kt CO2. This means that the sink, a negative value, decreased by 16%. 
Three drivers contributed the most to the decrease in the sink. These are: 

1.  Reduced afforestation: 13,277 kt CO2 less sequestration 

2.  Increased removals for forest-based bioenergy: 42,339 kt CO2 more emissions 

3.  Decrease in the living gains for forests: 7,298 kt CO2 less sequestration 

Is important to note that even though emissions form living losses have increased from 2013 
to 2018, the two major components: removals for HWP and removals for bioenergy partially 
result in increased sequestration or reduced emissions elsewhere in the inventory. Specifically, 
increased removals for HWP (16,043 ktCO2) are directly converted to HWP gains and results 
in  net  sequestration  (HWP  gains  minus  HWP  losses)  in  HWP  (-13,462  ktCO2).  Similarly, 
increased removals for bioenergy may partially be compensated by decreased emissions from 
the use of fossil fuels9, which are not reported in this table.  

These three listed drivers are explained below respectively. 

3.3.2.1.  Reduced 

afforestation 

(13,277 

kt  CO2 

less 

sequestration) 

The decrease in afforestation is most prevalent in MS with larger amounts of agricultural land. 
The  Atlantic  and  Mediterranean  regions  show  a  large  reduction  in  the  annual  emissions 
(removals) from afforestation since around 2010 (Table 8). This could indicate an increase in 
financial incentives to other land uses than afforestation. Such land uses could stem from a 
growing bioenergy demand or increased food demand. It could also be because of a drop of 
financial  incentives  for  afforestation.  Valin  et  al.  (2015)  forecast  the  possibility  of  reduced 
afforestation.  They  considered  that  between  2010  and  2030  up  to  145  Mt  CO2e  /  year, 
depending on scenario, in what they called “foregone sequestration” could be expected in the 
EU. By 2018, there was about 99 Mt CO2 in foregone sequestration due to the reduction in 
afforestation. 

3.3.2.2.  Increased harvest for forest-based bioenergy (42,339 kt 

CO2 more emissions) 

The major contribution from the change in the sink from 2013 to 2018 is due to the increase in 
living losses for bioenergy. As we have discussed above this is currently mostly coming from 
the Scandinavian region. 

It should be noted that, while harvest for bioenergy actually causes emissions as a decrease 
in forest  stocks,  one must  remember that these are  not the full  impact  on the  environment 

9 They are only partially compensated because: 1) the C per energy ratio is higher for wood than for  fossil fuels, 2) the energy 
efficiency  of  fossil  energy  systems  tends  to  be  higher  than  for  wood-based  systems,  3)  the  wood-based  energy  may  replace 
natural gas systems (low C / energy, and high efficiency), and 4) the wood-based energy may only expand energy consumption. 

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because  they  (may)  have  caused  a  decrease  in  emissions  in  the  energy  sector.  These 
emissions are not shown here. 

3.3.2.3.  Decrease  in  the  living  gains  by  forests  (7,298  kt  CO2 

less sequestration) 

As discussed above, the gross annual increment of the forests has increased, and as a result 
the  living  gains  have  become  more  negative  (i.e.  forests  are  absorbing  more)  since  1980 
(Nabuurs  et  al.,  2013)  and  it  stabilized  around  1990  (Bellassen  et  al.,  2011).  However,  as 
evidenced in the national inventories, since around 2013, the rate of absorption has become 
less. The change in gross annual increment is a result of the aging EU forests.  

As a result of these drivers, the EU is facing problems with an aging, climate sensitive, poorly 
managed, and un-replenishing forest. Below, this situation is explained. 

3.3.3. Problems derived from the drivers 

There  is  a  need  for  forest  renewal  in  the  EU  for  numerous  reasons.  However,  how  forest 
renewal is achieved has an impact on the forest sink. Four main problems have been found to 
follow as a natural effect of the drivers explained earlier. They all contribute individually to the 
decreased carbon sink from the European forests. They are: 

1.  Increasing maturity/average age of forests 

2.  Sensitivity to droughts, fires, and storms due to climate change 

3.  Forest management practices 

4.  Decline in afforestation 

Below, these four problems are examined: 

3.3.3.1.  Aging of forests 

As forests age, their increment rates decrease and eventually the forests approach a steady 
state. Further, the EU forests have been characterized with skewed age structure, with large 
areas now approaching maturity (Nabuurs et al. 2013). This is apparent as a decline in forest 
increment. One method of stimulating an increase in forest increment is to harvest the older 
stands  and  thus  move  the  forest  into  a  younger,  more  productive  age  class.  However, 
harvesting  also  causes  a  temporary  decrease  in  carbon  stocks  and  has  implications  for 
biodiversity. A holistic forest management strategy, across MS, needs to be developed that 
includes biodiversity considerations and scenarios for future demand of bioenergy, HWP and 
a  strong  LULUCF  sink.  With  both  afforestation  and  forest  management  practices  being 
challenged, the aging of forests is a persistent problem and one that requires substantial and 
cross-cutting measures to solve. 

3.3.3.2.  Sensitivity to droughts, fires, and storms due to climate 

change 

An  aging  forest  is  more  susceptible  to  disturbances  (fires  and  storms),  and  as  the  mature 
forests were planted shortly after the World War II, they were planted in a different climate. 
Modelling  suggest  that  we  should  expect  a  2  –  5  increase  in  mean  annual  temperature,  a 
decrease in annual precipitation particular in S. Europe (European Environment Agency, 2017) 
and an increase extreme winds particularly in around the Baltic Sea (e.g. northern Germany, 
and  Poland).  These  climatic  changes  will  require  a  modifying  the  forest  from  the  current 
species distribution to more suitable species to maintain or improve the forest sink. 

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3.3.3.3.  Forest management practices  

Forests stocks follow the “fast-out, slow-in" paradigm. Harvesting for bioenergy or harvested 
wood products causes a quick loss of forest carbon stocks (i.e. a fast out emission) followed 
by  a slower forest  carbon  stock recovery  as the forest regrows  (i.e.  a slow  in sink). On the 
other hand, increasing thinnings may enhance forest growth and especially increase the future 
yield  of  larger  stems  available  for  longer  lasting  harvested  wood  products  (e.g.  boards  and 
lumber).  Numerous, less intrusive interventions allow for quicker recovery, but are more costly. 
Financial incentives beyond the value of the biomass are needed to help forest owners manage 
their land to promote the forest sink. 

3.3.3.4.  Decline in afforestation 

To a certain extent, afforestation can help mitigate short term decreases in the managed forest 
sink due to harvest and cause a delayed increase in the forest sink as the newly planted forests 
move into their prime growth years (>20 years). Hence, the decline in afforestation that we are 
currently observing will lead to a decrease in the future forest sink with respect to what would 
have occurred. 

With these drivers and problems, research studies, NECPs, and impact assessments have led 
to scenario modelling about the coming decades in the EU. Below, the most prominent models 
will be presented. 

3.4. Future scenarios 

Not many future scenarios have been made for the EU, but Böttcher (2008) made a relatively 
comprehensive  modelling  of  the  future  biomass  accounting  on  the  MS  level.  The  result  is 
shown in Figure 19.  

Figure 19: Development of forest biomass C sinks and sources under business-as-usual in selected countries as projected by 
the model over a 60-year simulation period under sustainable harvest conditions. Emissions have positive sign, removals 
negative. C stock changes are only due to age–class legacy under assumed constant management and harvest levels. Source: 
Böttcher et al. 2008. 

The figure shows an almost even horizontal average where the included MSs even each other 
out throughout the years until 2050. Whereas Italy is projected to experience large emissions 
of carbon to the atmosphere followed by Poland and France, Slovenia offers a counterweight 

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to Italy, and Finland, Sweden and Germany counterweights to Poland and France. In short, 
the future scenarios  show  that  the forest  carbon  sink in the  EU  will  not  increase above the 
current level if policy and practices remain on the current level.  

In 2006, the future carbon balance of Austria has been modelled. Figure 20 shows the results 
of  five  scenarios,  including  a  reference  scenario,  three  increased  logging  scenarios,  and  a 
reduced logging scenario.  

Figure 20: Annual changes of total forest carbon stock. Scenario R: Reference scenario, 1a: Increased logging due to biomass 
for energy policies, 1b: Increased logging due to policies fostering increased material use, 1c: 1b with optimistic import 
assumptions, 2: Reduced utilization of timber from managed forests (designation of areas of reduced or restricted utilization due 
to conservation measures). Source: Braun et al., 2016. 

Here,  only  scenario  2 shows  viable  substantial  forest  carbon  stock  changes  the  coming  50 
years. This scenario is described as follows:  

"Through  policies  toward  increased  conservation  and  growing  carbon  pools  in  forestry,  a 
system  for  reimbursements  for  building  up  carbon  stocks  is  created  which  leads  to  a 
decrease  in  utilized  areas  of  forests  available  for  wood  supply.  Additional  restrictions 
concerning logging are implemented (e.g. Natura 2000, EU biodiversity strategy). Furthermore, 
there is an increase of natural forest reserves, biosphere parks and subsidies for measures 
toward an increased carbon stock in forests. There are reimbursements for losses induced 
through reduced utilization." (Braun et al., 2006, p. 274). 

France has been modelled recently. This is shown in Figure 21.  

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Figure 21: Three intensification scenarios and a business-as-usual scenario. These intensification scenarios targeted either 
overstocked, harvest-delayed or currently actively managed stands. Blue shows all three scenarios combined (D+Ov+M), brown 
shows intensification of actively managed sites (M), red shows intensification of harvest-delayed sites (D), green shows 
intensification of overstocked sites (Ov), and black shows business as usual management of all sites (BaU). Source: Valade, et. 
al, 2018. 

While  most  of  the  illustrated  scenarios  above  can  seem  unrealistic  and  perhaps  overly 
optimistic, the business as usual scenario is modelled to be removing an increasingly large 
cumulated  amount  of  carbon  from  Earth  to  the  atmosphere.  This  indicates  that  something 
drastic will have to be done to prevent this development.  

Figure 22 and Figure 23 show the annual greenhouse gas emissions (1990 – 2018) from living 
gains and losses and the values projected for the forest reference levels, as documented in 
the countries’ National Forestry Accounting Plans (NFAP) for the EU and the four regions. 

Figure 22: Annual greenhouse gas emissions (1990 – 2018) from living gains and losses for the EU with the NFAP. Source: EU 
GHGI-data extracted from the 2020 report at UNFCCC. The NFAP value has been provided by the JRC. It has been adjusted to 
be consistent with the FL-FL value from the EU GHGI 

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Figure 23: Annual greenhouse gas emissions (1990 – 2018) from living gains and losses by region. It is important to note that a) 
the model to produce these diagrams is not very robust and b) the sum of the regional results may not equal the EU values. 
Source: Self-calculation based on MS GHGI-data extracted from the 2020 report at UNFCCC. The NFAP values have been 
provided JRC. They have been adjusted to be consistent with the FL-FL value from the EU GHGI 

The NFAPs forecast that the FL-FL will continue to become more positive by 2021-2025. The 
Atlantic and Mediterranean regions are forecast to have an FL-FL that will be constant, but 
both the Continental and Scandinavian regions have predicted a continued trend towards more 
positive FL-FL emissions. 

In  the  Impact  Assessment  for  Stepping  up  Europe’s  2030  climate  ambition:  Investing  in  a 
climate-neutral future for the benefit of our people the Commission Staff have assessed future 
scenarios for size of the LULUCF sink required to meet a goal of EU climate neutrality in 2050, 
and  the  impacts  on  the  LULUCF  sink  from  proposed  policy  options.  One  point  is  clear. 
Minimum compliance by MS with the LULUCF no-debit rules would result in a decrease in the 
LULUCF sink by 2030 compared to today’s sink.  

3.5. Conclusion and summary 

The aging of the forests is a driver in the decrease in the forest carbon sink. This is due to a 
lack of reforestation, afforestation, and past forest  management practices. Much of the root 
causes of these trends can be traced back to a lack of financial incentives for the landowners 
to prioritize such afforestation, reforestation and active forest management. .  

A part of the sink reduction can be attributed to the increased amount and intensity of storms, 
fires, droughts, and CO₂-fertilization-induced growth pattern disturbances.  

However, another important driver for the decreasing carbon sink in forest land is decrease in 
afforestation,  forest  degradation,  and  worsened  forest  management  due  to  an  increasing 
demand for bioenergy. While there is an urgent need for a rapid phasing out of any fossil fuel 
combustion,  more  sustainable  alternatives  to  the  short-term  bioenergy  will  need  to  be 
developed in order to increase the forest carbon sink once again.  

The projections are dire. So far not enough measures are targeting the reversal of this trend, 
and even scenarios with the additional measures planned by the EU MSs in National Energy 

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and  Climate  Plans  are  not  enough  to  reverse  this  trend.  The  need  for  bioenergy  can  be 
expected to increase until enough renewable alternatives are offered broadly in the EU.  

Moreover,  as  climate  change  worsens,  more  droughts,  fires,  storms,  and  floods  can 
exacerbate the already sensitive forests and make them even more sensitive. In this way, we 
now have a window of opportunity to rejuvenate our forests before the negative feedback loop 
worsens the forest carbon sink.  

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3.6. References 

Bellassen,  V.,  Viovy,  N.,  Luyssaert,  S.,  Maire,  G.  L.,  Schelhaas,  M.-J.,  &  Ciais,  P.  (2011). 
Reconstruction and attribution of the carbon sink of European forests between 1950 and 2000. 
Global Change Biology, 17(11), 3274–3292. https://doi.org/10.1111/j.1365-2486.2011.02476.x 

Canadell, J. G., Pataki, D. E., Gifford, R., Houghton, R. A., Luo, Y., Raupach, M. R., Smith, P., 
& Steffen, W. (2007). Saturation of the Terrestrial Carbon Sink. In J. G. Canadell, D. E. Pataki, 
& L. F. Pitelka (Eds.), Terrestrial Ecosystems in a Changing World (pp. 59–78). Springer Berlin 
Heidelberg. https://doi.org/10.1007/978-3-540-32730-1_6 

Grassi,  G.,  Cescatti,  A.,  Matthews,  R.,  Duveiller,  G.,  Camia,  A.,  Federici,  S.,  House,  J.,  de 
Noblet-Ducoudré, N., Pilli, R., & Vizzarri, M. (2019). On the realistic contribution of European 
forests to reach climate objectives. Carbon Balance and Management, 14(1), 8, s13021-019-
0123-y. https://doi.org/10.1186/s13021-019-0123-y 

European Environment Agency (2017). Climate change, impacts and vulnerability in Europe 
2016 (No. 1/2017). European Environment Agency. 

FAO. (2012). Forest Resources Assessment 2015. Terms and Definitions (Forest Resources 
Assessment  Working  Paper  No.  180).  Food  and  Agriculture  Organization  of  the  United 
Nations. 

Karsenty,  A.,  Blanco,  C.,  &  Dufour,  T.  (2003).  Instruments  related  to  the  united  nations 
framework  convention  on  climate  change  and  their  potential  for  sustainable  forest 
management  in  Africa  (Working  Paper  No.  1;  Forests  and  Climate  Change).  Food  And 
Agriculture 
(FAO). 
http://www.fao.org/3/ac836e/AC836E00.HTM 

Organization 

Nations 

United 

The 

Of 

Nabuurs, G.-J., Delacote, P., Ellison, D., Hanewinkel, M., Hetemäki, L., & Lindner, M. (2017). 
By  2050  the  Mitigation  Effects  of  EU  Forests  Could  Nearly  Double  through  Climate  Smart 
Forestry. Forests, 8(12), 484. https://doi.org/10.3390/f8120484 

Nabuurs, G.-J., Lindner, M., Verkerk, P. J., Gunia, K., Deda, P., Michalak, R., & Grassi, G. 
(2013). First signs of carbon sink saturation in European forest biomass. Nature Clim. Change, 
3(9), 792–796. 

Naudts, K., Chen, Y., McGrath, M. J., Ryder, J., Valade, A., Otto, J., & Luyssaert, S. (2016). 
Europe’s forest management did not mitigate climate warming. Science, 351(6273), 597–600. 
https://doi.org/10.1126/science.aad7270 

Pilli, R., Grassi, G., Kurz, W. A., Fiorese, G., & Cescatti, A. (2017). The European forest sector: 
Past  and  future  carbon  budget  and  fluxes  under  different  management  scenarios. 
Biogeosciences, 14(9), 2387–2405. https://doi.org/10.5194/bg-14-2387-2017 

Smyth, C. E., Stinson, G., Neilson, E., Lemprière, T. C., Hafer, M., Rampley, G. J., & Kurz, W. 
A. (2014). Quantifying the biophysical climate change mitigation potential of Canada’s forest 
sector. Biogeosciences, 11(13), 3515–3529. https://doi.org/10.5194/bg-11-3515-2014 

UNFCCC (2021) Glossary of climate change acronyms and terms. https://unfccc.int/process-
and-meetings/the-convention/glossary-of-climate-change-acronyms-and-terms 
Accessed 
2021-02-01. 

Valade, A., Luyssaert, S., Vallet, P., Njakou Djomo, S., Jesus Van Der Kellen, I., & Bellassen, 
V. (2018). Carbon costs and benefits of France’s biomass energy production targets. Carbon 
Balance and Management, 13(1), 26. https://doi.org/10.1186/s13021-018-0113-5 

Valin,  H.,  Peters,  D.,  van  den  Berg,  M.,  Frank,  S.,  Havlik,  P.,  Forsell,  N.,  &  Hamelinck,  C. 
(2015). The land use change impact of biofuels consumed in the EU: Quantification of area 
and greenhouse gas impacts (No. BIENL13120). ECOFYS Netherlands B.V. 

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4. Topic  Note  #2:  Soil  Carbon:  Current  Trends  and 

Challenges 

Abstract 
Soil carbon is expensive to monitor. In the absence of strong policy incentives to monitor and 
increase soil carbon storage, there is an important shortfall of soil carbon data, both at EU and 
MS level. As a result, soil carbon is the blind spot of LULUCF policy. Large carbon gains and 
losses  go  unreported.  Unreported  losses  could  be  around  70  MtCO2/yr  in  croplands  and 
unreported gains could be around 15 MtCO2/yr in grasslands and 45 MtCO2/yr in forests, but 
data shortage makes these estimates very uncertain. The share of EU forest area for which 
soil carbon is being accurately reported is at most 33%, and more likely close to 24%. The 
picture  is  even  worse  for  grasslands  and  croplands.  This  is  part  of  the  backdrop  for  the 
currently  very  low  levels  of  adoption  of  key  carbon  farming  practices  (peatland  restoration, 
agroforestry,  substituting  maize  with  grass)  which  could  remove  an  additional  200-300 
MtCO2/yr  if  they  became  widespread.  But  even  if  strong  policies  managed  to  disseminate 
them,  current  GHG  inventories  would  not  capture  their  climate  mitigation  benefits  in  most 
member states. 

57 

Problem Drivers ProblemsCurrent situationScarcedata makes soil carbon the blind spot of LULUCF policyLack of  measurements of  effects of  current measures made on the soils. Full  knowledge  on  measures that are needed ( low tillage, carbon farming, crop rotation, straw inputs,  agroforestry,). Lack of enforcement Expected situationReduction of uncertainty –bias and lack of precision –in the reported valuesAbility to track best management practices for soil carbon and their impactMore soil related measures aimingatincreasingSOCSchematic diagram on Soil carbon: Current trends and how to improve themShortfall of soil data at EU and MS levelsHigh cost of soil monitoringThe reported data on soils have large uncertaintyLarge carbon gains and losses likely go unreported (bias)Key drivers of soil carbon changes (agroforestry, cover crops, yield, …) are not captured byGHG inventoriesLack of incentives for land owners toprotect or increasesoil carbonBest management practices for soil carbon are not widespreadLack of incentive to accurately monitor soil carbon changes 
 
 
 
 
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4.1. Introduction 

This  topic  note  presents  the  current  trends  in  soil  carbon  changes  in Europe,  how  they  are 
reported  in  national  greenhouse  gas  inventories  (GHGIs)  and  the  potential  of  best 
management practices to protect and enhance soil carbon stocks in the EU.   

4.2. Current situation 

Most soil carbon stock changes in European soils are currently not being monitored, which is 
the  most  important  blind  spot  of  land-related  climate  policy.  If  soil  carbon  was  properly 
monitored  all  over  the  EU,  new  emissions  on  the  order  of  70  MtCO2/yr  could  appear  in 
croplands, and new removals on the same order of magnitude could appear in grasslands and 
forests. The drivers behind these large numbers are likely a combination of legacy from past 
land-use changes (eg. grassland/forest conversions into cropland) and environmental changes 
(eg.  increased  organic  inputs  to  forest  soils  as  a  result  of  CO₂  fertilization  and  nitrogen 
deposition) (Solberg et al., 2009; Zaehle et al., 2010). 

Drained organic soils are also a large source of emissions, reported at 100 MtCO2/yr in GHGIs. 
They  are  better  monitored  than  mineral  soils,  although  substantial  improvements  are  also 
desirable which would likely increase the current estimate. Interestingly, these total emissions 
are  comparable  to  the  carbon  stock  changes  likely  occurring  in  mineral  soils,  but  they  are 
concentrated on 5 % of the land . 

A  few  key  management  practices  –  agroforestry,  cover  crops,  substitution  of  maize  by 
grassland,  wetland/peatland  restoration  and  increased  organic  returns  to  soil  -  have  the 
potential to enhance carbon removals by 200-300 MtCO2/yr (see section 4.4.5). Yet, with the 
possible exception of cover crops, these practices are not widely adopted by farmers and other 
land managers. 

The expected situation following the implementation of the European Green Deal is one where 
best  soil  management  practices  are  being  widely  implemented  to  protect  and  enhance  soil 
carbon  stocks  and  where  the  results  of  these  practices  is  being  accurately  monitored  and 
reported in GHG inventories 

4.3. Problem drivers 

This  chapter  covers  problem  drivers  related  to  the  monitoring  of  soil  carbon  including  data 
production and gathering. While mentioned here, the connection between the weak incentives 
for  soil  monitoring  of  the  current  LULUCF  policy  setup  and  GHG  reporting  and  accounting 
rules,  are  covered  more  exhaustively  in  the  respective  Topic  Notes  (TN5  and  TN6)  on 
Reporting and Accounting. 

4.3.1. Soil data is scarce 

Most MS do not regularly monitor their soils through a soil inventory. Belgium, one of the few 
MS which had been conducting a regular soil inventory since 1990, stopped doing so in 2006. 
At the EU level, the LUCAS soil survey has been implemented at regular intervals since 2009 
but  its  quality,  representativeness  and  resolution  have  been  questioned.  The  LUCAS 
remeasurement campaign since 2018 should provide estimates at EU level. A recent working 
paper  from  JRC10  is  consistent  with  the  general  trends  in  European  soils  from  the  scientific 

10 https://esdac.jrc.ec.europa.eu/public_path/shared_folder/dataset/66/JRC120138_lucas_changes_09-15_-_final_1.pdf 

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literature  but  falls  short  of  providing  figures  on  stock  changes,  expressed  in  tC/ha/yr  (only 
changes in concentration are estimated, expressed in gC/kg soil/yr). 

4.3.2. High cost of extensive and repeated soil monitoring  

To track and understand changes in soil carbon stocks in different soils, climate conditions and 
under different management regimes, one must have repeated field trials or campaigns with 
relevant  spatial  resolution,  including  soil  sampling  and  lab  testing,  and  soil  and  land  use 
mapping  on  the  ground  and  from  alternative  sources  such  as  Remote  Sensing  and  CAP 
administrative systems. Proper monitoring of soil carbon including regular soil measurements 
at a reasonable spatial resolution is however resource intensive. In France for example, it has 
recently been estimated to cost between 2 and 6.5 million euros per year (Voltz et al., 2018). 
A coarse upscaling proportional to land area puts this amount at 15-55 million euros per year 
for the EU. 

4.3.3. Limited climate policy attention to soils until now  

Until 2021, cropland and grassland management were voluntary activities under the second 
period of the Kyoto protocol, and only DK, PT and ES decided to include these activities for 
their KP target setting and compliance. For the remaining MS, the incentive to improve their 
reporting  of  soil  carbon  was  ensured  via  reporting  obligations  under  the  LULUCF  Decision 
(Decision 529/2013), but there was no associated target, as LULUCF was not part of the 2020 
EU climate framework.  

Current  reporting  and  accounting  rules  under  the  LULUCF  Regulation  (2018/841)  and  the 
Governance Regulation (2018/1999) require to improve the monitoring and reporting LULUCF 
systems, including for soil carbon (see TN5 and TN6 for more details). While the effect of these 
recent Regulations remains to be seen, it is found that the requirement that soil carbon in key 
“managed  land”  categories  be  monitored  using  at  least  a  Tier  2  approach  is  not  fully 
implemented  and  likely  insufficient  to  ensure  proper  monitoring  (see  section  4.4.1).11 
Furthermore, it is considered that: 

the  MS-level  incentive  for  increasing  soil  carbon  storage  in  forests  is  diluted  by  LULUCF-
specific accounting rules designed to factor out natural effects and limit windfall credits, such 
as caps, FRLs and limited flexibilities (see TN6); 

in  contrast  to  the  EU  ETS  which  directly  provides  incentives  to  firms,  the  incentives  from 
LULUCF regulation only apply to MS which largely fail to pass them on to land owners and 
land managers through national legislation (see TN3). 

4.3.4. Few  and  scattered  non-Climate  policy  incentives  to  protect 

and enhance soil carbon stocks 

Another key problem driver is the shortfall of incentives (see TN3), both at MS and landowner 
levels, to protect and enhance soil carbon stocks. No policy tool is primarily aimed at storing 
carbon in soils (Pellerin et al., 2019). This does not mean that landowners are totally deprived 
of incentives to store carbon in soils and there are still some tools in place: 

  Some policy tools with other primary objectives such as the cover crops mandated by 
the Nitrates directive or CAP subsidies for agroforestry indirectly provide incentives to 
store carbon in soils; 

11 Tiers refer to emission factors: 
1 = UNFCCC default  
2 = Country specific 3 = Modelled from primary data 

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  The  ancillary  internal  benefits  of  high  soil  carbon  stocks  such  as  higher  fertility  and 
water retention are sometimes sufficient to convince farmers to implement soil carbon 
enhancing practices; 

  Several  MS  have  encouraged  the  development  of  carbon  standards  aimed  at 
channelling  private  corporate  social  responsibility  (CSR)  money  towards  soil  carbon 
sequestration (eg. Finland, Belgium, Sweden, France (Cevallos et al., 2019)).  

However,  these  minor  or  indirect  incentives  and/or  constraints  are  not  sufficient  to  drive 
widespread  adoption  of  best  management  practices  such  as  cover  crops,  agroforestry,  or 
wetland protection. 

4.4. Problems 

This chapter presents four problems resulting from the drivers identified in the above chapter. 
For  the  first  problem  (data  gaps  and  uncertainty),  a  component  is  investigated  at  the  land 
category level. 

4.4.1. Reported data has large gaps and large uncertainty 

Emissions factors from land conversions are properly reported by all MS as even IPCC Tier 1 
methods  are  reasonably  accurate  in  this  respect.  Therefore,  we  focus  here  on  the  “land 
remaining  land”  categories.  Throughout  this  section,  “cropland”  refers  to  the  “cropland 
remaining cropland” category, “grassland” refers to “grassland remaining grassland”, etc. 

For these categories, the Tier 1 method ignores carbon stock changes in mineral soils. Tier 2 
methods  generally  apply  a  fixed  emission  factor  to  estimate  the  soil  carbon  stock  changes 
resulting  from  conversions  between  predefined  management  types  (eg.  perennial  crops  vs 
annual crops, tillage vs no-till farming, low vs large manure inputs, …). Additionally, there are 
two very different types of Tier 3 methods: 

1.  Soil  inventories:  soil  carbon content  is  repeatedly  measured over  a large  number  of 

sample plots across the country; 

2.  Model: a soil model (eg. Yasso, C-Tool) – often based on half-decay factors and carbon 
transfers  between  different  organic  matter  pools  –  is  run  to  estimate  soil  carbon 
changes based on variable inputs such as weather data, soil type, harvest statistics, 
etc. 

In  the  following  section,  two  proxies  are  used  to  determine  how  many  MS  and  how  much 
European area are properly monitoring soil carbon: 

1.  The  method  type:  the  Tier  1  method  is  obviously  too  coarse  (they  assume  that  no 
change  is  occurring),  and  only  soil  inventories  are  sufficient.  Indeed,  many  Tier  2 
methods  are  restricted  to  the  distinction  between  annual  and  perennial  crops,  a 
typology which fails to capture key carbon storage practices. On the other hand, Tier 3 
approaches based on modelling are usually not properly validated (see 4.4.1.2). 

2.  The variability of reported carbon stock changes: carbon stock changes in mineral soils 
are subject to large variations, both in the short term (weather, yield, …) and in the long 
term  (change  in  practices,  …). The  reporting  of a  constant  or  almost  constant  value 
over 1990-2018 is therefore a sign that carbon stock changes are not being monitored 
with  precision.  Based  on  a  few  countries  using  accurate  methods  such  as  soil 
inventories  or  detailed  Tier  2  approaches,  we  determine  that  a  standard  deviation 
higher than 0.01 tC/ha over 1990-2018 in the implied emission factor for carbon stock 
changes is a likely necessary – but not sufficient – indicator that soil carbon is being 
properly monitored. 

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4.4.1.1.  Current gaps in reported data 

Mineral soils 

Current reporting completely ignores carbon stock changes in an estimated 5% of EU cropland 
area  (Tier  1 method,  see  table  below).  Based  on  the  proxies for  proper  monitoring  defined 
above, the share of EU cropland area which is being properly reported is estimated to be at 
most  37%,  and  more  likely  close  to  1%:  the  implied  emission  factors  exhibit  a  standard 
deviation higher than 0.01 tC/ha over 1990-2018 – a likely necessary but not sufficient indicator 
of accurate reporting. In 11 MS this reporting adds up to 37% of EU cropland area, and only 
Belgium  is  actually  reporting  soil  carbon  changes  based  on  a  soil  inventory  for  this  land 
category. 

The reporting gaps are even larger for grassland and forest soils: Tier 1 reporting rises to 32% 
and 53% respectively, and only 8 and 3 MS respectively report a substantial standard deviation 
in  their  implied  emission  factor.  However,  two  large  MS,  Sweden  and  Germany,  base  their 
reporting on a soil inventory for forest soils, representing a quarter of the EU forest area. 

Table 9: Reporting methods for soils in GHG inventories (2020 submissions)12. 

Total 
area 
(kha) 

Reporting type 
Tier 1 

Measurement-
based (Tier 3, 
soil inventory 

Modelling-
based (Tier 3, 
model) 

# of 
MS 

109,922  5/27 

Share of 
total 
area 
5% 

# of 
MS 

1/27 

Share of 
total 
area 
1% 

# of 
MS 

Share of 
total 
area 

3/27  7% 

11/27 

64,519 

12/27 

32% 

2/27 

1% 

1/27  1% 

8/27 

29% 

145,481  19/27 

52% 

2/27 

24% 

3/27  14% 

3/27 

33% 

Substantial 
inter-annual 
variation in IEF 
(SD > 0.01 
tC/ha) 
# of 
MS 

Share of 
total 
area 
37% 

Cropland remaining 
cropland 
Grassland remaining 
grassland 
Forest remaining 
forest 

Organic soils 

Overall, the current reporting of organic soils is more satisfactory, although the reported figures 
are incomplete or imprecise in several MS. 

Barthelmes (2018) identified substantial gaps in the reported areas of drained peatlands for 5 
MS  but  in  the  2020  submissions,  Romania  was  the  only  MS  with  a  sizeable  (>  200  kha) 
unreported drained peatland area. Note there is still a gap of more than 1 Mha between the 
information compiled by Barthelmes (2018) and the area reported by the UK in 2020. 

Many MS are still using Tier 1 approaches to estimate emissions from drained organic soils. 
This generates substantial uncertainty. For example, Estonia uses an average emission factor 
of  1.3 tC/ha/yr for  drained forested  peatlands,  derived  from the IPCC  default  values for the 
boreal zone. Whether this emission factor or the emission factor for temperate forests is more 
relevant is a matter of debate, but the temperate zone would increase Estonian emissions by 
approximately 0.6 MtCO2/yr. Ultimately, the only way to settle the debate is to invest in the 
development of a country-specific measurement-based emission factor (Tier 2 approach). 

12 Adding Tier 2 reporting type allows the numbers to sum up to 27 MS. 

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In addition, 50-70% of MS with drained organic soils do not estimate all sources of emissions 
(CH4,  N2O  and  DOC).  In  the  MS  where  these  omissions  occur,  emissions  from  drained 
peatland may be underestimated by up to 20% (Barthelmes et al., 2015). 

4.4.1.2.  Large uncertainty from Tier 3 soil models 

Process-based model (Tier 3) is often put forward as an efficient alternative to soil inventories 
for accurate reporting. This strategy is implemented by some MS for all land uses (Sweden) or 
for a subset of land uses (Finland or Austria for forests, Denmark for cropland and grassland). 

Unfortunately, most of these models are not able to reproduce recent trends. This is illustrated 
below with the examples of Sweden and Austria. In Sweden (Figure 24), measured soil carbon 
changes (black) are 2-3 times lower than inventory and FRL simulations (blue, Q model) in 
level,  and  inconsistent  trend  (simulations  are  stable  whereas  sequestration  is  increasing  in 
measurements).  In  Austria  (Figure  25),  simulated  regional  changes  are  equally  distributed 
above and below zero, whereas measured changes all point to decreases in soil carbon stocks. 
Whereas a valid model would be expected to produce approximately aligned points close to 
the first bisector, Figure 25 shows a large pack with no correlation between simulations and 
measurements. 

Figure 24: Comparison of measured and simulated forest soil carbon changes in Sweden (source: Swedish NFAP) 

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Figure 25: Comparison of measured and simulated forest soil carbon changes in Austria. The soil carbon change of the Austrian 
Forest Soil Inventory (1989) versus Biosoil (2006) against simulated data with Yasso07 in the same time span. The grey bullet 
represents the average value for Austria (source: Austrian NFAP, figure 15)  

The reason for these serious mismatches may simply be that current knowledge of soil carbon 
processes  is  not  sufficient  to  design  process-based  models  suited  to  simulate  soil  carbon 
changes  at  national  level.  In  all  cases,  these  examples  question  the  relevance  of  using 
process-based models for soil carbon reporting and emphasizes the necessity of regular soil 
inventories to accurately capture decadal changes in soil carbon stocks. 

4.4.2. Current  trends  in  what  the  EU  and  its  Member  states  are 

currently reporting 

Overall, reported changes in soil carbon – excluding land-use changes – are small: emissions 
decreased by 29 MtCO2/yr between 1990 and 2018 (Table 10). Actual changes could be much 
larger as the bulk of emissions and removals in these categories currently goes unreported 
(see section 4.4.1.1). In particular, reported changes in soil carbon have contributed little to 
the 18% decrease in the reported total LULUCF sink between 2013 and 2018.  

Table 10: Changes in soil carbon, excluding land-use changes13 

1990 

2013 

2018 

2018-2013 

Forest mineral 
soils 
Cropland 
mineral soils 
Grassland 
mineral soils 
Organic soils 
Total 
Total LULUCF 

ktCO2e 

ktCO2e 

ktCO2e 

ktCO2e 

% of 2013 

-38 761 

-40 867 

-42 573 

-1 706  0.5% 

-3 414 

-10 924 

-9 687 

1 237 

-0.4% 

665 

-2 549 

-3 062 

-513  0.2% 

111 092 
69 582 
-255 038 

98 942 
44 601 
-324 315 

96 441 
41 119 
-262 996 

-2 502  0.8% 
-3 483  1.1% 
61 318 

-18.9% 

13 This table is similar to the corresponding overview table in TN1, with a focus on soil carbon in “land remaining land” categories, 
thereby excluding land-use changes and changes in biomass. 

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In  order  to  disentangle  EU-wide  trends  for  each  land  category,  MS  are  grouped  into  four 
clusters, based on the largest biogeographical zone (Cervellini et al., 2020) in their territory 
(Table 11): Atlantic, Scandinavian, Mediterranean, Continental.  

Table 11: Country groupings according to the biogeographical zones. 

4.4.2.1.  Forest mineral soils 

Figure 26. Soil carbon changes in forest mineral soils. 

In MS which report soil carbon changes in forest mineral soils, the net sink has remained stable 
since 1990, around 40 MtCO2. It is dominated by Scandinavian countries, both in level and 
trend.  This  dominance  is  likely  an  artefact  stemming  from  the  overall  poor  reporting  of  this 
category: Finland and Sweden are the only two MS using a Tier 3 approach for forest soils. 

The sink has been slightly increased in recent years, from 39 MtCO2 in 2011 to 43 MtCO2 in 
2018, largely driven by Sweden. The Swedish National Inventory report does not explain the 
drivers of this reported increase in removals. 

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4.4.2.2.  Cropland mineral soils 

Figure 27. Soil carbon changes in cropland mineral soils. 

In MS which report soil carbon changes in cropland mineral soils, the net sink has increased 
from 3 MtCO2 in 1990 to 9 MtCO2 in 2018, with a peak 13 MtCO2 in 2009. All regions contribute 
to the level except Scandinavia, but the trend is largely driven by the Atlantic region and more 
specifically France. According to the French NIR, a switch from classical tillage to simplified or 
no-till techniques for around 30% of cropland area is driving this reported increased sink over 
the long term. The short-term variations of the reported sink for the Atlantic region are driven 
by Denmark which uses a Tier 3 modelling approach for reporting. 

In the Mediterranean region, Italy and Spain are driving an increasing sink from 1 MtCO2 in 
1990 to 5 MtCO2 in 2018. In Italy, this sink is driven by the increasing share of organic farming 
in perennial crops, while changes of management in annual crops (organic, conventional, set 
aside, …) create the short-term variability. In Spain, the reported increase in the sink is driven 
by  an  increased  area  of  perennial  crops,  in  which  the  share  of  soil  conservation  practices 
(limited tillage, set-aside and cover crops) is also increasing. In the Scandinavian region, the 
reported source of 2 MtCO2 at the end of the 1990s is driven by Sweden. Sweden also uses a 
Tier  3  modelling  approach  for  reporting.  However,  the  Swedish  NIR  does  not  explain  the 
reasons  for  the  reported  changes  in  soil  carbon  emissions/removals.  The  carbon  stock 
changes in the Continental region are more or less stable. 

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4.4.2.3.  Grassland mineral soils 

Figure 28. Soil carbon changes in grassland mineral soils. 

In MS which report soil carbon changes in grassland mineral soils, the balance shifted from 
net emissions of 1 MtCO2e in 1990 to a net sink of 3 MtCO2 in 2018. Both level and trend are 
mostly driven by the Atlantic and Mediterranean regions. 

In the Atlantic region, the increasing trend is driven by Ireland where grasslands “not in use” 
have been expanding at the expense of improved grasslands. 

In the Mediterranean region, Italy has followed a parabolic trend with a peak in 2006, partly 
offset by a net sink taking off in Portugal at the same period, ending up at comparable levels, 
around 0.4 MtCO2 each, in 2018. The Italian curve results from the opposing influences of an 
increasing share of organic farming in grassland and an overall decrease in grassland area. In 
Portugal, the increased removals are caused by two projects funded by the Portuguese Carbon 
Fund. These project focus on boosting grass productivity by sowing grassland with a highly 
biodiverse seed mix including a substantial share of legumes.  

4.4.2.4.  Drained organic soils 

Figure 29. Soil carbon changes in organic soils (mostly wetland/peatland drainage). 

CO2 emissions from drained peatlands and wetlands have been decreasing from 111 MtCO2 
in 1990 to 96 MtCO2 in 2018. All regions substantially contribute to the level, but the decreasing 
trend is driven by Scandinavia. Within Scandinavia, the bulk of the decrease takes place in 
Finland,  where  outflow  (heterotrophic  respiration)  is  assumed  to  be  constant  whereas  the 
inflow from root turnover is increasing in proportion to tree biomass.  

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4.4.3. Large soil carbon gains and losses likely go unreported 

In the absence of reliable reporting of soil carbon changes in GHG inventories, one must rely 
on  scientific  publications  to  assess  current  trends  at  EU  level.  Table  12  compiles  recent 
scientific  estimates  for  different  land-uses  in  European  or  comparable  (temperate)  areas. 
Forests and grasslands are currently storing soil carbon, likely because some of them are still 
transitioning  from  former  cropland  use,  but  also  due  to  environmental  changes  which  have 
been  boosting  vegetation  growth  and  hence  organic  inputs  to  soils.  On  the  other  hand, 
croplands are losing carbon, the main driver likely being that many are still transitioning from 
former grassland  use  although  there could be  other  explanations  such  as  the  stagnation  of 
crop  yield  since  1990  or  rising  temperatures.  Recent  increases  in  cover  crop  areas  may, 
however, be turning croplands from net source to net sink. 

Table 12: Average soil carbon changes in the EU (tC ha-1 yr-1, adapted from Pellerin et al. (2019)). 

From\To 

Forest 

Cropland 

Grassland 

Wetland 

Forest 

0.17 [0 ; 0.41]14 

Cropland 

Grassland 

Over 20 years: 
0,77 ± 0,36 
Over 100 years: 
0,80 ± 0,37 
0 

Wetland 

- 3 ± 2 

Over 20 years: -
2,31 ± 1,50 
Over 100 years: 
-0,47 ± 0,29 
-0.17 [-0.5 ; 
0.16]15 

Over 20 years: -
2,08 ± 0,26 
Over 100 years: 
-0,42 ± 0,05 
- 3 ± 2 

0 

Over 20 years: 0,92 ± 
0,25 
Over 100 years: 0,59 
± 0,11 
0.11 [-0.03 ; 0.17] 

0 

0 

0 

- 3 ± 2 

0.4 ± 0.2 

A coarse upscaling of these figures give a sense what current GHG inventories may be missing 
at EU level: cropland soils could be currently emitting 70 MtCO2 yr-1 whereas inventories report 
a net sequestration of 3 MtCO2 yr-1, grassland soils could be storing 25 MtCO2 yr-1 whereas 
inventories report a net sequestration of 10 MtCO2 yr-1 and forest soils could be storing twice 
the reported 43 MtCO2 yr-1. 

These upscaled figures are obtained by multiplying the average implied emission factors from 
Table 12 by the mineral soils area in each land category. The latter is obtained by subtracting 
the UK areas from the UK 2020 submission from the areas in the EU 2020 submission which 
still covers the EU 27 plus the UK. The obvious pitfall of such coarse upscaling is that they rely 
on one-off soil inventory repetitions in very few and mostly oceanic countries (Belgium, UK, 
Germany,  Denmark)  which  are  likely  not  representative  of  current  trends  in  the  entire  EU. 
Given  the  shortage  of  data  however,  there  is  no  obvious  other  way  of  obtaining  more 
representative and up-to-date estimates. 

In addition, one cannot exclude that the emissions and removals currently measured by soil 
inventories  have  partly  been  reported  in  past  GHG  inventories  as  resulting  from  land-use 
changes. Indeed, most MS assume that all emissions and removals from land-use changes 
are compressed during the first 20 years following change, whereas in practice they spread 
over roughly 50-100 years. There again, the shortage of data makes it difficult to tell apart the 

14 Pellerin et al. (2019) does not provide an uncertainty range for forest soils. 0 is the value reported by Emmett (2010) based on 
the UK soil inventory and 0.41 is the value reported by Gruneberg et al (2014) based on the German soil inventory. 

15 Pellerin et al. (2019) does not provide an uncertainty range. The range is taken from Ciais et al. (2010) which also averages at 
–0.17 tC/ha/yr and is quoted by Pellerin et al. (2019). 

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share of the legacy effects of past land-use changes which are included the average implied 
emission factors from Table 12 and have been reported, albeit too early, in GHG inventories. 

Based on available projections, the EU soil carbon balance is not predicted to deteriorate as a 
result of climate change (Lugato et al., 2018; Smith et al., 2005; Yigini and Panagos, 2016) 
although  these  projections  are  very  uncertain  and  not  unanimous  (Wiesmeier  et  al.,  2016). 
One of the main factors is the balance between rising C inputs and rising decomposition driven 
by higher temperatures. The amount of soil organic carbon is in constant dynamic equilibrium 
between the carbon inputs from, mainly crops residues, organic fertilizers and losses of carbon 
caused by the decomposition of soil organic matter. 

4.4.4. Key drivers of soil carbon changes (agroforestry, cover crops, 

yield, …) are not captured by GHG inventories 

In the absence of a regular soil inventory or a valid Tier 3 model, a Tier 2 approach, monitoring 
the  areas  of  key  practices  impacting  soil  carbon,  is  a  suitable  way  of  reporting  soil  carbon 
changes.  In  particular, these  approaches  are,  in  principle,  able to capture favourable policy 
moves towards more widespread best management practices. 

In their vast majority though, current GHG inventories are not able to capture best practices 
and drivers. The only practice captured by a majority of MS is perennial cropping, although 
replacing  annual  crops  with  perennial  crops  is  generally  not  seen  as  a  promising  climate 
mitigation lever, if only because they are not close substitutes. Five and seven MS capture soil 
carbon changes resulting from changes in external organic inputs (e.g. sludge) and reduced 
tillage respectively. Only six MS capture, at least partly, the benefits from cover crops. Other 
key  drivers  of  soil  carbon  changes  are  captured  by  MS  representing  less  than  10%  of  EU 
croplands. 

Table 13: Current coverage by GHG inventories of key drivers of soil carbon changes. The extent to which temporary grassland 

are captured is difficult to assess as they may be indirectly and imprecisely captured by artificial land-use changes 
between cropland and grassland. 

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4.4.5. Practices to increase soil carbon not adopted 

This section covers four key practices for which research indicates significant potential for soil 
carbon build up: agroforestry, cover crops, substituting fodder crops (e.g. maize) with grass, 
and  wetland/peatland  restoration.  Their  biophysical  potential  is  coarsely  assessed  at  an 
additional 200-300 MtCO2/yr (sum of the per practice potentials listed in Table 14 below). 

Table 14. Sequestration potential of four key practices. Figures from Pellerin et al. (2019) are upscaled from French to EU level 

in proportion of cropland (for arable agroforestry and cover crops) and in proportion of cattle heads for grass/maize 
substitution. The original figure from Greifswald Mire Centre (2020) is 25% of EU agricultural emissions, which 
amounted to 436 MtCO2e in 2018. 

Current 
area 
(Mha) 

Carbon sequestration potential in the soil (MtCO2/yr) 

Pellerin et al. 2019) 
upscaled 

Lugato et al. (2014)  Greifswald Mire 

Centre (2020) 

Arable agroforestry 
Cover crops 
Grass/Maize 
substitution 
Wetland restoration 

0.4 
7.5 
N/A 

Negligible  

60 
94 
25 

46 
46 

109 

Reduced tillage is discussed, but there is growing consensus that this practice does not store 
carbon  when  the  entire  soil  profile  is  accounted  for  (section  4.4.5.5).  Increased  nitrogen 
fertilization  is  not  considered  either  because  its  soil  carbon  benefits  are  offset  by  fertilizer-
induced emissions  in grassland  (Pellerin  et  al., 2019).  Other  practices  have been  shown to 
store  carbon in  the  soil -  hedges,  crop  residues, exogenous  organic matter  input,  etc.  -  but 
their potential at a large scale is likely limited (Pellerin et al., 2019; Lugato et al., 2014).  

Regarding forest soils, existing scientific evidence only provides one clear recommendation: 
avoiding  losses  that  have  been  documented  to  take  place  when  whole-tree  harvesting  – 
including  remnants  and  stumps  –  is  practiced  (Achat  et  al.,  2015;  Mayer  et  al.,  2020). 
Fortunately,  this  type  of  harvesting  remains  exceptional  in  the  EU.  Nitrogen  addition  or  the 
introduction  of  nitrogen-fixing  species  are  the  only  practices  which  have  been  consistently 

69 

Cropland remaining croplandGrassland remaining grasslandForest remaining forestTotal area (kha)109 92264 519145 481# of MS1/26Share of total area1%# of MS3/25Share of total area2%# of MS6/26Share of total area47%# of MS1/262/26Share of total area1%1%# of MS4/263/26Share of total area12%13%# of MS7/26Share of total area35%# of MS16/255/25Share of total area63%11%# of MS7/27Share of total area45%# of MS5/274/27Share of total area16%17%# of MS5/274/275/27Share of total area9%22%38%# of MS4/273/275/27Share of total area8%2%38%# of MS4/273/275/27Share of total area8%2%38%Practices capturedExternal organic inputs (eg. food YieldTemperaturePrecipitationEffects capturedAgroforestryTemporary grasslandCover cropsHedgesReduced tillageOrganic farmingInternal organic inputs (manure, …)Perennial crops 
 
 
 
 
 
 
 
 
 
 
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shown  to  increase  soil  carbon  storage,  but  the  extent  to  which  this  increase  offsets  the 
associated  fertilizer-induced  emissions  remains  to  be  assessed  (Mayer  et  al.,  2020).  The 
impact of other practices such as leaving harvest residues on site, extending rotation length, 
limiting soil disturbance and replacing clear-cut harvesting by partial harvesting are likely to be 
beneficial but limited. Further research is needed to obtain robust estimates of the effect of 
these practices on soil carbon, and derive clear policy recommendations (Mayer et al., 2020). 

4.4.5.1.  Agroforestry 

The sequestration potential of arable agroforestry has been estimated at 0.8 tCO2/ha/yr in the 
soil and 3.3 tCO2/ha/yr in the biomass, leading to a national potential of 34 MtCO2/yr in France 
at  a  price  of  250  €/tCO2e  (Pellerin  et  al.,  2019).  A  coarse  proportional  upscaling  puts  the 
European  potential  at  260  MtCO2/yr.  Current  agroforested  arable  areas  only  amount  to  0.4 
Mha, or equal to 0.3% of the cropland area in the EU16. 

4.4.5.2.  Cover crops 

Introducing  cover  crops,  avoiding  bare  soils  between  harvest  and  seeding,  is  boosting 
removals by 0.3 tC ha-1 yr-1 (Pellerin et al., 2019) and their area have been rapidly growing 
from 6% to 8% of EU arable land between 2010 and 2016. With 23-30% of bare soil during the 
winter, there is still substantial untapped potential estimated at EU level by Lugato et al. (2014) 
at 45 MtCO2/yr. 

4.4.5.3.  Substituting maize with grass 

Pellerin et al. (2019) estimates the national storage potential of this practice at 5 MtCO2/yr in 
France  at  a  price  of  250  €/tCO2e. The  EU  level  potential  of  a similar  practice,  consisting  in 
increasing areas cultivated with ley/alfalfa, has been estimated at 45 MtCO2/yr (Lugato et al., 
2014).  

4.4.5.4.  Wetland/peatland restoration 

While peatland restoration does not allow to restore a positive carbon storage dynamic in the 
short term, it quickly reduces or stops the considerable CO₂ emissions from peatland drainage 
that  could  otherwise  go  on  for  decades.  Depending  on  climate,  land-use  and  the  extent  of 
degradation, peatland restoration can avoid emissions between 2 and 34 tCO2e/ha/yr (Table 
15; Pellerin et al., 2019; Barthelmes, 2018). The EU potential for reducing emissions through 
peatland restoration has been estimated at around 109 MtCO2e/yr (Barthelmes, 2018). 

Table 15. Indicative emission reductions (in tCO2-e ha-1 yr-1) resulting from rewetting of drained organic soils with various initial 

land use types based on IPCC default emission factors (source: Barthelmes, 2018). 

Land use category 

Emission reduction after rewetting (t CO2eq ha-1yr-1) 
Temperate zone 

Boreal zone 

Forest land 
Cropland 
Grassland 
Wetlands (Peat 
extraction) 

6 
28 
20 
9 

2 
34 
25 
11 

16https://www.europarl.europa.eu/RegData/etudes/BRIE/2020/651982/EPRS_BRI(2020)651982_EN.pdf 

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4.4.5.5.  Reduced tillage 

The European potential for soil carbon storage through reduced tillage is estimated by Lugato 
et  al.  (2014)  at  32  MtCO2/yr.  The  carbon  gains  attributed  to  this  practice  are  however 
increasingly  controversial.  While  IPCC  guidelines  and  the  Cool  Farm  Tool  (a  C  footprint 
calculator)  still  credit  low  tillage  techniques  for  increasing  soil  carbon,  a  French  group  of 
scientists (Pellerin et al., 2019) concluded that low/no-tillage only redistributes soil carbon to 
the superficial (0-30 cm) layer but has no effect on total soil carbon content (0-150 cm), except 
in Mediterranean conditions. Their conclusion relies on a quality-controlled selection of studies, 
and most importantly the recent meta-analysis by Haddaway et al. (2017).  

4.5. Concluding remarks 

Soil carbon is expensive to monitor. In the absence of strong policy incentives to monitor and 
increase soil carbon storage, there is an important shortfall of soil carbon data, both at EU and 
MS level. As a result, soil carbon is the blind spot of LULUCF policy. Large carbon gains and 
losses  go  unreported.  Unreported  losses  could  be  around  70  MtCO2/yr  in  croplands  and 
unreported gains could be around 15 MtCO2/yr in grasslands and 45 MtCO2/yr in forests, but 
data shortage makes these estimates very uncertain. The share of EU forest area for which 
soil carbon is being accurately reported is at most 33%, and more likely close to 24%. The 
picture  is  even  worse  for  grasslands  and  croplands.  This  is  part  of  the  backdrop  for  the 
currently  very  low  levels  of  adoption  of  key  carbon  farming  practices  (peatland  restoration, 
agroforestry,  substituting  maize  with  grass)  which  could  remove  an  additional  200-300 
MtCO2/yr  if  they  became  widespread.  But  even  if  strong  policies  managed  to  disseminate 
them,  current  GHG  inventories  would  not  capture  their  climate  mitigation  benefits  in  most 
member states. 

Regarding soil carbon, two priorities are therefore identified: improve monitoring and step up 
incentives towards practices with a large carbon storage potential. Solutions to reach the first 
goal are described in TN5 while solutions to step up incentives are addressed in TN6. 

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4.6. References 

Cervellini,  M.,  Zannini,  P.,  Di  Musciano,  M.,  Fattorini,  S.,  Jiménez-Alfaro,  B.,  Rocchini,  D., 
Field, R., R. Vetaas, O., Irl, S.D.H., Beierkuhnlein, C., Hoffmann, S., Fischer, J.-C., Casella, 
L., Angelini, P., Genovesi, P., Nascimbene, J., Chiarucci, A., 2020. A grid-based map for the 
Biogeographical Regions of Europe. BDJ 8, e53720. https://doi.org/10.3897/BDJ.8.e53720 

Ciais, P., Wattenbach, M., Vuichard, N., Smith, P., Piao, S.L., Don, A., Luyssaert, S., Janssens, 
I.A., Bondeau, A., Dechow, R., Leip, A., Smith, Pc, Beer, C., Werf, G.R.V.D., Gervois, S., Oost, 
K.V., Tomelleri, E., Freibauer, A., Schulze, E.D., 2010. The European carbon balance. Part 2: 
croplands.  Global  Change  Biology  16,  1409–1428.  https://doi.org/10.1111/j.1365-
2486.2009.02055.x 

Emmett,  B.A.,  Reynolds,  B.,  Chamberlain,  P.M.,  Rowe,  E.C.,  Spurgeon,  D.,  Brittain,  S.A., 
Frogbrook,  Z.L.,  Hughes,  S.,  Lawlor,  A.J.,  Poskitt,  J.,  Potter,  E.,  Robinson,  D.A.,  Scott,  A., 
Wood, C., Woods, C., 2010. Soils Report from 2007 (No. 9/07), CS Technical Report. Centre 
for Ecology & Hydrology. 

Grüneberg, E., Ziche, D., Wellbrock, N., 2014. Organic carbon stocks and sequestration rates 
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Haddaway,  N.R.,  Hedlund,  K.,  Jackson,  L.E.,  Kätterer,  T.,  Lugato,  E.,  Thomsen,  I.K., 
Jørgensen, H.B., Isberg, P.-E., 2017. How does tillage intensity affect soil organic carbon? A 
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Pellerin,  S.,  Bamière,  L.,  Launay,  C.,  Martin,  R.,  Schiavo,  M.,  Angers,  D.,  Augusto,  L., 
Balesdent, J., BASILE-DOELSCH, I., Bellassen, V., Cardinael, R., Cécillon, L., Ceschia, E., 
Chenu,  C.,  Constantin,  J.,  Darroussin,  J.,  Delacote,  P.,  Delame,  N.,  Gastal,  F.,  Gilbert,  D., 
Graux, A.-I., Guenet, B., Houot, S., Klumpp, K., LETORT, E., Litrico, I., Martin, M., Menasseri-
Aubry,  S.,  Meziere,  D.,  Morvan,  T.,  Mosnier,  C.,  ROGER-ESTRADE,  J.,  Saint-André,  L., 
Sierra, J., Therond, O., Viaud, V., Grateau, R., Le Perchec, S., Savini, I., Rechauchère, O., 
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1000 et à quel coût ? (Contract). Agence de l’Environnement et de la Maîtrise de l’Energie. 

Smith, P., Martino, D., Cai, Z., Gwary, D., Janzen, H., Kumar, P., McCarl, B., Ogle, S., O’Mara, 
F., Rice, C., Scholes, B., Sirotenko, O., Howden, M., McAllister, T., Pan, G., Romanenkov, V., 
Schneider, U., Towprayoon, S., Wattenbach, M., Smith, J., 2008. Greenhouse gas mitigation 
in  agriculture.  Philosophical  Transactions  of  the  Royal  Society  B:  Biological  Sciences  363, 
789–813. https://doi.org/10.1098/rstb.2007.2184 

Achat, D.L., Fortin, M., Landmann, G., Ringeval, B., Augusto, L., 2015. Forest soil carbon is 
threatened 
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5, 

Barthelmes, A., 2018. Reporting greenhouse gas emissions from organic soils in the European 
Union: challenges and opportunities, Proceedings of the Greifswald Mire Centre. Greifswald 
Mire Centre. 

Mayer, M., Prescott, C.E., Abaker, W.E.A., Augusto, L., Cécillon, L., Ferreira, G.W.D., James, 
J., Jandl, R., Katzensteiner, K., Laclau, J.-P., Laganière, J., Nouvellon, Y., Paré, D., Stanturf, 
J.A., Vanguelova, E.I., Vesterdal, L., 2020. Influence of forest management activities on soil 
organic carbon stocks: A knowledge synthesis. Forest Ecology and Management 466, 118127. 
https://doi.org/10.1016/j.foreco.2020.118127 

Cevallos,  G.,  Grimault,  J.,  Bellassen,  V.,  2019.  Domestic  carbon  standards  in  Europe  - 
Overview and perspectives. I4CE. 

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Lugato,  E.,  Bampa,  F.,  Panagos,  P.,  Montanarella,  L.,  Jones,  A.,  2014.  Potential  carbon 
sequestration  of  European  arable  soils  estimated  by  modelling  a  comprehensive  set  of 
management practices. Glob Change Biol 20, 3557–3567. https://doi.org/10.1111/gcb.12551 

Lugato, E., Smith, P., Borrelli, P., Panagos, P., Ballabio, C., Orgiazzi, A., Fernandez-Ugalde, 
O., Montanarella, L., Jones, A., 2018. Soil erosion is unlikely to drive a future carbon sink in 
Europe. Sci Adv 4. https://doi.org/10.1126/sciadv.aau3523 

Pellerin,  S.,  Bamière,  L.,  Launay,  C.,  Martin,  R.,  Schiavo,  M.,  Angers,  D.,  Augusto,  L., 
Balesdent, J., BASILE-DOELSCH, I., Bellassen, V., Cardinael, R., Cécillon, L., Ceschia, E., 
Chenu,  C.,  Constantin,  J.,  Darroussin,  J.,  Delacote,  P.,  Delame,  N.,  Gastal,  F.,  Gilbert,  D., 
Graux, A.-I., Guenet, B., Houot, S., Klumpp, K., LETORT, E., Litrico, I., Martin, M., Menasseri-
Aubry,  S.,  Meziere,  D.,  Morvan,  T.,  Mosnier,  C.,  ROGER-ESTRADE,  J.,  Saint-André,  L., 
Sierra, J., Therond, O., Viaud, V., Grateau, R., Le Perchec, S., Savini, I., Rechauchère, O., 
2019. Stocker du carbone dans les sols français, quel potentiel au regard de l’objectif 4 pour 
1000 et à quel coût ? (Contract). Agence de l’Environnement et de la Maîtrise de l’Energie. 

Smith, J., Smith, P., Wattenbach, M., Zaehle, S., Hiederer, R., Jones, R.J.A., Montanarella, L., 
Rounsevell, M.D.A., Reginster, I., Ewert, F., 2005. Projected changes in mineral soil carbon of 
European  croplands  and  grasslands,  1990–2080.  Global  Change  Biology  11,  2141–2152. 
https://doi.org/10.1111/j.1365-2486.2005.001075.x 

Solberg,  S.,  Dobbertin,  M.,  Reinds,  G.J.,  Lange,  H.,  Andreassen,  K.,  Fernandez,  P.G., 
Hildingsson,  A.,  de  Vries,  W.,  2009.  Analyses  of  the  impact  of  changes  in  atmospheric 
deposition  and  climate  on  forest  growth  in  European  monitoring  plots:  A  stand  growth 
approach. Forest Ecology and Management 258, 1735–1750. 

Voltz,  M.,  Arrouays,  D.,  Bispo,  A.,  Lagacherie,  P.,  Laroche,  B.,  Lemercier,  B.,  Richer  de 
Forges,  A.,  Sauter,  J.,  Schnebelen,  N.,  Le  Bas,  C.,  Gandon,  N.,  Rennes,  S.,  2018.  La 
cartographie des sols en France : Etat des lieux et perspectives. INRA. 

Wiesmeier,  M.,  Poeplau,  C.,  Sierra,  C.A.,  Maier,  H.,  Frühauf,  C.,  Hübner,  R.,  Kühnel,  A., 
Spörlein,  P.,  Geuß,  U.,  Hangen,  E.,  Schilling,  B.,  von  Lützow,  M.,  Kögel-Knabner,  I.,  2016. 
Projected loss of soil organic carbon in temperate agricultural soils in the 21 st century: effects 
trends.  Scientific  Reports  6,  32525. 
of  climate  change  and  carbon 
https://doi.org/10.1038/srep32525 

input 

Yigini, Y., Panagos, P., 2016. Assessment of soil organic carbon stocks under future climate 
and  land  cover  changes  in  Europe.  Science  of  The  Total  Environment  557–558,  838–850. 
https://doi.org/10.1016/j.scitotenv.2016.03.085 

Zaehle, S., Friend, A.D., Friedlingstein, P., Dentener, F., Peylin, P., Schulz, M., 2010. Carbon 
and nitrogen cycle dynamics in the O-CN land surface model: 2. Role of the nitrogen cycle in 
the  historical 
carbon  balance.  Global  Biogeochemical  Cycles  24. 
https://doi.org/10.1029/2009GB003522 

terrestrial 

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5. Topic Note #3: Externalities and Missing Markets 

Abstract 
This note presents a set of macro-level drivers related to the ability and willingness of European 
landowners to respond to climate incentives. These drivers take shape outside of the political 
sphere  and are  therefore  deemed  'policy-external.'  Due  to  economic,  structural  and  market 
issues, it is found that significant barriers remain for the transformation of European land use 
into a provider of carbon removals in a market based, climate neutral EU policy framework. 
The overarching market failure implicit in several of the drivers is the lack of internalisation of 
negative  climate  externalities,  which  results  in  the  lack  of  clear,  common  price  signals 
promoting climate action and transition from the markets, farmers, and forest owners' service. 
In the context of developing short term, pre-2030 policy proposals and long term 2050 policy 
visions,  the  drivers  are  manifested  in  a  set  of  specific  problems.  Past  optimisations  and 
technology adoptions have delivered significant GHG emission reductions and halved carbon 
loss  intensity,  but  also  resulted  in  a  lock-in  in  the  farming  sector,  where  high  debt  levels, 
absence  of  carbon  revenue  streams,  increasing  costs  of  climate  risks,  and  limitations  in 
responsiveness to certain incentives renders a future structural change difficult and creates 
resistance  among  land  owners,  which  are  based  in  their  business  and  not  values.  The 
ramifications need to be understood and addressed by future EU land use policies for the long-
term vision to succeed.    

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5.1. Introduction 

True cost of climate impacts not paid 

Emissions that result in climate change constitute a well-known ‘negative externality’  where 
economic actors impose costs on others without paying a price for their actions (Pigou 1920; 
Stern 2008). Just as businesses and consumers do not pay anything for – or at least do not 
pay the ‘true’ cost of – burning fossil fuels and releasing greenhouse gas (GHG) emissions 
from deforestation and land degradation, they are also not rewarded for remedial action, i.e. 
removing GHG emissions from the atmosphere.  

Price on GHG emissions, not carbon 

An increasing number of countries and economies, nonetheless, have taken to respond to the 
dilemma  by  putting  a  price  on  the  generation  of  emissions  –  usually  in  the  form  of  a  tax 
(possibly labelled as a levy, or surcharge) or a cap-and-trade system based tradable permits.17 
The Kyoto Protocol had installed the first global cap-and-trade system to tackle climate change 
(based  on  U.S.  practice in  combatting  acid rain a decade earlier).  Yet,  the  EU  became the 
international trailblazer for translating the Kyoto Protocol’s emissions trading approach from a 
government-to-government affair into the sphere of the market, i.e. where economic operators 
meet. With 14 billion euros in state revenues from allowances auctions in 2018, the European 
Emissions  Trading  System  (EU  ETS)  remains  the  world’s  flagship  cap-and-trade  system 
imposing the obligation on key energy-intensive industrial sectors to purchase and surrender 
an EU allowance for each ton of CO2eq. emitted into the atmosphere. More generally, with 
more  than  75%  of  global  carbon  revenues  being  levied  by  EU  Member  States,  the  EU 
leadership in carbon pricing is undeniable.  

As a result, for large scale energy installations, and increasingly other energy using sectors in 
the  EU,  a  price  is  placed  on  emissions  to  some  extent  internalising  negative  externalities. 
However, for the emissions resulting from anthropogenic impacts on the carbon stocks and 
fluxes found in biological sources such as plants, trees, and soil, there is no pricing.  

5.2. Problem Drivers 

LULUCF sector yet to internalise costs 

Since 2021, the land use, land-use change and forestry (LULUCF) sector is included in the 
EU’s climate and energy framework 2030, with binding quantitative restrictions on emissions 
under the so called no-debit-rule (LULUCF Regulation[1]18) which is essentially a no backsliding 
provision. This rule applies to EU Member States, not market participants (forest and farmland 
owners) and therefore imposes limited pressure on pricing. Notwithstanding implementation at 
Member State implementation level, measures under the Common Agriculture Policy (CAP) 
benefitting carbon stock enhancement indirectly, and various forms of carbon taxes or tariffs 
being considered by governments, there is currently no uniform or Union wide internalisation 
of the externalities in the land use sector. Similarly, there is no price or mechanism in place for 
the removals of carbon which forests, vegetation and soil processes delivers.     

17 An overview of approaches is provided by I4CE (2019). A similar overview from OECD in 2008, found mostly government-
financed  subsidies  to  reduce  GHG  emissions  given  the  general  adherence  to  the  polluter-pays  principle.  Thus  cap-and-trade 
approaches have gained ground in the past 10-12 years. 

18 Regulation (EU) 2018/841 of the European Parliament and the Council of 30 May 2018 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 No 529/2013/EU, OJ L 156/1 of 19 June 2018 

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Support schemes and regulatory incentives, but no price signal 

While EU policymakers are clear about the need for the LULUCF sector to contribute to the 
bloc’s  long-term  net-zero  emissions  target  and  while  certain  sector-specific  subsidy 
frameworks exist to help market operators take climate mitigation action (e.g. under the CAP), 
there is no regulatory carbon price mechanism in place at market operator level that would pay 
forest and farm owners or operators to make additional efforts (to what they otherwise do) to 
increase the sink function of their land. 

This is particularly problematic given both the LULUCF sector’s high but dormant mitigation 
potential at relatively low cost (e.g. agroforestry, peatland restoration, see Topic Notes 1 & 2) 
and the uneven distribution of this potential among EU Member States. An EU mechanism to 
incentivize  land  mitigation  action  could  tap  into  the  potential  while  allowing  trade  across 
Member State borders to improve overall market conditions.  

8 problem drivers, incl. 2 forest specific 

When assessed more closely, eight drivers relating to the lack of internalisation of externalities 
and pricing  of  the  climate  mitigation benefits  at  the  level  of  the  individual  land owner  stand 
out.19 The drivers are organised around trends and developments that are external to the policy 
sphere; while the current CAP structure and instruments are part of both the problem and the 
solution for several of them, the CAP is not considered a driver in itself. The eight drivers are: 

1.  No revenue from climate mitigation (or other ecosystem services).     

2.  No value assigned to carbon assets, and hence no incentive to protect.  

3.  No clear price signals from consumers and other end users.  

4.  High costs and high debt limits farmers risk appetite  

5.  Farmers and foresters are exposed to climate risks to their business, which are only 

partially abated. 

6.  Farmers (less so forest owners) are not investable for private or institutional investors 
and hence have limited access to e.g. climate, restoration, conservation or biodiversity 
finance.  

In addition, one must bear in mind that carbon pricing can only trigger action from landowners 
and  firms  which  are  responsive  to  price  incentives.  In  the  forestry  sector  in  particular,  this 
cannot always be taken for granted due to two additional problem drivers:  

1.  A  substantial  part  of  forest  area  consists  in  small  parcels  owned  by  multiple  small 

owners. 

2.  Forest rotations range from 40 to 150 years, intrinsically conferring a substantial inertia 

to forest management and its responsiveness to price signals. 

The below sections explain in more detail each of the identified drivers.  

5.2.1. No revenue from climate mitigation action 

Landowners cannot earn revenue from improving their carbon footprint 

GHG emissions and carbon loss in the agricultural and land use sectors is an unpriced side-
effect  or  negative  externality.  When  there  are  no  or  only  limited,  distorted  or  weak  signals 
incentivising actions that increase sinks or reduce GHG emissions, these will be of secondary 
importance  relative  to  other  income  generating  activities.  The  CAP,  first  and  foremost,  has 

19 Inspired by e.g. https://www.blendedfinance.earth/better-finance-better-food 

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continued to  provide  income support for  activities that generate  substantial  GHG  emissions 
such  as livestock  rearing,  and  especially  ruminants. While the  CAP  and additional  Member 
State regulation does offer support for improving carbon management in the LULUCF sector, 
none of these seem to have significant impact on land management priorities (Bonvillain et al. 
2020).  This  drives  a  host  of  different  behaviours  and  impose  a  number  of  barriers  for 
landowners, which are problematic in the context of the LULUCF sector and 2030 ambitions.  

5.2.2. No value assigned to carbon or biodiversity assets 

Assets without business value are not managed 

Farmers  produce  commodities  and  manage  ecosystem  services,  but  only  the  former  are 
currently priced (Ribaudo et al., 2010). Under the current land governance regime in the EU 
and with current pricing strategies in the agricultural markets, farmers can only earn revenue 
from  the  products  their  natural  capital  can  produce  via  conventional  land  management 
practices, even when this includes depleting the carbon stock (or biodiversity) on their land. 
With increasing attention on direct emissions of GHG on the farm or from forest management 
(linked to driver 2.1 above), loss of carbon from the carbon stock to the atmosphere may be 
regulated  in  the  future,  but  loss  of  carbon  through  overharvesting  and  use  of  land  may 
continue.  

800 billion euro worth of ecosystems services not in the books 

For example, recent work argues that the carbon removal service of global forests, is worth 
appx EUR 800 billion to society (Llavador et al., 2015), but this value does not translate into 
any commensurable pricing approaches. Managing a passive asset (in this case soil carbon) 
is a financial discipline itself, with focus on anticipated long-term profit (Paulson Institute, 2020). 
With  no  foreseen  pricing  of  these  assets,  farmers  and  forest  owners  have  no  reasons  to 
maintain carbon stocks other than the soil improving and productivity enhancing benefits soil 
carbon delivers, such as nutrient and water retention (Pascual et al., 2014; Brady et al., 2015, 
Amundson and Biardeau 2018).  

Many good initiatives, but yet to price the passive asset 

Some of the piloting carbon farming practices in Europe (e.g. Spar Initiative in Austria, 4/1000 
in France, and peatland codes in the UK and DE) test pricing of avoiding emissions from soil 
carbon  pools,  which  is  a  step  towards  the  valuation  of  the  carbon  stock  itself.  There  are 
however no scheme or mechanism in the voluntary carbon markets (in operation in the EU), 
that monetise soil carbon as an asset. This situation, if unabated in the long term, may reduce 
the efficiency of any legal initiative aimed at transferring incentives for carbon sequestration 
and avoided emissions to farmers and forest owners. 

5.2.3. No clear price signals 

Markets and consumers do not price carbon management 

As a whole, consumers and other end users of products from agriculture and forest sectors 
send  no  clear  price  signals  upstream  through  the  value  chain  favouring  GHG  emissions 
reductions or net-zero products and tend to prefer low cost and uniform quality. Admittedly, 
carbon-related consumer pressure cannot be expected in the absence of labels signalling the 
carbon  content  of  products,  and  transparent  and  clear  labelling  of  climate  impacts  are 
intrinsically complex and likely will happen at only some time in the future. But experiments to 
that end show that even better information is unlikely to drastically change consumer behaviour 
(e.g. Castellari et al 2019).  

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Big food companies taking action 

On  the  bright  side,  the  market  share  of  certified  value  chains  such  as  organic  food  and 
geographical indications is rising: organic food consumption has doubled between 2009 and 
2018,  now  exceeding  5%  in  many  Member  States.  While  these  labels  are  providing  many 
sustainability benefits, their contribution to climate mitigation is debated and likely modest (e.g. 
Meier et al., 2015; Bellassen et al., submitted). Recently, large international food and grocery 
companies have started certifying their value chains, and calculating scope 1 and 2 emissions 
from their products and portfolios as part of net-zero claims. This trend promise well for the 
indirect internalization of externalities and improvement of the overall climate footprint of the 
food sector, but still leaves farmers with unclear price signals. 

Farmers can only wait for pricing to get right 

In  general,  farmers  are  price  takers  in  oligopolistic  markets  with  little  ability  to  differentiate 
products for climate impact or footprint beyond such mainstream certification schemes, and 
are not able to recoup costs of internalising externalities in farm management.20 This again, 
serves as a problematic barrier for addressing the market failure through upstream measures, 
but  also  for  imposing  cost-intensive  actions  or  restrictions  on  farmers  through  LULUCF 
policies. 

5.2.4. High costs, high debt, and stranded assets means limited risk 

appetite in the sector 

Squeezed business case for farming 

High  fixed  costs  (land,  equipment)  and  high  labour  costs  (compared  to  third  countries), 
combined with high debt levels, restrict farmers’ risk appetite and access to finance for new 
technologies and practices (van Asseldonk et al. 2019). Much of the farming sector outside of 
various high-value segments (with associated barriers to entry) delivers low or even negative 
profit  margins,  obliging  some  farmers  to  rely  on  CAP  subsidies  for  their  survival21,  as  also 
reported by the 2019 JRC farmers view report (JRC, 2019).  

…and assets may strand when climate changes 

Of similar importance, but less prominently discussed for the land use sector and its assets, is 
the concept of climate transition risks22. The currently unpriced risk of structural changes to the 
land sector and its various types of capital may lead to stranded assets, i.e. land that is no 
longer available for farming (such as peatlands) or not profitable to maintain. Investments in 
land  that  requires  significant  rehabilitation  are  much  riskier  than  in  land  that  has  been 
sustainably managed. If no alternative pricing of the services of the land is offered (as covered 
in 2.3 on natural capital assets), obsolete land uses means the value of the land will decrease. 
A  similar  logic may  apply for  certain  equipment, expertise  or  even  animal  herds (Caldecott, 
2013). In aggregate, loss of income may turn out significant. A recent EEA report (EEA, 2019), 
estimated that European agriculture could face a potential income loss of up 16% by 2050, 
with large regional variations. The same EEA report estimates that farmland value in certain 

20 https://ec.europa.eu/info/sites/info/files/food-farming-fisheries/trade/documents/agri-market-brief-04_en.pdf  

21 For instance, the Irish Parliamentary Budget Office (PBO) briefing paper on the CAP in Ireland cites that over half of the average 
family farm income comes from direct payments from CAP funds. For cattle and sheep rearing, this value is even higher at 114% 
and 
(2018) 
https://data.oireachtas.ie/ie/oireachtas/parliamentaryBudgetOffice/2018/2018-08-17_an-overview-of-the-common-agricultural-
policy-cap-in-ireland-and-potential-regional-and-sectoral-implications-of-future-reforms_en.pdf 

respectively. 

dependence 

Source: 

income 

115% 

PBO. 

CAP, 

on 

of 

22 Climate Transition: An Unpriced Risk? | Beyond Ratings (beyond-ratings.com) 

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Mediterranean Member States can fall by up to 80% over the same time period due to loss of 
productivity. 

Structural caution towards change 

This partially explains the resistance or hesitance of certain farmer groups to increased climate 
targets  and  top  down  regulation  that  allows  no  way  out  or  offers  no  conciliation  for  or 
safeguards against stranded assets. Overall, high costs, high debt, squeezed business models 
and risk of stranded assets, serves as barriers to the adoption of new technologies and may 
drive  resistance  in  the  agriculture  and  forest  sectors  to  fast,  costly  or  unevenly  distributed 
measures or initiatives as part of more stringent EU LULUCF legislation or targets. 

5.2.5. Increasing climate risk 

Climate risks are financial risks 

Farmers and foresters are inherently exposed to climate risks to their business. Risks related 
to weather and climate conditions and foreseen changes will materialise in changing conditions 
and a wide range of changing and erratic events that will increase total risk for farmers for their 
herds, crops, and costs. It is foreseen that there will be increased need for watering of animals, 
irrigation and optimised breeds in parts of the livestock sector, positive and negative changes 
in  crop  productivity,  more  and  more  severe  extreme  weather  events,  just  as  storage, 
processing  and  transport  of  crops  and  animal  products  will  be  impacted  and  necessitate 
investments  (EEA,  2019).  Although  risks  will  play  out  differently  across  Member  States,  as 
such agriculture faces a climate transition. Also, it is important to note that as many farmers 
operate diversified and multi-practice farms, impacts on livestock rearing may influence soil 
management and protection of carbon stocks, as the farmer manages one budget and limited 
financial resources. 

Banks and financial institutions (and re-insurers alike) are realising that climate change risks 
eventually  will  materialise  as  financial  risks  which  will  be  transferred  from  landowners  to 
financial institutions one way or the other (see UNEP and Global Canopy, 2020). The main 
implication of climate risks will be loss of harvest, declining productivity or yield, water stress, 
or increasing costs of irrigation water. These can be insured however, and several Member 
States  includes  insurance  schemes  to  improve  climate  resilience  as  part  of  their  Rural 
Development measures. 

5.2.6. Farmers are not investable 

Small and medium family farms have limited access to finance 

Farmers (less so forest owners) are not easily investable for private or institutional investors 
and hence have limited access to various forms of potentially relevant finance, such as climate, 
restoration, conservation or biodiversity finance in particular in the form of equity. The low level 
of investments into EU farms, may be a result of the ownership structure and business models 
of the typical EU farmer. Although a group of large industrial farms operated by a company 
have increased in number over the past 20-30 years, even these farms are often incorporated 
and  operated  in  ways  that  offers  unattractive  risk/return  profiles  for  institutional  investors, 
venture capital and fund managers. For privately-owned small and medium size farms, assets 
such  as  land,  machines,  animal  herds  and  buildings  are  not  included  in  EU  financing 
programmes. In many Member States, restrictions on ownership and farm size are regulated 
in  land  tenure,  zoning  or  agricultural  laws,  and  reflecting  traditions  or  past  priorities.  In 
summary, landowners are generally limited to financing through debt markets or market risk 
insurance, traditional banking credits or government subsidies and loans.  

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EU Taxonomy part of the way forward 

Many recent publications raise the expectation that the assets of agriculture and forests can 
become investable and that existing financial services available to the sector increasingly will 
consider  climate  and  biodiversity  impacts.  This  is  also  reflected  in  the  substantial  work 
undertaken to define an EU taxonomy for sustainable finance for the agricultural and forest 
sectors,  which  will  surely  remove  barriers  for  investment  into  these  sectors.  While  this  will 
surely mean that certain farms or farming practices such as afforestation or wetland restoration 
can attract more and other types of finance, it is not expected as such to remove the access 
barriers for the vast majority of small and medium size farms across the EU23.  

Impediment for change and new technology adoption 

The problem driver of low investability leading to resistance to change and slow uptake of new 
technologies and practices works in concert with and is exacerbated by the lack of revenue for 
climate mitigation activities and the lack of value for carbon assets mentioned above (in 2.2 
and 2.3).  

5.2.7. Ownership  structures  of  European  forests  not  conducive  to 

market induced changes  

Public forests may respond differently 

40% of European forests are public-owned, and this share often exceeds 75% in most Eastern 
European  countries24.  This  substantial  portion  of  European  forests  cannot  be  expected  to 
perfectly respond to market incentives as predicted by standard economic theory. This is all 
the  more  true  for  municipal  ownership.  In  France for  example,  municipalities  represent  two 
thirds of public forest ownership and a key priority for them is to supply their constituents with 
a regular yearly provision of energy wood. 

Small forests managed differently 

Even among private holdings, responsiveness to market incentives can be questioned. Among 
others, 30% of private forests consists in land holdings smaller than 10 hectares, and another 
13%  belongs  to  land  holdings  smaller  than  20  hectares25,  while  15  hectares  is  commonly 
considered as the minimal area allowing for active forest management. This scattered private 
ownership is the result of inheritance laws and inheritance tax regimes. Many Member States 
have long been aiming at defragmenting forest land ownership26 but as illustrated by the above 
figures, their policies have not lived up to the challenge. 

Tricky to devise effective result-based climate schemes for forests 

The ownership structure becomes a problem driver as small, private forest owners on the one 
hand may  not  adopt  professional management  practices  and  respond to market  incentives. 
On  the  other  hand,  state  or  municipal  ownership  may  adhere  to  certain  Sustainable  Forest 
Management  practices  and  can  be  directed  towards  carbon  forestry  practices,  but  not 

23 UNEP and Global Canopy (2020). Beyond Business as Usual: Biodiversity Targets and finance. UNEP-WCMC, Cambridge, 
UK. 

24 https://efi.int/sites/default/files/files/publication-bank/2018/tr_88.pdf 

25 https://unece.org/DAM/timber/publications/SP-26.pdf 

26 https://www.sciencedirect.com/science/article/pii/S1389934117301740 

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necessarily  through  market  incentives  or  price  signals  as  they  operate  forests  not  only  for 
commercial reasons. 

5.2.8. Forest  rotations  range  from  40  to  140  years,  intrinsically 
conferring a substantial inertia to forest management and its 
responsiveness to price signals 

Structural inertia to change 

In Europe, forest rotation length typically ranges from 40 to 140 years, depending on species 
and pedo-climatic conditions27.  Classical  Faustmannian  forest  economics demonstrates  that 
shortening  optimal  rotation 
lengths  comes  at  exponentially  rising  opportunity  costs 
(Samuelson, 1976). These timelines confer substantial inertia to the forestry sector. Of course, 
forest managers can somewhat delay or move forward thinnings and final cuts to seize market 
opportunities  or  respond  to  the  risk  of  natural  disturbances.  But  they  cannot  rapidly  alter 
species mixes, forest type (e.g. high stand vs coppices) or other key management choices. 
Even where they are timely, the monetary and carbon benefits of management interventions, 
such as converting coppices to high stands or thinnings intended at improving fire resilience, 
typically take decades to materialize, which mitigates their appeal for profit. 

5.3. Problems 

Eight problems that future climate policy should address 

As  a  result  of  the  above  drivers  working  in  concert,  land  owners  in  general  maintain  land 
management practices that do not optimize climate mitigation (or other ecosystem services), 
as  pointed  out  in  Topic  Notes  1  and  2.  The  above  drivers  are  structural  and  frame  the 
agricultural and forest sectors in the EU. At the same time, they lead to a number of concrete 
problems or barriers which an EU Climate Policy and governance framework that includes the 
LULUCF must consider and possibly mitigate or address. This section explain and substantiate 
eight problems that result from one or more of the drivers. Each of these are formulated so 
they  can  be  targeted  and  addressed  fully  or  in  part  by  policies  and  measures  within  the 
mandate of the European Commission.  

Land management decisions considering regulations, markets, nature 

The  core  problem  remains  that  climate  externalities  are  not  internalised  and  therefore  that 
there is no clear, common and unionwide market signal from financial service providers, food 
industry,  retailers,  commodity  traders  or  consumers  that  incentivise  reduction  in  GHG 
emissions,  sequestration  of  carbon  and  protection  of  the  already  existing  carbon  stock  (or 
biodiversity). When making management, pricing and financing decisions, any landowner will 
seek a balance between incentives on offer, feasibility of the solution, regulatory constraints 
and  own  beliefs  and  willingness  (Bijttebier  et  al.,  2018;  Barnes  et  al.,  2019).  Currently,  this 
balance  may  favour  optimising  nutrient  use,  reducing  waste,  adopting  renewable  energy 
technologies  and  reduced  tillage  practices  among  other.  But  not  very  often,  farmers  find  it 
favourable to restore peatlands, adopt regenerative soil management, agro-forestry and inter-
cropping, or actively build carbon stocks in mineral soils.     

Weak, occasional price signals is a good start 

27 http://dataservices.efi.int/casfor/downloads/kaipainen_et_al.pdf 

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Based on recent reviews (COWI et. al, 2021), it is found that there are only few and scattered 
carbon  farming  pilots  or  systems  in  place  that  offer  a  transparent,  farm  level  incentive  for 
climate  action  in  the  land  use  sector.  Together  with  the  limited  uptake  of  voluntary  carbon 
markets in the EU, the situation is that there are currently only opportunistic and low frequent 
pricing signals from the market. Such erratic signals is not the same as internalisation in each 
and every market transaction and financing decision of a farmer, and hence most farmers will 
maintain status quo unless subsidised or regulated.  

Eight specific problems  

This  overall  problem  has  been  unfolded  into  a  number  of  specific  immediate  problems  for 
ambitious, cost effective policy action in the land sector, for the purpose of this note: 

1.  European farmers maintain GHG emission intensive agricultural practices  

2.  Very low uptake of results-based carbon farming practices in the EU     

3.  The unmonetised carbon asset is depleting 

4.  Unallocated cost and risk of reversals 

5.  Forest owners are only weakly sensitive to market incentives.  

6.  Farmers respond to market signals but get no climate mitigation signal  

7.  Low investment levels and in particular for digital and sustainable land use practices 

and thus slow adoption.  

8.  Externalities are not or only partially monitored and quantified  

Each of the problems are briefly explained in the below sections. 

5.3.1. European 

farmers  maintain  GHG  emission 

intensive 

agricultural practices  

Net emissions from the land sector not improving lately 

For the period 1990 to 2016, the EU LULUCF net-sink increased slightly, however since appx 
2000  the  trend  has  been  a  slight  decrease  which  is  furthermore  expected  to  continue,  as 
covered  in  Topic  Notes  1  and  2.  Similarly,  for  the  agricultural  sector  (UNFCCC,  non-CO₂ 
emissions), only a limited decline is observed since 2000, and emissions have stagnated since 
201128. According to the latest inventory data published by the EEA, agriculture accounts for 
appx  10%  of  EU's  total  GHG  emissions,  making  mitigation  efforts  highly  valuable  to  future 
emission  reductions.29  By  one  estimate,  the  use  of  mitigation  technologies  and  climate-
focussed farming practices could reduce non-CO₂ emissions by up to 50-55 million MtCO2eq 
per  year  (Pérez  et  al.,  2016).  Furthermore,  at  a  price  of  EUR  100/tonne,  agriculture  has  a 
mitigation potential of 90 million MtCO₂eq by 2050 (EC, 2018). This situation testifies, that the 
beforementioned balance between various incentives have not at scale tipped in the favour of 
protecting  carbon sinks and stocks  in the  LULUCF sector,  and reducing GHG  emissions  in 
both LULUCF and agricultural sectors.  

28 Total emissions from agriculture decreased by 24% 1990-2016, JRC Ecampa 2016. 

29  EEA  (2018),  Annual  European  Union  greenhouse  gas  inventory  1990–2016  and  inventory  report  2018,  Submission  to  the 
UNFCCC Secretariat. Technical report No 5/2018, European Environment Agency. 

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Figure 30: Period 1990 to 2016, EU emissions from different sectors including LULUCF. Source: EEA (2018), Annual European 
Union greenhouse gas inventory 1990–2016 

Considering the  limitations  in reported  data,  and  the  widespread reliance  on  default factors 
and statistics for activity data, as covered in Topic Notes 2 (Soils) and 5 (GHG reporting), it is 
further clear that there is little farm level or forest plot evidence of quantifiable climate mitigation 
potential.    

Past improvements driven by subsidies, regulation and cost reductions 

Instead, peatlands remain drained, and intensive single cropping farming and forestry continue 
to dominate many landscapes, while regenerative or conservation farming practices for some 
time have seen slow adoption rates in the EU (Lahmar, 2007; Kertesz and Madarasz, 2014). 
For many years, farmers restoring wetlands, or applying practices to increase biodiversity and 
carbon  services  of  forests  have  had  to  rely  on  government  support  schemes  or  own 
benevolence to remain competitive in their markets while reducing emissions significantly. It 
should be noted that new and efficient technologies (Barnes et al., 2019), no tillage farming 
(Bijttebier et al., 2018) and nutrient efficient land use practices30, as well as many other positive 
and worthwhile initiatives have been adopted by European farmers over this period. Mostly, 
these technologies and initiatives have been adopted without the need for financial incentives, 
e.g. through pricing or conditionality on sale contracts or supplier agreements (Loevinsohn et 
al.,  2012).  For  example,  no  or  low  tillage has  been  adopted  widely  within EU  over the  past 
decade because of its combination of cost savings and mainly where farmers where aware of 
its  benefits.  However,  the  practices  have  mainly  been  adopted  by  larger  farms  and  with 
significant regional differences31. At the same time total production has increased, so the main 
decrease  is  in GHG  intensity  (and  not  total  GHG  emissions),    which  is  not  visible  from  the 
above graph.    

5.3.2. Very low uptake of result-based carbon farming practices in 

the EU  

How to translate targets to landowner incentives? 

A specific problem is that the EU and Member State policies do not transfer financial incentives 
directly to farm or forest owner level, and thus that there is an efficiency loss in interventions. 
The  obligations  and regulatory  incentives  (e.g.  no backsliding) from the LULUCF regulation 

30 Agri-environmental indicator - gross nitrogen balance - Statistics Explained (europa.eu) 

31 Agri-environmental indicator - tillage practices - Statistics Explained (europa.eu) 

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have not been translated into farm level obligations or incentives. Beyond the mostly voluntary 
support  schemes,  Rural  Development  Programme  measures,  and  considerations  of  carbon 
taxes  in  certain  Member  States,  farmers  climate  action  is  governed  by  Member  State  
implementation of cross-compliance rules and weak, product specific price incentives from the 
market. Farmers are not subject to any EU level incentives or regulation. Quantitative GHG 
targets or obligations are defined at Member State level, and so far with no LULUCF sector 
target beyond the no-debit rule.  

Carbon Farming can test that, but difficult to get started 

Carbon Farming is a result-based approach that aims to exactly transfer incentives to farm and 
forest levels by monetising specific and verified GHG mitigation action. Uptake of result-based 
carbon  farming  practices  in  the  EU  remains  scarce,  scattered  and  linked  to  dedicated 
individuals, foundations or pioneering companies. Landowners find that the costs of setting up, 
participating in and managing carbon farming are prohibitively high, and, without a change of 
mindset, support-schemes and infrastructure, these barriers will remain. For farmers subject 
to  extensive  regulation,  servicing  a  high  debt  and  earning  low  margins,  it  is  safer  and  less 
complicated to leave the initiative to high level policies that apply to all farmers at once, thus 
minimizing  competitive  disadvantages  that  might  otherwise  appear  from  solo  action.  As  a 
result,  any  farmer  or  forest  owner  wanting  to  monetise  and  earn  from  best  practice 
implementation of e.g. restoration of peatlands, afforestation or soil carbon enhancement, do 
not have access to financial rewards for their action.   

Voluntary Carbon Markets are an alternative 

In the absence of large-scale Carbon Farming in the EU, Voluntary carbon markets (VCM) are 
currently the only possibility to monetise climate mitigation in the European land sector. The 
VCMs (for land use) have generated exchanges of around 100 MtCO2e/yr globally since 2008, 
with  end-demand  in  carbon  offsets  around  one  third  that  amount  (Ecosystem  Marketplace, 
2020). These numbers are far below the 450 MtCO2e/yr of necessary sink by 2050 in the EU 
alone.  

…but not really so in the EU 

In addition, VCMs have only very recently become accessible to EU landowners through the 
development of national offset standards. Indeed, for debatable reasons, international offset 
standards  have  historically  been  reluctant  to  certify  emissions  reductions  on  EU  territory 
(Cevallos et al., 2019). As a result, the current supply of carbon offsets from agriculture and 
forestry projects in the EU is assessed at only 3 MtCO2e (Cevallos et al., 2019). 

5.3.3. The unmonetised carbon asset continues to deplete  

We are losing soil carbon 

The  fact  that  the  carbon  stock  or  biodiversity  on  a  given  plot  of  land  does  not  represent  a 
financial value (Paulson Institute, 2020) and is not safeguarded by regulations, means it risks 
not  being  considered  in  management  decisions  on  e.g.  land  use  intensity,  application  of 
regenerative agricultural practices, or no tillage (Pascual et al. 2014). As a result, land-based 
natural capital (carbon stocks) is being depleted in organic croplands and grasslands, and in 
forest  soils  as  such  (soil  organic  carbon  losses),  see  chart  below.  Since  1990,  the  rate  of 
carbon stock has continued to decline, although this decline has slowed down in recent years, 
in  particular  for  organic  forest  and  grassland  soils.  The  annual  rate  of  carbon  uptake  has 
stabilised for mineral cropland soils, whereas mineral soils overall build up carbon, although 
with low intensity per hectare, as the increment is small but covers a very large area.  

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Figure 31: Overview of carbon stock change factors for EU27 for the period 1990-2018 as reported by Member States and 
aggregated by EEA. Excludes Land Use Changes, and is based on CL-CL, GL-GL, and FL-FL land categories, split into mineral 
and organic soils. Own production, data downloaded from UNFCCC Data viewer, December 2020. 

The observed slowdown in the loss-rate of carbon in forestland mineral soils, cropland organic 
soils and grassland (organic and mineral soils) is a result of improvements in land management 
resulting from a combination of improved technology and knowhow, implementation of GAECs 
and cross-compliance of the Common Agricultural Policy for agricultural soils. Expectedly, it is 
also as a result of changes to data quality and modelling tools across Member States. Overall 
changes for both mineral and organic soils show a steady decrease without the same evening-
out, possibly due to the continued decrease in organic forestland soils. Data for soil carbon in 
mineral soils excluding land-use changes from 2013 to 2018 is presented in the table below. 
The reported changes are small but could potentially be attributed to lack of data from Member 
States on carbon stock changes.   

Table 16. Changes in soil carbon, excluding land-use changes. 

Forest mineral soils 

Cropland mineral soils 

Grassland mineral soils 

Organic soils 

Total 

Total LULUCF 

MtCO2e  MtCO2e  MtCO2e  MtCO2e  % of 
total 
decrease 
-2.8% 

-1.7 

-39 

-41 

-43 

-3 

1 

111 

70 

-255 

-11 

-3 

99 

45 

-10 

-3 

96 

41 

-324 

-263 

1.2 

-0.5 

-2.5 

-3.5 

61.3 

2.0% 

-0.8% 

-4.1% 

-5.7% 

100% 

% of 
2013 

0.5% 

-0.4% 

0.2% 

0.8% 

1.1% 

-18.9% 

Loss rate is slowing down, but still significant 

The plateau for the years 2016-2018, indicates a continued loss of carbon from organic soils, 
partially compensated by an uptake in mineral soils. The above graphs does not show the size 
of the carbon pools in the soils under the respective land categories, but other sources confirm 

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that the total carbon stock of organic soils are significantly larger than the mineral soils carbon 
stock.  The  loss  of  carbon  from  organic  soils,  is  mostly  from  managed  peatlands  subject  to 
drainage,  tillage  and  intensive  cropping  or  a  combination  of  these.  In  a  situation  with  few 
incentives, and low willingness, capacity or ability to change this, the carbon depletion can be 
expected to continue for organic soils as the stock is far from empty. Only by valuing soil carbon 
can economic decisions in the agricultural sector incorporate the many benefits of stable and 
high soil carbon levels, and consider the opportunity costs related to food security and rural 
livelihoods (Pascual et al., 2014).   

5.3.4. Unallocated cost and risk of reversals  

How to mitigate natural risks? 

In the context of climate change mitigation and anticipated future emission reduction targets 
for the LULUCF sector, the climate risks also translate into an additional liability for farmers or 
forest  owners.  The  risks  of  reversal  of  past  removals  or  sudden,  significant  increases  in 
emissions  also  pose  a  risk,  which  farmer  organisations,  NGOs  and  researchers  in  concert 
articulate as a barrier for climate action in the land sector. This perception and standpoint is 
only  one  of  several  possible  ways  to  articulate  these  risks,  but  nonetheless  drives  an 
implementation problem for further LULUCF action. 

It is a compliance risk that can be priced 

Depending on the choice of incentive instrument and the level of its application (landowner, 
industry, Member State), the risk will fall on different actors. In a carbon farming and carbon 
market scenario, landowners (the owner of the credit) will face this risk and have to find means 
to address it which will inevitably add costs on farmers. Such actions may include change of 
land  management  practices,  change  in  land  use,  or  retiring  certain  lands,  or  setting  up  of 
common buffer accounts and mechanisms for distributing risk. In a regulatory, policy driven 
scenario with national or sector specific climate targets, the climate risk will materialise as a 
target compliance risk, which will need to be managed as well.  

5.3.5. Forest  owners  show  limited  responsiveness  to  market 

incentives 

Low price elasticity  

Forest managers are only weakly sensitive to market incentives when it comes to management 
of forests and harvest, at least in Southern Europe. For example, in France, the price elasticity 
of coniferous wood supply has been assessed at 0.06 (Barkaoui, 2007), which means that a 
1% increase in wood price raises supply by only 0.06%. This is ten times lower than typical 
elasticity estimates in the agricultural sector (Arnade et al., 2002; Iqbal & Babcock, 2018; Kim 
& Moschini, 2018; Miao, 2013). 

This  indicates  that  in  many  countries,  institutional  or  organisational  aspects  may  be  more 
important  than  price.  A  substantial  share  of  forest  ownership  is  public  (around  40%,  FAO 
2007).  Although  public  forest  managers  are  increasingly  sensitive  to  price  incentives,  they 
likely balance them with other aspects demanded by local or national stakeholders such as the 
provision of energy wood or recreational services. Furthermore, a substantial share of forest 
holdings in Southern Europe are smaller than 15 ha and therefore often not actively managed, 
and management changes therefore inherently difficult to incentivise. 

While the production of wood shows limited sensitivity to market signals due to long rotation 
periods (in particular for hardwoods),  ownership structures  and  lack  of  active management, 
the specific end use of harvested wood is highly sensitive to price signals. Current policies in 
this respect are incomplete and possibly counterproductive as the bulk of the incentives they 
provide goes to energy use instead of material use (Baron et al., 2013). Unfortunately, there is 
lack of scientific literature on this topic (Grassi et al., 2019) (Smyth et al., 2014). 

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Tree planting linked to long term incentives 

Due  to  the  long  rotation  times,  tree  planting  is  rarely  determined  by  short  term  market 
incentives, such as price of wood. The decision of a private landowner to plant new or more 
forest (afforestation)  hinges  on market  perspectives and regulatory  incentives (Knoot  et  al., 
2015). Based on Australian experiences with afforestation schemes, Evans (2018) finds that 
in addition to market incentives tree planting is influenced by co-benefits, policy certainty and 
coherence, and social networks. In the same context, Bryan (2016) reports that land rents for 
competing land uses quite unsurprisingly plays a key role, and that regulation was needed to 
maximize the  carbon  and  biodiversity  benefits  of  otherwise unattractive land use  change  to 
forest.  However,  the  complexity  and  user  friendliness  of  requirements  of  such  regulation 
remains a key determinant of landowner willingness (Knoot et al., 2015). This underpins the 
impact of a lack of clear carbon pricing at landowner level. A carbon (and biodiversity) price 
for  sequestered  carbon  would  be  able  to  deliver  shorter  term  return  on  investment  (10-30 
years)  and  hence  drive  afforestation.  Favero  (2016)  finds  that  at  low  carbon  prices  natural 
forest  would  dominate  afforestation,  while  at  carbon  prices  above  200  €  /  t  CO2e,  more 
intensive production of wood would dominate management decisions. 

5.3.6. Farmers respond to price signals but there is no carbon signal 

Farmers strongly respond to market incentives. Price elasticity of crop supply is high (typically 
around  0.5)  which  drives  responsiveness  to  the  problem  of  a  missing  carbon  price  signal 
(Arnade et al., 2002; Iqbal & Babcock, 2018; Kim & Moschini, 2018; Miao, 2013). A recent and 
specific example is the fast development of rapeseed crops (mostly in France) in response to 
monetary  incentives following the  biofuel  directive  of  2003.  However,  on  the  EU  and global 
markets this price signal does not internalise the cost of GHG emissions or depletion of soil 
carbon stocks.  

Limited incentive signal from CAP 

Although recent  reforms  of  the  CAP  tended to  improve its  contribution to  climate mitigation 
(Baudrier  et  al.,  2015),  its  overall  impactshould  be  consinusly  analayesed  The  main  fiscal 
incentive in the CAP remains the mandatory green payments which have been designed to 
have limited transaction costs (Lugato et al., 2014; Bonvillain et al. 2020), but is not tied to the 
sale  and  price  of  commodities,  products  or  goods.  The  fiscal  incentive  have  been  found  to 
have an impact on less than 5% of European agricultural land (European Court of Auditors, 
2017). In particular, agroforestry represents only 4 % of the Ecological Focus Areas (EFAs) 
declared  for  green  payments.  The  EFA  option  which  was  most  often  selected  by  the  EU 
Member States is nitrogen-fixing crops (35–46%), which have uncertain impacts on soil carbon 
sequestration.  Catch  crops  also  represent  substantial  shares  (15–35%)  but  they  are  likely 
mandatory in most cases and as such not additional (Mosquera-Losada et al. 2018). 

AECMs do not provide a wide and common market incentive 

Agri-Environment  and  Climate  Measure  under  Pillar  II  of  the  CAP  (AECMs)  are  voluntary. 
Some  are  highly  additional  (e.g.  organic  farming  support)  but  some  suffer  from  important 
windfall effects (Chabe-Ferret & Subervie, 2013). Overall, their complexity and associated high 
transaction costs has resulted in a limited take-up from farmers (Bonvillain et al. 2020). Beyond 
AECMs,  other  pillar  2  measures  provide  incentives  to  increase  soil  carbon  storage.  For 
example, Measure 8.2 subsidizes up to 80% of the investment costs of agroforestry. However, 
this  measure  has  not  been  widely  offered  by  European  regions  (Mosquera-Losada  et  al. 
2018).Same line  of  argumentation,  and  limited  offering  of measures  applies  to  afforestation 
and  forest  management  (Alliance  Environnemnet,  2017),  and  complements  and  confirms  a 
picture of limited availability of fiscal incentives for actions with climate benefits.  

The  agricultural  soils  have  some  potential  to  be  incentivised  by  market  measures,  and  in 
particular  price  incentives  would  expectedly  be  very  effective.  In  France,  the  potential  for 

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additional removals from agricultural soils has been assessed at around 30 MtCO2e/yr., that is 
one third of emissions from the agricultural sector at national level (Pellerin et al., 2019).  

Wetlands/Peatland 

Farmer  responsiveness  to  price  signals  is  high  and  this  inherently  includes  wetland 
managers/owners. As peatlands exhibit very different yields, and these are closely to the water 
table, the below considerations must be used with due consideration. In any case, and different 
from arable farming on mineral soils, maintaining functional drains is an additional recurring 
operational  cost  on  the  balance  sheet  which  likely  fosters  regular  cost/benefits  analysis  by 
relevant land managers. 

High opportunity cost for peatland restoration 

In  an  EU  context  however,  the  CAP  currently  provides  counter-incentive  by  raising  the 
opportunity  cost  of  wetland/peatland  restoration  which  effectively  makes peatland  rewetting 
and restoration much less attractive even where yields are low. Wetland/peatland restoration 
entails foregoing  1st  pillar  CAP  subsidies,  at  least for  cropland,  as GAEC  standards  require 
avoiding  the  encroachment  of  unwanted  vegetation  (wet  grassland  can  be  managed  for 
productive  uses,  although  with  much  lower  productivity).  Therefore,  for  drained  wetland 
converted  to  cropland, the  CAP  creates an  opportunity  costs  of an  average  259 EUR/ha  in 
direct  payments,  in  addition  to  the  net  revenues  from  crop  sales.  With  emission  avoidance 
rates of 30 to 40 t CO2eq per hectare per year (Tiemeyer et al., 2020) and current Voluntary 
Carbon  Market  prices  of  around  4-6  EUR  per  tonne  for  land  use  credits  (Ecosystem 
Marketplace, 2020), it is not attractive to convert land eligible to support into wetland. 

5.3.7. Low investment levels in particular for digital and sustainable 

land use practices and thus slow adoption 

Not able to invest  

Given  a  combination  of  drivers  3,  4,  5  and  6,  many  farmers  find  themselves  stressed  by 
decreasing margins and difficult access to financial markets, resulting in limited ability to invest 
in technologies and take risk on new methods on markets,  unless having access to credits, 
support measures or government projects. While these measures are crucial for innovation in 
the  farming  sector,  they  are  often  also  associated  with  controls,  political  pressures  and 
preferences, and rather slow taking months or years from idea to realisation.  

Technology lock in    

As a consequence of this problem, and closely linked to problem 1, current and conventional 
technologies and practices are somewhat locked in. Adoption of hi-tech data generating farm 
equipment such as drones, sensors, mini-robots, and other IoT items are thus slow and add 
to  the  problem  of  inadequate  or  low  quality  data  on  emissions,  removals,  soils,  and  land 
cover/use in many parts of the EU. As data and more efficient new technologies are a core 
part  of  digital  farm,  their  slow  adoption  becomes  a  problem  for  developing  new  business 
models in farming that can focus on and deliver tangible and quantifiable climate mitigation 
benefits.     

5.3.8. Externalities are insufficiently monitored and quantified 

Need for monitoring of trends in ecosystem services in the landscape 

Externalities are not or only partially monitored and quantified at farm or forest levels, rendering 
result-based pricing to correct the market failure a problem. Data on carbon stocks and fluxes 
are not produced and shared by landowners, their industry organisations or the sector as such, 
and governments have not prioritised dedicated research programmes due to low perceived 

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political relevance until recently. Hence, it remains a problem that farm level data from the CAP 
(IACS, LPIS, self-reporting) and e.g. tractor-collected soil, weather, and productivity data are 
limited by data protection provisions and not available to researchers, authorities or the market. 
This  means  quantifying  and  understanding  the  current  situation,  establishing  a  baseline  for 
results-based mitigation pricing and introducing fair and realistic pricing mechanisms is difficult 
as data are incomplete and sometimes lacking.  

5.4. Concluding remarks 

The  concerted  impact  of  the  problems  is  structural  resistance  and  barriers  for  changes  in 
production  systems  imposed  and  incentivised  by  new  or  more  stringent  EU  (and  Member 
State) climate legislation, as market forces will counter and data remains scarce (as explored 
in Topic Notes 1, 2, and 5). This can be addressed through a combination of short- and long-
term policy action, and further research and development work to better understand the drivers 
and problems, i.e. through better and more complete datasets. 

5.4.1. Proposed goals for future policy work 

Five overarching goals to be met 

Based on the content already presented within this topic note, five proposed strategic goals 
have  been  chosen  to  consider  for  future  policy  work.  These  goals  have  been  selected  to 
address the  drivers  and problems  and lead to a situation  where farmers and forest  owners 
increasingly adopt practices that increase the carbon stock in products, soils and forests: 

 

In the short term before 2030, EU and Member State targets and policy architecture 
address the market failure at governance level by fully incorporating quantitative GHG 
targets at least at Member State level for the LULUCF sector.  

  Private  finance  can  blend  into  and  support  public  climate  mitigation  budgets, 
programmes and projects in the land use sector in the EU through e.g. investments 

  There  is  a  union-wide  price  on  biogenic  carbon  as  an  asset  and  ideally  ecosystem 

services in general 

 

 

Incentives and responsibilities for climate action are transferred to landowners, at first 
by  developing  and  testing  landowner  level  quantification  and  reporting  of  GHG  and 
sequestration data 

Increase market demand for low-emission agricultural products    

5.4.2. Future work to improve understanding and evidence of drivers 

and problems 

Structural drivers beyond scope of climate policy 

The  identified  problem  drivers  are  in  many  case  structural,  and  beyond  the  scope  of  EU 
Climate Policy (or most other land policies in Member States or EU) to deal with in the short to 
medium term before 2050. For these, a prudent approach is to consider them carefully when 
developing new policies and measures. This means that acting on the risks and opportunities 
inherent  in  the  problems  presented  above,  is  an  appropriate  scope  for  future  policy  and 
measure design. Suggested future work on structural issues and risks and opportunities are 
presented in turn below.  

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5.4.2.1.  Considering structural barriers 

The main structural barriers for increased investment, uptake of new technologies, and long 
term,  risk  management  capacity  in  relation  to  the  transition  to  a  climate  neutral  EU  and 
European agricultural and forest sectors are ownership structures, unvalued carbon assets in 
soils, and high costs and costs level of European agriculture.  

The ownership structures of each Member State are legacy based and tied to cultural heritage 
and economic macrolevel decisions in the past. It is hardly a matter for the Union to decide on, 
although the CAP over the years have led to structural changes in many regions towards bigger 
and  more  industrialised  farms.  The  ramification  of  the  different  ownership  structures  as 
concerns average farm size and ownership of land (most for forest land), is that carbon farming 
and forestry schemes as well as any other mechanism to transfer incentive and obligations to 
land owner level, must have practices, regulations, administrative and control procedures in 
place for major categories of different farms and forest holdings.  

Research into carbon assets in agriculture and forestry 

The lack of valuation of passive carbon assets, means that in some cases the business case 
for  losing  soil  carbon  will  be  attractive  for  the  landowner,  in  particular  where  the  carbon  is 
exported from the farm in products. A low-emission, biobased economy incentivising build-up 
of carbon in products and materials, where only emissions of GHGs to the atmosphere is priced 
and  regulated,  can  still  deplete  carbon  stocks  and  will  need  safeguards  to  protect  carbon 
stocks. The scientific, GHG reporting and forecasting aspects of soil carbon are explored in 
Topic Note 2. The note highlights how both data and reporting practices on soil carbon in the 
EU can and should improve in order to provide policy makers a comprehensive and reliable 
picture on the state of soil carbon. Unfortunately, it seems that current reporting practices are 
incomplete, inconsistent and not at a level where transfer of incentives or precise tracking at 
field level is realistic. Therefore, assigning value to carbon stocks will rely on further conceptual 
research and development, better data and a regulatory framework. While LULUCF policy can 
be  a  major  future  lever  for  protection  of  soil  carbon  stocks,  establishment  of  market-based 
price incentives to maintain carbon stocks is most likely a long-term goal. 

CAP support and result based incentives in the meantime 

Lastly,  the  high  cost  and  debt  levels  of  European  agriculture  remains  a  structural  barrier 
beyond  the  scope  of  the  LULUCF  regulation  and  future  policy  development.  Rather,  as 
explored further in Topic Note 8 on the synergies between the CAP and LULUCF regulation in 
the future, creating technical and data infrastructure for future integration of LULUCF targets 
and CAP incentives, may be a viable way forward in the medium term. Providing more and 
more targeted climate incentives and support schemes in the CAP, can allow farmers to invest 
for and plan the climate transition even with limited access to finance and low risk appetite. 

5.4.2.2.  Acting on risks and opportunities   

Several of the problems presented above also materialise as concrete risks and opportunities 
that can be acted upon in the shorter term before 2030. These relate to data and monitoring, 
supporting and nurturing carbon farming practices, and getting incentives right.  

More and better MRV and data on soil carbon 

High quality and resolution data and monitoring of carbon flows and stocks, and ecosystem 
services at farms and in managed forests in general, will be a crucial enabler for a future policy 
setup that can introduce clear price signals, farm level incentives and obligations, and hence 
create revenue streams from ecosystem services and allow valuation of carbon assets. These 

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aspects are also explored in Topic Notes 1 on Forest sink, 2 on Soil Carbon, and 5 on GHG 
reporting systems, as well as in Topic Note 4 on a long vision for the AFOLU sector as a major 
provider of carbon removals for a climate neutral EU by 2050. 

Remove barriers for Carbon Farming 

Carbon Farming with due consideration and eventually pricing of biodiversity results and co-
benefits  in  general  has  been  highlighted  as  a  possible  new  business  model  for  European 
farmers. The Farm to Fork Strategy proposes 27 specific legal action points within sustainable 
agriculture, one of which is a carbon farming initiative.32 The carbon farming practices rely on 
good carbon and ecosystem data, and hold potential to enable the transfer of incentives and 
obligations  to  land  owner  levels.  In  the  short  term,  peatland  restoration  and  rewetting, 
agroforestry and possibly afforestation appear to have the highest potential as pilots for testing 
the  approach.  When  done  right,  carbon  farming  can  help  address  all  the  listed  problems, 
however,  to  kick  start  its  adoption  a  range  of  practical  obstacles  should  be  removed.  High 
opportunity costs related to CAP eligibility for direct support, insufficient farm level data in many 
Member  States,  and  unclear  ownership  and  use  of  generated  mitigation  outcomes  (e.g. 
credits)  are  among  the  main  barriers,  which  could  be  resolved  by  dedicated  study  work, 
research programmes, standard setting for MRV, accounting and registry practices at EU level 
and knowledge sharing.    

Test Carbon Removal Certificates early 

The  current  weak  incentives  are  difficult  to  correct  completely  before  2030  but  will  need  a 
longer  term  vision  and  plan.  In  the  short  term,  correcting  for  the  restoration  of  wetlands  is 
already  seriously  considered  in  the  CAP  negotiations,  which  is  a  promising  start.  Allowing 
flexibility of trading certain carbon removals certificates between industry and energy sectors 
and  the  LULUCF  sector  under  a  controlled  test-schemes  before  2030  will  be  important  in 
paving  the  way  and  gathering  lessons  learned.  It  will  show  farmers  that  a  viable  system 
generating  a  revenue  stream  and  creating  a  price  incentive  can  be  established.  Ways  and 
means for increased flexibility is further explored in Topic Note 7 on LULUCF sector flexibility 
options in the future.     

32 https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:52020DC0381  

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6. Topic Note #4: Vision for 2050 

6.1. Introduction: The Land Sector in a Climate Neutral Europe 

With the 2050 target set to achieving net-zero greenhouse gas (GHG) emissions and with the 
2050 pathway taking shape with the endorsement of the 55% reduction target by the European 
Council  (European  Council  2020),  the  proposal  on  a  European  Climate  Law  (European 
Commission 2020) and the growing number of initiatives around the EU’s new flagship initiative 
– the European Green Deal – there is still little clarity on how climate economics will look for 
EU citizens in the year 2050 and beyond.  

There  is  equally  little  clarity  on  the  specific  policy  parameters  that  will  drive  these  climate 
economics. While this applies in principle to all economic sectors, it is particularly true for the 
land sector, which will serve an intrinsic triple climate purpose of (1) Reducing GHG emissions 
to the absolute minimum, (2) Producing biomass as biomaterial substitute and as feedstock to 
generate bioenergy, and (3) generating sufficient carbon sink capabilities and “land mitigation 
units” (LMUs).  

As the enhanced climate purpose interacts with other functions of the land – producing food, 
feed  and  fibre,  on  the  one  hand,  and  providing  crucial  ecosystem  services  (such  as  clean 
water, healthy soils, pollination, stable waterways, and so forth) on the other – careful policy 
calibration will be needed. There are two significant issues at play here: 

1.  In  its  strategic  long-term  vision,  the  European  Commission  notes  that  bio-energy 
consumption may increase by up to 80% from today’s levels (European Commission 
2018). This puts additional pressure on, e.g. EU forests to deliver significant biomass 
to support the bioeconomy and run the risk of deteriorating in the long-term. 

2.  Emissions from agricultural production, for their part, may go down dramatically thanks 
to  smart  technologies  (precision  farming,  manure  treatment,  etc.),  diet  changes  and 
more. However, residual emissions from the sector will be generated beyond 2050 and 
require  compensation  from  within  the  agriculture,  forestry  and  land-use  sector 
(AFOLU). 

96 

Current situation (2021)•Trajectory points to a decreasing carbon sink exasperated by growing bioenergy appetite•Emission limitations for the land sector apply to governments only, not forest holders or farmers•Few incentivesforforest holders and farmers to enhance sink capacityExpected situation (2050)•Healthy growth in the land carbon sinkcapacityto generate some 500 MtCO2eq. in removals each year•Emission limitation (zero net target) at operator level (forest holders and farmers)•Crediting mechanism available at scale to generate LMUs (removals only)Problem DriversReduced afforestationDecrease in living gainsincreasing uptake in removal activities for forest-based bioenergy production ProblemsGrowingappetiteforbioenergyLack of available sites for afforestationLack of motivation for land holders to increase carbon sink•Net zero targets directly for landholders Options•LMU certification mechanism accessible for land holders (from 2050 removals only)•Additionalityandpermanencenolongeradequatecategories for LMU certification•Creditmarkets and transactions will be organized in a decentralized form (over the counter), even though governments may become important market participants 
 
 
 
 REVIEWING THE CONTRIBUTION OF THE LAND USE, LAND-USE CHANGE AND FORESTRY 
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What these issues imply, is that the forestry sector as well as the farming sector will need to 
reduce  or  even  bring  their  emissions  to  zero,  while  at  the  same  time  boosting  carbon  sink 
capacities. This task implies that drained peatlands and other wetlands need to be rewetted at 
a large-scale; that degraded forest lands are restored and suitable non-forest lands afforested 
(beyond the need to generate biomass stock); and that farmers and foresters take up agro-
forestry and carbon farming practices at scale. 

Overall,  the  AFOLU  sector  will  become  increasingly  important,  while  the  sectors  of  historic 
climate interest – energy sourcing and industrial production – will have faded in significance. 
In a world that produces 100% of its electricity and heat as well as most of its mobility and 
industrial production from renewable sources, the climate policy tools will shift their attention 
to  (i)  boosting  biomass production,  and (ii)  providing  a  robust  system  that  delivers  negative 
emissions where and when they are needed. 

6.2. Trends and Drivers 

If unchecked, current trends of soil degradation, reduced afforestation activities, a decrease in 
living gains across the forest stock, and an increasing uptake in removal activities for forest-
based bioenergy production will exacerbate the diminishing sink capacity of the land sector 
over the next 30 years.  

Policies and measures to stop and revert the trend are highly important, but will need to be 
supported as well by technological advances across the spectrum of Nature-based solutions 
(NbS). 

6.3. Emissions and removal ranges for the land use sector 

The  European  Commission  (2018)  A  Clean  Planet  for  all:  A  European  long-term  strategic 
vision for a prosperous, modern, competitive and climate neutral economy assumes that the 
LULUCF sector will have -236 Mt CO2 of emissions in 2050 in the Baseline33. As one land use 
example, forest lands, identified as the source of a diminishing EU sink in TN1, were modelled 
to have -321.8 Mt CO2 emissions in 2020, -319.7 Mt CO2 in 2030 and - 292.9 Mt CO2 in 2050, 
an increase of 28.9 Mt CO2. This change is “due to the ageing of the forest and an increasing 
mobilisation of forest biomass, mainly for material use (industrial roundwood, sawnwood, wood 
panels, paper, paperboard)”. This emission time series is shown in Figure 32. 

Among the various scenarios that would go beyond the Baseline and that would reach between 
85% and virtually 100% reduction (climate neutrality) by 2050, the 1.5LIFE scenario assumes 
the adoption of a more circular economy by EU business and lifestyle changes and consumer 
choices  by  EU  citizens  that  demonstrate  an  increased  climate  awareness  and  are  more 
beneficial  for  the  climate.  These  changes  include  less  carbon  intensive  diets,  the  sharing 
economy in transport, limiting growth in air transport demand and more rational use of energy 
demand for heating and cooling. The details of emissions as forecasted in the baseline and 
1.5LIFE scenarios are shown in Table 17. It is expected that the LULUCF sector will need to 
deliver an additional 228 Mt CO2 / yr sequestration by 2050. 

33 From European Commission (2018) page 46: “a baseline scenario (referred to below as “the Baseline”) was developed to reflect 
the  current  EU  decarbonisation  trajectory  based  largely  on  agreed  EU  policies,  or  policies  that  have  been  proposed  by  the 
Commission but are still under discussion in the European Parliament and Council.” 

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Figure 32: Evolution of emissions and removals from land use, land use change and forestry due to existing policies or policies 
under discussion (aka the “Baseline”) Source: European Commission (2018), figure 13 

Table 17:Details of emissions in forecasted baseline and 1.5LIFE scenarios 
Source: European Commission (2018), table 9 page 198 

Baseline 

1.5LIFE 

[Mt CO2] 

[Mt CO2] 

772 

1,442 

2,214 

-236 

1,978 

123 

366 

489 

-464 

25 

ETS GHGs emissions 

Non-ETS GHG emissions 

Total GHG excl. LULUCF 

LULUCF 

Total GHG incl. LULUCF 

Details by sector 

CO2 Emissions 

1,605 

202 

Residential 

Transport 

Tertiary 

Industry 

Power 

Non-CO2 Emissions 

Agriculture 

Waste 

Industry 

130 

667 

78 

484 

246 

610 

404 

90 

116 

Total GHG excl. LULUCF 

2,215 

98 

11 

95 

19 

53 

24 

286 

230 

29 

27 

488 

 
 
 
 
  
  
 
 
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In the European Commission (2018) document, the authors estimated that over 160 Mt CO2 
of enhanced emission reductions could be generated in the LULUCF sector at a range of CO2 
prices (Figure 33). This estimate does not include potential emission reductions from wetlands.  

Error! Reference source not found. 

Figure 33: The estimated potential for enhancing the LULUCF sink at different carbon prices. Source: European Commission 
(2018), figure 86 page 18 

However, the 160 Mt CO2 / yr is less than the required additional 228 Mt CO2 / yr required in 
the 1.5LIFE scenario. An additional 68 Mt CO2 / yr will be needed and they are assumed to 
come from the following: 

“the implementation of agricultural practices aiming at improving the soil carbon 
sequestration makes possible for EU cropland to turn, in this scenario, from net 
carbon source to net carbon sink by 2050, with a LULUCF sink in EU increasing to 
close to 400 MtCO2.” 
Source: European Commission (2018) page. 185. 

and 

“changes in consumer choice and circular economy, the combination of reduced 
energy consumption and increased availability of land allows for a potential larger 
role for afforestation and land restoration, reducing significantly the need for the 
deployment of biomass with CCS to achieve net zero GHG emissions.” 
Source: European Commission (2018) page. 197. 

In their National Forest Actions Plans (NFAPs), Member States submitted the forecasted level 
of emissions from forest land remaining forest land during the 2030 – 2035 period. For the EU, 
the total was -306.6 Mt CO2 / yr. This value is more positive (i.e. less sequestration) than the 
value  assumed  in  the  European  Commission  (2018)  document  (-319.7  Mt  CO2  /  yr).  This 
unexpected  reduction  in  the  LULUCF  sink  will  mean  that  even  more  enhancement  of  the 
LULUCF sink will be required to meet the 1.5LIFE scenario and further highlights the need to 
reverse the trend in the LULUCF sink as soon as possible. 

6.3.1. Technological advances and possibilities 

Technological advances are under way and will be fully rolled out and refined over the next 
decades to benefit sink enhancement activities across the board. This applies, first, to novel 
approaches in climate smart forestry, climate smart agriculture, and carbon farming, including 
with respect to agroforestry, soil enhancement on mineral soils, sustainable farming on organic 
(peat) soils, and sustainable farming in coastal wetlands (kelp farming).  

This  applies,  second,  to  data  gathering  and  management,  with  improved  accessibility  of 
satellite  imaging  and  other  remote-sensing  technologies,  artificial  intelligence  to  inform  sink 
enhancement  strategies  at  the  EU,  MS  and  the  local  level,  and  ready-to-use  monitoring 
capabilities available to farmers, forest holders and other landowners at no or minimal cost. 
For a line-up of new technologies tested in 2021 see Klein 2021. 

Third, this applies to new financial support, investment and other incentive products for smart, 
scaled-up interventions, reaching farmers and forest holders in all MS, offering simple terms 
of participation and substantial benefits.  

6.4. Climate  governance  and  policy  design 

for  climate 

neutrality in 2050 

6.5. Policy shift 

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Today’s flagship climate policies, the European Emissions Trading System (EU ETS), on the 
one  hand,  and  the  framework  defined  by  the  Effort  Sharing  Regulation  (ESR)  and  the 
Regulation on the inclusion of GHG emissions and removals from land use, land use change 
and forestry (LULUCF Regulation), on the other hand, are forcing GHG continuous emission 
limitations and/or reductions on economic operators (EU ETS) or EU Member States (ESR, 
LULUCF Regulation).  

In 2050, these policies will have lost much of their relevance for most sectors and technologies 
as these will have achieve zero-emissions production some time before.  Instead, the 2050 
policy focus will be on securing net-zero compliance, in the first instance, and the subsequent 
generation  of  negative  emissions.  In  addition,  some  protections  against  backsliding  will  be 
necessary to prevent a default on the target.  

6.6. Shifting scopes 

It is not yet settled whether and for how long today’s climate policies and emissions trading 
tools  will  remain  in  place  in  2050  and,  if  so,  in  what  form.  The  emission  levels  set  for  any 
sectors  in any case would be much more stringent than they are today. The decarbonisation 
of the power sector will have mostly taken place; for example, the Clean Planet Report (Figure 
11) recommends that the power sector reduces its emissions from 1000 Mt CO2e in 2020 to 
204 Mt CO2e in 2050. But those installations and operations that continue to generate GHG 
emissions, such as steel, and cement will also be required to reduce their industrial emissions 
(from 863 kt CO2e in 2020 to 471 kt CO2e in 2050 – Clean Planet Report). 

At  the  same  time,  emissions  from  across  sectors  –  including  energy  and  industry  but  also 
agriculture – will not completely disappear. Besides future technological solutions, it will fall 
primarily on the land sector to neutralize these emissions through stable, if not growing, sink 
activities.   

6.6.1. Sector split 

A possible scenario in this respect – to boost the land sector’s sink capacities – is the redrawing 
of boundaries of a policy instrument, that combines most sectors of what today is covered by 
the EU ETS and the ESR, and the creation of a new AFOLU framework. The ESR framework, 
then, could largely disappear, though it might be needed in parallel to cover emissions from 
small-scale operators only. This new AFOLU regime might, on the other hand, incorporate the 
scope of both today’s LULUCF Regulation as well as non-CO2 agricultural emissions.  

6.6.1.1.  Shift of responsibilities 

Moving beyond the ESR and the LULUCF Regulation would ideally go hand-in-hand with a 
transfer of responsibility from the MS to the operator-level. There would no longer be targets 
for MS – except concerning operations that are deemed too small to be covered by the AFOLU 
framework  – but instead there would be strict targets at installation/operation level. It would, 
thus, work similar to today’s EU ETS and establish monitoring and compliance obligations for 
economic operators.  

Addressing the economic operators follows considerations of effectiveness. Defining (as the 
ESR  and  the  LULUCF  Regulation  do  today)  abstract  targets  at  government-level,  without 
implicating the operational level, comes with obvious limitations as to what real change can be 
catalysed  on  the  ground.  Conversely,  top-down  target  setting  will  have  to  be  followed  by 
domestic interventions at the farm/forest operator-level to become relevant. This is particularly 
true when considering the need to boost carbon sinks and have economic operators engage 
in creating negative emissions. 

Another motive for addressing economic operators directly relates to climate justice. The more 
sectors, installations and operators from other sectors are under direct obligations to reduce 

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their carbon footprint, the less it is defendable to carve out a general exception for the AFOLU 
sectors as such. Operators in these sectors will have to carry direct obligations as do those 
from all other sectors.34 

6.7. Targets and incentives 

Several approaches to target-setting and incentive mechanisms are prima facie feasible. 

6.7.1. Targets 

The AFOLU framework for the year 2050, just as the EU ETS does today, could start from the 
polluter-pays principle where every operator has to account for their full emissions footprint. 
This would translate into a net-zero (climate-neutral) target at source, i.e. for each installation 
or operation covered by the rules. Operators are allowed to offset their emissions to the extent 
that they have taken all the necessary efforts to reduce their emissions footprint within their 
operations and that they are generating no more than the residual (necessary) emissions. They 
would be responsible for sourcing their LMUs on the market. 

The alternative would be to involve MS with an active role. Operators would be issued a limited 
number of allowances to reflect those residual emissions. As long as they do not exceed them, 
no offsetting needs to arise at their level. By contrast, the net-zero target would be set at MS 
level in this case, and MS would need to plan for and invest in LMUs to offset the allowances 
granted to operators in recognition of the residual emissions burden.  

While this alternative option has some advantages – control and curatorial power over supply, 
bargaining power in terms of offset price, and generally economies of scale – it also comes 
with  risks.  Governments  may  not  be  better  than  the  market  to  organize  offset  supply; 
procurement may be slow and inflexible; operators by contrast might lack incentives to bring 
emissions to zero. At a general level, it would seem perhaps inefficient and arbitrary to both 
rely on market forces (emissions trading) and at the same time to have the government control 
a large segment therein.  

The  probably  stronger  case  can  be  made  for  a  decentralized,  operator-focused  approach 
whereby  each  operator  (above  a  certain  production  threshold)  would  have  to  source  LMUs 
directly  on  the  market  for  any  positive  emissions  they  are  responsible  for.  This  said,  the 
government may still retain an important, if limited in size, purchasing role to compensate for 
residual emissions from small-scale operators that fall below the threshold for direct coverage. 

Another target-specific question concerns the idea of negative targets. The AFOLU framework, 
one could argue, should stipulate specific sequestration targets for farmers or forest holders. 
As the European Commission estimates (though the figures shown above in section 6.3 argue 
for  some caution), the  new  AFOLU  sector  could become “rapidly  climate-neutral  by  around 
2035 in a cost-effective manner, and subsequently generate more removals than greenhouse 
gas emissions” (European Commission 2020a). Confining the AFOLU targets, then, to nothing 
beyond a net-zero benchmark could be seen as lacking in overall ambition. However, setting 
negative targets at operator-level would be technically difficult, and the very ambition behind 
any  specific  targets/benchmarks  would  almost  certainly  suffer  (as  these  would  likely  be 
conservatively  put).  What  is  more,  negative  targets  could  be  difficult  to  reconcile  with  the 

34 Cf. the jurisprudence of the European Court of Justice. In Arcelor (C-127/07) the court opined on the risk of social and financial 
discrimination. Relying on the precautionary principle and the polluter-pays principle, the Court clarified that the Community legislator 
“has a broad discretion where its actions involve political, economic and social choices and where it is called on to undertake complex 
assessments and evaluations” (para. 57). As long as the specific choice is based on “objective criteria appropriate to the aim pursued by 
the legislation in question” (para. 58), the legislation passes the test of judicial control. While the judgement permits that specific sectors 
are treated differently from others, it does not allow continuous privileges for one specific sector regardless of changing circumstances. 

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principles of ‘do no harm’ and ‘polluter pays’, which are fundamental underpinnings of climate 
policymaking (European Court of Justice 2008).  

With this in mind, negative emissions should not be imposed through targets (negative targets) 
but rather incentivized through flexibility instruments. That the overall AFOLU sector generates 
more removals than emissions says little about the level of ambition at operator-level, namely 
for those that generate more emissions than removals. 

6.7.1.1.  Incentives 

The AFOLU framework would squarely function as a cap-and-trade system, with each operator 
obliged  to  purchase  removal  allowances  to  offset  all  their  emissions.  Those  operators  that 
generate negative emissions can offset their own (positive) emissions or trade them to other 
operators  that  face  offsetting  obligations.  They  might  even  be  able  to  trade  their  negative 
emissions – LMUs – into the EU ETS (on the difficulties, however, cf. Rickels et al. 2020) or 
any alternative policy tool still in force by 2050.  

The issuance of tradable LMUs will require that operators/landholders have their sink activities 
certified. Establishing an effective and efficient LMU certification mechanism is a key challenge 
of the future. There are ample reasons not to wait until 2050 to install such a mechanism. By 
2050,  it  is  assumed  that  such  a  mechanism  has  already  been  established  and  operates 
smoothly.  

Participation and Scale 

While  carbon  crediting  has  proved  successful  across  several  project  types  –  including 
afforestation/reforestation, soil carbon enhancement, and peatland rewetting – it is noted that 
almost all interventions have been modest in scale. The exception is the UK Woodland Code, 
an  initiative  to  provide  results-based  finance  for  afforestation  and  reforestation  measures, 
which has already given rise to more than 3 million removal units (COWI et al. 2021). 

Creating a functional monitoring and certification process will be a key priority on the pathway 
to 2050. The growing number of (mostly voluntary) initiatives and crediting mechanisms – from 
Europe (Cevallos et al. 2019), North America (CAR 2020), Australia and elsewhere – offer a 
useful point of departure to build on and/or learn from. It is important to note, though, that none 
of the pilots and global precedents comes close to the scale of LMU generation needed by 
2050. The European Commission has recently commissioned its own study on the potential 
and  the  feasibility  of  implementation  concerning  carbon  farming  activities,  namely  peatland 
restoration, agroforestry, enhancement of soil organic carbon in mineral soils and grassland 
enhancement (COWI et al. 2021). The certification mechanism needs to be built in a way that 
could absorb the higher end carbon estimates reflected here and in similar assessments on 
forest carbon potential (cf. Nabuurs et al. 2017; Grassi et al. 2019). 

Table 18:  Annual potential for additional sink activities per category (figures extracted from Nabuurs et al. 2017 and COWI 
2021). Most peatland restoration (in italics) will have to happen or initiated prior to 2050 (emission reductions). 

Activity 

Annual potential (in MtCO2eq.) (additional 
to baseline emissions/sinks) 

Improved  forest  management  (full-grown  coppice, 
enhanced  productivity  and  management,  reduced 
disturbances and drainage) 

129 

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Forest area expansion 

Forest reserves 

Agroforestry 

SOC enhancement (mineral soils) 

Grassland management 

Peatland restoration 

Total 

64 

64 

8-235 

9-58 

4,000-8000 

2,000 

6,274 – 10,550 

There  is  a  high  probability  that  technological  challenges  for  tracing  GHG  fluxes  at  minimal 
effort and at scale will be overcome over the next decades, if not years. It is less clear whether 
the  societal  challenges  –  ensuring  participation  of  most,  if  not  all,  landholders  –  will  be 
overcome  simultaneously.  Financial  incentives  can  go  a  long  way  to  facilitate  this,  but  still 
require uptake from farmers and forest holders. Outreach and communication policies will be 
as important as the establishment of support facilities or firms – similar in design and function 
to energy service companies (ESCOs) – that manage certification and carbon asset generation 
activities for landholders. 

Scope 

Between now and 2050, the focus for the LMU certification mechanism will shift. Notably, by 
(long before, even) 2050, LMUs will no longer be issued for emission reductions. All emissions 
except residual ones (i.e., those for which the abatement cannot be done with reasonable cost 
and  means)  will  have  to  be  mitigated  at  operator/operation-level  (without  offsetting  options 
from emissions trading sources).  

Next, the mechanism will define the list of eligible sink enhancement activities and benchmarks 
for their use. Net carbon gains are not the only criteria. Biodiversity and resilience objectives 
will dictate which activities are admissible in which ecosystems.  

Then,  the  mechanism  could  also  prioritize  specific  project  types,  e.g.  landscape restoration 
over  non-restorative  afforestation.  Prioritization  in  this  case  could  be  expressed  through  a 
specific credit label. Those labels, in turn, may be needed for specific offsetting purposes (e.g., 
aviation or shipping operators must use landscape / seascape restoration credits). 

Additionality 

Additionality – one of the core principles shaping emissions trading or, more precisely, carbon 
offset trading prior to 2050, from Kyoto’s clean development mechanism to Article 6.4 of the 
Paris Agreement – will no longer have a significant role to play. This principle sought to ensure 
that  no  fictitious  carbon  units,  i.e.  units  that  do  not  represent  ‘real’  emission  reductions, 
compromise the carbon markets and result in an overall increase of emissions (Michaelowa et 
al. 2019). It was used to fend off ‘hot air’ projections and accounting operations that created 
credits where there was otherwise no underlying emission reduction.  

This  function  has  become  redundant  in  the  world  of  2050,  when  all  sink  projects  will  occur 
within  an  ambitiously  capped  environment,  i.e.,  net-zero  emissions.  Instead,  any  (stable) 
sequestration gains in the sense of actual stock enhancement from eligible activities will be 
deemed,  as  a  rule,  certifiable  and  marketable  regardless  of  whether  carbon  finance  was 
instrumental in implementation. The capacity to enhance carbon sinks will, thus, be treated as 
a valuable and valorizable asset. 

Permanence and Longevity 

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The stability of the carbon sink and the GHG benefits achieved will be a systematic requirement 
for the net-zero economy. However, at the operator (project) level, permanence will have lost 
its significance as a crediting requirement. Any stable GHG benefit generated by an eligible 
activity and duly verified can be certified without the need to show that the benefits remain in 
place for 20, 50, 100 years or longer.  

This is because any subsequent stock loss (natural or human-made) will be accounted for as 
a liability for the landholder. While natural disturbances may temporarily exempt landholders 
from  the  net-zero  obligation  at  the  operator-level,  this  does  not  apply  for  areas  that  have 
previously  benefited  from  carbon  crediting  which  –  in  other  words  –  carry  a  permanence 
liability. Human-induced carbon losses will need to be accounted for by all operators whether 
crediting  has  happened  in  the  past  or  not.  Small-scale  operators  may  be  exempt  from 
monitoring and compliance obligations, though they, too, incur a permanence liability in the 
case of a carbon crediting legacy on their land. 

To cover the liability, operators may pool their risks and invest in a credit buffer or purchase 
insurance that would pay for future liabilities from carbon losses. The regulator may consider 
making risk pools or insurance policies mandatory. 

When it comes to project longevity, there will be no need for a minimum threshold (beyond a 
minimal timeframe of somewhere between 2 and 5 years to ensure that verification of stable 
carbon pools can be reliably made) or, indeed, a crediting ceiling. As long as sequestration 
continues  and  is  verifiable,  certification  of  GHG  benefits  and  credit  issuance  will  remain 
available for any project in principle. This said, the regulator should define crediting renewable 
timeframes (e.g. every ten years) and should retain the option to reject the renewal (perhaps 
after a project has been renewed already once) on the ground of policy priorities or changes 
(e.g., to boost certain project activities and/or new entries of operators). 

6.7.2. Markets and Transactions 

Climate  neutrality  will  be  a  minimum  target,  with  incentives  set  and  used  to  frequently 
overachieve  the  target.  This  implies  strict  compliance  and  enforcement  of  operator-level 
neutrality targets, and the creation of publicly or privately held removal buffers to compensate 
for any shortfalls. 

There is no need to strictly regulate the emissions trading market beyond today’s regulation of 
financial instruments (MiFID). Transactions will be realized via exchanges and over the counter 
(OTC). Prices will float according to demand and supply.  

This said, MS governments will control substantial market shares – a large portion of carbon 
sink areas are public lands across MS – and may have a bearing on pricing, too. In the event 
that they issue allowances for market participants in the EU ETS or any alternative tool (see 
above, section 6.7.1.1), they will need to net those issuances with negative emissions procured 
elsewhere. Then, if the ESR survives to cover all emissions from small-scale operations, again, 
there will be the need for MS governments to offset those debits. Finally, they may take on the 
role of building a removal buffer to compensate for any shortfalls. 

To  control  sufficient  supply  at  cost-efficient  prices,  MS  authorities may  hold  regular  reverse 
auctions in which farmers and other landowners/-holders bid for a price at which they are willing 
to sell LMUs. These auctions could define price floors – farmers and forest holders can sell at 
the auction price but may decide not to – which adds long-term predictability to the market. 

6.8. Enablers: The road to 2050 

The EU’s land sector in 2050 will need to compensate for emissions in the range of 500 Mt 
CO2 annually. That sink capacity will not be generated over night. Instead, it takes an ambitious 
agenda to halt and reverse today’s trend of diminishing carbon sinks and to build a large-scale, 
resilient LMU infrastructure.  

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Several touchstones on the road toward 2050 need to be defined and met, including: 

  A  complete  or  close  to  complete  reduction  in  emissions,  notably  of  drained  organic 
soils. While the trading with LMUs between 2030 and 2050 will be the main driver of 
sink  activities,  complementary  regulatory,  command-and-control-based  may  be 
needed along the road towards 2050. As Tanneberger et al. have shown in their case 
study for Germany (Tanneberger et al. 2021), achieving net-zero emissions by 2050 
implies strict bans of drainage of agricultural and forestry soils and the raising of water 
tables across drained wetlands, with 2030 and 2040 representing important milestones. 
There  is  a  risk  that  these  milestones  will  be  missed  in  the  absence  of  regulatory 
intervention. 

  The  projections  for  the  carbon  sink  show  that  in  many  land  use  types,  the  sink  is 
diminishing.  In  particular,  the  projections  for  forestry  show  that  there  will  be  a  slight 
decrease in the sink to 2050 at the current state of management and capacity. This is 
mainly  due  to  the  maturing  of  EU  forests  and  the  increased  mobilisation  of  forest 
biomass, mainly for material use. Without increasing the capacity for forests to act as 
a sink, the road to net-zero emissions by 2050 will be a dead end.  

  The Common Agricultural Policy (CAP) needs to complement the results-based finance 
mechanism  through  activity-focused  command-and-control  as  well  as  incentive 
measures. Healthy growth targets for landscape restoration – in particular of organic 
soils – and sustainable, net-zero farming practices (including on wetted soils) must be 
inscribed in the CAP to help advance the carbon sink goals. The CAP infrastructure will 
also  be  important  for  the  roll-out  of  the  LMU  certification  mechanism  (to  include 
emissions reductions and removals before 2050 and removals only from 2050). The 
capacity for the CAP in farmer support and outreach is also necessary for uptake of 
financial incentives presented within a certification mechanism.  

  Research and development – important drivers for the net zero transformation across 
sectors – will be instrumental for the success of the land sector to grow and retain its 
sink  capacity  while  assuming  and  enhancing  all  its  essential  ecosystem  services 
beyond climate mitigation. While many climate-smart technologies are available even 
today, much innovation will have to be generated in the future ensuring a maximum of 
stable-ecosystem-based sequestration, highest-performing biodiversity gains and, last 
but not least, resilience of the EU’s land sector to a changing climate. 

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SECTOR TO THE GREEN DEAL 

6.9. References 

CAR 2020: Climate Action Reserve – Soil Enrichment Protocol (version 1.0, 2020), available 
at https://www.climateactionreserve.org/how/protocols/soil-enrichment/ 

COWI et al. (2021): COWI, Ecologic Institute and IEEP (2021) Technical Guidance Handbook 
- setting up and implementing result-based carbon farming mechanisms in the EU Report to 
the European Commission, DG Climate Action, under Contract No. CLIMA/C.3/ETU/2018/007. 
COWI, Kongens Lyngby. 

European Court of Justice 2008: Case C-127/07 – Société Arcelor, Reports 2008 I-09895, at 
https://curia.europa.eu/juris/liste.jsf?language=en&num=C-127/07 

Klein  2021:  GreenBiz  –  5  cool  measurement  tools  attempting  to  quantify  regenerative 
agriculture, 
https://www.greenbiz.com/article/5-cool-measurement-tools-attempting-
at 
quantify-regenerative-agriculture 

Nabuurs et al. 2017: Nabuurs G-J, Delacote P, Ellison D, Hanewinkel M, Hetemäki L, Lindner 
M. By 2050 the Mitigation Effects of EU Forests Could Nearly Double through Climate Smart 
Forestry. Forests. 2017; 8(12):484. https://doi.org/10.3390/f8120484 

Grassi et al. 2019: Grassi, G., Cescatti, A., Matthews, R. et al. On the realistic contribution of 
European  forests  to  reach  climate  objectives. Carbon  Balance  Manage 14, 8  (2019). 
https://doi.org/10.1186/s13021-019-0123-y 

Michaelowa et al . 2019: Axel Michaelowa, Lukas Hermwille, Wolfgang Obergassel & Sonja 
Butzengeiger (2019) Additionality  revisited:  guarding  the  integrity  of  market  mechanisms 
under 
Policy, 19:10,1211-
1224, DOI: 10.1080/14693062.2019.1628695 

Agreement, Climate 

Paris 

the 

Rickels et al.2020: Wilfried Rickels, Alexander Proelß, Oliver Geden, Julian Burhenne, Mathias 
Fridahl,  Kiel  Working  Paper:  The  Future  of  (Negative)  Emissions  Trading  in  the  European 
Union 
https://www.ifw-kiel.de/fileadmin/Dateiverwaltung/IfW-
Publications/Wilfried_Rickels/The_Future_of__Negative__Emissions_Trading_in_the_Europ
ean_Union/KWP_2164.pdf 

(September 

2020), 

at 

Tanneberger et al. 2021 : Towards net zero CO2 in 2050: An emission reduction pathway for 
organic  soils  in  Germany,  Mires  and  Peat,  Volume  27  (2021),  Article  05,  17  pp., 
http://www.mires-and-peat.net/  

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SECTOR TO THE GREEN DEAL 

7. Topic Note #5: Improve Reporting 

no 

Title 

Area of action (theme) 

Short Background 

5 

Improving reporting 
MRV 

LULUCF  reporting  in  the  EU  is  part  of  the  Member  States'  and  the  Union's 
reporting  under  UNFCCC.  Even  though  the  current  reporting  framework  is 
constantly  improving  and  adapting,  there  are  many  gaps  which  have  an 
unquantified  impact  on  overall  outcomes.  The  LULUCF  reporting  is  highly 
dependent on field data, a lot of which is collected autonomously by Member 
States with limited EU coordination. The result is data which is heterogeneous 
and  incomplete.  This  topic  note  describes  the  current  state  of  reporting  and 
points  out  problem  drivers  such  as  resources,  lack  of  incentives  for  better 
reporting  and  lack  of  direct  connection  between  reporting  and  the  policy  and 
economic sectors. The topic note defines a set of goals as a first step in the plan 
to  overcome  the  defined  problems.  The  goals  cover proper  monitoring  of  the 
contribution of all key activities in the inventories, simplification of the reporting, 
and increasing the visibility of the sector's contribution. Further, addressing the 
drivers could eliminate other reporting gaps in the accuracy of soil carbon and 
improve  strategies  regarding  the  necessity  to  increase  the  granularity  of  the 
reported data.  

107 

 
 
 
 
 
 
 
 
 
 
 
 
 
108 

Problem Drivers GoalsProblemsIdeas and solutionsCurrent situation and trajectoryCompilation of UNFCCC-compliant MS reportingComplex assessment structureExpected situationMore modern technologyinvolvementMore EU level solutions/GP•Clear legal impulseEnablersSchematic diagram of the topic note 5 Improve reporting systemThe lack of data, timeseries/data trials, and funding means that key sources of emission and removals are not monitored by many MSsThere is insufficient granularity in data sources to satisfy conditions for land holding or parcel level reporting (and obligations).The low uptake of real-time, digital data tools means that reporting system costs remain high and that data processing remains manual and labour-intensive.Stakeholders are frustrated that the “just and entire” contribution of their sector is not visible.Make the entire contribution of sector and sub-sector visible at a glanceSimplification and increased efficiency in monitoring and reportingAccurately monitor the contribution of all major sources of emissions and removalsLULUCF MRV is resource-intensive and requires a diversity of skillsMS do not have a strong incentive to improve the quality of their LULUCF reportingScarce data and insufficient reporting requirements make soil carbon the blind spot of LULUCF reporting, accounting, policy development and target settingThe economic, reporting, and policy sectors are not correspondingAdministration costs and siloedprocessesEstablishing common requirements for soil reportingR1: Mandatory tier 2 approach monitoring the activity data (area) of these practices  R2: Mandatory, spatially explicit, tier 3 based peatland inventory from 2030R3: A mandatory measurement-based approach post-2030 (Tier 3)R4: A verified model which uses the area of these practices as inputs (Tier 3)Other reporting rule-based solutionsR5: 2% materiality impact ruleR6: Develop a benchmark EU-level soil inventory based on LUCASR7: Area based RDP measures altering/managing carbon stocks submit LULUCF compliant mini-inventoryR8: Making available EU-level data on LPIS, and IACS and their use for MS useR9: Making available pre-treated RS data for land use matrix improvement or verificationCapacity-building solutions (process, skills)R10: Requiring multiple signatures on NIRsR11: Building skills and understanding through mandatory UNFCCC review participationR12: Establish LULUCF reporting help deskR13: E-learning and seminars to stimulate exchanges of good practices between MSR14: Explore possibilities to use (new) digital technologies for trends analysis and EFsR15: EU review backed by CoACommunication-related solutionsR16: Illustrate CRF tables with sectors and subsectors “at a glance”R17: Explicit Bioenergy reporting EU CRF table and data viewer R18: Removals and the restR19: A step towards a bio-based products categoryR20: Reinforcing the “name and shame” incentive from review reports 
 
7.1. Introduction 

An  overall  aim  of  monitoring,  reporting  and  verification  (MRV)  within  the  LULUCF  sector  is 
mapping out the very complex flow of carbon, communicating it in a simple way, and making 
all steps in the process transparent enough to be able to apply, compare and improve. While 
significant  progress  has been  made,  there  are still  gaps,  often  with an  unquantified  impact, 
which need to be resolved. An additional constraint is the high dependence on field data, a lot 
of which is collected by Member states with limited EU coordination and large heterogeneity in 
completeness.  Correctly  and  fully  measuring  the  natural  sink  is  of  paramount  importance 
considering its role in achieving climate neutrality in the EU by 2050. 

This  topic  note  sets  out to illuminate  the most  crucial  gaps  in  MS  inventories  and  suggests 
routes to address them. Underlying drivers such as resource- and skill-intensity of monitoring, 
lack  of  incentives  to  improve  reporting,  and  lack  of  correspondence  between  the  reporting, 
policy,  and  economic  sectors  incite  and  invoke a  debate  on  how  to  best  improve  upon  the 
systems  in  an  agile  and  inclusive  fashion.  These  drivers  cause  a  lack  of  monitoring,  most 
acutely with regard to soil carbon, due to a lack of data, timeseries, trials, and funding. They 
also halt the necessary increase in granularity that is often pointed out by UNFCCC reviewers; 
they  cause  artificially  high  costs  due  to  a  low  uptake  of  technology,  and  inaccurate  and 
inefficient monitoring due to a lack of best practices within modelling.  

These  problems  call  for  goals  about  accurate  and  understandable  MRV.  Such  goals  are 
formulated in this topic note. Here, concrete options are described that can be implemented 
by  the  Commission  to  address  and  potentially  overcome  the  challenges  needed  to  place 
LULUCF MRV in the central role that climate change calls for.  

7.2. Current situation and trajectory 

The monitoring within the EU varies between Tier 1, Tier 2 and Tier 335 level measurements. 
Within Tier 3, the modelling is similarly diverse, and debate is still ongoing about which models 
are  best.  The  biomass  pool  is  accurately  and  precisely  monitored  in  most  Member  states 
thanks to regular forest inventories (for forest land) and crop yield statistics (for cropland). This 
is  in  particular  the  case  for  the  5  largest  “forest  countries”  in  Europe  (Germany,  Sweden, 
Finland, France and Poland: 62 % of EU wood production and 58 % of EU forest area). The 
soil carbon pool however is still poorly monitored in most Member states, as well as the areas 
of  drained  and  rewetted  (and  restored)  wetland.  Regarding  soil  MRV,  the  Danish  case  for 
cropland  and  having  a  regular  soil  inventory  while  implementing  a  modelling  framework 
through  the  use  of  C-tool  is  likely  the  ideal  system,  yet  Denmark  is  the  only  MS  to  have  it 
currently in place (Please see Topic Note 2). 

Currently,  there  are  also  several  emerging  technologies  that  are  being  adopted  and 
implemented  to  a  varying  degree.  These  technologies  include  remote  sensing,  big  data, 
machine learning, interface development (e.g. Land Parcel Information System - LPIS), IoT36, 
and  quantum  computing  is  not  far  from  joining  this  list  (described  further  in  Chapter  2). 
Currently, data is still too scarce and scattered for quantum computing or even to some extent 
big data to be able to contribute significantly to a better MRV. However, as IoT starts to get 
adopted post-2030, the data abundance and availability will enable models to use big data on 
available climate, land use, cadastre, Integrated Administration and Control System (IACS), 
rainfall,  soil  maps,  dipwell  measurements,  crop  production  data,  tractor  traffic,  tillage  data, 

35 Tier 1: Using default data; Tier 2: Using country-specific data; and Tier 3: Using advanced methods and detailed country-specific 
data according to IPCC good practice guidelines for LULUCF. 

36 The Internet of things (IoT) describes the network of physical  objects—“things”—that are embedded with sensors, software, 
and other technologies for the purpose of connecting and exchanging data with other devices and systems over the Internet. 

109 

 
 
                                                 
fertilizer  use,  etc.  to  compute  baselines,  benchmarks,  variance,  and  models  that  would 
significantly be able to complement classical LULUCF data. 

Figure 34 below shows the dimensions reported on forestland to the UNFCCC. The tables for 
the other reported land types are similar (of course without the columns for litter and wood). 
The remaining right side of the reporting table refers to carbon stock changes and net carbon 
emissions / removals. 

Figure 34: The parameters reported annually. 

In  the  LULUCF  sector,  activity  data  refers  to  the  land  area  subject  to  a  given  land-use  or 
management  within  a  given  geographical  unit.  Carbon  stock  change  factors  refer  to  the 
intensity of carbon flows per hectare for this land area. At aggregated levels averaging different 
land  managements  and  geographical  units,  the  weighted  averages  of  emission  factors  are 
called “implied carbon stock change factors”. The research and monitoring leading up to this 
annual reporting is complex. The following Figure 35 illustrates the annual workflow moving 
from left to right, where the far-right side of the drawing is the reporting itself.  

Figure 35: Process diagram illustrating the creation of Common Reporting Format (CRF) data and National Inventory Reports 
(NIRs) . The red dotted lines show the scope of reviews, and the blue lines show some examples of the back-tracing process in 
this assessment. In this case, one fluctuation can be traced back to the “sources” section of “Activity data”, and another 
fluctuation can be traced back to the “QA/QC, approval, and submission” part. Time is in this figure depicted as moving from left 
to right. The process is repeated yearly. 

This process diagram shows how the data collection phase of any given year is synthesized 
in reports in parallel and independent tracks and not necessarily with any direct connection to 
each other or any UN goals. During the data preparation phase, a selection - and thus naturally 
also an elimination - is being conducted by the assessors of the reports with the overall goal 
to synthesize CRFs and NIRs.  

110 

GainsLossesNet changeMineral soilsOrganic soilsGainsLossesNet changeMineral soilsOrganic soils(kt)Net carbon stock change in soils per areaCarbon stock change in living biomassNet carbon stock change in dead woodNet carbon stock change in litterNet carbon stock change in soils(t C/ha)(kt C)ACTIVITY DATAIMPLIED CARBON-STOCK-CHANGE FACTORSCHANGES IN CARBON STOCK AND NET CO2 EMISSIONS/REMOVALS FROM SOILSNet CO2 emissions/ removalsTotal area(kha)Area of mineral soil(kha)Area of organic soil(kha)Carbon stock change in living biomass per areaNet carbon stock change in dead wood per areaNet carbon stock change in litter per area 
 
 
 
Because  of  the  complexity  of  this  process,  evaluating  the  process  of  reporting  is 
correspondingly complex. As illustrated with the blue lines, the exercise of back-tracking can 
lead back to various stages within this figure. The place of origin can be examined for potential 
selections and eliminations of methods or data that can lead to findings about why any given 
pattern deviation found in the histograms is as it is.  

In  practice,  reporting  happens  through  annual  submissions  to  the  UNFCCC.  Verification 
happens through independent UNFCCC reviewers. Both reporting and verification is currently 
on a MS level only, although the data is then compiled into an EU-wide GHG inventory. Here, 
NIRs and CRF tables are submitted annually and reviewed in technical annual review reports 
written by the UNFCCC reviewers. The UNFCCC has standards for compliance that have been 
updated and that are currently being implemented nationally.  

7.3. Problem drivers 

In total, the problems with carrying out cost-effective accurate monitoring are here identified 
as  having  three  overall  drivers.  Before  diving  into  the  problems,  these  three  drivers  are 
presented: 

1.  LULUCF monitoring is resource-intensive and requires a diversity of skills. 

2.  Incentives for MS to prioritise the necessary investments, resources and attention, to 
bring  LULUCF  inventories  to  the  necessary  level  for  full  and  high-quality  removal 
reporting are insufficient. 

3.  The  correspondence  between  sectors  as  defined  in  GHG  inventories  and  economic 

sectors is not straightforward. 

4.  Scarce data and insufficient reporting requirements make soil carbon the blind spot of 

LULUCF reporting, accounting, policy development and target setting 

7.3.1. Problem  driver  1:  LULUCF  MRV  is  resource-intensive  and 

requires a diversity of skills 

LULUCF  MRV  is  inherently  cross-disciplinary  and  cross-thematic.  Understanding  natural 
science and within this science the differences between forests, cropland, grassland, wetland 
and urban areas is key to finding solutions for LULUCF. Equally, understanding the differences 
within  and  between  the  legislative  and  financial  playing  field  of  the  same  dimensions  are 
paramount  to  identifying  and  understanding  the  challenges  in  MRV.  Also,  science  and 
technology  behind  available  and  new  technologies  is  key  to  understanding  the  differences 
between the strengths and weakness of current and emerging remote sensing technology and 
being able to compare them with the strengths and weaknesses of current and emerging use 
of modelling combined with big data, neural networks, and IoT. Even communicating with 3d-
modelling and mixed reality interfaces is important to be able to improve MRV. Human science 
is also critical.  

Beyond the ability to understand this diversity of disciplines and themes, the inventory team 
must gather the capacity to understand and process data sources related to them, which range 
from field surveys to remote sensing and sector-specific statistics. 

Each  of  these  dimensions  and  perspectives  can  make  the  MRV-processes  more  difficult, 
distort them, and slow them down, and they all influence the evolution of the carbon sink. 

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7.3.2. Problem  driver  2:  MS  do  not  have  a  strong  incentive  to 

improve the quality of their LULUCF reporting 

Some of the data used in LULUCF reporting primarily respond to other important economic or 
policy  needs.  For  example, forest  inventories  are primarily  intended to assess wood supply 
and  LPIS  is  primarily  intended  to  control  CAP  payments.  However,  where such  exogenous 
incentives do not exist (eg. peatland mapping or soil carbon monitoring),  there is little incentive 
for  MS  to  become  able  to  report  increased  removals  in  subcategories  or  pools  which  are 
currently not adequately monitored. This is as a result of: 

  Accounting  rules  diluting  the  benefits  of  being  able  to  report  improvements  in  the 
LULUCF  balance.  Currently,  the  LULUCF  balance  of  a  MS  may  improve  without 
improving its ability to comply with its climate target (eg. because it has no ESR debit 
or because its LULUCF balance already allows for the limited possibility to offset an 
ESR debit, see TN 6 for details). This uncertainty on the benefits of being able to report 
LULUCF improvements lowers the incentive for accurate and precise monitoring. 

  Monitoring rules allowing for not reporting a carbon pool as long as it is not a source of 
emissions (Regulation (EU) 2018/841, art. 5.4). They also allow to report under Tier 1 
– which for litter and soil carbon is equivalent to not reporting – carbon pools in non-
key categories or carbon pools which contribute less than 25-30 % of a key category 
(Regulation (EU) 525/2013, annex 3A). As a result, if the costs of monitoring a pool 
outweigh the perceived benefits of monitoring it, MS can be tempted to opt out. While 
such  provisions  make  sense  for  materiality  purposes,  it  decreases  the  incentive  to 
adequately monitor all sources. 

  Lack of visibility of GHGI review outcomes. Currently, the only incentive to comply with 
IPCC  guidelines  for  GHGIs  is  of  a  “name-and-shame"  nature.  All  points  of  non-
compliance  are  reported  by  UNFCCC  reviewers  in  biennial  Assessment  Review 
Reports (ARRs). Although the UNFCCC has improved the readability of these reports 
since 2015, they remain very technical and it is challenging for a non-reviewer to tell 
apart a good reporting system from a poor one on this sole basis. As a consequence 
of the limited audience, the “name-and-shame" incentive is also limited. 

  Verification is mostly delegated to the UNFCCC and its accredited reviewers. Overall, 
the stringency of the UNFCCC accreditation and the biennial occurrence of inventory 
reviews ensures that major flaws in an inventory are unlikely to remain unflagged in the 
long  run.  There  is  nevertheless  a  heterogeneity  in  reviewer  competence  and 
dedication, partly linked to the lack of sufficient funding (e.g. the UNFCCC Secretariat 
does not have sufficient resources to pay for the travel costs of EU reviewers, let alone 
their time). As a result, the EU has little means to focus the reviews on categories or 
practices that it would deem particularly important (eg. wetlands, agroforestry, …) and 
to enforce its own interpretation of the IPCC guidelines for GHGIs. 

  There is no monetary incentive for MS to maintain good reporting systems or improve 
them. In particular, the EU spends a lot of money on the land sector, mostly through 
the  CAP,  but  these  subsidies  are  not  conditioned  to  proper  reporting  systems  and 
therefore do not provide an incentive to improve reporting. 

  There is an ineffective coordination between different national organisations (ministries, 
agencies…) which hampers the awareness of what synergies are there to exploit. 

7.3.3. Problem driver 3: The economic, reporting, and policy sectors 

are not corresponding 

In the UNFCCC guidelines, there are six reporting sectors:  

112 

 
 
1.  Energy 

2.  Industry 

3.  Industrial gasses 

4.  Agriculture 

5.  LULUCF 

6.  Waste 

There are also three EU policy frameworks for climate change mitigation, policy development, 
stakeholder interaction, and research: 

1.  Emission trading 

2.  Effort sharing 

3.  LULUCF 

Furthermore, there are economic sectors (such as retail, transport, healthcare, etc.). 

These sectoral breakdowns are far from aligned. The dissonance between these breakdowns 
and their stakeholder group distorts the flowcharts that would give policy makers and scientists 
alike the possibility to create crosscutting solutions for the EU carbon sink.  Furthermore, the 
ability  to  translate  between  these  three  dimensions  (the  reporting,  the  policy,  and  the 
economic) is challenged by their inherently different metrics, structures, and reports. 

Reporting  (CRF  tables)  is  structured  around  5  sectors.  But  these  “IPCC  sectors”  do  not 
correspond to economic sectors or actual value chains. For example, the contribution of the 
forestry  sector  to  climate  change  and  its  mitigation  is  spread  across  four  IPCC  sectors: 
LULUCF  for  the  forest  and  HWP  stock  changes,  energy  and  industrial  processes  for  the 
substitution of other feedstock than wood, and waste for the decomposition of wood products. 
The same problem occurs for the agriculture and food sector. 

Furthermore,  simple  HWP  accounting  may  not  capture  full  removal  benefits.  Many  product 
uses are not clearly or accurately reflected, e.g. through country and product specific emission 
factors. Also, the scope of HWPs leaves out many long-lived biomaterials and products not 
directly produced from wood or harvest and sawmill residues. It has been suggested that the 
current coarse HWP accounting may underestimate actual removals by as much as 40%.37  

In the same line of thought, agroforestry may not be captured in accounting under the forest 
definition. Accounting rules and practices give little attention to this promising practice. 

7.3.4. Problem  driver  4:  Scarce  data  and  insufficient  reporting 
requirements  make  soil  carbon  the  blind  spot  of  LULUCF 
reporting, accounting, policy development and target setting 

While emission factors in forestlands can be relatively easily generated with a high granularity 
by using decades old data sets about the tree species growth patterns combined with general 
climate  and  soil  conditions,  similarly  high  tier  emission  factors  for  soil  carbon  are  less 
accessible. This makes soil carbon the major blind spot of current LULUCF reporting with as 
much up to 100 MtCO2e/yr of unreported fluxes, either emissions or removals (see TN2 for 
details). 

37 Steel, E. A., Officer, F., & Ashley, F. A. O. 2021. Carbon Storage and Climate Change Mitigation Potential of Harvested Wood 
Products. 

113 

 
 
                                                 
In order to reach a high granularity of soil carbon emission factors, complex modelling is in 
theory a substitute to build up tables of emission factors in various conditions for various soil 
types. Unfortunately, even complex soil models fail to reproduce observed soil carbon changes 
in  the  MS  where  they  are  implemented  (e.g.  Austria,  Sweden,  see  TN2  for  details  and 
demonstration). Therefore, there is likely no substitute to increasing soil carbon measurements 
and facilitating their availability at MS level. The recent launch in 2020 of the European Soil 
Observatory is step in that direction. 

This  need  for  improving  soil  carbon  measurements  is  not  sufficiently  reflected  in  reporting 
requirements, accounting, policy development, and target setting.  

7.4. Problems 

The four above mentioned drivers lead to six distinct problems, namely: 

1.  The  lack  of  data,  timeseries/data  trials,  and  funding  means  that  potentially  large 

sources of emission and removals are not monitored by many MS. 

2.  There is insufficient granularity in data sources to satisfy conditions for land holding or 

parcel level reporting (and obligations). 

3.  The low uptake of real-time, digital data tools means that reporting system costs remain 

high and that data processing remains manual and labour-intensive. 

4.  Stakeholders are frustrated that the “just and entire” contribution of their sector is not 

visible. 

5.  Administration costs and red tape. 

7.4.1. Problem 1: Lack of data, timeseries/trials, and funding means 
potentially  large  sources  of  removals  are  not  monitored  by 
many MS 

Whereas the  CAP,  economic interests  and national  legislative frameworks  ensure a certain 
standard of monitoring of the area of croplands, grasslands and forest lands as well as the 
aboveground biomass in forests, accurate and precise data is lacking in many MS on carbon 
stock changes in soils (see TN2) as well as in the biomass of out-of-forest trees (agroforestry, 
hedges, …).  

Even  for  croplands  and  grasslands,  CAP  data  does  not  necessarily  fulfil  all  the  needs  of 
GHGIs. Agroforestry or hedges for example  are not necessarily recorded in LPIS, and both 
LPIS and IACS are limited to the land and practices which receive subsidies, leaving aside 
unsubsidized climate-relevant practices. Some MS directly use LPIS for their land-transition 
matrix  (eg.  Denmark),  some  indirectly  use  it  (eg.  France)  and  some  do  not  mention  it  (eg. 
Germany). 

7.4.2. Problem  2:  Insufficient  granularity  in  data  sources  to  satisfy 
conditions  for  land  holding  or  parcel  level  reporting  (and 
obligations) 

Even  when  the  GHGI  monitors  practices  associated  with  removals,  it  may  not  do  so  with 
sufficient granularity to be translated into a parcel-specific incentive. In France, for example, 
the presence of cover crops is monitored through the “farm practice” survey which documents 
a very limited sample of farms every 5-6 years. While it is sufficient to estimate the frequency 
of a given practice at national scale, it is not suitable as a basis for parcel-level incentives. This 
coarse  granularity  is  becoming  increasingly  problematic  in  line  with  the  increased  political 

114 

 
 
ambitions  to  increase  the  carbon  sink  in  the  EU. Whether  future  policy  incentives  to  do  so 
come  through  the  CAP  or  through  a  dedicated  carbon  farming  scheme,  a  fine  monitoring 
granularity is becoming increasingly essential. 

7.4.3. Problem 3: Low uptake of real-time, digital data tools means 
reporting  system  costs  remains  high  and  data  processing 
manual and labour-intensive 

The assimilation of technologies into the LULUCF MRV is not fast enough to keep the cost 
down. This is because of several factors.  

1.  The technological readiness of key tools such as IoT, neural networks, big data, and 
quantum computing is not yet at the point where is can be easily accessed, understood, 
and  used.  Remote  sensing  products  are  more  readily  accessible  for  monitoring 
purposes  (eg.  Copernicus  or  the  Global  Forest  Change  dataset),  yet  they  are  still 
seldom used in GHGIs.  

2.  The  siloed  management  of  data  between ministries,  departments,  and  sectors  does 
not invite sufficiently for the broad collaboration needed to adopt such new technologies 
at the required cross-disciplinarian spectrum. 

3.  The complexity of the emerging technologies is still at a stage where they have not yet 
been made intuitive for non-experts to understand, let alone use. This leads to manual 
and labour-intensive implementation plans. 

7.4.4. Problem  4:  Stakeholders  are  frustrated  that  the  “just  and 
entire”  contribution  of  their  sector  is  not  visible  (e.g.  spread 
across the LULUCF and energy sectors) 

Thus  far,  the  LULUCF  sector  is  not  sufficiently  incentivized,  conditionalized,  and  financially 
supported,  and  because  of  this, the  policy  is  not giving  enough use  of the LULUCF-related 
removals38.  The  inconsistencies  across  the  three  economic,  reporting,  and  policy  sectors 
cloaks and blurs contributions made by the individual stakeholders, creating a feeling of red 
tape and lack of political ambition. 

The  inconsistencies  between  economic,  reporting,  and  policy  sectors  not  only  frustrates 
stakeholders, but are also a source of confusion for interested non-LULUCF-experts and policy 
makers to understand. This information barrier keeps the LULUCF data at a hand's length from 
financial and legislative incentive inclusion. 

7.4.5. Problem 5: Administration costs and siloed processes 

LULUCF is  a  complex  and vast  sector  which touches  land  uses  and  economic  sectors  that 
have historically been at the core of business of different departments, agencies and ministries 
in the public administration at national scale (e.g. forest, environment, agriculture, nature, etc.). 
These  departments,  agencies,  ministries,  and  Universities  are  siloed  clusters  where 
information often flows imperfectly, and where data can be both marginalized, incompatible, 
and  inaccessible.  Researchers  producing  data  and  estimates  of  GHG  fluxes  may  not 
communicate it to the agencies in charge of GHG reporting, while these agencies often fail to 

38 This is however understandable as the LULUCF's separate target has only recently been introduced. The MSs (people beyond 
the LULUCF world) should now be made aware of this, and in some MSs the work has already started concretely. 

115 

 
 
                                                 
involve academic researchers in their quality assurance process. This drives up administration 
costs and hinders the full exploitation of all available information for reporting purposes. 

7.5. Goals 

Each of the six problems described above have solutions that can be achieved by setting goals. 
In this case, particularly three goals are worth mentioning here. They have a relatively large 
potential for improving the monitoring.  

7.5.1. Goal  1:  Accurately  monitor  the  contribution  of  all  major 

sources of emissions and removals  

Through the three following tracks, MS need to improve their monitoring: 

1.  EU-MS work programme on soil inventories and soil carbon modelling 

2.  MS  research  to  establish  benchmarks  and  soil  maps,  in  particular  for  wetlands  and 

peatlands 

3.  Digitisation and digitalisation of soil inventories 

4.  Activity data on out-of-forest trees such as agroforestry and hedges. 

Data  on  agroforestry,  wetlands,  peatlands,  lands  with  cover  crops,  lands  with  temporary 
pasture, and with the use of HWPs in the buildings sector are important to measure early in 
order to advance towards the 2030-targets. Moving towards a world with higher incentivisation 
is essential to ensure that all key activities are accurately monitored. 

7.5.2. Goal 2: Simplification and increased efficiency in monitoring 

and reporting 

First of all, flows need to be digitised through measurement. IoT is improving this capability 
and will continue to do so the coming decades. Already, however, there are many datasets 
that are unused or underused (e.g. LUCAS, LPIS, ...). Data across many platforms need to be 
merged,  and  metadata  needs  to  be  produced.  This  is  a  fundamental  step  to  increase 
geographical and temporal accuracy substantially. This merging requires improvement in data 
storage as well as data modelling across platforms.  

Simplification of the processes resulting in monitoring and reporting, illustrated in Figure 36, 
makes  both  MRV  as  well  as  communication  easier.  Such  a  simplified  data  flow  requires 
adoption  of  advanced  technologies,  simplified  graphics,  increased  intercommunication 
between data sets, and larger transparency. 

7.5.3. Goal 3: Make the entire contribution of sector and sub-sector 

visible at a glance 

The importance of the LULUCF sector for 2030 targets and 2050 climate neutrality remains 
largely  un-recognized  outside  sector  stakeholders  and  climate  mitigation  experts.  Partly 
because of its perceived complexity, partly because of the complicated reporting of the sector, 
and  perhaps  partly  because  of  socio-economic  circumstances.  Therefore,  the  current 
communication gap must be bridged by intuitive graphics, tables and texts that are accessible 
for  non-experts  both  nationally  and 
internationally.  These  contributions  must  be 
understandable enough to also foster closer collaboration between currently siloed sectors and 
organisations.  

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7.6. Incentives to improve monitoring 

The reporting of complete, wall-to-wall, consistent, updated and accurate data are the basis 
for high integrity accounting, target setting, compliance checking and eventually land holding 
level incentive transfer. This section presents and explains ideas and suggested solutions for 
improving reporting of the LULUCF sector across the EU. Some of the solutions overlap or 
represent  partially  different means  to  achieve  the same improvement,  which is  on  purpose. 
The list of approx. 20 solutions proposed is therefore not a list of 20 unique, mutually exclusive 
solutions. These proposed solutions solely reflect the views of the authors of this document 
and do not reflect the views of the European Commission. 

7.6.1. Establishing common requirements for soil reporting 

As  outlined,  scarce  data  and  insufficient  reporting  requirements  make  soil  carbon  the  blind 
spot of LULUCF reporting, accounting, policy development and target setting (Please see TN 
2 for detailed justification). The problems are tier specific and presented below.  

Tier  1:  E.g.  Only  a  few  MS  report  soil  carbon  in  the  "forestland  remaining  forest  land" 
categories, and most of those MS have been reporting a constant or almost constant value 
since 1990. 

Tier  2:  There  is  more  reporting for  other  "land  remaining  land"  categories,  but  there  is  little 
measurement.  Some  countries  use  Tier  2,  which  is  more  accurate,  but  in  these  Tier  2 
approaches, the key activity data or variables worth monitoring are often not the ones actually 
being  monitored.  In  many  MS,  the  Tier  2  method  boils  down  to  distinguishing  annual  and 
perennial crops. In the case of France, activities such as agroforestry and temporary pasture 
have  a  large  mitigation  potential  and  are  left  unmonitored.  The  three  activities  actually 
monitored are cover crops, low tillage and crop residues, which, except for cover crops, have 
little  mitigation potential  at  national  scale  (Pellerin  et  al.,  2019).  This  demonstrates  that  the 
current  implicit  requirement  from  the  LULUCF  regulation  (article  7)  that  soil  carbon  in  key 
“managed land” categories be monitored using at least a Tier 2 approach is not sufficient to 
ensure that the most promising activities to increase removals are properly monitored.  

Tier 3: Similarly, most MS that have adopted a Tier 3 level use models that are not valid: the 
model is not able to reproduce historical data from soil inventories (e.g. Norway, Sweden and 
Austria – see TN2 for details). As a result, soil carbon changes being reported are likely very 
far from actual soil carbon changes. 

In addition, models have to be reactive to the policies that the MS want to use, but this is rarely 
the case with a few exceptions such as the model used by Denmark, which is a responsive 
model sensitive to crop yield and cover crops. These are two important drivers that are often 
left out. This pitfall can also happen with a Tier 2 approach (see above). 

Very few MS actually measure soil carbon changes for all land uses: Belgium recently stopped, 
France  had  its  first  remeasurements  in  2020,  and  Denmark  and  Sweden  do  it  regularly. 
Supposedly, 1-2 other MS do measure soil carbon. Some countries have monitored as specific 
land-use type (e.g. Germany or Austria for forest soils).  

In terms of ways to address the shortcomings of current soil modelling, there are three ways 
for reporting systems to be reactive to major levers of soil carbon sequestration (agroforestry, 
cover crops, temporary pasture, wetland drainage or rewetting, and to a lesser extent, hedges):  

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7.6.1.1.  Solution  R1:  Mandatory  Tier  2  approach,  with  a 
requirement  to  monitor  the  activity  data  (area)  of  key 
practices 

The practices above are the most influential on soil carbon stocks. Therefore, their emission 
factors should be refined, but even more important is to obtain accurate and up to date activity 
data. The solution is therefore to mandate that activity data for these practices be monitored, 
possibly using innovative data sources (see 2.2.4) which would also improve the comparability 
between MS. 

The Pro of this requirement is that it will provide a key improvement in the ability of GHGIs to 
respond to best management practices regarding soil carbon. It would likely be the cheapest 
monitoring approach to guarantees this, and it is already partly in place in several countries 
(see TN2). 

The Con is that if activities are made the centre of attention emission factors would remain a 
large source of uncertainty. Also, other important drivers of soil carbon changes (crop yield, 
temperature, moisture, …) could be overlooked. 

Regarding forest soils, no practice with a large storage potential has been identified (see TN2). 
However, full tree harvesting has been identified as a threat for soil carbon (Achat et al., 2015). 
It could therefore be added to the list of key practices to be monitored.  

7.6.1.2.  Solution R2: Mandatory, spatially explicit, tier 2 based on 

wetland inventories  

Wetlands  are  carbon-rich  landscapes  with  significant  potential  for  avoided  emissions  to  be 
reported  and  accounted,  not  to  mention  longer  term  potential  for  significant  carbon 
sequestration.  Therefore,  in  MS  where  drained  wetlands  and  peatlands  are  reasonably 
expected to be a key soil category (i.e. exempting Greece, Cyprus, Malta, etc.), the highest 
quality requirements should be imposed on MS.  

The  requirement  from  Regulation  (EU)  2018/841  that  managed  wetland  be  included  in  MS 
commitments (art. 7.3) may draw MS to dedicate more resources to wetland monitoring, but 
without explicit minimal requirements on activity data and emission factors, wetland monitoring 
may remain inaccurate (see TN2). Tier 2 approaches from the 2013 IPCC Wetland supplement 
with country-specific emission factors, or measurement-based Tier 3 approaches, should be 
imposed. Either of these solutions will necessitate the implementation of wetland inventories 
covering  all  organic  soils,  that  is  both  current  and  former,  drained,  wetlands.  The  primary 
objective of these inventories should be to regularly update activity data, that is the area of 
drained and restored organic soils. However, these inventories should also include soil carbon 
measurements which can either be focused on a few cases if the objective is to derive emission 
factors for Tier 2 approaches, or regularly repeated over a large and representative sample to 
support a measurement-based Tier 3 approach.  

7.6.1.3.  Solution  R3:  A  mandatory  measurement-based 

approach post-2030 (Tier 3)  

While the impact of several key practices on soil carbon is known with a reasonable confidence 
(see  above),  there  are  still  enormous  gaps  in  the  knowledge  of  soil  carbon  dynamics.  For 
example, while several models have been validated for biomass changes in forests or crop 
yield in agriculture, most soil carbon models remain unable to reproduce soil carbon change 

118 

 
 
data  (e.g.  Mao  et  al.  2018)39.  As  a  result,  there  is  currently  no  alternative  to  a  proper  soil 
inventory to know the overall trend in soil carbon changes in land remaining land categories. 

The Pros are that it would shed light on the most important blind spot in current EU LULUCF 
reporting. The Cons would be that it is costly and demanding in terms of know-how, analysis 
capacity (both physical analysis of soil samples and statistical analysis of results) and planning 
to achieve this. Three ways to mitigate this: 1) mandate it only for large countries; 2) mandate 
it only at meta-country level (e.g. allow a single soil inventory for several similar/neighbouring 
countries); 3) organize an EU-wide soil inventory. 

A coarse estimate of the cost of an EU-wide soil inventory not accounting for the synergy with 
LUCAS puts the figure at 15-55 million euros per year for the EU (see TN2). 

7.6.1.4.  Solution R4: A verified model which uses the area of key 

practices as inputs (Tier 3) 

This approach is often promoted as a cost-saving alternative to soil inventories. Its major pitfall 
however is that few models are actually able to provide valid simulations of soil carbon changes 
at national level (see above and TN 2). This pitfall leads to two sub-solutions: a) an EU research 
strategy  to  develop  and  regularly  validate  such  a  model  and  b)  refining  the  reporting 
requirement to curtail the use of invalid models in GHG inventories. 

In principle, such invalid models are not allowed by IPCC guidelines. Yet, it may take several 
UNFCCC reviews to notice that a complex Tier 3 approach is invalid, and when such invalidity 
is  notified  in  review  reports,  countries  do  not  necessarily  correct  the  model  or  change  the 
monitoring approach (e.g. Reverting to Tier 2). The UNFCCC designed an online training on 
reviewing Tier 3 approaches to address this pitfall, but without success.  

Therefore, the EU could impose minimum requirements for any model contributing to reporting 
of a key category, and a core principle should be that models are verified. Furthermore, any 
future EU review of GHG inventories should require a response from a reviewer and a MS to 
the  questions:  “If  a  modelled  Tier  3  approach  is  used  for  soil  carbon,  has  the  ability  of  the 
model to reproduce soil carbon changes as measured by soil inventories at the national scale 
of the country reviewed been demonstrated?” To avoid a heterogeneous assessment of this 
demonstration,  as  was  the  case  for  the  ability  of  FRL  models  to  reproduce  historical  data, 
prescriptive guidance and tools could be developed (please see TN6). 

From a legal basis point of view, the revised LULUCF regulation could require that one or more 
of  the  solutions  R2-R5  are  applied  for  key  “land  remaining  land”  categories,  “cropland 
remaining cropland” likely being the most important one. 

7.6.1.5.  Solution R5: 2% materiality impact rule 

Materiality means allocating resources in proportion to the size of emissions sources and the 
level of uncertainty. For example, wetlands in Greece are much less significant and offer much 
lower mitigation potential than in Sweden. This would suggest allowing the use of a lower tier 
or exemption for Greece.  

A solution could be to introduce a "2% impact rule" into the LULUCF regulation (note that this 
is conflicting with the higher stringency of the UNFCCC guidelines which set the cumulative 
threshold  0.1%  of  national  emissions),  which  would  relax  the  reporting  requirements  for 
sources smaller than 500 ktCO2e/yr and 0.05% of national emissions, up to a cumulated 2%. 

39 Mao, Z., Derrien, D., Didion, M., Liski, J., Eglin, T., Nicolas, M., Jonard, M., Saint-André, L., 2018. Modeling soil organic carbon 
dynamics in temperate forests using Yasso07. Biogeosciences Discussions 1–39. https://doi.org/10.5194/bg-2018-219 

119 

 
 
                                                 
Whenever  a  country  would  use  such  a  materiality  rule  to  avoid  a  higher  Tier  reporting 
requirement, the country should estimate the order of magnitude of the corresponding source 
based on reasonably recent – e.g. at most 20-year old – data. Harking back to the example of 
wetlands in Greece, an option could be to estimate their area and demonstrate that even if 
they were all drained, the associated emissions would remain below the materiality threshold. 

A  few  precisions  or  guidelines  could  be  added  to  make  this  materiality  provision  more 
operational:  

  Specify how the demonstration that a given category meets the “insignificance” criterion 
can be provided. Examples could be the use of activity data and/or emission factors 
from a comparable country or an existing publication allowing an estimate for a given 
year.  

  Specify how often the demonstration that a given category meets the “insignificance” 
criterion needs to be provided. 10 years could be a reasonable period: a minor source 
is unlikely to become major in less than 10 years.  

 

Increase the cumulative total to 1% or 2%. Such low percentages are already much 
below  the  uncertainty  of  national  totals.  Requiring  that  resources  be  put  to  improve 
completeness beyond 98% is arguably of lower priority than investing these resources 
to reduce uncertainty on the already estimated sources.  

A key challenge with these solutions is that they would make the EU reporting requirements 
diverge from the UNFCCC ones. Being more “lenient”, they will have little effect as long as EU 
countries continue reporting to the UNFCCC. An option would be that the EU negotiate the 
inclusion of such changes in the next set of UNFCCC reporting guidelines.  

Materiality provisions could also be introduced in the verification/review process. For example, 
the urgency to take action on an identified error in reporting or the severity of the review report 
(see solution R20) could be inversely proportional to the amount of emissions at stake. Note 
that the UNFCCC review process however does not include any materiality provision. 

A  large  majority  of  the  participants  to  the  workshop  held  on  “LULUCF  Reporting  and 
Accounting approaches”40 supported Tier 2 reporting only above a minimal threshold. 

7.6.1.6.  Solution  R6:  Develop  a  benchmark  EU-level  soil 

inventory based on LUCAS 

The “Land Use/Cover Area frame statistical Survey Soil” or simply LUCAS is an EU-wide soil 
inventory,  which  is  repeated  every  3-7  years  depending  on  budget  allocation  and  practical 
feasibility.  After  its  third  campaign  in  2018,  up  to  45,000  samples  have  been  taken  and 
analysed, most of them recurring. In the 2009-2012 campaign, a limited range of parameters 
were measured, and hence absolute soil carbon (in weight) could not be derived, but this has 
later changed. As of now the resulting inventory of spatially explicit soil data on key parameters 
including organic soils holds valuable information that could complement MS data, serve as 
basis for improved MS or regional soil maps, or provide benchmarks. As more measurement 
cycles are completed before 2030 (and possibly more sample sites and parameters covered), 
the soil database could also support regional emission factor development, separate organic 
soil or peatland reference data sets, or even EU level soil carbon modelling valuable for future 
reviews, baselines or natural disturbance issues.     

The lack of soil maps in some MS and incomplete or weak data for emission factors warrants 
a recommendation to make wider use of LUCAS. It is therefore proposed to study and refine 

40  The  workshop  “LULUCF  Reporting  and  Accounting  approaches”  was  held  on  18th  November  2020.  The  presentations  and 
discussions were used to design or refine several proposed solutions in this topic note as well as in TN 6. 

120 

 
 
                                                 
how future campaigns could best serve LULUCF soil reporting and allocate EU funding to JRC 
for  this  purpose.  In  parallel,  existing  data  should  be  used  to  produce  benchmarks,  national 
maps and support services for MS. A third component could be to prepare for the development 
of  a  database  of  Emission  Factors  and  eventually  an  EU  soil  carbon  and  GHG  model  with 
sufficient spatial granularity to offer MS specific modelling. 

Sample  size  is  a  key  element  to  assess  whether  LUCAS  could,  in  time,  replace  existing 
national  soil  inventories  for  national-level  estimates  such  as  GHG  inventories.  The  current 
sample size of LUCAS is comparable to existing soil inventories, with variability between MS 
(Table  19).  This  comparison  shows  that  the  use  of  LUCAS  for  national-level  estimates  is 
realistic, especially considering the possibility to use points from neighbouring countries with 
similar characteristics. 

Table 19: Sample size (number of sites, with often 4-5 measurements per site) of a few existing soil inventories. 

Member State 

LUCAS sample size in 
201541 

Sample size of the National 
inventory42 

France 

Belgium 

Denmark 

3050 

146 

222 

215843 
62944 

336-59045 

7.6.2. Solution  R7:  Area  based  RDP  measures  altering/managing 
carbon stocks submit LULUCF compliant mini-inventory 

In some MS, the Rural Development Plan (RDP) measures have already been used to pilot or 
test  actions  to  protect  or  enhance  the  carbon  stock  in  peatlands,  organic  soils,  or  trees. 
However,  the  mandatory  result  or  impact  indicators  are  usually  coarse  and  standard 
methodologies 
farm  or 
measure/national  level  are  lacking.  Expectedly,  several  MS  will  use  RDP  measures  in  the 
coming  CAP  period  to  prepare  and  test  results-based  interventions  and  some  may  even 
prepare  for  Carbon  Farming  schemes  with  associated  mini/restricted  (domestic)  carbon 
markets.46  

the  measure  at 

for  estimating 

the  direct 

impact  of 

field, 

In view of this situation, it is recommended to develop a suitable RDP specific standard for 
reporting  of  GHG  impacts  from  e.g.  peatland  restoration,  agroforestry  or  afforestation,  and 
require in both CAP and LULUCF regulation that the MS level methods are internally consistent 
and any impacts are directly and explicitly listed and used in the LULUCF inventory. In practical 
terms, the requirement could focus on regional or measure specific mini-inventories to be set 
up. The inventories should minimize the administrative burden on farmers or forest owners, 
and  push  MS  to  invest  more  resources  and  capacity  in  LULUCF  inventories.  Such  a 

41 https://esdac.jrc.ec.europa.eu/public_path/shared_folder/dataset/66/JRC121325_lucas_2015_topsoil_survey_final_1.pdf 

42 When the sample size varies between measurement campaigns, a range is provided. 

43  Meersmans,  J.,  Martin,  M.P.,  Lacarce,  E.,  De  Baets,  S.,  Jolivet,  C.,  Boulonne,  L.,  Lehmann,  S.,  Saby,  N.P.A.,  Bispo,  A., 
Arrouays, D., 2012. A high-resolution map of French soil organic carbon. Agron. Sustain. Dev. 32, 841–851. 

44 Meersmans, J., Van Wesemael, B., De Ridder, F., Dotti, M. F., De Baets, S., and Van Molle, M.: Changes in organic carbon 
distribution with depth in agricultural soils in northern Belgium, 1960–2006, Glob. Change Biol., 15, 2739–2750, 2011. 

45 Taghizadeh-Toosi, A., Olesen, J.E., Kristensen, K., Elsgaard, L., Østergaard, H.S., Laegdsmand, M., Greve, M.H., Christensen, 
B.T.,  2014.  Changes  in  carbon  stocks  of  Danish  agricultural  mineral  soils  between  1986  and  2009:  Soil  carbon  storage  and 
management. Eur J Soil Sci 65, 730–740. 

46 Matthews, A. 2020. Promoting climate action in the future Common Agricultural Policy. Italian Review of Agricultural Economics, 
75(3), 19-24. 

121 

 
 
                                                 
requirement  could  be  a  precursor  for  a  later  system  to  prevent  double-counting  and 
inconsistencies between CAP payments and carbon prices for LMUs.    

7.6.2.1.  Solution  R8:  Making  available  EU-level  data  on  LPIS, 

IACS, and their use for MS use 

The LPIS maintained for CAP reporting and compliance purposes can also be used for the 
land transition matrix, at least for changes related to cropland and grassland. The destination 
or origin of the transition may not always be known (e.g. Forest or settlement) but at least it 
provides  total  losses  and  total gains. It should  be  noted that the  LPIS does  not  necessarily 
accurately  cover  unsubsidized  areas.  Depending  on  national  circumstances,  LPIS  may  be 
used  for  activity  data  on  subcategories  (e.g.  Agroforestry,  hedges,  …)  or  as  data  for 
verification, control or as supplementary data source. Where a given practice can reasonably 
occur only if subsidized (e.g. afforestation in Denmark), IACS can be used for activity data on 
this practice. 

LPIS and IACS data are generated and owned by  MS so in principle, MS could already be 
using them for GHG reporting. However, few of them do it, likely because this data is in practice 
not readily available in a user-friendly format to inventory compilers in most MS. 

A combination of specific actions could serve to enhance the use of LPIS and IACS data for 
LULUCF reporting, among others: 

  A data viewer or common interface hosted by EEA and/or JRC where inventory makers 
and  the  public  can  access  prepared  land  transition  matrix  based  on  LPIS  data  and 
download datasets. The data viewer should also present EU level aggregate data, land 
transition matrix and other relevant information. 

  To ensure a regulatory push, a revised LULUCF regulation could impose a requirement 
for MS to ensure consistency for activity data reported for CLrCL, GLrGL, and various 
other key categories, and national LPIS data on area and land use changes.    

  A  reverse  consistency  requirement  could  be  introduced  requiring  future  compliance 
reports of MS and national control guidelines to ensure that (by e.g. 2026), farm level 
area  or  land  use  changes  are  reported  to  the  GHG  inventory  team  and  any 
inconsistencies between IACS data and LULUCF land transition matrix are explained 
in a non-technical narrative and made public.  

  An EC led study to map and understand data ownership, restriction and sharing issues 
for  LPIS  and  IACS  in  view  of  a  later  review  or  amendment  of  the  EU  legislation  to 
remove  legal/regulatory  barriers  at  EU  level  and  help  MS  do  the  same.  This  should 
include workshops and a guideline for use of LPIS and IACS data for LULUCF reporting 
and the land use matrix. 

7.6.2.2.  Solution  R9:  Making  available  enhanced/value-added 
RS data and products for land use matrix improvement or 
verification  

Various Remote Sensing data and products can be used for the land transition matrix, possibly 
in combination with LPIS. Depending on RS products, it may be possible to obtain activity data 
on subcategories (e.g. cover crops, hedges, …). Wall-to-wall land use maps are deemed to be 
a key component to improve reporting. However, only a few  MS have tapped into this data 
source. The barriers for this are not clear. To understand and respond to this situation, three 
successive actions are recommended: 

122 

 
 
1.  An EC study and/or JRC work process targeted at use of Remote Sensing products for 
populating  CRF  tables,  identifying  technical,  capacity  and  budgetary  barriers  and 
proposing solutions to these. 

2.  A  JRC  or  EEA  hosted  platform  gathering,  pre-treating  and  offering  RS  products  for 

GHG inventory making. 

3.  A help desk for GHG inventory staff on RS products. 

7.6.3. Capacity-building solutions (process, skills) 

The below proposed solutions all relate to the process, staff, or political capital to be invested 
in  GHG  inventories  for  the  LULUCF  sector  and  not  the  population  of  the  CRF  tables 
themselves. Two particular priorities have been guiding the development of solutions: 

1.  In many MS, different datasets in different institutions co-exist but are not combined or 
used  for  various  reporting  purposes.  Some  of  these  could  be  useful  for  the  GHGI 
compilers, but due to institutional barriers they may not be aware of the data let alone 
have  access  to  it.  In  order  to  accommodate  for  these  inconsistencies,  increasing 
awareness of the LULUCF inventories would be direly needed in most MS. Therefore, 
many  of  the  solutions  contain  an  element  directly  or  indirectly  promoting  breaking 
down of institutional barriers and silos. 

2.  Reporting to EU and UNFCCC (and other conventions) is already complex and requires 
many manhours across MS. The resource efficiency of the reporting must increase so 
that costs and staffing does not continue to increase with the importance of improved 
LULUCF  reporting.  Therefore,  several  of  the  solutions  seek  to  directly  or  indirectly 
decouple  improvements  from  (too  many)  additional  budget  increases.  A  priority  has 
been to promote simplification. By aligning reporting and accounting categories which 
were different under the Kyoto Protocol (e.g. former difference between Afforestation 
and Land converted to Forest Land), the LULUCF regulation has already simplified the 
task of inventory teams.   

7.6.3.1.  Solution R11: Building skills and understanding through 

mandatory UNFCCC review participation 

A great learning opportunity is to study the LULUCF inventories of other MS or annex 1 parties. 
That way, different approaches, detailed data processing, or modelling decisions may inspire 
GHG inventory teams for their own country.  

It  is  therefore  proposed  to  apply  a  requirement  that  MS  nominate  and  make  available  to 
UNFCCC at least one LULUCF reviewer per UNFCCC sector with more than 5 million tonnes 
of  net  emissions  or  removals,  or  another  relevant  quantitative  benchmark/threshold.  This 
should encourage training and career planning in the respective MS. A threshold of 5 million 
tonnes this would require 15 MS to provide a LULUCF reviewer and a threshold of 10 million 
tonnes would concern 8 MS. 

Furthermore,  the  solution  could  be  expanded  to  ensure  the  participation  of  independent 
reviewers  in  all  reviews.  The  participation  of  independent  reviewers  –  non-members  of  an 
inventory  team  such  as scientists,  NGOs,  etc.  – to the  review  process  achieves  the  double 
objective  of  bringing  new  ideas  into  the  process  and  of  limiting  conflicts  of  interest.  This 
external participation would require the Commission to be in charge of recruiting them, to avoid 
interference by MS. Commission staff could be part of this pool of independent reviewers. 

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7.6.3.2.  Solution R12: Establish LULUCF reporting help desk  

Given the complexity of the collaboration as well as potential conflicting interests, establishing 
best  practices  and  lessons  learned  is  an  important  step  towards  improving  monitoring  and 
reporting. This is true both on the organizational level, the MS-level, and on EU-level. In order 
to  both  collect  and  distribute  best  practices  and  lessons  learned,  the  EU  could  establish  a 
LULUCF help-desk that could offer just-in-time support to all MS and all involved organisations 
and thus speed up the adoption of an efficient monitoring mechanism. Such a help-desk could 
gather best practices and offer training, a data and study repository, and share all of it with the 
implementing  staff  in  each  MS.  This  is  primarily  a  top  down  approach  that  can  be 
supplemented with input from JRC and MS.  

7.6.3.3.  Solution  R13:  E-learning  and  seminars  to  stimulate 

exchanges of good practices between MS 

There is an uneven distribution of institutional capacity, LULUCF file history, capacity to follow 
negotiation and Subsidiary Body for Scientific and Technological Advice (SBSTA) networks, 
relevant national university level training and domestic knowledge bases among MS. While not 
a  revolutionary  recommendation,  a  LULUCF  reporting  master  class  could  be  envisioned.  It 
should  be  web-based,  produce  and  host  webinars  and  organise  hackathons  on  specific 
problems and issues. The online community could be hosted by the abovementioned LULUCF 
help-desk and could be linked to the LULUCF Review process and SBSTA negotiations.  

One  need  to  cover  would be  basic  introduction to LULUCF MRV  and accounting for  newer 
staff (to shorten time needed to build capacity and skills) both in political systems, the wider 
expert  groups  and  junior  inventory  staff.  Another  would  be  the  front-end,  exploratory 
investigations of detailed issues for experienced inventory compilers.      

7.6.3.4.  Solution  R14:  Explore  possibilities  to  use  (new)  digital 

technologies for trends analysis and EFs 

To  gather  data  for  LULUCF  inventory  making,  MS  should  seek  data  sets  and  historic  and 
ongoing sampling and trials, relying on a fairly limited set of domestic data sources, potentially 
complemented  by  case-by-case  data  or  models  from  neighbouring  MS  or  international 
journals. However, if capacity allows, many more supportive and complementary data could 
be used both as primary data or for benchmarks mostly on emission factors. Data from tractors, 
forest  machinery  and  farm  IT  systems,  weather  data,  trade  and  economic  activity  data,  tax 
data, dipwell and drinking water monitoring data, to name a few, might hold trends or aspects 
that could support inventories. Many of these are not economically feasible to incorporate at 
this stage, but new digital tools might allow to expand the scope of data.    

With the emerging of quantum computing and machine learning, the large dataset generated 
by  the  coming  IoT-sector,  along  with  the  historical  cloud  of  data,  can  become  activated  to 
specify  emission  factors,  benchmarks,  baselines,  validation,  verification  data  sets,  etc.  in 
certain environments as well as predict the carbon flow over time more accurately. 

In  practical  terms,  the  solution  could  be  promoted,  and  kick  started  by  a  mapping  and 
identification  exercise  either  in  the  form  of  a  study  or  a  JRC  work  package  to  pinpoint 
technologies and their possible application. This solution is rather generic, as it tries to cover 
a range of technologies, countries, uses and barriers in one.  

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7.6.4. Communication-related ideas and solutions  

Given  the  above  described  problem  drivers  and  problems  related  to  the  cross-disciplinary, 
cross-sectoral,  and  cross-technological  nature  of  LULUCF,  given  the  potential  conflicting 
interests  of  land management, and given  the  siloed and  even  entrenched stances  between 
organisations,  communication  is  the  best  tool  for  mutual  understanding  and  trust  building. 
During any transition – such as the current green transition – working as one becomes more 
important.  

7.6.4.1.  Solution  R16:  Illustrate  CRF  tables  with  sectors  and 

subsectors “at a glance” 

The confusion of different reporting  sectors across the NECP, UNFCCC CRFs, EU Climate 
Policy  Sectors  and  common  economic  sectors  could  warrant  a  translation  matrix  to  be 
produced to help journalists, policy makers, and inventory stakeholders navigate and translate 
between  sectors.  Ideally,  the  matrix  would  contain  a  macroed  excel  that  could  translate 
numbers and show allocations. 

On top of this, the JRC could produce an annual note or homepage data viewer showing in 
simple graphics state of play for each MS across the requirements for the various sectors.   

7.6.4.2.  Solution R17: Explicit Bioenergy reporting EU CRF table 

and data viewer  

The current reporting practice in MS, which is in accordance with IPCC GPGs, requires that 
biomass  used  for  energy  purposes  is  reported  as  a  memo  item,  with  hardly  any  narrative 
around  it.  In  view  of  Energy  Union  Governance  requirements  and  the  ongoing  debate  on 
bioenergy and its sustainability, it is problematic that it is difficult for non-inventory experts to 
access and compare reported data for bioenergy (see problem 4) between e.g. the NECPs 
and  CRFs.  Since  both  reportings  would  include  bioenergy,  inconsistencies  between  them 
could  be  an  indicator  of  incomplete  communication.  Difficulties  accessing  comparable  and 
consistent data becomes a barrier for an open and informed dialogue. 

Therefore,  a  solution  could  be  to  add  an  EU  specific  table  in  the  MS  reporting  to  the  EC 
(submitted  prior to the annual  UNFCCC  reporting)  which  would show  numbers  reported for 
renewable energy use under the Energy Union/National Energy and Climate Plans, LULUCF 
Forest  Reference  Levels  and  Harvested  Wood  Products,  MS  based  Emissions  Trading 
Scheme installations using biomass, and the memo item. Any inconsistencies relating to the 
choice of data should be explained in the accompanying NIR.   

7.6.4.3.  Solution R18: Removals and the rest 

In  2050,  nature-based  removals  (equal  to  LULUCF  net  sinks)  and  technological  removals 
(CCU+)  will  have  to  deliver  the  total  amount  of  credits  to  cover  residual  emissions  (and 
substitute  allowance  for  all  emitters).  From  an  accounting  perspective  (but  not  necessarily 
reporting perspective), it would make sense to aggregate all LULUCF sinks in one category 
and apply consistent if not similar accounting approaches across the board (provided data and 
reporting quality allows so). This would further allow for total sink targets, policy incentives and 
dedicated flexibilities. 

Such  an  aggregation  would  be  a  radical  shift  away  from  the  current  land  category-based 
accounting  as  applied  in  the  other  solutions  presented.  It  would  entail  gathering  all  sinks 
(‘gains’) from all CRF tables, irrespective of the emissions (‘losses’) taking place in the same 
forest, field or farm. This approach would have the benefit of combining all the “slow, future” 

125 

 
 
removals and have MS and land-owners optimise across land management practices, holdings 
and  regions  dedicated  to  ‘sink  planning’.  For  example,  deforestation,  wetland  drainage, 
grassland conversion and increased harvest on forest land would be aggregated and should 
be  at  least  balanced  by  afforestation,  wetland  restoration,  cropland  retirement  (or 
extensification) and reduced harvest intensity. A downside of this approach would be the un-
intuitive separation of fluxes as a result of the same land management action on the same plot 
of  land.  Depending  on  the  monitoring  approach,  separating  gains  from  losses  may  not  be 
feasible:  for  forest  biomass  for  example,  it  would  preclude  the  “stock  difference  method” 
currently implemented in many MS.  

7.6.4.4.  Solution  R19:  A  step  towards  a  bio-based  products 

category 

The current, simple HWPs categories are specified in the IPCC guidelines and stem from WTO 
trade nomenclature (Harmonised System) and are often populated with data from FAOStat. 
However,  these  HWP  categories  are  quite  coarse,  and  may  underestimate  HWP  removals 
significantly as the half live values in many cases are very average and overall (due to, e.g. 
lack of country specific Emission Factors). 

Many of the long-lived wood, wood fibre, or biomaterial uses of not only wood but also hemp 
and  other  biobased  fibres  are  not  recognised  individually  in  the  system.  In  a  2050  climate 
neutrality  scenario,  the  contribution  of  the  circular  bioeconomy  (AFOLU  sector  and  its 
products) is crucial not only in terms of delivering sinks to balance sources, but also to offer 
biobased climate neutral products that can both substitute energy intensive products and serve 
as a carbon store through successive product lifetimes. Approaches to incentivise such uses 
are covered in a parallel EU study, not accessible to the authors of this note.   

In order to maintain a high level of compatibility or even compliance with WTO nomenclature 
and  rules  (Harmonised  System,  Level  6  or  8),  a  first  step  would  be  to  apply  more 
disaggregated/detailed  product  categories  (sub-categories)  and/or  to  recognise  non-wood 
products, in what would become Biobased Products instead of HWPs. This would align well 
with the overarching policy ambition to advance to a sustainable, low carbon bioeconomy by 
2050. The JRCs bioeconomy observatory47 shows the complexity and current categorisation 
of pools and carbon flows in the Bioeconomy, see below Figure 36. 

47 https://ec.europa.eu/knowledge4policy/bioeconomy/topic/biomass_en#biomassflows 

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Figure 36: The JRC's current categorisation of pools and carbon flows in the Bioeconomy. Source:  
https://ec.europa.eu/knowledge4policy/bioeconomy/topic/biomass_en#biomassflows 

Developing  a  new  Harvested  Wood  Products  or  Bio-based  Products  categorisation,  and 
subsequent  data  population,  is  a  complex  and  time-consuming  exercise.  It  is  suggested  to 
prioritise and initiate this process soon and aim for a categorisation that can be translated into 
Harmonized  System  (HS)  codes48,  covers  a broader  scope,  offers more product  level  detail 
and initially aims at primary products and goods. From a LULUCF regulation accounting point 
of view, a first step would be to introduce more MS discretion in (reporting and) accounting 
categories,  but  at  the  same  time  fix  quality,  data  and  categorisation  requirements  by  2030, 
allowing MS and the EU to prepare.   

7.6.5. Solution  R20:  Reinforcing  the  “name  and  shame”  incentive 

from review reports 

Since  the  demise  of  flexibility  mechanisms  of  the  Kyoto  Protocol,  there  has  been  little 
incentives for countries to address the recommendations of UNFCCC reviewers and thereby 
improve their reporting system. The core principle so far is built around the so-called "naming 
and  shaming",  where  non-compliant  MS  will  have  their  errors  flagged  in  the  annual  review 
reports. These reports are highly technical and very difficult reading for non-experts, and this 
difficulty takes away the key principle of the current mechanism – the naming and shaming 
part. If, however, a traffic light colour painting system were to be implemented, then it would 
be  easier  for  non-experts  to  understand  the  outcome  of  reviews  which  would  increase  the 
incentive  to  improve  the  monitoring  and  reporting.  A  key  aspect  here  could  be  to  visually 
include  a  chronological  dashboard  of  consecutive  non-compliance  so  that  there  is  a  larger 
shaming  in  not  fixing  errors  pointed  out  in  the  previous  review.  Going  beyond  naming  and 
shaming,  access  to  some  EU  mechanisms  such  as  CAP  payments  or  an  EU-level  carbon 
removals crediting scheme could be conditioned to the colours of this traffic light colour painting 
system to increase the incentives for reporting improvements (see TN7 for details). 

48 For industry classification, Harmonized System (HS) Codes are the most common for the export/import process for goods. The 
Harmonized System is a standardized numerical method of classifying traded products. 

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8. Topic Note #6: Amend the LULUCF Accounting Rules 

to Make the No-Debit Rule More Stringent 

Abstract 
The current accounting approach for the LULUCF sector is influenced by years of negotiation 
under the UNFCCC, albeit with slight differences from the UNFCCC approach. The approach 
serves the basic purpose of regulating how a sector excluded from targets can contribute to 
target  compliance  under  certain  conditions  (since  2012).  The  system  is  complicated,  and 
represents several political compromises on integrity and completeness. Due to the LULUCF 
sector's inherent purpose and history, the sector offers very few incentives for increasing sinks, 
and only at the level of parties or in the case of the EU at MS level. In addition, at policy and 
decision maker levels, the particularities and complexities of the sector has been difficult to 
communicate. Risk aversion and the absence of other targets than no-backsliding and no-debit 
rules  in  EU  regulation,  means  few  MS  have  planned  policies  and  defined  targets  that  will 
reverse the declining trend of the EU level net-sink.  

The current system with its shortcomings, was furthermore designed for incremental, 5-10 year 
emission  reduction  targets.  Climate neutrality  in the  EU  by  2050  and  across  all  sectors  will 
require  a  different  accounting  practice,  where  target  compliance,  understood  as  annual 
balance  between  emissions  and  removals,  is  based  on  reported  numbers  for  all  land 
categories in the sector. The current system is not suited for this, and therefore correcting or 
improving the current system in view of increased ambition for 2030 may not be future proof 
or worthwhile. This note therefore considers a suite of proposed solutions, some of which will 
constitute  a  radical  shift  in  accounting  practices  whereas  others  are  merely  improvements 
within the current system which could be implemented short term.

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8.1. Introduction 

GHG accounting in an EU and UNFCCC context, is understood as the exercise of governing 
which reported GHG numbers from National Inventories are allowed to count towards target 
compliance under a legally binding multinational agreement such as the Kyoto Protocol or the 
Paris  Agreement.  For  all  sectors  but  the  LULUCF  sector,  accounting  requires  all  reported 
numbers  to  be  used  for  establishing  basis  for  compliance  with  targets,  whereas  for  the 
LULUCF sector only a subset of reported values have historically been allowed to be used. In 
reality, LULUCF accounting rules have hitherto served the purpose of excluding emissions and 
removals that were found to be too uncertain, not verifiable, or not understood. 

The current situation for LULUCF accounting in the EU, is a result of 20-30 years of incremental 
rules and policy development in the EU and UNFCCC settings, which gradually have offered 
new rules for inclusion of more GHG emission and removals for target compliance. For the 
same reasons as described above, under current rules, the LULUCF sector is not subject to 
any country or EU level target, other than the MS level no-debit rule imposed since 1 January 
2021.  In the  UN  setting,  under  the  Kyoto  Protocol  (both  compliance  periods  1  and  2),  only 
afforestation,  reforestation,  and  deforestation  were  allowed  to  count  towards  compliance 
targets directly, and only a subset of emissions or removals from so-called (Kyoto Protocol) 
Article 3.4 activities resulting from Forest Management is allowed to count towards KP targets, 
subject to a Forest Management Reference Level (FMRL). The FMRL was adopted as practice 
at the Durban COP in 2011, and accepted as the common approach by EU member states 
with  the  LULUCF  decision  (529/2013).  For  other  land  management  activities,  such  as 
Grassland  or  Cropland  Management  (GM  and  CM),  parties  to  the  UN  Climate  Convention 
could voluntarily include emission and removals from these in their accounts, while rules and 
practices  for  accounting  of  wetland  management  fluxes  and  pools  were  only  adopted 
internationally within the past five years and still to be included by parties.  

At  the  same  time, the  LULUCF net-sink  in the EU  is  projected to decline  in the future (see 
Topic Note 1 and 2), while reporting of GHG emissions and removals in the non-Forest land 
categories remains incomplete and inconsistent. For the LULUCF sector to be fully integrated 
into any future policy and target architecture in the EU, it is therefore necessary to not only 
improve reporting systems (see Topic Note 5), but also develop rules and systems for how to 
count emissions and removals from the land sector towards a 2030 target. This will create a 
MS level incentive for strategic management of the land sink. Notwithstanding any current or 
future shortcomings in data completeness or quality, it is the long term ambition that the sector 
should count in full towards EU GHG mitigation targets and eventually Climate Neutrality at 
least by 2050. 

8.1.1. Problem drivers 

There  are  four  identified  problem  drivers  outside  of  the  scope  of  the  LULUCF  Regulation 
revision, which frame the analysis herein.  

8.1.1.1.  Sector designed for exclusion 

The current system as described above is a heritage of the Kyoto Protocol and a system where 
the LULUCF sector for various reasons was treated as a separate system, with separate rules 
and limited inclusion towards targets. This approach, as confirmed by 20 years of COPs and 
EU climate policy architecture, was essentially adopted to safeguard targets for other sectors 
such as the EU-ETS and the sectors governed by the Effort Sharing Decision against dilution, 
high  variability,  unmanageable  uncertainty,  and  cheating.  The  first  driver  of  the  current 
situation is political, historical exclusion of the LULUCF sector. 

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8.1.1.2.  Anthropogenic vs nature 

The  second  driver  of  the  current  situation  is  related  to  the  fact  that  the  LULUCF  sector's 
building  blocks  are  natural  processes  such  as  photosynthesis,  decomposition  and 
geochemical  transformations  of  matter.  These  processes  influence  levels  and  timing  of 
emissions and removals even where systems are managed by humans. The processes are 
therefore also susceptible to sudden and significant changes in environmental conditions such 
as droughts, wild fires, icebreaks and flooding which is not directly a result of anthropogenic 
land management decisions. Therefore, the beforementioned accounting rules have included 
progressively complex natural disturbance rules on top of accounting rules that aimed to isolate 
and count only the human induced changes of the living systems. This driver enforces the fact 
that GHG accounting rules differentiates between human-induced emission and removals, and 
those beyond human control. 

8.1.1.3.  Inertia and legacy effects 

Thirdly, the current and any future situations, will be under the influence of the inertia and time-
lag that characterises the sector and differentiates it from the industrial, energy or transport 
emission  sectors.  In  particular  the  age-related  dynamics  of  forests,  but  also  for  some  soil 
processes such as peat formation, response time is decadal, and effects of decision by land 
managers today may only show in reporting and accounting in 10-20-50 years later. The inertia 
of these natural systems is a third driver. Legacy effects go in the opposite direction and are 
classified by past disturbances or management activities and influence the productivity of the 
forests in terms of future emissions and removals. Legacy effects are complicated because a 
sink may increase in young forests due to a recovery from a past disturbance, as opposed to 
concrete management changes (Grassi et al. 2018).  

8.1.1.4.  Land sector key to 2050 climate neutrality  

The last driver presents how the perceived future trend of LULUCF emissions relate to other 
sectors.  Over  the  next  30  years,  ongoing  transformation  of  energy,  transport  and  industrial 
sectors will lead to a situation where the land sectors emissions from both agricultural activities 
and land management will be the single largest share of emissions in most MS and in the EU 
as such. By 2050 it is very likely, that aggregated emissions from the current Agriculture and 
LULUCF categories will constitute the bulk of economy wide emissions, and that the sink of 
forests  and  soils,  alongside  technological  removals  from  CCU+  will  be  pivotal  for  climate 
neutrality. The fourth drivers is therefore that the Land Sector – and hence its accounting rules 
– will be the most important sector for ensuring and governing climate neutrality at latest in 
2050. Ensuring that the sector does not deterioriate due to current land management practices 
is  a  central  part  of  the  LULUCF  Regulation  and  in  projections  for  the  sector,  the  sector  is 
expected  to  make  up  higher  offsets  than  those  from  carbon  capture  technology  (European 
Commission, 2020a).  

In aggregate, the challenge is to gradually include a distinct but increasingly important sector 
into  an  existing  accounting  and  target  architecture  system,  designed  and  refined  in  past 
decades, while having limited and incomplete data on the actual emissions and removals of 
that system. This can be translated into a set of specific problems as presented below. 

8.1.2. Problems 

The list of identified problems with the accounting approaches are presented below. They are 
grouped  into  three  overarching  problem  types:  insufficient  incentives,  high  complexity,  and 
inertia. 

130 

 
 
8.1.2.1.  Accounting rules offer only limited incentives 

There are three specific problems related to lack of clear incentives in current rules: 

1.  The first problem is that the overall “no-debit” rule is not ambitious, and does not send 
a strong mitigation action signal to MS. In fact, as discussed in Topic Note 7, most MS 
tend to prioritise certainty and low-risk of debits from the sector. This problem of lack 
of ambitious sectoral targets is due to the FRL approach. In theory, this is not a problem 
as MS can use or sell LULUCF credits if they overachieve. In practice however, the 
absence of a mandatory ambitious target limits the political momentum to set ambitious 
“overachievement targets” at national level. 

2.  Thirdly,  the  target  and  accounting  system  offers  no  direct  incentives  to  economic 
agents on the ground – land managers – to mitigate GHGs emissions and increase the 
carbon sink. Current targets are set at MS level, as in ESR, and not at firm-level, as in 
the ETS, or in this context at land parcel or farm levels. In theory this is not a problem 
as long as MS transmit their incentive to economic agents through appropriate national 
legislation.  But  in  practice,  this  is  seldom  the  case.  The  accounting  rules  and  the 
practices applied by MS reporting agencies, calls for MS level excel-sheets aggregating 
and  estimating  emissions  and  removals  from  national  or  regional  assumptions,  with 
very little role for bottom up data (see Topic Note 5 on reporting for more on this). 

8.1.2.2.  High complexity creates noise 

High  complexity  has  ramifications  for  both  transparency,  verification  and  review  processes, 
and  obscures  comparability  across  MS.  Also,  in  MS  governments  and  non-experts  have 
difficulties devising long term policies based on these systems. The specific problems identified 
relate to FRLs, and concerns the counterfactual nature of the FRLs, and the incompatibility of 
FRLs with climate neutrality: 

1.  FRL is a technical counterfactual benchmark: as such, its calculation is based on many 
assumptions  and  creates  many  challenges,  which  causes  a  large  amount  of 
uncertainty.  For  instance,  the  modelling,  updating  and  review  is  costly,  time-
consuming, and offers limited and skewed incentives to enhance sinks while restricting 
MS and forest owners. Furthermore, due to the MS context dependency of FRLs and 
the legacy effect of historic pre-FRL decisions on data, Forest Inventories and sectoral 
or regional specificities result in a stark information asymmetry. In turn, this complicates 
and restricts any third-party review or contribution. For all these reasons, stakeholders 
do not wish the FRL approach to be continued 49. 

2.  Natural  disturbance  provisions  create  a  potentially  large  gap  between  what  is 
accounted  and  what  is  emitted.  In  addition,  they  require  to  track  land  subject  to 
disturbance for a very long time, which is challenging. 

3.  The temporal asymmetry between immediate emissions from disturbance, harvest or 
conversion and the slow sequestration in growing biomass, is currently an accounting 
liability  for  MS  and  ultimately  the  EU.  The  slow  and  future  benefits  of  removals  are 
difficult to capture in ten-year compliance cycles and in the business case for ex-ante-
based project level crediting schemes.  

49  This  information  was  extracted  from  the  survey  conducted  on  the  first  workshop.  For  more  information,  please  refer  to  the 
workshop report. 

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8.1.2.3.  Forest  and  wetland  accounting  not  compatible  with 

climate neutrality reporting 

Lastly, the third problem cluster relates to established accounting practices which might conflict 
with  the  accounting  principles  expected  to  be  necessary  for  climate  neutrality  reporting.  In 
2050, to determine climate neutrality across all sectors annually, accounting will need to be 
similar to reported numbers. This will pertain to all land categories, but in particular for forest 
land and wetland categories, current rules will result in exclusion of significant emissions and 
removals, which is not compatible with true climate neutrality.   

1.  The  counterfactual  FRL  approach  is  not  compatible  with  the  2050  carbon  neutrality 
objective which requires an absolute target for gross removals, at least for the whole 
LULUCF sector at pan-European level if not at MS level and for specific sub-sectors. 
The counterfactual approach excludes from accounting towards any target, emissions 
and removals that result from legacy effects and is perceived a baseline projection. 

2.  Unmanaged land is considered outside of scope. However, both CO₂ fertilization effects 
that can be considered indirectly human (through rising CO₂ levels in the atmosphere), 
and  the  ecosystem  services  provided  by  unmanaged  land,  would  impact  climate 
neutrality if calculated for the full territory of a country.  

8.2. Goals 

The proposed goals of any amendment or revision of accounting provisions in the LULUCF 
regulation would be to: 

  Strengthen MS level incentives to increase the LULUCF sink through accounting rules  

  Prepare for accounting based on an absolute EU emissions/removals target, similar to 
all other sectors, in 2050: simplify current accounting practices, tools and principles for 
this transition, incl. on FRLs.  

  Prepare for transfer of incentives to land category or land-owner levels for increasing 
removals 
in 
afforestation/reforestation,  agroforestry,  peatland  restoration  and  rewetting,  and  no-
tillage soil practices. 

investments 

stimulating 

emissions 

avoiding 

and 

by 

While  useful  for  the  debate  on  many  aspects  of  revised  2030  LULUCF  regulation,  a  more 
precise understanding and definition of the 2050 vision for the sectors and EUs climate neutral 
climate policy framework is not part of the scope of the review. Ideally, the 2050 vision was 
clear and concise so as to serve as guiding star for the revision of the regulation. This would 
allow for already now preparing for the system changes that will be needed. This note will not 
propose solutions for the accounting system for the LULUCF sinks and sources in 2050, as 
the vision will remain open for debate in the years to come, including in Topic Note 4. However, 
as a background for some of the later solutions, the following short section does outline some 
aspects of possible accounting principles for the 2050 vision as outlined in COM strategies and 
presentations in the past years. 

8.2.1. Accounting system goal for 2050 

With the 2050 goal of climate neutrality, the EU should strive for target-based accounting for 
all  LULUCF  categories.  This  is  the  simplest  accounting  system  and  it’s  similar  to  what  is 
applied to other sectors. It is fully transparent and allows for the clear establishment of EU-
wide  targets  for  LULUCF  and  the  evaluation  of  MS’  (and  eventually  land  owner)  progress 
towards specified targets. 

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Changing all managed lands from net-net50 to target-based simplifies the accounting one step 
further because there is no discussion of which year (or period) is the base year or the special 
circumstances that an MS may claim occurred during that period. 

Here, it is necessary to underline that the only difference between target-based and net-net 
accounting in terms of climate neutrality is the specification of targets. As shown in the following 
example, if in a given year a MS emits E Mt CO2 from the non-LULUCF sectors, then it requires 
absolute L Mt CO2 removals from the LULUCF sector where E + L = 0. If one accounts for the 
removals in the LULUCF sector as Ĺ = L – Lbase then the MS need to produce Ĺ + Lbase  removals, 
i.e. more than what is due under the target, to achive climate neutrality. 

If many absolute removals are needed, it would just complicate the accounting and make it 
less transparent if net-net accounting is used. 

On  top  of  accounting  principles,  an  interpretation  of  and  target-setting  for  climate  neutrality 
including the role of the land sector should be defined for 2050. The below sections offer two 
possible principle ways for target setting. The public debate in the years to come will offer more 
alternatives,  and  the  below  should  therefore  only  be  seen  as  ideas  for  inspiration.  A  key 
variable  for  the  discussion  of  2050  target  setting  is  whether  MS  level  targets  would  still  be 
relevant in a hypothetical situation where all emissions are covered by a revised EU ETS, and 
where  carbon  removals  from  both  technical  and  nature  based  solutions  can  be  issued  to 
individual  land  or  technology  owners,  and  freely  traded  and  exchanged  within  the  EU. 
Therefore, a third option for EU targets is offered as well.  

8.2.1.1.  Target setting based on ESR 

The general principle of this first target-setting option is that LULUCF is merged with all other 
non-ETS sectors – ESR sectors – and that discussions on effort sharing between MS start on 
the basis of the effort sharing already agreed for 2030 on ESR sectors. 

Let us assume that the overall EU target for the LULUCF sector is to remove 450 MtCO2e/yr 
from  2050  onwards.  This  target  is  linearly  backcast  to  390  MtCO2e/yr  in  2040  and  330 
MtCO2e/yr  in  2030.  At  each  interim  point  (2030,  2040,  2050),  the  target  is  then  allocated 
proportionally to the effort required from each MS in the ESR regulation (2018/842)51, that is 
the amount of emissions reductions required from a given MS (2030 MS target minus 2005 
MS emissions) divided by the total amount of emissions reduction at EU level (2030 EU target 
minus 2005 EU emissions). 

Pros: 

  Simple approach 

  Effort sharing allocation identical to one already agreed upon for other sectors, taking 

into consideration the wealth discrepancies between MS. 

Cons: 

  Large windfall credits for some MS and very ambitious targets for others 

  The rationale for the consideration of wealth discrepancies decreases over time  

50 Net-net accounting accounts for the difference between a given base year and each year in the commitment period (e.g. 1990 
and 2012).  

51 This idea was presented by one of the participants of the  first workshop.  For more information, please refer to the workshop 
report. 

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8.2.1.2.  Target setting based on potential   

The general principle of this second target-setting option is that discussions on effort sharing 
between MS start on the basis of a simplified proxy for the potential of each MS to store carbon 
in biomass and soil, namely its land area.  

Let us assume that the overall EU target for the LULUCF sector is to remove 450 MtCO2e/yr 
from  2050  onwards.  This  target  is  linearly  backcast  to  390  MtCO2e/yr  in  2040  and  330 
MtCO2e/yr  in  2030.  At  each  interim  point  (2030,  2040,  2050),  the  target  is  then  allocated 
proportionally to the land area of each MS.  

Pros: 

  Simple 

  No obvious windfall credits 

  Consistent  with  long-term  persistent  removals  targets  (the  long-term  removals 
potential, that is beyond age-related effects, are logically strongly correlated with land 
area) 

  Reasonable ambition for all MS (MS for which the percentage increase in removals is 
large are MS for which the absolute value in 2018 is small despite a medium land area) 

Cons: 

  Not based on a historically agreed rationale for effort sharing 

  No adjustment for other determinants of the potential (eg. climate and soil conditions, 

current land-uses and land managements, ...) 

8.2.1.3.  EU level climate neutrality without targets? 

If the transfer of incentives and obligations to entity levels are possible and implemented, the 
climate neutrality target is in principle applied at the level of actors, and MS would not have a 
specific  climate  neutrality  target.  This  situation  is  however  very  simplistic  for  a  number  of 
reasons.  Firstly,  there  will  be  land  categories  with  low  intensity  on  fluxes  or  stable  carbon 
stocks, where removals would not be issued cost efficiently, even with significant technological 
advances. Also, for some forests in certain regions at high risk of recurring forest fires, pests 
or frost-related dieback, the necessary price premium or price reduction to internalise this risk, 
would effectively price removals from these lands out of the market. In reality, while the majority 
of  EU  land  would  be  available  for  a  future  carbon  removal  market,  residual  land  would  still 
need  to be reported  as over  large areas the  removals  and  emission  would be  measurable. 
Such  lands  could  still  be  required  to be  included  in  MS  level  GHG  accounts,  even  if  these 
would  be  of  subordinate  importance.  One  possible  approach  would  be  to  impose  no-debit 
targets  for  the  residual  lands,  to  make  sure  the  climate  neutrality  target  set  for  the  two 
components at EU level would not be jeopardised. The management of these residual lands 
could then be financed from a mandatory share of proceeds from all issued removals units. 

Likewise,  of  principle  importance  for  2050  target  setting  is  the  success  of  the  emission 
reduction trajectory for the time until 2050. If the sink is increased to the necessary 400-500 
Mt  CO2eq  annual  sink  capacity,  a  significant  proportion  of  the  now  available  potential  for 
afforestation/reforestation,  forest  management  improvements  and  peatland  restoration,  will 
have  been  used  up.  One  scenario  is  therefore,  that  currently  unaccounted  natural  sink  in 
managed  forests  is  recognized  as  an  eligible  carbon  removal,  and  likewise that  the  carbon 
accrual in peat in managed peatlands is both feasible to measure and verify and made eligible. 
In such a scenario, a carbon removal target would translate into a target for maintenance of 
areas  and  stocks  of  managed  forests  and  peatlands.  This  would  then  need  to  balance  out 
residual  emissions  from  agriculture,  deforestation,  and  all  other  economic  sectors,  and 

134 

 
 
complemented by technical removals, ensure at first annual climate neutrality at union level, 
and later an increasing EU net sink to draw down carbon from the atmosphere. 

8.3. Options to change the LULUCF accounting rules 

The  below  text  briefly  presents  and  explains  background, rationale,  logic,  and benefits  of  a 
number  of  different  clusters  or  aggregations  of  land  categories  with  shared  accounting 
approaches. A cross-cutting rationale for the proposed clusters is a simplification.  

8.3.1.1.  Solution A1: Continuation of the current approaches with 

marginal improvements 

One possible solution could be that lands that do not change land use category would remain 
accounted for using net-net, while impacts of lands use change would be captured using gross-
net accounting.  

Forest  land  remaining  forest  land  would  remain an  exception  for  which  a forecast  of  future 
emissions (the FRL) is the basis for accounting. In order to easily implement this quantitative 
assessment, MS would receive support from the Commission in the form of a tool automatically 
performing the assessment and potential adjustments once MS have entered historical and 
simulated time-series. 

Figure 37: The division of responses by stakeholders on improvement of the reliability of FRLs 

8.3.1.2.  Solution A2: Combination of Net-net & Gross-net 

The continuation of current approaches, and in particular of the FRL system, would be costly, 
complex,  and  uncertain.  As  such,  continuation  gathers  little  support  from  relevant 
stakeholders. From the Open Public Consultation (OPC) on the EU rules on LULUCF (Figure 
38),  discontinuation of  FRLs is  the  second highest  response  after 'Other.'Error!  Reference 
source not found. 

135 

 
 
 
 
Figure 38: The division of responses by stakeholders during the first carbon farming workshop on the future of the current 
accounting approaches using the Forest Reference Levels.  

Figure 39: Responses from stakeholders from the OPC for LULUCF in the EU. 

An alternative to the FRL approach is to use net-net accounting for all managed lands. This is 
the position proposed by European NGOs (Climate Action Network (CAN) Europe, 2016). 

This solution removes the drawbacks discussed above. In addition, a drawback of this solution 
is  the  potential  for  “windfall”  removals  for  an  MS  in  FL-FL  without  any  action  and  the 
“burdening”  of  an  MS  with  emissions  due  to  existing  forest  structure.  Overcoming  this 
drawback  will  require  the  use  of  an  EU-wide  pooled  target  for  FL-FL  and  an  intra-MS 
negotiated contribution LULUCF Effort Sharing Regulation (ESRLU) or a mechanism to allow 
intra-MS trading of FL-FL credits and debits. The concept of winners and losers is illustrated 
in Figure 39. 

136 

 
 
 
 
Figure 40: Two types of forest show “winners” and “losers” from a switch from FRL to net-net (or gross-net) accounting. Spain 
(above) has an increasing forest and will have a credit in 2021-2025 in a net-net or gross-net accounting system. Austria 
(below) has projected a slight removal from managed forests in 2021-2025 (gross-net). However, if net-net accounting was used 
with 2000-2005 as the base period, Austria would have emissions of around 8.500 kt CO2. Using FRL, both MS will have no 
emissions if the forests behave as predicted. Source: FRL submissions for Spain and Austria 

The  benefit  of  this  solution  is  improved  simplicity  and  transparency  and  allowing  clear 
establishment of EU-wide targets for this category and evaluation of an MS’ progress towards 
targets. 

8.3.1.3.  Solution  A3:  no  backsliding subrule  for  categories  with 

large potential for “fast out” emissions 

Aggregating the accounting of and aligning the accounting principles for the carbon intensive 
land categories is another solution. This adapted carbon pool centric, risk-based accounting 
system would gather the land use categories for which land conversion will lead to significant 
and immediate emissions in one group. For this group, specific targets or restrictions could be 
applied.  As  these  would  also  be  the  categories  for  which  project  and results  based  carbon 
farming and carbon forestry mechanisms would be most feasible, this set up could be a neat 
precursor for a later EU wide mechanism with associated common CRC rules, registry (see 
later) and eventually extended review. The Carbon Rich Land Categories (CRLC) group should 
by  2050  have  its  own  and  detailed  set  of gross-net  based  accounting  rules. The  remaining 
sectors  could  have  more  flexible  and  lenient  rules,  thus  allowing  for  a  simplification  and 
focusing of administrative and inventory work on the most important sectors.  

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8.4. Increasing stringency of benchmarks for 2030 

The benchmarks for 2030 should be tightened to counteract the decline in the LULUCF sink. 
The recent GHG inventories show that currently, the combined LULUCF sink in the EU is - 263 
Mt CO2/year. To reach the - 55% EU-wide 2030 target a minimum sink of - 225 Mt CO2/year is 
required. However, a a range between – 340 and – 260 Mt CO2/year is feasible at a relatively 
low cost. Finally, to be on track for the 2050 net zero emissions goal, an interpolated sink of -
300 Mt CO2/year would be needed around 2030. 

8.4.1.1.  Solution A4: More stringent national LULUCF targets 

As discussed above, the absolute removals in 2030 need to be at least 300 Mt CO2/year, 14% 
more than they are currently. How these are distributed to each MS is varied. They may be 
allocated using one of the following indicators (not limited): 

a)  Share  of  total  land  area  [with  an  adjustment  for  MS  climate  and  net  primary 

productivity]. This assumes all MS can contribute equally. 

b)  An indicator based on amount of removals per hectare below the EU-wide target [with 
an  adjustment  for  MS  climate  and  net  primary  productivity].  This  is  an  indicator  of 
fairness – all MS contribute equally to the EU sink. 

c)  Share of current removals (or removals in the last five years). This is an indicator of 

efficiency (e.g. cost-effective mitigation potential). 

d)  Share of removals in a chosen historic time period. 

8.4.1.2.  Solution A5: More stringent EU-wide target for managed 

forests (FL-FL)  

As indicated in Solution A2 (section 8.3.1.2) it may be necessary to treat managed forests as 
an EU-wide pool with a shared target for all MS. This could be an option to be considered as 
forest  policy  is  not  an  EU  mandate,  and  building  on  experiences  from  the  2030  Energy 
Efficiency EU level target and its implementation. If tied closely to the continuation of the no-
debit  rule principle, the EU  level  target  could  be  legally  linked to a  no-backsliding  principle, 
where no MS share of the total EU forest sink was allowed to decrease while the total EU sink 
target would be strengthened over time. Any underdelivery in percentage by 2030 would be 
sanctioned by fines in the form of either accounting debits or economic fines that would be 
redistributed to the MS meeting their share.  

A different approach would create an EU carbon forestry investment fund, which would offer a 
floor  price  for  forest  credits,  and  fund  improved  management  practices  (and  possible 
afforestation),  in  exchange  of  full  transparency,  third  party  reviews,  and  requirements  for 
highest level tier reporting for any land supported. The generated credits would count to the 
host MS only after a certain share delivered to the EU fund and counted towards the EU level 
sink target.  

Both  of  the  outlined  approaches  would  ensure  that  all  MS  promote  improved  forest 
management,  but  with  target  compliance  risk  limited  to  the  sector  and  proportional  to  the 
importance of the forest sink. As much as an additional - 172 Mt CO2/year could be achieved 
by 2050 through improved forest management (Nabuurs et al., 2017).  

8.4.1.3.  Solution A6: National removal targets  

An MS specific removals target could be defined for 2030 and set as the difference between a 
total  emission  reduction  target  for  the  ESR  +  LULUCF  sectors,  and  a  calculated/projected 
potential for peatland restoration, afforestation, and halt of all tillage on organic rich cropland 

138 

 
 
soils. National Targets for removals should be set using activity data and emission factors as 
used in reporting by the MS, and achieved via the implementation of the actions described in 
CAP Strategic Plans or other land-related national policies. The national strategy to achieve 
the target would be based on considerations on future land use dynamics, the risk assessment 
produced  and  a  qualitative  assessment  of  potentials  for  increasing  land  area  of  peatlands, 
forests, and low- or no-tillage cropland. The targets could be set as milestones every fifth year 
between 2030 and 2050, with the end point being defined from a 2050 projection and plan as 
outlined in A17 later. 

The  national  level  removal  target  would  be  more  flexible  than  the  activity  or  land  specific 
approach proposed below in A7. 

8.4.1.4.  Solution A7: National, land category specific targets 

In line with the CAP discussion in GAEC 2 (on protection of peatlands), and the overall ambition 
to increase the sink by 2050, it could be considered to have a net-net, no-debit target for the 
emissions and removals from all reported WLrWL, conversions to WL and conversions from 
WL to other land use. The target could also be more specific and relate to conversions from 
WL to other, thus effectively punishing draining of new wetlands.  

8.4.1.5.  Solution A8: National targets for HWP use 

In line with later assessment and text on HWPs (see chapter 6 herein), it could be relevant to 
propose  quantitative  targets  for  the  net-storage  of  carbon  in  the  HWP  pool  by  2030,  and 
possibly  a trajectory  towards  this target.  Any  such HWP target  should be  computed from  a 
combination of domestic wood production, availability of wood processing industries, past and 
project  import  and  export  shares/amounts,  size  and  age  class  distribution  of  forests,  mean 
residence time and current storage rate. 

HWP targets would translate into a wood and other biogenic material use target and should be 
seen in a long term Biobased economy perspective. In line with national priorities, the target 
could be expanded to cover also use of wood derived materials, such as bioplastic and lignin 
based materials. While the substitution effects and its accounting could be an issue in itself 
(see chapter 6), the LULUCF accounting rules would link HWP use to national GHG targets 
and in 2050 help expand the net-sink.  

8.5. Forest Reference Level accounting improvements before 

2030 

The  below  sections  present  detailed  and  specific  ideas  for  how  to  improve  stringency  of 
accounting for forest land. Several of the ideas are directly or indirectly developed from findings 
of the EU LULUCF Expert group, during their work in 2019-2020 on assessment of draft FRLs 
as submitted by MS under the LULUCF Regulation (841/2018). As such the ideas should be 
seen as detailed and specific adjustments to the proposed solution A1 of chapter 3, as they 
are improvements of the current approach which could then be continued.  

8.5.1. Management intensity  

The  following  solution  (Solution  A9)  is  related  to  how  to  define  management  intensity.  The 
LULUCF Regulation (2018/841) requests that "The forest reference level shall be based on 
the continuation of sustainable forest management practice, as documented in the period from 
2000  to  2009.”  In  their  NFAPs, many  MS  assume a  constant  “management  intensity”  (at 
national level, per stratum, per age class or other aggregates) to demonstrate that their FRL 

139 

 
 
meet  the  “continuation”  requirement.  However,  the  definitions  of  management  intensity  are 
diverse52:  

1.  Harvest  probabilities based  on  age-related  characteristics  (age,  standing  volume, 

mean diameter, …)  

2.  Harvest volume per growing stock / biomass available for wood supply   

3.  Harvest area per area available for harvest   

4.  Harvest per increment   

5.  Harvest volume per hectare  

Some  of  these  definitions  are  more  meaningful  than  others  when  it  is  necessary  to  “take 
account of the future impact of dynamic age-related characteristics” (Article 8.5), which is the 
main justification for an accounting system based on FRLs. Take the example of a country with 
a  typical rotation  age  of  80  years,  5 Mha of  forests  aged  around  50  years  and  of  forests 
constant  management 
1 Mha aged 
intensity assumption to  project  more  harvest  in 30  years  than  now,  as  a  larger  part  of  the 
national forest area reaches harvesting age. This example rules out definitions 3-5.  

years.  One would 

expect a 

around 

70 

A  necessary  condition  for  management  intensity  indicators  is  to  project  an  increase  in 
harvested  volume  when  a  populated cohort  reaches  harvesting  age.  Harvest  probabilities 
based on age-related characteristics (age, standing volume, mean diameter, …) best meet this 
criterion and are commonly used in the scientific literature (e.g. Luyssaert et al., 2018).  

Coarser indicators such as harvest volume per growing stock for a given stratum – defined as 
a region, species or combination of both – also meet the criterion, albeit with a lower likelihood 
to  result  in  valid  projection.  Being  coarser  is however  a  benefit to  be considered:  the 
implementation of a coarse indicator is less demanding in terms of know-how, resources and 
input data. In a nutshell, the relative merit of definitions 1 and 2 can be debated, but definitions 
3-5 – which are not less resource-demanding that definition 2 – are clearly less suited than 
definition 2.  

8.5.1.1.  Solution A9: Limit range of definitions 

Accordingly,  restricting  the  possible  definitions  of  management  intensity  in  the  LULUCF 
regulation to the first two indicators (harvest probabilities based on age-related characteristics 
and harvest volume per growing stock) would improve the reliability of FRLs without increasing 
the burden of the regulation.  

8.5.2. Demonstrating consistency of the FRL with the GHGI  

For  obvious  consistency  reasons,  the  FRL  should  include  all  pool  and  gases  which  are 
reported  in  the  GHGI.  When  accounting  is  based  on  a  reference  level,  this  necessity  of 
consistency is actually a good argument for excluding some pools and gases from accounting. 
Nevertheless,  the  reasoning  behind  the  exclusion  of  certain  pools  and  gases  is  thoroughly 
checked for inconsistencies. Most MS in their NFAPs reported individual estimates for each 
carbon  pool  (European  Commission,  2020b).  Still,  knowledge,  resources  and  data  are 
to  meaningfully  model  certain carbon  pools (e.g.  soil 
sometimes 
carbon). This problem can be addressed through the following two provisions:  

insufficient 

largely 

52 Input from first workshop. 

140 

 
 
                                                 
8.5.2.1.  Solution A10: Materiality based exclusions 

Materiality: minor pools or gases can be excluded from the accounting – and therefore from 
the FRL – up to a cumulated share of national emissions (e.g. 0.05%, see materiality section 
for details). 

8.5.2.2.  Solution A11: Pool specific accounting 

Use of a non-FRL approach for accounting: some pools (e.g. soil carbon) can reasonably be 
assumed  to  be  largely  independent  from  age-related  characteristics.  This  would  justify  a 
“gross-net”  accounting  for  these  pools,  thus  avoiding  random  projections  when  knowledge, 
resources or data are insufficient. 

8.5.3. Numerical consistency for a given pool (level)  

Criterion A.h in annex IV of the Regulation requires consistency between the FRL and GHGI, 
and that the model used to construct the FRL be able to reproduce historical data. However, 
expert knowledge in statistics is heterogeneous, and as a result, so is their judgement on the 
extent to which consistency is achieved.  

To address this pitfall, the JRC guidance document (section 8.1.1) provides detailed guidance 
on  how  this  numerical  consistency  can  be  assessed  and  achieved.  This  guidance  was 
successfully applied by some MS while others either chose not to use it or misused it (Forsell 
et al., 2018).  

A typical example is the application of a standard t-test. When applied to time-series where 
points are obviously paired (the projected point for year 20XX is paired with the observed point 
for the same year), a paired t-test is better suited than the standard test. Among others, the 
paired t-test will detect systematic bias when the standard test will not.  

This  example  demonstrates  the  technicality  of  standardizing  judgement  on  numerical 
consistency. A solution to make this technical approach accessible to all member states would 
be: 

8.5.3.1.  Solution A12: Refine JRC Guidance 

Refine the JRC guidance (Forsell et al., 2018) and make it more prescriptive. For example, a 
paired t-test could be mandated to detect systematic bias. Similarly, a minimal number of years 
could be prescribed.  

8.5.3.2.  Solution A13: Develop and share automated calculation 

sheet 

Provide MS with a calculation-sheet that would automatically compute the results of statistical 
tests and adjustments when the projected and observed time-series have been entered.  

8.5.4. Numerical consistency for a given pool (trend)  

Of  course,  the  solutions  proposed  for  numerical  consistency  of  project  levels    are only 
constructive for Member States where modelled trends are reasonably close to observed ones. 
Indeed,  while  modelled  levels  can  be  adjusted,  there  is  no  simple  adjustment  for  modelled 
trends.  Depending  on  national  resources,  obtaining  such  a  model  and  understanding  its 
behaviour may be quite challenging. This is a limit of the FRL accounting approach for which 
there is no satisfactory solution.  

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8.5.4.1.  Solution  A14:  Issue  encouragement  or  preference  for 

peer-reviewed models 

A possibility would be to encourage MS for which validated models and projections have been 
published,  preferentially  in peer-reviewed journals,  to  use  them  rather  than  construct  a  new 
model or make new projections from an existing one. This will most of the time require more 
substantial adjustments for the level (differences in forest area, biomass expansion factors or 
other  such  parameters,  start  date  of 
the  projection,  …).  The  associated increase 
in uncertainty will  often  be  balanced  by  the  decrease  in uncertainty obtained  from  a 
meaningful,  peer-reviewed,  trend. Several  MS  already  benefit  from  published  models  and 
projections (France, Austria, Germany, Finland, Sweden, Italy, Poland, Slovenia, …) but this 
solution will  not  be  applicable  to  all  MS  however,  as  many  are  lacking  such  models  and 
projections.  

8.5.4.2.  Solution A15: Provide centralised modelled trends 

Another possibility would be to require the JRC to provide modelled trends for each MS as was 
the  case  for  the  FMRLs  of  the  second  period  of  the  Kyoto  Protocol  (2013-2020).  The JRC 
simulations should then be of mandatory use. Otherwise, MS which possess their own model 
and  projections  can  pick  the  model/projection  which  yields  the  most  favourable  FRL.  This 
ability to pick across a menu of projections may have been one of the key explanations for the 
bias  of  the  2013-2020 FMRLs  (currently  around  100  MtCO2e/yr below  actual  GHGI  data, 
despite  changes  in  policies  – towards increased  harvest  –  which  should  have  driven  GHGI 
data below FMRLs if anything).  

8.5.4.3.  Solution  A16:  Mandatory  explanations  of  trends  in 

simulations 

Mandating that a narrative for the key features/trends in the simulations over the reference and 
projection periods be provided would help. One can consider that a set of simulations where 
key drivers are not identified is not properly validated.  

8.5.4.4.  Solution  A17:  Project  and  explain  post-2050  climate 

neutrality 

After 2050, it is expected that the EU will become a net sink on an annual basis. This entails 
that economy wide removals from soils, forests and technical solutions (e.g. CCU+) balance 
out and eventually exceed any residual emissions. This principle is reflected in the following 
text included in the annex of the LULUCF Regulation: “The reference level shall be consistent 
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, including enhancing 
the potential removals by ageing forest stocks that may otherwise show progressively declining 
sinks.” 

Starting from 2030, MS will likely be required to produce and update every five years, modelled 
projections  for  economy  wide  emissions.  To  provide  a  consistent  and  complete  inventory, 
emissions and removals from soils, and forests should be included. This will require explaining 
trends  including  any  legacy  effects  on  forest  land  and  foreseen  gaps  (or  overshoot),  and 
identification of PaMs to address these. A similar requirement could be installed for soils. The 
reporting could be linked to future NECPs or their successors, and updates timed to 1-2 years 
before  global  stocktakes  under  the  Paris  Agreement.  The  purpose  would  be  to  promote 
planning and transparency around long time use and prioritisation of forest and soil sinks. 

The  mandatory  projection  could  further  impose  full  transparency  of  and  consistency  with 
projected assumed future harvest levels, as already foreseen in the LULUCF decision in 2013 

142 

 
 
(in Annex B (d)): information on how harvesting rates are expected to develop under different 
policy scenarios.  

8.5.5. Stratification  

Stratification is not an explicit requirement in the LULUCF Regulation. As mentioned by the 
JRC guidance, “The basis and level of detail for the stratification are likely to depend strongly 
on the national circumstances and the forest management practices applied in the country.” 
Therefore, there is limited rationale for constraining stratification in the Regulation. The JRC 
guidance (section 8.5.3) and the IPCC guidelines should be sufficient to help Member States 
make meaningful choices. A necessary condition is that data be sufficient to model “constant 
forest management practices” at the stratum level (see section 8.1.1). In most cases, the area 
of a  given stratum 
the 
to be  constant,  which 
understanding  of  model  behaviour  (a  possible  exception  being  where  forest  management 
practices during the reference period consist in systematically replacing one species mix with 
another after clear-cut). It follows from this expectation that age is not a recommended criterion 
for  stratification.  Ultimately,  however,  any  inaccuracy  in  projections  stemming  from  poor 
stratification  choices  can,  in  principle,  be  addressed  by  experts  during  the  review 
process. Based on this, there is no recommended action or solution for stratification.  

facilitates  modelling  and 

is  expected 

8.5.5.1.  Solution A18: Explicit threshold of estimated bias 

Introducing an explicit threshold of estimated bias above which the Commission is required to 
propose  a  correction  of  the  FRL would  help  focus  the  review  process  on  major  issues  and 
ensure equal treatments of all Member states regarding corrections.  

8.5.6. Missed opportunity to use FRLs in national climate strategies  

The  short  term  versus  long  term  trade-off  of  forest  management  strategies  such  as 
incentivizing  harvest  are  paramount  and  have been extensively  highlighted  in the  literature. 
Although several criteria (e.g. IV.A.g, IV.B.d) were possibly intended to spur discussion on this 
trade-off in the NFAPs – e.g. by what time will the carbon debt of a “more harvest” strategy be 
repaid?  –  this  aspect  was  generally  overlooked  in  NFAPs.  More  specific  criteria  and 
requirements  could  be  designed  to  ensure  that  MS  have  thought  this  through  and  that  the 
strategy they propose will mitigate climate change within a reasonable timeframe (e.g. before 
2050).  

8.5.6.1.  Solution A19: No backsliding for Forest Strategies 

A  possible solution could  be the requirement  that  MS  demonstrate that their  national forest 
strategy  is  cumulatively  better  than  “business-as-usual”  (i.e.  FRL)  by  2050,  at  least  once 
substitution effects have been accounted for.  

8.5.7. Review process  

No matter how hard EU legislators work on refining reporting and accounting provisions, the 
application of these provisions to specific cases will always be partly up to interpretation. This 
is why ensuring an expert and independent review process is paramount.  

The review of NFAPs has been satisfactory on this aspect. Key elements of success were:  

  A  mix  of  experts  between  independent  (type  A),  member  states  (type  D)  and  civil 
society  (type  C). This  prevents  conflicts  of  interest  between  type  D  experts  –  being 
lenient in the hope that other type D experts will be lenient as well – and allows civil 
society to signal its concerns to type A experts and the Commission;  

143 

 
 
  The ability of the Commission to allocate experts to the review of specific countries, 

matching their expertise with the national circumstances of the reviewed FRLs;  

  The possibility for the Commission to conduct its own assessment of FRLs and to alert 

reviewers about its concerns.  

The  major  pitfall  of  this  process  is  that  it  is  lengthy  and  costly,  and  that  despite  all  this 
investment in review, the likelihood that final FRLs remain biased is still not negligible. There 
is no obvious solution to alleviate this intrinsic pitfall of FRL accounting: national experts will 
always  benefit  from  insider  information  on  their  national  circumstances  and  modelling 
framework which can be used to dissimulate modelling biases to independent experts and the 
Commission.  

8.5.7.1.  Solution  A20:  Expose  FRLs  to  complimentary  open 

public consultations 

It  is  difficult  to  revise  the  current  Expert  Group  review  process  given  the  narrow  mandate 
Council  would  supposedly  allow.  Also,  if  all  or  most  of  the  above  presented  requirements 
(solutions A10-A20) were implemented, the actual LULUCF EG review process would have 
firmer ground and a common basis for the assessment of FRLs. Nonetheless, an option for 
further scrutiny and also for allowing in-country experts (researchers, NGOs, forest owners, 
etc.) to contribute and challenge assumptions, data and processes, the draft FRLs could be 
subject to an EU wide open consultation. Experts could be required to register in individual 
capacity,  and  MS  could  be  required  to  respond  to  consultation  questions  in  a  public  note. 
Based on these inputs, the LULUCF EG could start its review. This would not be a simplification 
of the process in terms of steps but might reduce the uncertainty and hence time spend in the 
EG review process itself.      

8.6. Harvested Wood Products 

Currently HWPs are in the accounting system using a simplified methodology for estimating 
the carbon stock of HWP. They are accounted for using gross-net method. 

There is evidence that the simplified HWP flow and lifetimes underestimates the size and flow 
(removals) to these pools (Aleinikovas et al., 2018; Jasinevičius et al., 2018). Putting that aside, 
in which sector (LULUCF or other) the flows to and from these pools are accounted remains 
to  be  discussed.  During  the  2000s  three  approaches  for  accounting  for  HWP  were  in 
discussion (Skog, 2008): 

1.  Stock-change  approach  accounts  for  the  annual  carbon  stock  change  in  HWP  and 

forests in a country regardless of wood origin. 

2.  Atmospheric approach accounts for the annual carbon fluxes between the atmosphere 
and forests/HWPs within a country. Emissions from HWP and removals by forests are 
accounted for in the country where they occur. 

3.  Production approach accounts for the annual carbon stock change in HWP and forests 

where the carbon is from trees harvested in the reporting country. 

In  2011,  Decision  2/CMP.7  the  Parties  to  the  Kyoto  Protocol  under  the  UNFCCC  process 
agreed to use the production approach to account for HWPs. This is the current approach used 
in the EU LULUCF regulation.  

In the enhanced transparency framework of the Paris Agreement, Parties have the possibility 
of using other IPCC reporting approaches than the production approach, but in that case, they 
shall also provide supplementary information on emissions and removals from harvested wood 
products estimated using the production approach. Hence, one could account for the storage 
in sectors where they are used (e.g. construction). This would be equivalent to a stock-change 

144 

 
 
approach for HWP between the LULUCF and construction sectors. If the construction sector 
is charged with the emissions from cement and steel use, then adding the stock-change due 
to HWP may increase the use of wood in this sector. If this stimulation does not occur, then 
there is no difference in LULUCF accounting. Options for renumeration schemes for climate 
benefits of wood use in various industrial sectors is currently being explored in a DG CLIMA 
contracted study (Ricardo et al., 2021).  

The proposed solution A8 in chapter 4 concerns target setting for HWP at MS level, and is the 
only proposed solution for HWP in this note.    

8.7. Avoiding  double  counting  and  additionality  issues  of 

voluntary schemes or initiatives 

Double-counting  can  be  a  reputational  and  integrity  risk  to  any  GHG  accounting  system. 
Counting the same emission reduction or carbon sequestration benefit twice towards the same 
or two separate targets undermines the purpose of the target, as ultimately the claimed and 
expected contributions are not delivered in reality. There is a risk of double-counting whenever 
two accounting systems are applied to the same sink or source, or where a unit representing 
a unique mitigation outcome can be used twice.  

In  short,  there  are  three  dimensions  of  relevance  for  assessing  and  eventually  addressing 
double-counting, namely jurisdiction, sector, and the formal nature of the outcome. All existing 
MRV, Inventory and registry protocols and principles, cover the issue of double counting within 
emissions or activity sectors of the schemes and mechanisms that rely on these. Any action 
or solution to double counting should therefore consider where there is risk of confusion, non-
consistency,  lack  of  information  sharing  or  non-recognition  between  two  systems.  The  risk 
pertains to all mitigation outcomes such as government inventories, credits, or certificates.  

The risk is usually higher where one or more of the below situations exists: 

  Two schemes operate at different scale: A sub-national vs a nationwide or international 

scheme; 

  Two  schemes  are  owned  and  operated  by  different  types  of  actors:  governments, 
industry organisations, businesses, NGOs, certification schemes or private citizens; 

  Two schemes apply different MRV and unit types or standards: Ex-ante crediting vs. 

ex-post crediting, or different baselines are applied; 

  And  lastly  where  two  schemes  are  not  aware  of  each  other:  A  company  claiming 
emissions  reductions  in  its  supply  chain  (insetting),  while  some  of  the  same  supply 
chain actors are part of e.g. a NAMA project funded by international donors.   

Addressing double-counting in various ways is a precondition for the robustness and integrity 
of  parallel  governmental  and  non-governmental  (‘voluntary’)  carbon  markets.  Below  three 
ideas for solutions to the above issues are presented. The solutions are not mutually exclusive, 
but rather mutually reinforcing.   

8.7.1.1.  Solution  A21:  MS  Accounting  Based  Target  approach 
accredited in EU for all non-governmental schemes  

Make  it  mandatory  to  follow  an  accredited  approach  to  setting  of  company  targets  and 
mitigation action. All accredited approaches in the EU should hold specific provisions on how 
to link to and share mitigation outcomes with the GHG inventory organisation in the relevant 
MS. An approach like science-based targets encourages linking to and ensuring consistency 
with national standards, data and approaches, which is already a good starting point. 

145 

 
 
Using an accredited approach could make companies eligible for applying an “EU approved 
climate action” stamp or trademark on their products, strategies or homepages.  

8.7.1.2.  Solution A22: Settle double counting terminology 

The term and concept of double counting is used widely and in different contexts, referring to 
various situations as outlined previously. The relevance, risk and appropriate response from 
EU, governments, inventory administrators, scheme owners and project owners will depend 
on  the  nature  of  the  double-counting.  Addressing  the  different  types  of  double  counting 
situations will require one or more of three actions: 

1.  Clear and common understanding and definition of various types of double counting 

2.  Practices and tools to prevent double counting 

3.  Regulatory responses where necessary and appropriate. 

As  concerns  the  EU  land  sector  and  the  2050  vision  for  a  carbon  removal  certification 
mechanism and market-based trading systems for removals, a first step would be to clarify a 
common understanding of double counting and identify likely situations where there is risk of 
double counting. In the medium term (2025-2035), where more local and other sub-national 
scale private or private-public carbon farming schemes may emerge but where a EU backed 
trading system for removals is not in place, a Good Practice Guideline for Avoidance of double 
counting of mitigation outcomes in the LULUCF sector could be developed and made available 
to the public and project developers. It could: 

1.  Discuss and compare different definitions of varying stringency and scope 

2.  Map  and  explain  relevant  stakeholders  and  their  responsibilities  and  possible  risk 

mitigation actions. 

3.  Provide overview of common risk situations 

4.  Propose practices and guides to avoid double-counting        

It  is  important  that  any  such  GPG  would  aim  at  a  range  of  stakeholders,  such  as  scheme 
operators, project owners, credit users, policymakers/regulators, investors, registries, and the 
general public (serving as buyers off offsets for flights, travel, other emissions).  

8.7.1.3.  Solution A23: Set up mandatory EU wide registry for all 

mitigation outcomes 

A key to prevent double counting is to be able to assign any approved and unique mitigation 
outcome and unique ID and register it in a database that can track trading and use in these via 
a transaction log.  

An EU wide registry, linked to an EU approved stamp (see solution A21 above), available with 
a small registration fee could be set up based on the experiences and system requirements of 
the ETS registries or EUTR databases. It could be a series of connected MS registries or an 
EU base registry e.g. operated by the EEA. In order to obtain the “EU approved stamp”, the 
mechanism  issuing  the  mitigation  outcome  unit  (credit,  certificate,  …)  should  adhere to the 
registry requirements and register all issued outcomes. The registry should ideally register all 
LMUs exchanged between two MS and between climate governance sectors of a MS (LULUCF 
and ESR, see Topic Note 7 on Flexibilities).  

In the medium term, the registry should link GHG inventories, voluntary carbon farming (and 
possibly  HWP  based)  initiatives  and  have  mandate  to  scrutinize  the  MRV  and  origin  of  all 
registered mitigation outcomes. With a view to a post 2050 trading system, the registry could 
be further developed and extended.  

146 

 
 
8.7.1.4.  Solution  A24:  issue  an  opinion  legitimating  “vertical” 

double-claiming 

Vertical  double-claiming  occurs  when  one  state  and  one  non-state  entity  (e.g.  a  firm  or  an 
individual)  simultaneously  claim  the  “benefit”  of  the  same  emissions  reduction  action.  For 
example, an agri-food firm claims that its products are climate-neutral because it has financed 
agroforestry projects and the MS where these projects take place reports increase removals 
in its LULUCF sector. 

In principle, vertical double-claiming does not impair environmental integrity. The same way 
that  emissions from  cows  are  accounted  both  in the  carbon footprint  of the farm  and  in the 
national  GHGI  of  the  MS  where  the  cows  live,  reduced  emissions  from  improved  cow 
management should be reported both by the relevant farm and MS. 

However,  this  has  not  historically  been  the  viewpoint  of  most  international  offset  standards 
(e.g. Gold Standard, Verra) which in turn has hampered the certification of emissions reduction 
projects  in  the  EU.  Confronted  with  the  implementation  of  the  Paris  Agreement,  these 
international standards are revising their stance on vertical double claiming, but they have not 
yet removed it from their criteria. 

EU could suggest certification schemes based on MS best-practices that assure environmental 
integrity  by  minimizing  vertical  double-claiming.  The  EU  could  support  these  initiatives  by 
issuing a similar opinion. 

147 

 
 
 
 
8.8. References 

Aleinikovas,  M.,  Jasinevičius,  G.,  Škėma,  M.,  Beniušienė,  L.,  Šilinskas,  B.,  &  Varnagirytė-
Kabašinskienė, I. (2018). Assessing the Effects of Accounting Methods for Carbon Storage in 
Harvested Wood Products on the National Carbon Budget of Lithuania. Forests, 9(12), 737. 
https://doi.org/10.3390/f9120737 

Climate  Action  Network  (CAN)  Europe.  (2016).  NGO  position  on  the  post-2020  LULUCF 
regulation. Climate Action Network (CAN) Europe. 

European  Commission.  (2020a).  Impact  Assessment:  STepping  up  Europe's  2030  climate 
final. 
document 
ambition, 
https://ec.europa.eu/clima/sites/clima/files/eu-climate-action/docs/impact_en.pdf 

SWD(2020) 

working 

Staff 

176 

European Commission. (2020b). Staff Working Document amending Annex IV to Regulation 
(EU) 2018/841 of the European Parliament and of the Council as regards the forest reference 
levels to be applied by the Member States for the period 2021-2025. 

Forsell,  N.,  Korosuo,  A.,  Fedeirici,  S.,  Gusti,  M.,  Rincón-Cristóbal,  J.  J.,  Rüter,  S.,  ...  & 
Gardiner,  J.  (2018).  Guidance  on  developing  and  reporting  the  Forest  Reference  Levels  in 
accordance with Regulation (EU) 2018/841. 

Forsell, N., Korosuo, A., Gusti, M., Rüter, S., Havlik, P., & Obersteiner, M. (2019). Impact of 
modelling  choices  on  setting  the  reference  levels  for  the  EU  forest  carbon  sinks:  How  do 
different assumptions affect the country-specific forest reference levels? Carbon Balance and 
Management, 14(1), 10. https://doi.org/10.1186/s13021-019-0125-9 

Grassi, G., Pilli, R., House, J., Federici, S., & Kurz, W. A. (2018). Science-based approach for 
forests. Carbon  balance  and 
credible  accounting  of  mitigation 
management, 13(1), 1-16. 

in  managed 

Jasinevičius, G., Lindner, M., Cienciala, E., & Tykkyläinen, M. (2018). Carbon Accounting in 
Harvested  Wood  Products:  Assessment  Using  Material  Flow  Analysis  Resulting  in  Larger 
Pools Compared to the IPCC Default Method. Journal of Industrial Ecology, 22(1), 121–131. 
https://doi.org/10.1111/jiec.12538 

Körner,  C.  (2003).  Slow  in,  Rapid  out—Carbon  Flux  Studies  and  Kyoto  Targets.  Science, 
300(5623), 1242–1243. https://doi.org/10.1126/science.1084460 

Kulovesi,  K.,  &  Oberthür,  S.  (2020).  Assessing  the  EU’s  2030  Climate  and  Energy  Policy 
Framework:  Incremental  change  toward  radical  transformation?  Review  of  European, 
Comparative 
151–166. 
https://doi.org/10.1111/reel.12358 

Environmental 

International 

29(2), 

Law, 

& 

Luyssaert, S., Marie, G., Valade, A., Chen, Y.-Y., Njakou Djomo, S., Ryder, J., Otto, J., Naudts, 
K., Lansø, A. S., Ghattas, J., & McGrath, M. J. (2018). Trade-offs in using European forests to 
meet  climate  objectives.  Nature,  562(7726),  259–262.  https://doi.org/10.1038/s41586-018-
0577-1 

Nabuurs, G.-J., Delacote, P., Ellison, D., Hanewinkel, M., Hetemäki, L., & Lindner, M. (2017). 
By  2050  the  Mitigation  Effects  of  EU  Forests  Could  Nearly  Double  through  Climate  Smart 
Forestry. Forests, 8(12), 484. https://doi.org/10.3390/f8120484 

Romppanen, S. (2020). The LULUCF Regulation: The new role of land and forests in the EU 
climate and policy framework. Journal of Energy & Natural Resources Law, 38(3), 261–287. 
https://doi.org/10.1080/02646811.2020.1756622 

Savaresi, A., & Perugini, L. (2019). The Land Sector in the 2030 EU Climate Change Policy 
Framework: A Look At The Future. Journal for European Environmental & Planning Law, 16(2), 
148–164. https://doi.org/10.1163/18760104-01602004 

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Savaresi, A., Perugini, L., & Chiriacò, M. V. (2020). Making sense of the LULUCF Regulation: 
Much  ado  about  nothing?  Review  of  European,  Comparative  &  International  Environmental 
Law, 29(2), 212–220. https://doi.org/10.1111/reel.12332 

Skog, K. E. (2008). Sequestration of carbon in harvested wood products for the United States. 
Forest Products Journal, 58(6), 56–72. 

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9. Topic Note #7: Governance of LULUCF Flexibility 

Content note: 
This  topic  note  discusses  the  potentials  and  opportunities  for  enhancing  the  relationship 
between the  Land  Use and  Land-use  Change  and  Forestry (LULUCF) Regulation53  and the 
flexibilities  available  for  the  sector  within  the  EU  Effort  Sharing  Regulation  (ESR).54  The 
approaches for the governance of flexibilities could help to trigger a list of short-term actions 
to enhance the long-term contribution from the sector towards achieving the climate neutrality 
target for 2050. The note explores the current governance of flexibilities and identifies some 
existing problems, e.g. the uneven conditions across EU Member States with regard to data 
availability,  mitigation  potential  and  abatement  costs.  While  there  are  already  LULUCF 
flexibilities in place for the ESR, there are some signals that MS are finding it difficult to make 
use of them in any form. With the carbon sink decreasing across MS, it is also difficult to justify 
the trade of removal units from the sector. The note then provides ten possible options for the 
design of flexibility mechanisms. 

53 Regulation (EU) 2018/841 of the European Parliament and the Council of 30 May 2018 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 No 529/2013/EU, OJ L 156/1 of 19 June 2018. 

54 Regulation (EU) 2018/842 of the European Parliament and 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 156/26 of 19 June 2018. 

150 

 
 
 
                                                 
151 

 
 
9.1. Introducing Flexibility 

Flexibility, here understood as the transfer of accountable mitigation outcomes or allowances 
between sectors and across EU member states (MS) with different GHG targets, can reduce 
compliance costs. Flexibility can be measured on a scale from full unrestricted liquidity on one 
end  to  compartmentalized  and  ringfenced  sectors  or  MS-based  system  tied  to  a  MS-level 
target with no transfer allowed on the other end. Between the two extremes, there is a wide 
range of possible restricted flexibility options. This topic note explores the type of flexibility that 
could apply in a 2030 LULUCF governance system. 

The  figure  below  is  a  stylised  representation  of  the  sectors  of  EU  climate  policy  with  the 
currently available flexibilities depicted as green arrows. However, in principle, any two boxes 
at  any  level  could  be  connected,  and  exchanges  of  accountable  mitigation  outcomes  (or 
allowances)  allowed,  which  then  would  constitute  an  available  flexibility.  In  fact,  full  and 
unconditional  flexibility  between  all  sectors  and  MS  (or  one  joint  target),  would  minimise 
abatement costs, but at the same time reduce short-term incentives to address systematic or 
inherent challenges in a MS or sector.  

Figure 41: Stylised overview of current (green) flexibility flows available between sectors and MS in the current EU climate policy 
governance system. Own production, 2021.  

Flexibility  is  perceived  by  some  stakeholders  as  a  low-integrity  type  of  trading,  allowing  for 
watering down of or diluting mitigation obligations. In particular, where the traded amounts of 
emission reductions or future carbon dioxide removals, i.e. units representing the withdrawal 
of greenhouse gases (GHGs) from the atmosphere as a result of deliberate human activities 
(IPCC,  2018),  originate  from  projects  or  actions  that  are  not  comprehensively,  consistently, 
transparently and accurately MRVed. To address these concerns, work is ongoing to establish 
an EU Carbon Removal Certification mechanism to define what criteria and governance would 
be needed for high integrity units for carbon removals.    

Flexibilities  can  be  restricted  along  different  parameters,  for  instance  time,  direction,  level, 
amount, type, provenience and conditionality. For a typology of restrictions, see Table 20. 

152 

 
 
 
 
 
 
Type of restriction 

Description 

Table 20: Flexibility restrictions.  

Time 

Direction 

Level 

Amount 

Type 

Provenience 

Conditionality 

Access to flexibility can be restricted to a certain period or time-window, or multiple fixed-
frequency  windows,  e.g.  linked  to  every  international  stocktake  under  UNFCCC  Paris 
Agreement. Permanent access to flexibility is unrestricted time-wise. 

A restriction on direction can mean that receivers in one sector or other category cannot 
supply flexibility to other actors. In other words, units from sector A can be used in sector 
B, but not the other way around.  

More  precise  conditional  one-way  flexibility  can  also  be  constructed  by  combining 
directional  flexibility  with  any of  the other  restrictions.  Two-way  flexibility  is in principle 
open both ways but can be combined with certain one-way restrictions or conditions as 
well.  

Flexibility can be offered to actors or entities at a certain level only, e.g. flexibility only 
between MS, between certain sectors, or between sectors within a MS only. 

Capped flexibility, as is the system under the current ESR regulation, means that only a 
certain amount can be exchanged. The cap can be applied at union level, for a sector, 
for incoming transfer or outgoing, or relative to a target or baseline in percentage. 

Flexibility  can  be  allowed  for  some  types  of  mitigation  outcomes,  e.g.  units  from 
peatlands, forests, or certified lands, and excluded for other types  

Similar to the above, flexibility can be restricted or allowed for certain regions, partners or 
countries outside the EU (or even inside the EU) and ideally linked to conditions.  

Access  to  flexibility  can  be  made  conditional  on  quality,  completeness,  transparency, 
certain actions, or implementation issues. For example, allowing access to outbound or 
supply flexibility only when mitigation outcomes are based on Tier 3 level reporting, or if 
made subject to third party expert verification (as for carbon markets).  

9.2. Problem drivers: Uneven conditions  

The  question  of  whether  and/or  to  what  extent  to  allow  flexibilities  is  closely  linked  to  the 
question of how to define the target. With targets perfectly calibrated at all times to the situation 
of  MS  –  targets  that  reflect  equal  ambition  as  much  as  potential,  required  emissions  and 
sequestration  pathways,  that  respond  to  innovation,  changing  costs  of  intervention,  other 
changes over time, and viability at large – the need for, and interest in, flexibilities would be 
low. By contrast, targets that lack the level of perfect and continuous calibration across MS 
(whether initially or over time) will drive the demand for flexibilities. Flexibilities are a measure 
of and a fix to imperfection. 

While perfect calibration may be a long-term goal, at present it is not realistic for lack of data, 
for divergence of mitigation potential and abatement costs, and given changes in time. 

Lack  of  data:  As  explored  in  topic  note  2  on  soil  data,  most  soil  carbon  stock  changes  in 
European soils  are  currently  not  being monitored,  which is  the most  important  blind  spot  of 
land-related climate policy. Mitigation potential is assessed via scenario projections which rely 
on many assumptions. This problem is conflated by the fact that it is difficult to foresee what 
tools of innovation will be at the disposal of landowners and developers and to what extent 
they will be picked up.   

153 

 
 
 
 
 
Mitigation potential and abatement costs: Variations in geography, habitat, climate and soils 
cause stark differences in mitigation options (see Figure 42) and also prices. For some MS, 
the availability of additional sink activities is low due to already very high forest coverage (e.g. 
SE, FI, EE, LT), or because of intensive land use with dominance of settlements and agriculture 
(i.e. DK, NL). For other MS, land is available, but carbon sequestration levels are comparatively 
low (e.g. CY, ML, HE, IT) or high (e.g. IE) due to biogeophysical and climatic factors. 

On the other hand, in some MS (e.g. DE, DK, NL, PL, FI, SE), reducing emissions by restoring 
peatlands may present considerable potential, but the abatement costs are often high and the 
political viability complex. 

In principle, these differences could be taken into account when setting MS specific targets. 
The regulatory practice, however, will have to respond not just to stark variations but also to 
diverging  policy  priorities  among  MS  and  industries  and  –  given,  in  particular,  economic 
heterogeneity laid on top of the geographical differences in mitigation potential – the need for 
political compromise. 

Changes  in  time:  Setting  targets  for  several  years,  if  not  decades,  gives  regulatory 
predictability,  but  there  is  always  the  risk  that  over  time  economic,  technological,  legal  and 
social conditions change, with new mitigation options becoming available in one MS but not in 
the other.  

Flexibilities help navigate these challenges. They are conduits between sectors and MS, and 
they are meant to balance divergence in mitigation potential and between abatement costs, 
different speeds in climate action and innovation, and differing levels of climate priorities and 
ambition.  

The Figure 42 below presenting 2030 LULUCF emissions and removals as reported in Member 
States’ NECPs. The graph presents the emissions and removals in two  variants With Existing 
Measures (WEM) scenario, With Additional Measures (WAM) scenario. Additionally, the light-
coloured columns were based on the surrogate data, the data originating from different data 
sets covering the same area or activity.  

Figure 42. 2030 LULUCF emissions and removals as reported: With Existing Measures (WEM) scenario, With Additional 

Measures (WAM) scenario; Surrogate data Sources: Member States’ NECPs, First interim report. 

154 

 
 
 
9.2.1. Today’s targets and flexibilities 

Under the ESR, MS have binding annual GHG emission targets for 2021-2030 for economic 
sectors that fall outside the scope of the EU ETS (but excluding LULUCF). The targets are 
calculated  to  achieve  30%  emission  reductions  in  the  respective  sectors  across  the  EU, 
compared to 2005 levels. 

Under  the  LULUCF  Regulation,  MS  have  to  ensure  that  accounted  GHG  emissions  from 
LULUCF  are  balanced  by  at  least  an  equivalent  accounted  removal  of  CO₂  from  the 
atmosphere in the period 2021 to 2030 (“no debit rule”). 

With the enhancement of the overall EU target from 40% below 1990 emissions by 2030 to 
55%, both the ESR and the LULUCF targets are set to be strengthened in the coming years. 
As  a  consequence,  the  role  of  flexibilities  within  the  regulations  will  only  become  more 
pronounced. 

9.2.2. Flexibilities between ESR and LULUCF Regulation 

Two types of flexibilities link the ESR and the LULUCF Regulation directly, namely: 

1.  ESR  Flexibility  (ESR  to  LULUCF):  Where  total  LULUCF  emissions  exceed  total 
removals, a MS can access units from its ESR account – annual emission allocation 
units  (AEAs)  –  to  balance  the  LULUCF  debit  (Article  12(1)  LULUCF  Regulation). 
Detailed rules for accounting of transactions under the Regulations are set out under 
the  Union  Registry  –  Delegated  Regulation  (EU)  2019/1124  amending  Delegated 
Regulation  (EU)  2019/1122  as  regards  the  functioning  of  the  Union  Registry  under 
Regulation (EU) 2018/84255 and (once it is adopted) Delegated Regulation (EU) …/… 
amending  Delegated  Regulation  (EU)  2019/1122  as  regards  the  functioning  of  the 
Union Registry under Regulation (EU) 2018/841. The ESR Flexibility has no direct cap 
(restriction in amount);  

2.  LULUCF Flexibility  (LULUCF to ESR):  A  MS  may  use  credits from  various LULUCF 
sectors – referred to as “land mitigation units” (LMUs) or “removal units” – to account 
against  its  ESR  targets  over  the  period  2021-2030  (Article  7  ESR).  This  flexibility  is 
strictly capped for each MS (cf. Annex III of the ESR), with the total cap (all MS) set at 
262.7  MtCO2eq  over  the  10-year  period.  Individual  MS  quotas  are  calculated  and 
weighed according to emissions of the MS’ non-CO₂ agriculture sector, assuming that 
emission  reductions  in  this  sector  are  particularly  difficult,  sensitive  (in  light  of  food 
security), and costly.56 

It is important to note that the principle of ‘vertical integration’ applies under both flexibilities, 
i.e. each MS can trade its own ESR quota into its LULUCF quota, and vice versa, but a MS 
cannot  trade  horizontally  into  another  MS’  quotas  across  Regulations  (i.e.  it  cannot  buy 
LULUCF quotas from another MS for its own ESR compliance, and vice versa). This said, the 
ban of horizontal (from one MS to another MS) trades applies only to direct transactions. An 
MS  may  trade  AEAs  to  another  MS  (under  a  separate  flexibility,  unrelated  to  the  LULUCF 
Regulation), which may then trade said AEAs (now in its account) into its LULUCF framework. 
The LULUCF flexibility, for its part, allows LMU trading horizontally (from one MS to another). 
The buying MS, then, in principle, and subject to the limitations specific under Article 7(1) ESR, 
can use the traded quota for its own ESR compliance.  

55 OJ L 177, 2.7.2019, p. 66. 

56 Cf. recital 22 ESR; see also European Commission 2016. 

155 

 
 
                                                 
9.2.3. Use of Flexibilities 

While the rationale for introducing flexibilities is sound, their relevance in practice has so far 
been limited, especially with regard to the LULUCF flexibility. There are signals that MS are 
finding it difficult to make use of it in any form. As an EU-wide assessment of National Energy 
and Climate Plans (NECPs) shows (European Commission 2020b), most MS plan to ensure 
that their carbon sink will be large enough to avoid generating any debits (confirmation of no-
debit rule), but very few of them give any indication in their NECPs of the extent to which they 
plan to generate and use LULUCF credits for ESR compliance.  

Some MS noted the uncertainty of future sink achievements – Finland, for instance, will state 
its plans on using the LULUCF flexibility only at the time of first compliance check after the end 
of the first compliance period (in 2027). Another consideration is, however, that MS with high 
(or higher) LULUCF potential have few, if any, incentives to build this asset. Ireland is a good 
example. As one of the few countries that has indicated that it will use the LULUCF flexibility, 
it orients its LULUCF policies (afforestation; reduced drainage of organic soils; grassland and 
wetland management) exactly – and not beyond – towards its LULUCF flexibility quota of 26.8 
MtCO₂.57 In the case of Lithuania, there are expected high net gains for the sector regardless 
of  additional  measures.  The  NECP  simply  notes  that  there  are  “opportunities”  for  further 
mitigation,  without  specifying  concrete  targets.  Spain  clarifies  that  it  seeks  to  “exceed”  its 
LULUCF no debit level, while stating that it has no plans to-date to use the quota. 

Still, a multitude of MS remain focused on achieving mitigation gains in the LULUCF sector, 
though  without  consideration  necessarily  of  the  use  of  flexibilities.  Denmark  considers 
agricultural  support  to  provide  farmers  the  incentive  to  transition  to  a  more  sustainable 
production and thereby supporting the green transition of the industry. France promotes “smart 
and sustainable management  of forests."  Germany focuses  on  carbon (?) preservation and 
accumulation  on  arable  land  as  well  as  peatland  protection.  Spain  seeks  to  regenerate 
silvopastoral  systems  and  conservation  agriculture.  Several  MS  specifically  refer  to  the 
Common Agricultural Policy (CAP) and its rural development programmes as tools to achieve 
future GHG benefits. Yet, this is mostly discussed outside the flexibility considerations between 
the ESR and LULUCF Regulation. 

9.2.4. Observed problems with current flexibilities 

The weak uptake of the flexibilities, in general, and of the LULUCF Flexibility, in particular is 
not  altogether  surprising.  There  are  obstacles  to  trading.  The  ban  on  horizontal  trading 
between  MS  and  across  Regulations  is  an  important  one,  i.e.  the  requirement  of  vertical 
integration (within the same MS only) creates a formidable limitation to what otherwise would 
be a marketplace between 27 parties. 

Lack of robust monitoring data, variability, and low predictability are also taking their toll. As 
Finland’s statement in the NECP shows: MS are wary of tapping into an asset that remains 
unpredictable, which is also found to be the case at the global level (IETA, 2020). In the Finnish 
example,  the  variability  of  the  sector  is  high  (the  sink  contributions  fluctuated  each  year 
between 1990 and 2017 between -14 and -33.7 Mt CO2eq. annually, see also TN1 and TN2). 
High variability makes it hard for countries to make firm budgetary-style plans for the sector 
with clear earmarks for transfers to the ESR regime. 

It is also noted that the accounting rules for the sector’s key activity – managing forest land – 
have only recently been agreed (Commission Delegated Regulation of 28 October 2020). It is 

57 IE explains that the flexibility is needed precisely because it has high agricultural emissions that require partial offsetting. 

156 

 
 
                                                 
only now that MS are on firm regulatory ground to plan their compliance exposure and excess 
budgets are available for trading.  

On the implementation side, planning and implementing an ambitious mitigation strategy in the 
LULUCF sector remains a novelty for some Member States (as this sector only contributes to 
the  EU  climate  target  as  of  2021).  As  the  NECPs  show,  many  governments  have  started 
piloting  schemes,  but  few,  if  any,  have  outlined  robust  sink  enhancement  pathways.  The 
difficulty, in some cases, to monitor these pathways is a roadblock to forward planning of using 
surplus quotas under flexibility instruments.  

Then, exchanging, trading or transferring units based on land use actions remains contentious 
in the political discourse across the EU. The case against allowing a LULUCF flexibility into 
the ESR is made under the arguments that sink functions should be employed in addition to 
emission  reductions  and  not  as  a  replacement  to  them  (Fern  2018;  Carbon  Market  Watch 
2015; CAN Europe 2016); that the use of removal units would delay the necessary transition 
to a zero-carbon economy (Sandbag 2018); that removal units are somewhat less valuable 
given the non-permanence risk for sequestered emissions (Cevallos et al. 2018); and that the 
overall ambition of the EU would lapse (Savaresi et al 2019). MS governments may have taken 
these  criticisms,  if  not  necessarily  at  heart,  as  a  warning  not  to  burn  political  capital  by 
advocating  the  use  of  the  flexibility  whose  relevance  for  compliance,  in  any  case,  remains 
overall small.  

9.2.5. Options for design of flexibility mechanisms 

The backdrop for the use of flexibilities in the context of climate policy and increased ambition 
levels  in  the  EU,  is  the  fact  that  carbon  sinks  across  MS  are  decreasing  due  to  ageing  of 
forests, harvesting, intensive peatland use, depletion of the soil carbon stock and increasing 
natural  disturbances.  Aggregating the  projection information  included  in the  NECPs  reveals 
that,  according MS  projections,  around  a  third  of the  2005  EU  carbon  sink could  be  lost  by 
2030. In some Member States, the LULUCF sector may continue to be or become a net emitter 
after  2030. In this  situation,  ensuring  incentives  to realise  the full  mitigation  potential  at the 
lowest total cost when potentials and costs are unevenly distributed across the EU, will require 
inter-MS and inter-sector flexibilities. In the long term, around 2050 and beyond, the potential 
commoditisation  of  carbon  removals  and  creation  of  an  EU-level  common  market  could  to 
some extent address these issues. At the same time it could make inter-MS and inter-sector 
flexibility  mechanisms  obsolete.  Therefore,  the  flexibility  mechanisms  presented  below  are 
envisioned  as  temporary  in  nature  (10-30  years)  and  defined  by  the  sector  and  target 
architecture within which flexibility is needed. The target and sector architecture presented in 
the EC Impact Assessment for 55% is used as a basis and presented in the below sub-chapter, 
although this may have changed radically by 2050.   

9.2.6. Basic assumptions 

For the development of flexibility options following the text below, four overall principles have 
been applied. First, a firm separation between the European Emissions Trading Scheme (EU 
ETS)  and  the  non-EU  ETS  sectors  will  remain.  This  also  means  that  none  of  the  flexibility 
mechanisms create a quantitative link between the EU ETS and the LULUCF sectors, allowing 
for exchange of accountable mitigation outcomes. There are however a set of ideas relating to 
the use of auctioning proceeds from the ETS presented in the end, that would pass over some 
costs of action in the LULUCF sector, without a corresponding transfer of mitigation outcomes 
for accounting purposes. 

Secondly, it is assumed that the ESR target can increase or sector-coverage decrease. In both 
cases the mitigation pressure would increase on the activities in the ESR, which could foster 
changes in needs. It is assumed that national targets are maintained. Thirdly, it is assumed 

157 

 
 
that  the  LULUCF  sector  maintains  its  no  backsliding  principle  with  or  without  access  to 
flexibility, or its assigned sector target, with the specific architecture still unknown.  

Fourth, the flexibility concept as one in which the access to flexibility would allow parties of the 
exchange to mutually benefit from the exchange through, e.g. a financial transfer and lower 
abatement  costs respectively,  is  to  be  reconfirmed.  Flexibility  can  serve  as an  incentive for 
both the receiving and the supplying side. With the right design of a flexibility mechanism, the 
combination  of  an  incentive  and  a  targeted  and strategic  restriction  or  conditionality  for  the 
access to flexibility, the mechanism can serve as a policy instrument promoting certain action 
or policy objectives.   

In short, the specific goals for the use of new or extended flexibilities could be: 

  Mobilise all feasible and accountable sink and emission reduction potential in the EU 

  Enhance cost-effectiveness of mitigation efforts in the sectors covered by the LULUCF 

and ESR 

  Leverage  certain  policy  initiatives  or  priorities  through  conditional  access  for  MS  to 

strategic flexibilities  

  Alleviate suboptimal policy development arising from the uneven sink distribution in the 

EU 

  Prepare for and eventually test larger scale sector and MS level flexibilities necessary 

in a 2050 carbon neutrality scenario  

The following sub-chapters use the above categories of restrictions as tools to develop and 
present  a  range  of  possible  flexibility  mechanisms.  The  proposed  options  or  solutions  are 
idealized and presented as principal ways to address problems and promote the goals of EU 
climate policy for land use sectors. 

9.2.6.1.  F1: Prioritize the trade of certified LMUs into the ESR  

Creating a taxonomy of sink interventions and offering a certification scheme to participating 
landowners would address several of the obstacles observed and would drive activities on the 
ground. 

The basic idea would be to allow certified LMUs (or “carbon removal certificates”) to be freely 
traded into the ESR and without consideration to all or most of the current conditions set by 
Article 7.1 ESR.  

This option would address the implementation deficit at MS level integrating farmers and forest 
holders  through  a  certification  scheme,  likely  supported  by  a  credit  compensation  scheme 
triggering additional incentives to generate a sink. It would also address monitoring/data gaps 
and – with tight certification requirements in place – the still contentious political debate.  

Arguably, at least for certain activities, an ESR cap on the use of LMUs for ESR purposes may 
not  be  needed  at  all.  A strong  case  can  be made in this  context for  restoration  activities of 
degraded ecosystems (Meyer-Ohlendort 2020) and also for allowing emissions avoidance and 
reduction categories (rather than focusing exclusively on sequestration). Restoration activities 
also do not come with the same level of non-permanence challenges and score particularly 
high  on  ecosystem  service  provision  at  large  (Joosten  et  al.  2016).  The  restoration  (full  or 
partial through the wet farming techniques) of drained peatlands – responsible for about 220 
MtCO2eq across the EU every year (Tanneberger et al. 2020) – would likely be at the top of 
the list for potential emission avoidance.  

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9.2.6.2.  F2: Permit direct horizontal trading 

It is well documented that almost all MS have robust potential to deliver LMUs from enhanced 
mitigation action for Afforested Land and Agricultural land at fairly low prices (20eur/MtCO2eq) 
(European Commission 2016). However, not all MS will require LMUs for their ESR compliance 
or  will  have  the  intention  to  use  them  for  ESR  compliance.  Some  MS  will  also  have  more 
potential to deliver LMUs than admitted under their cap, while others face a higher shortfall 
under the ESR and have a potentially higher demand for LMUs. Permitting MS to trade the 
LMUs across borders would improve the liquidity of the market as a whole. 

That is, with the sale and purchase of distinct LULUCF categories allowed across MS, in any 
case – from the LULUCF sector in one country into the ESR sector in another, LULUCF credit 
demand and supply would be amplified. To safeguard the integrity of such trades or to leverage 
certain  policy  action  or  instrument,  the  European  Commission  could  assume  a  vetting  role 
concerning methodological and MRV approaches. Also, any authorization to lateralize removal 
units across MS could be made conditional.  

9.2.7. Creating Intra-AFOLU targets and flexibility 

While currently separated in different policy frameworks, the agriculture, forestry and land-use 
(AFOLU)  sectors  are  naturally  linked  on  various  levels  (including  in  terms  of  mitigation 
intervention,  economic  production,  landscape  planning,  and  other).  The  sectors  are  also 
connected indirectly at a climate policy level, i.e. through the calculation of the access to the 
LULUCF flexibility per MS based on the share of agricultural emissions.  

These linkages can be used and further enhanced by targeting key categories in the agriculture 
(ESR)  sector  and  by  setting  specific  offsetting (climate  neutrality) targets  within what  would 
constitute  a  broader  AFOLU  sector.  This  subsection  offers  a  number  of  options  that  would 
facilitate  AFOLU  sector  flexibility  in  various  ways.  They  all  assume  that  some  restriction  or 
separation of the UNFCCC Agriculture and LULUCF sectors are maintained for governance 
purposes. 

The European Commission may be involved in a scheme vetting role concerning the definition 
of carbon farming quality and MRV standards.  

9.2.7.1.  F3: Create an AFOLU compliance framework 

The basic idea is to create a common compliance framework for emissions from agriculture 
and emission and removals from LULUCF. Today, the LULUCF flexibility in the ESR is broadly 
calculated on the size of an MS’ agricultural emissions. This option would both simplify and 
strengthen  this  approach.  Each  MS,  in  this  option,  would  by  design  offset  its  agricultural 
emissions  with  LULUCF  removals.  The  prospect  of  net  emissions  under  the  AFOLU 
compliance  system,  in  turn,  would  trigger  additional  efforts  to  increase  LULUCF  sink  and 
decrease agricultural emissions at the same time. The ‘linking’ obstacles between the sectors 
would disappear and, depending on the targets agreed – which may first calibrate towards no-
debit between 2030 and 2040 and, then, move into negative terrain – setting ambitious sink 
milestones for the EU towards EU-wide climate neutrality.   

9.2.7.2.  F4: Additional sub-targets 

Option F3 may be combined with jurisdictional and/or activity-specific targeting allowing MS to 
export any overcompliance or surplus using any of the flexibility mechanisms presented in this 
paper. In this section it is envisioned as an intra-AFOLU sector flexibility to ensure trees are 

159 

 
 
planted. This could be set up in principle without restrictions on where the credits would be 
used. 

This could take the form of the below specific examples:  

Jurisdiction version: Local and regional origination of LMUs 

Specific targets – and climate neutrality targets – could be applied to the local or regional level. 
In  this  case,  emissions  would  then  have  to  be  offset  by  LMUs  generated  through  peatland 
restoration, improved grassland management or afforestation in the same jurisdiction (district, 
region, or state). 

Activity version: Activity specific (climate neutrality) target through removal offsetting 

A  (climate  neutrality)  target  could  be  applied  for  the  livestock  sector,  where  any  residual 
emission, once removals on the land of the farmers subject to the target had been counted in, 
would have to be balanced by removals from afforestation or peatland restoration either in the 
same MS or outside. This would in practice internalize costs of GHG emissions from livestock 
production, but necessitate project level flexibility for the sector into forestry or peatlands.  

9.2.7.3.  F5: Tree planting flexibility mechanism for 3 billion trees 

offering fast-track accounting 

As land availability and costs vary greatly among MS, a specific flexibility linked to tree planting 
could be envisioned, which would also promote action to support the current Commission's 3 
billion  trees  ambition58.  As  a  restricted  and  activity  specific  project  based  mechanism,  tree 
planting  (afforestation,  reforestation  and  agroforestry)  in  a  given  MS  but  fully  or  partially 
financed  by  another  MS  should  give  the  financing  part  access  to  MS  level  transfer  of 
corresponding  amounts  of  removal  units  between  the  project  host  country  and  financing 
country.  This  would  necessitate  corresponding  adjustments  in  the  AFOLU  (or  LULUCF,  if 
today’s separation remains) accounts of both MS. This project level flexibility could be subject 
to  third  party  verification,  and  also  made  conditional  on  the  quality/tier  level  of  the  activity 
reporting in the issuing MS.  

9.2.8. Indirect  Incentives:  strategic  allocation  of  EU  ETS  and  ESR 

proceeds 

Activities to enhance natural sinks can also be promoted indirectly, i.e. through the proceeds 
from sales or auctions of emission allowances.  

The total revenues generated by MS from auctions of EU ETS allowances between 2012 and 
30 June 2019 exceeded EUR 42 billion (European Commission 2019a). The 2018 revenues 
alone stood at 14 billion EUR; since then the allowance prices increased sharply.  

While MS are free to determine the use of most of these funds, the EU ETS Directive instructs 
MS to “determine” the use of the revenues and to consider (“should be used”) earmarking of 
at least 50% of them in accordance with a number of dedicated purposes (Art. 10.3 EU ETS 
Directive). These purposes have an emphasis on energy and international climate finance, but 
they also include “forestry sequestration in the Union.” Other soil enhancement measures are 
not mentioned.  

58 Biodiversity strategy for 2030; https://eur-lex.europa.eu/legal-
content/EN/TXT/?qid=1590574123338&uri=CELEX%3A52020DC0380 

160 

 
 
                                                 
It would not require much regulatory or – it would seem – political effort to amplify the revenue 
use purpose provisions in Article 10 EU ETS Directive through more targeted earmarking. 

9.2.8.1.  F6:  Emissions  trading  proceeds  –  targeting  specific 

carbon sink activities  

A  revised  Article  10  EU  ETS  Directive  could  add  other  sink  activities  beyond  forest 
sequestration,  namely  improved  soil  management  through  the  restoration  of  wetlands 
(including peatlands) and other degraded lands.  

A similar prioritization of fund use may be included in the ESR whose current Article 5.6 makes 
only  scant  provision  for  the  potential  (“Member  States  may”)  of  using  revenues  “to  tackle 
climate change in the Union or in third countries.” 

However, the impact of any such specification in the relevant regulatory frameworks may be 
limited. There is not much evidence that  MS have been using EU ETS auction proceeds to 
channel  investments  in  the  LULUCF  sector  despite  the  clear  language  on  “forestry 
sequestration” (listed in Article 10 EU ETS Directive since 2009). A study found that during 
2013-2015 only 1% of total MS auction proceeds went into forestry-related activities (Le Den 
et al. 2017).  

9.2.8.2.  F7: Introducing binding earmarks 

To introduce binding earmarks, the EU legislator would have to resort to stricter forms of fund 
prioritization. The earmarking language could still leave discretion, i.e. 'x% of proceeds should 
go  into  forest  and  soil  carbon  removal  activities.'  Alternatively,  the  EU  legislator  can  adopt 
binding earmarking provisions, i.e. 'x% of proceeds must go into forest and soil carbon removal 
activities.' 

It is noted that this binding earmark approach was recently added to a legislative act by the 
European  Parliament  with  respect  to  another  sector,  i.e.  international  shipping  (European 
Parliament 2020). 

9.2.8.3.  F8: LULUCF funds (member state and EU level) 

Any earmarking decision could further be combined with certain procedural and institutional 
requirements. MS would be obliged not only to dedicate a certain amount of auction (EU ETS) 
or sales (ESR) proceeds to specific LULUCF actions, but to set up dedicated (public, private 
or  public-private)  LULUCF  funds  that  are  operational  and  mandated  to  support  projects  or 
schemes that would deliver avoided emission or removals units. This could be balanced by the 
centralized fund, an EU LULUCF fund (similar to the EU’s Innovation Fund). 

The fund could be set up with the operational purpose to buy up or help create demand for 
carbon removal certificates, e.g. from carbon farming initiatives and others. Also, it could co-
finance tree planting initiatives as outlined in F5 above and reserve the right of access to a 
limited amount of the resulting removal units for an EU level compliance buffer. 

9.2.8.4.  F9:  Linking  LULUCF 

funds  and  project-based 

approaches 

The LULUCF funds could also be instructed to run credit purchase auctions from national or 
EU-wide  project-based  mechanisms.  Auctions  could  be  separated  in  slots,  tranches  or 
windows to account for different credit prices. It is noted that peatland restoration projects, in 
particular, may not be competitive in terms of price compared with forestry and a range of soil 

161 

 
 
enhancement practices. The voluntary standard MoorFutures has a price tag of US$ 40-80 per 
tonne. Max. moor charges around US$ 95 per tonne for peatland restoration in Switzerland 
(Von Unger et al. 2020). Ecological conditions for peat restoration vary sharply and so do prices 
of  restoration  (Artz  et  al.  2018;  Glenk  and  Martin-Ortega  2018),  yet  average  prices  remain 
elevated. 

9.2.8.5.  F10: LULUCF Research and Development 

In  addition,  or  alternatively,  the  LULUCF  funds  could  dedicate  funding  to  improve  data, 
technologies and MRV. MS could be obliged –though “LULUCF investment and development 
funds”  –  to  target  research,  tech-development,  and  skills-building  programmes  to  support 
LULUCF sector MRV improvements. 

162 

 
 
 
9.3. References 

Artz et al. 2018: Artz, R. et al., Peatland restoration – a comparative analysis of the costs and 
merits of different restoration methods, James Hutton Institute (2018). 

Cevallos et al. 2020: Cevallos, Gabriella; Grimault, Julia; Bellassen, Valentin, Domestic carbon 
standards  in  Europe.  Overview  and  perspectives  (Institute  for  Climate  Economics  2019), 
available 
https://www.i4ce.org/wp-core/wp-content/uploads/2020/02/0218-i4ce3153-
DomecticCarbonStandards.pdf 

at 

European  Commission  2020a:  Communication  from  the  Commission  to  the  European 
Parliament, the Council, the European Economic and Social Committee and the Committee of 
the Regions, Stepping up Europe’s 2030 climate ambition. Investing in a climate-neutral future 
for  the  benefit  of  our  people,  COM(2020)  562  final  of  17  September  2020,  available  at 
https://ec.europa.eu/transparency/regdoc/rep/1/2020/EN/COM-2020-562-F1-EN-MAIN-
PART-1.PDF 

European  Commission  20020b:  Staff  Working  Document 
(Impact  Assessment), 
accompanying  European  Commission  2020a,  SWD(2020)  176final  of  17  September  2020 
(Part  2),  available  at  https://ec.europa.eu/transparency/regdoc/rep/10102/2020/EN/SWD-
2020-176-F1-EN-MAIN-PART-1.PDF 

European Commission 2020c: Staff Working Document (Impact Assessment), accompanying 
European Commission 2020a, SWD(2020) 176final of 17 September 2020 (Part 2), available 
at 
https://ec.europa.eu/transparency/regdoc/rep/10102/2020/EN/SWD-2020-176-F1-EN-
MAIN-PART-2.PDF 

European  Commission  2020d:  European  Commission,  Caring  for  soil  is  caring  for  life, 
accessible  at  https://ec.europa.eu/jrc/en/science-update/proposal-soil-health-mission-caring-
soil-caring-life 

European  Commission  2020e:  Communication  from  the  Commission  to  the  European 
Parliament, the Council, the European Economic and Social Committee and the Committee of 
the Regions, An EU-wide assessment of National Energy and Climate Plans. Driving forward 
the green transition and promoting recovery through integrated energy and climate planning, 
COM(2020)  564  final  (17  September  2020),  available  at  https://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:52020DC0564&from=EN 

European  Commission  2019a:  European  Commission,  Report  from  the  Commission  to  the 
European Parliament and the Council: Report on functioning of the European carbon market, 
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164 

 
 
10.  Workshop 

I  Report:  LULUCF  Reporting  and 

Accounting Approaches 

10.1. Overview 

The workshop “LULUCF Reporting and Accounting approaches” was held on 18th November 
2020.  The  workshop  was  organized  under  the  study  “Reviewing  the  contribution  of  the 
LULUCF  sector  to  the  Green  Deal”  commissioned  by  DG  CLIMA  to  experts  from  COWI, 
Technopolis Group and Exergia.  

The outcome of the workshop will inform the impact assessment on increasing the ambition of 
European climate target to at least 55% of greenhouse gas reductions by 2030. 

The workshop information was published one month before the event through an Eventbrite 
webpage. In addition, official invitations were sent to targeted stakeholders in agreement with 
DG CLIMA. 

10.2. Workshop Objectives  

The workshop was the first one of the series of four workshops under the study” Reviewing the 
contribution  of  the  LULUCF  sector  to  the  Green  Deal  commissioned  by  DG  CLIMA.  The 
workshop was structured in a way to enable interactive debates with the audience, with the 
objective of introducing and initiating discussions on future policy design in the LULUCF sector, 
in the context of the impact assessment on increasing the ambition of European climate target 
of 55% of greenhouse gas reductions by 2030. 

The workshop was designed and dedicated to participants who should be familiar with one or 
several  of  the  fields  to  be  discussed  and  feel  confident  to  make  concise  forward-looking 
interventions. Each broader topic was opened by a short inspirational introduction, followed by 
life polls to kick off open discussions.  

The  workshop  was  also  aimed  to  initiate  a  discussion  and  greater  use  of  full  insights  from 
stakeholders  how  to  strengthen  greenhouse  gas  reporting  and  how  to  adjust  accounting 
methodologies to ensure that the LULUCF sector can effectively, efficiently and reliably deliver 
to the new target setting. 

10.3. Introduction  

Asger Olesen (COWI) introduced himself as the moderator for the first part of the workshop. 
He welcomed the participants and introduced some guidelines for the workshop. He presented 
the agenda for the day as described in Figure 44. 

 
 
 
 
 
 
 
 
 
 
Figure 43: Agenda 

10.4. Participants 

Overall, the workshop was limited to 70 participants from different stakeholders groups. 

Figure 44: Participants by stakeholder category 

10.5. Welcome and setting the scene 

166 

 
 
 
 
 
Simon  Kay  (DG  CLIMA)  provided  an  introductory  presentation  to  set  the  context  for  the 
workshop. 

He provided an overview of where the EU stands and the vision for the future, starting with the 
EU’s objective to become carbon-neutral by 2050, as presented in the EU Long-term Strategy 
in  March  2020.  Such  an  objective  fits  with  other  international  objectives,  such  as  the  Paris 
Agreement, and fully reflects the European Commission’s political priorities since the election 
of President Von der Leyden. 

He made a clear reference to the Climate Law and the Climate Target Plan  – including the 
revision of 2030 targets to at least 55% of emissions reductions – as moving towards making 
the climate-neutrality objective a legally enshrined target. Both proposals use a metric which 
includes emissions and removals of GHG from land.  

A graph  of the  pathway  to climate  neutrality  was presented,  showing  how  the metrics  have 
been aligned to reach the objective by 2050.  

He then provided an overview of the potentials for the LULUCF sector, namely, to increase the 
land  sink  to  300MtCO2e  by  2030,  to  significantly  reduce  non-CO2  emissions  including 
agriculture by 2030, and to reach climate neutral/bioeconomy by 2035. 

Simon Kay invited the audience to participate in the consultation process of the ongoing “Fit 
for 55” review. The consultation has just started and will remain open until the 5th February 
2021. 

He concluded his presentation by introducing the key questions that the workshop aimed to 
address. He stated that the workshop aims to provide a better vision on what needs to happen 
with  action  on  land.  The  purpose  of  the  workshop  was  to  discuss  the  simplification  of 
accounting  rules  and  being  sure  that  the  accounting  approaches  used  are  “fit  for  55”.  As 
regards reporting, the emphasis was on completeness as well as comparability.. 

10.6. Part 1: LULUCF Accounting 

The first  part  of  the  workshop  challenged  some of  basic  ideas on  LULUCF accounting  and 
what  changes  can  be  made.  This  part  of  the  workshop  included  two  presentations,  each 
followed by an interactive discussion session. 

10.6.1. LULUCF accounting 

Paulo Canaveira (Portuguese Environment  Agency) provided an overview of the current 
situation in relation to the use of LULUCF accounting rules as well as a historical perspective 
on the origin of such rules.  

The  presenter  started  his  intervention  with  a  brief  historical  overview  on  the  origin  of  the 
accounting rules, from the Berlin Mandate in 1995 and the Kyoto Protocol in 1997. The Kyoto 
protocol was decided in the context of limited information on emissions. In particular, there was 
little GHG inventory experience and limited knowledge about LULUCF emissions.  

Paulo  Canaveira  then  moved  the  focus  of  his  presentation  to  the  present.  The  LULUCF 
accounting  rules  present  some  challenges  due  to  their  complexity,  which  constrain  the 
participation of the sector. The LULUCF Regulation is based on the complex Kyoto Protocol 
system. While more experience has been achieved on GHG inventories and on how LULUCF 
emissions work and their trends, this has not been reflected in the way we approach LULUCF. 

Following such overview, the presenter introduced the Paris Agreement, as based on a system 
which takes full  emissions  into  account,  including  LULUCF.  He  reflected  upon two  possible 
options,  namely,  to  keep  our  current  approach  to  LULUCF  with  the  risk  of  rules  getting 
increasingly complex, or to embrace the Paris Agreement and simplify the EU system. 

167 

 
 
Two scenarios were presented to include LULUCF in the Effort Sharing. The first one showed 
the  same  LULUCF  sink  for  1990  and  2010,  which  implies  a  reduction  in all  sectors  except 
LULUCF. The second one showed a decreasing LULUCF sink which requires more of non-
LULUCF sectors to compensate for this. He explained that in this scenario, including LULUCF 
in the target would increase the ambition in the other sectors.  

Paulo Canaveira concluded his presentation emphasizing the importance of LULUCF in Effort 
Sharing to correct a system that is flawed, to embrace the Paris Agreement and move to a 
simplified and more transparent system, and to account for trade-offs between sectors. 

10.6.2. Interactive polls 

The interactive discussion session developed on six poll questions which were directed to the 
audience via an interactive online software (Mentimeter). 

The first poll aimed to categorise the respondents under specific stakeholder categories. 40 
stakeholders participated in this poll. 

Figure 45: Respondents by stakeholder category 

The second poll question investigated whether there should be more stringent targets for the 
LULUCF sector. 43 stakeholders participated in this poll, with 26 responding affirmatively. 

168 

20%7,5%20%30%17,5%2,5%2,5%Respondents by stakeholder categoryBusiness & Trade associationsNGOsResearch & AcademiaNational authoritiesEU institutionsInternational institutionsIndependent 
 
 
 
 
 
Figure 46: Responses by stakeholder category (poll N°2) 

The third poll question asked the audience, in the case there would be national targets for the 
LULUCF sector, how these should be calculated. 34 stakeholders responded to this poll, with 
the  majority  (19)  answering  with  “A  target  proportional  to  the  Member  State’s  potential  to 
increase the net sink in a cost-efficient way”. 

Figure 47: Responses by stakeholder category (poll N°3) 

169 

136631157161202468101214Business &TradeassociationsNGOsResearch &AcademiaNationalauthoritiesEU institutionsInternationalinstitutionsIndependentUnspecifiedShould there be more stringent targets for the LULUCF sector?No, continue with the current "no-debit" ruleYes, there should be more stringent targets than the current "no-debit" rule1321232162211111402468101214161820A percentage increase compared to the Member State’s past net sinkA percentage increase compared to the Member State’s no-debit baselineA change in theaccounting rules tomake the no-debitbaseline morestringentA target proportional to the Member State’s potential to increase the net sink in a cost-efficient wayA target proportional to the Member State’s share of agricultural land, forest land and wetlandA target proportional to the Member State’s wealth (GDP per capita)In case there would be national targets for the LULUCF sector, how should these targets be formulated?Business & Trade associationsNGOsResearch & AcademiaNational authoritiesEU institutionsInternational institutionsIndependentUnspecified 
 
 
 
 
 
 
The  fourth  poll  question  investigated  how  accounting  can  be  changed  to  achieve  a  good 
balance between simplification and higher climate ambition. 37 stakeholders responded to this 
poll,  showing  that  the  preferred  option  is  “Apply  gross-net  accounting  to  total  LULUCF”, 
followed by “Apply net-net accounting to total LULUCF” and “Other”. 

Figure 48: Responses by stakeholder category (poll N°4) 

The  fifth  poll  question  asked  which  specific  action  in  the  LULUCF  can  be  incentivised  by 
accounting and how. 27 stakeholders participated in this poll. “Afforestation by applying gross-
net accounting” was the preferred option. Multiple responses were allowed. 

170 

3131123134131143110246810121416Apply net-netaccounting to totalLULUCFApply gross-netaccounting to totalLULUCFApply differentrules to the landaccountingcategories of theLULUCF RegulationChange thedefinition of landaccountingcategories and thecorrespondingaccounting rulesKeep the landcategories andaccounting rules asin the LULUCFRegulationOtherLand accountigncategories andaccounting rules donot matterHow can accounting be changed to achieve a good balance between simplification and higher climate ambition?Business & Trade associationsNGOsResearch & AcademiaNational authoritiesEU institutionsInternational institutionsIndependentUnspecified 
 
 
 
Figure 49: Responses by stakeholder category (poll N°5) 

The sixth and last poll for this session asked which specific accounting elements should be 
revised in a simplified accounting framework. 30 stakeholders participated in this poll. “Cap on 
credits, e.g. from forest” resulted the most selected answer. Multiple answers were allowed. 

Figure 50: Responses by stakeholder category (poll N°6) 

171 

12231131111111261121111111111111322102468101214Rewetting byapplyinggross-netaccounting toall wetlandrelatedconversionsRewetting byapplying net-netaccounting toall wetlandrelatedconversionsHWP byapplyinggross-netaccountingHWP byapplying net-netaccountingAfforestationby applyinggross-netaccountingAfforestationby applyingnet-netaccountingApply net-net accounting to “land remaining” and gross-net accounting to “land converted”OtherThere shouldno specificaccounting toincentiviseactionWhich specific action in the LULUCF sector can be incentivised by accounting and how?Business & Trade associationsNGOsResearch & AcademiaNational authoritiesEU institutionsInternational institutionsIndependentUnspecified221211113321123435111111320246810121416HWP categoriesand half-valuesCap on credits, e.g.from forestExclusion ofcarbon pools thatare not a sourceTransition periodsother than 20yearsAll emissions andremovals currentlyoutside the scopeof the LULUCFRegulation(Settlements,Other land, Other)OtherWhich specific accounting elements and provisions should be revised in a simplified accounting framework? Business & Trade associationsNGOsResearch & AcademiaNational authoritiesEU institutionsInternational institutionsIndependentUnspecified 
 
 
 
10.6.3.  Discussion 

A national authority stakeholder asked if an indication could be given on the base year or 
period in net-net accounting. 

A national authority stakeholder clarified that there is uncertainty around how much will be 
asked from ETS. Calculations are based on 2005 numbers. As there was no ESR in 1990, it 
was not possible to calculate relating to 1990. The revised ETS and ESR will maintain 2005 
as base year, so if we treat LULUCF with ESR we would keep 2005. It will go hand in hand 
with how other regulations change. 

A  national  authority  stakeholder  asked  if  gross-net  accounting  would  be  with  a  cap.  A 
national authority stakeholder responded that it is not the idea to propose a gross-net, but 
a net-net approach (as in other sectors) comparing 2005 ESR emissions (including LULUCF) 
with 2030 ESR emissions (including LULUCF), so there would be no need for caps or other 
instruments constraining the sector. 

The moderator asked what the pros and cons would be of having a joint ESR with a net-net 
approach when we look towards 2050 and the climate neutrality objective, having to balance 
removals and emissions in other sectors. 

A national authority stakeholder clarified that this approach would be in combination with 
the ETS, so that the sum of ETS and the expanded ESR would be zero.  

A  research  &  academia  stakeholder  asked  what  the  target  for  LULUCF  would  be  and  if 
bringing this into an ETS world with higher ambition levels would imply watering down targets.  

A national authority stakeholder responded that the notion of watering down targets comes 
from the current system. It was discussed not to have sector-specific targets, and therefore not 
a LULUCF target, but rather an ESR target which would be set in the same way and include 
also LULUCF emissions. This would not be reducing ambitions as all countries would have to 
do more than what they are currently required to do. LULUCF could be addressed in domestic 
policies, through which one can decide whether to invest more or less in different sectors. This 
is already the case for countries to comply with ESR. 

A  research  &  academia  stakeholder  concluded  by  stating  that  when  constructing  the 
integrated ESR target, we have to assume something on the development of LULUCF (e.g. 
constant sink, declining sink), which implies that there are some assumptions on the LULUCF 
ambition level. 

A  business  & trade  association  stakeholder  asked  how  we  could ensure  that  embedding 
LULUCF  and  ESR  together,  and  possible  compensation  mechanisms,  do  not  negatively 
impact wood harvesting, and if in addition, there are any considerations to take into account 
for the substitution of fossil-based raw materials. 

The  moderator clarified  that  these issues  are  also relevant  to reconsider  how  we  do  wood 
products accounting, which might also be an issue to open up and discuss.  

A  national  authority  stakeholder  responded  that  there  would  not  be  negative  impacts  of 
harvesting.  The    proposed  idea  would  include  everything,  including  HWP,  implying  that  the 
trade-off between more harvesting and HWP could be captured. Current trends point out that 
the sink is being reduced, implying that the pressure on other sectors is increased. 

A stakeholder from research & academia welcomed the proposal as an improvement of the 
current state of affairs but explained that expanding the current ESR targets per Member State 
might be too simplistic, because these targets were designed without considering population 
density. When  including LULUCF,  the  amount  of  land per  inhabitant  becomes  an  important 
criteria to consider. The peraticpant added a justification for the preference of the gross-net 
approach,  stating  that  the  LULUCF  sink  in  1990  becomes  somewhat  irrelevant  to  consider 

172 

 
 
 
what the target for a country should be in 2030 or 2050. Instead, there is an EU level target 
that includes LULUCF, or even an EU level target specific to LULUCF, whether we start from 
net-net  or gross-net to  decide  how  to share  the target  between  Member States  becomes  a 
detail. 

A  national  authority  stakeholder  responded  that  using  gross-net  could  create  a  problem. 
When using net-net, all countries can do better or worse, regardless of how much forests or 
LULUCF they have. On the contrary, when using gross-net, the differences between Member 
States would be astronomical which could lead to very serious allocation problems to distribute 
targets across Member States. 

An  international  institution  stakeholder  commented  that  the  accounting  happening  in 
LULUCF  is  not  necessarily  enough  to  provide  incentives  for  higher  climate  ambitions.  For 
example, in the production of harvested wood products, the substitution effect is important and 
if we only look at the LULUCF sector, we are missing this. 

An NGO stakeholder asked how to justify the issue of treating different emissions in sectors 
which are  similar  both  in  respect to the  permanence  of  the sinks and the  origin of  different 
emissions. When there is an aspirational target in LULUCF, the question of what accounting 
principle  to  use  is  more  related  to  how  the  target  is  set  than  the  level.  The  participant  also 
stressed the importance of considering how to share the burden fairly in the LULUCF sector 
and added that there is a lot of merit in having separate incentives in the LULUCF sector based 
on the different nature of removals. 

A national authority stakeholder responded that permanence would not represent an issue 
and explained that if the permanence of stock is not ensured, one would have to account for 
it, report and compensate it with other sectors. 

A  research  &  academia  stakeholder  asked  whether  net  zero  in  2050  is  defined  as  an 
accounted net zero (i.e. based on net-net accounting rules for LULUCF) or as a net zero based 
on reported emissions/removals as reported to the UNFCCC. 

An  EU  institution  stakeholder  responded  that  the  pathways  for  LULUCF  have  been 
calculated  as  in  the  other  sectors.  When  arriving  in  2050  and  looking  at  a  within-year 
assessment, we do not act in respect to the base year. The participant raised the important 
question  of  how  to  frame  a  certain  level  of  ambition.  This  could  be  set  by  determining  an 
amount of removals as a pre requisite. The participant concluded by stating that the question 
remains on how to set the ambition for 2050. 

10.7. Forest Reference Level 

Valentin Bellassen (INRAE) provided some reflections on the Forest Reference Level (FRL) 
accounting approach.  

He explained that the FRL approach should not be continued after 2030 because there are 
key weaknesses, such as: difficulty to reconcile with the 2050 carbon neutrality target; potential 
unreliability  of  projections  as  we  get  further  away  from  the  2000-2009  reference  period; 
resource intensity of modelling and reviewing FRL; vulnerability to information asymmetry. 

Nevertheless, he mentioned also some of the strengths of the approach, such as that it allows 
to account for age-related trends in target setting. 

He continued his presentation by presenting a possible replacement for LULUCF accounting. 
As we have an EU-wide goal of reaching -425MtCO2e/yr in 2050, the question that remains is 
how  to  share  the  target.  This  could  be  called  gross-net  accounting;  however,  it  is  not 
understood in the same way as in the Kyoto Protocol for forest management. He proposed the 
Effort Sharing subdivisions between Member States, keeping in mind that several criteria are 
to  be  defined  and  the  overall  target  setting  should  be  open  to  discussion  and  political 
negotiations. 

173 

 
 
 
He provided some thoughts on how to assess the consistency of FRL with GHG inventories. 
From the NFAPs in 2018, it is clear that this assessment has been done heterogeneously. He 
proposed some solutions to improve the consistency, by assessing the consistency in trend 
and in level.  For  the former,  he  proposed  to facilitate  the  use of  pre-existing  and published 
models and projections, to mandate the JRC to provide country specific FRL, and to mandate 
a narrative of the key drivers of the trend. For the latter, he proposed to provide more specific 
requirements  on  how  to  assess  consistency  and  a  consistency  assessment  tool  in  tabular 
format. 

10.7.1. Interactive polls 

The interactive discussion session developed on five poll questions which were directed to the 
audience via Mentimeter. 

The first poll question investigated on the audience’s opinion regarding the continuation of the 
use of the reference level concept. 33 stakeholders participated in this poll, with the majority 
(18) answering “No, compare the net sink in existing forests to a historic baseline (“net-net” 
accounting); such baseline corresponds to a larger sink than FRL”. 

Figure 51: Responses by stakeholder category (poll N°1) 

The second poll question asked the audience their opinion regarding FRLs as implemented 
under the LULUCF Regulation. 27 stakeholders answered this poll, with the majority indicating 
that  “The  FRL  review  process  is  not  stringent”  and  that  “The  FRL  review  process  is  too 
burdensome and costly”. Multiple answers were allowed. 

174 

12221327211123302468101214161820Yes, continue to comparethe net sink from existingforests to a FRL which isbased on the continuation ofpast management practicesYes, continue to use FRLs,but harmonise themethodology to establishthem across Member StatesNo, compare the net sink in existing forests to a historic baseline (“net-net” accounting); such a baseline corresponds to a larger sink than the FRLNo, take into account the entire net sink in existing forests, without comparing it to any baseline (“gross-net” accounting)Should the EU continue with the reference level concept?Business & Trade associationsNGOsResearch & AcademiaNational authoritiesEU institutionsInternational institutionsIndependentUnspecified 
 
 
 
 
Figure 52: Responses by stakeholder category (poll N°2) 

The third question asked the audience how important a uniform application of the reference 
period is for setting FRLs. 29 stakeholders answered, with the great majority (21) indicating 
that “best available data should be used”. 

175 

13112211323434112302468101214The FRL modellingand review processunder the LULUCFRegulation is theright balanceThe FRL modelling istoo resource-intensive, e.g. data,human capital,overall costsThe FRL reviewprocess is tooburdensome andcostlyThe FRL reviewprocess is notstringentOtherWhat do you think about Forest Reference Levels as implemented under the LULUCF Regulation? Business & Trade associationsNGOsResearch & AcademiaNational authoritiesEU institutionsInternational institutionsIndependentUnspecified 
 
 
 
Figure 53: Responses by stakeholder category (poll N°3) 

The fourth question investigated on how management/harvest intensity should be defined. 21 
stakeholders participated in this poll, with the preferred option resulting in “there can be multiple 
definitions”, followed by “Harvest per increment”. 

176 

141213161111510510152025Data of all years from thereference period must be usedData the reference periodmust be used but some yearscan be excludedBest available data should beusedLatest available data should beusedHow important is a uniform application of the reference period for setting Forest Reference Levels?Business & Trade associationsNGOsResearch & AcademiaNational authoritiesEU institutionsInternational institutionsIndependentUnspecified 
 
 
 
Figure 54: Responses by stakeholder category (poll N°4) 

The  last  question  investigated  on  how  consistency  of  the  FRL  should  be  presented.  21 
stakeholders answered this poll, with the majority (13) indicating “quantitatively with statistical 
measures”. 

177 

212111113332012345678Harvest probabilitiesdefined for strata orage classesHarvest volume pergrowing stock orbiomass available forwood supplyHarvest area per areaavailable for harvestHarvest perincrementThere can be multipledefinitionsThe definition ofmanagement/harvestintensity is notrelevantHow should management/harvest intensity be defined?Business & Trade associationsNGOsResearch & AcademiaNational authoritiesEU institutionsInternational institutionsIndependentUnspecified 
 
 
 
Figure 55: Responses by stakeholder category (poll N°5) 

10.7.2.  Discussion 

An NGO stakeholder commented on the Reference Level concept and stated that generally, 
the more ambitious the target Member States need to cope with, the more they assume the 
appropriate incentives to enact it. Net-net is the closest to this approach, but one could also 
have an aspirational target for all countries and share the burden across.  

The moderator asked the audience to express their opinion on two options when not using 
FRL, namely compare the net sink in existing forests to a historic baseline (net-net accounting) 
and take into account the entire net sink in existing forests without comparing it to any baseline 
(gross-net accounting).  

An  EU  institution  stakeholder  responded  that  if  the  LULUCF  sink  is  the  base,  then 
accounting fully becomes a net-net. LULUCF is increasingly seen as being the base, therefore 
the distinction between gross-net and net-net should disappear. 

A research & academia stakeholder agreed with the previous statement and added that if 
LULUCF is included in the accounting, the only difference between the two approaches is the 
entry point to negotiate the target for each Member State. The participant asked the audience 
why, if starting with the LULUCF balance in 1990, this year is the most relevant starting point 
compared to other starting points (e.g. amount of land per inhabitant), keeping in mind that we 
are thinking of a long-term sink. 

An  NGO  stakeholder confirmed that the  discussion  should go  beyond net-net  and  that  the 
distinction between the two approaches becomes small. 

An international institution stakeholder commented that the reference level was introduced 
for Kyoto Protocol 2 because the cap for forest management used for Kyoto Protocol 1 did not 
provide  incentives  at  all.  The  participant  explained  the  rationale  in  the  context  of  the  Kyoto 

178 

21123114112202468101214QualitativelyQuantitatively with plotsQuantitatively withstatistical measuresA consistencypresentation is notnecessaryHow should consistency of the FRL be presented?Business & Trade associationsNGOsResearch & AcademiaNational authoritiesEU institutionsInternational institutionsIndependentUnspecified 
 
 
Protocol  that  accounting  should  exclude  removals  from  1)  elevated  CO2  concentration;  2) 
indirect nitrogen deposition; and 3) the dynamic effects of age structure resulting from activities 
and practices before the reference year. This should also be seen in the context that LULUCF 
was added after the targets were agreed. If this was known before, maybe targets should have 
been more ambitious, but there was a lack of knowledge on the potential back in 1997 in Kyoto. 

The  moderator  asked  the  audience their  opinion  about  the  reference  level  review,  and  the 
costs and stringency concerns over the EU process. 

An international institution stakeholder answered that it has been agreed that for NDCs there 
will  not  be  any  UNFCCC  review.  Countries  submit  what  they  want  to  achieve  and  what 
indicators they will use to determine their progress, and these indicators will be reviewed.  

An EU institution stakeholder commented that current FRLs have been designed to factor out 
the impact of age dynamics. However, age dynamic is still the main driver of sink decline in 
the medium term. The participant asked the audience whether, given the preference for net-
net emerging from the discussion, we could put the considerations on age dynamics aside. 

A  national  authority  stakeholder responded that  I  light  of the  previous  discussion  the total 
sink in LULUCF is small relative to ESR, and therefore having a target for the two would not 
be complicated to manage. 

A research & academia stakeholder added that when looking over the long-term, we do not 
only aim at a climate-neutral EU in 2050 but also afterwards, therefore age-dynamics become 
less relevant. In other sectors the age dynamics have not been included as technically as in 
the LULUCF (e.g. consider the age of buildings and of power plants), which implies that there 
is a less technical way for taking age-related dynamics into account. 

A national authority stakeholder commented on the importance of a uniform application of 
reference period for setting FRLs. While we may not need FRL going forward, if we are to use 
it we would have to use the best available data but the question that remains is whether we 
are talking of best available data in a free period or a constrained period. The former would be 
complicated  going  forward  and  the  latter  would  be  better  to  ensure  continuity  and 
comparability. Regardless of the use of FRL, all efforts would remain to report  all emissions 
and removals. Therefore, the accounting may be simplified, but the burden is not taken out of 
reporting. 

A research & academia stakeholder raised a question on the age dynamics issue previously 
addressd and asked why it remains an EU concern, given that many developed countries are 
not using FRLs.  

An  EU  institution  stakeholder  responded  that  it  is  not  very  clear  what  other  developed 
countries are doing on NDCs and suggested to direct these questions to Member States.  

An  international  institution  stakeholder  added  that  very  few  updated  NDCs  have  been 
received, making it difficult to conclude what other countries will do. New Zealand might use 
an FRL approach, US and Canada are keen on a net-net approach, while Russia has been 
using a gross-net approach.  

A research & academia stakeholder further reflected on the NDCs and added that there is a 
difference between an integrated target proposed by countries or a separate LULUCF target. 
For the latter, a finer accounting tool would be needed. Many countries opt for a full inclusion, 
making the LULUCF sector more prominent. This goes back to the question on the ambition 
levels, whether we include semi neutral or indirect effects into accounting for targets, and the 
same applies to accounting for disturbances. 

179 

 
 
An NGO stakeholder commented that what matters for the climate is how much carbon is in 
the ecosystem (e.g. forest ecosystem), rather than in the atmosphere. Therefore, there should 
be some flexibility over time regarding the timing of the sink when there is more carbon in the 
ecosystem. What matters is the stock, and this should be considered when providing incentives 
for substitution. 

A research & academia stakeholder commented on the issue of consistency and stated that 
if we are to opt for statistical measures of consistency, there should be guidelines and specific 
requirements on what these measures should be. Given the limited resources of the teams 
that deal with FRLs and inventories, a tool should be provided to implement the recommended 
statistical tests.  

An  EU  institution  stakeholder  concluded  the  Part  1  of  the  workshop  by  providing  some 
reflections  on  the  discussions.  The  participant  thanked  the  two  presenters  for  their 
contributions and highlighted some takeaways: 

  The 55% reduction should be a net comparison with a base year, but there is no need 
to call it this way as other sectors don’t. This provides scope for discussion on what 
purpose accounting rules have in a sector. 

  FRLs are an EU affair and the reason why they were introduced is because we had 
very  divergent  situations  between  Member  States  and  fragmented  ways  to  look  at 
LULUCF  questions.  We  had  to  deal  with  bringing  LULUCF  into  the  Kyoto  Protocol 
framework which took time. 

10.8. Part 2: LULUCF Reporting  

The second part of the workshop was moderated by John Van Aardenne (EEA) and focused 
on LULUCF reporting needs, completeness and accuracy as well as on wall-to-wall data as a 
cost-beneficial  means  for  land  monitoring.  This  part  of  the  workshop  included  two 
presentations, each followed by an interactive discussion session. 

10.8.1. LIFE Reporting 

Hannes Böttcher (Oeko Institute) provided a presentation on opportunities and challenges 
of reporting in LULUCF.  

He reflected on the role of existing independent/international data produced by different data 
communities (e.g.  remote  sensing,  flux  net,  modelling),  who  are  not  necessarily  aware  that 
such  data  would  be  used  for  inventories.  He  explained  that  there  are  opportunities  for 
improving  completeness,  consistency  and  comparability  of  the  inventories.  However, 
challenges persist, such as issues of definitions and matching reporting categories with model 
variables. He therefore called for a closer collaboration among the scientific communities on 
reporting. 

He  introduced  the  issue  of  visibility  of  mitigation  measures  in  reporting  and  explained  that, 
while  not  necessarily  meant  to  report  on  progress  of  mitigation  measures  of  different 
stakeholders,  reporting  is  often  used  for  assessing  this  progress.  As  there  is  an  increasing 
demand for  sinks  and flexibility  with other  sectors  is  increasing,  he  stressed  the  need for  a 
comprehensive inventory for the LULUCF sector. He added that there is a need for science to 
produce  emissions  factors  that  are  reflecting  mitigation  measures  on  the  ground,  to  make 
inventories ready for tracking mitigation action and setting more incentives for management 
changes. 

180 

 
 
 
Lastly, he commented on the need for reporting to be complete and accurate enough to reflect 
all  changes  in  time  and  space.  He  proposed  the  use  of  a  proxy  inventory  based  on  best 
available data, as it exists for other sectors. 

Hannes  Böttcher  concluded  his  presentation  by  calling  for  constant  improvement  and 
development of reporting methods to ensure adequate target setting. 

10.8.1.1. 

Interactive polls 

The  interactive  discussion  developed  on  five  poll  questions,  asked  to  the  audience  via 
Mentimeter. 

The first poll aimed to categorize the respondents under specific stakeholder categories. 26 
stakeholders participated in this poll. 

Figure 56: Respondents by stakeholder category 

The second poll investigated on the most pressing needs for improving LULUCF reporting. 25 
stakeholders  responded  to  this  poll.  The  preferred  answer  was  “activity  data  availability”, 
followed  by  “emissions  factor  data  quality”  and  “emissions  factor  data  availability”.  Multiple 
answers were allowed. 

181 

 
 
 
 
 
Figure 57: Responses by stakeholder category (poll N°2) 

The third poll asked the audience whether all emissions and removals should be reported. 25 
stakeholders answered this poll, with the majority (16) responding affirmatively. 

Figure 58: Responses by stakeholder category (poll N°3) 

182 

11142441161322232222112111111111134231312024681012141618Activity dataavailabilityActivity dataqualityEmissions factordata availabilityEmissions factordata qualityBetter internalreview, access toexternal expertsand learningprocessesCommonmethods andstandardsModeldevelopmentandimprovementHumanresources in theinventory teamOtherWhat are the most pressing needs for improving LULUCF reporting?Business & Trade associationsNGOsResearch & academiaNational authoritiesEU institutionsInternational institutionsIndependentUnspecified12321411111142024681012141618All emissions and removalsshould be reportedAll carbon stock changesemissions and removals shouldbe reported; gases only abovecertain thresholdOnly emissions and removalsabove a certain thresholdshould be reportedShould all emissions and removals (carbon stock changes and gases) be reported, regardless of the amount?Business & Trade associationsNGOsResearch & academiaNational authoritiesEU institutionsInternational institutionsIndependentUnspecified 
 
 
 
 
 
 
The  fourth  poll  asked  the  audience  which  carbon  stock  changes,  emissions  and  removals 
should  be  reported  at  least  at  tier  2.  18  stakeholders  responded  to  this  question,  with  the 
majority (11) responding “only above a certain threshold”. 

Figure 59: Responses by stakeholder category (poll N°4) 

The fifth and last poll asked how the accuracy and uncertainty of LULUCF estimates can be 
improved  and  verified.  19  stakeholders  answered  this  poll.  “Remote  sensing  data  and 
products” and “statistical and geostatistical modelling” resulted the preferred options. Multiple 
answers were allowed. 

183 

1313111111121024681012All, regardless of thequantityOnly above a certainthresholdNo requirements on tierreportingOtherWhich carbon stock changes, emissions and removals should be reported at least at tier 2?Business & Trade associationsNGOsResearch & academiaNational authoritiesEU institutionsInternational institutionsIndependentUnspecified 
 
 
 
Figure 60: Responses by stakeholder category (poll N°5) 

10.8.1.2. 

Discussion 

A national authority stakeholder commented on the previous presentation, stating that, while 
providing  useful  information,  the  role  of  inventories  is  not  to  characterise  the  relevance  of 
policies and measures. The focus of inventories should be to get as good a picture as possible 
of what is going on in terms of emissions and removals. The inventory alone will need some 
additional analysis. As regards the incentives, these are the role of policies, rather than of the 
inventories. 

A research & academia stakeholder emphasized the link to policy and a need for inventories 
to be updated. More information is needed for tracking mitigation measures and progress, but 
if  the  inventory  does  not  have  enough  resolution  and  granularity  to  detect  changes  (e.g. 
cropland  areas  changing  but  not  changing  management),  then  no  change  will  be  detected 
against the baseline.  

A research & academia stakeholder agreed that the link between scientists and inventories 
is not as tight as it could be and asked if there are concrete suggestions on how to improve 
their collaboration.  

A research & academia stakeholder responded that this can happen at different levels: at 
the inventory compilation level, if there is a consistent data set and similar definitions or at the 
EU level, where the initial checks can be supported by satellite data and check plausibility of 
results  to  improve  accuracy.  Modelling  data  from  inverse  modelling  can  be  used  to  get  an 
envelope around the sector where the net total can be determined at national boundaries.  

A research & academia stakeholder added that there is a need to rethink how data can be 
integrated, rather than thinking of science and inventories. 

The moderator invited the audience to comment on the most pressing needs for improving 
LULUCF reporting, particularly on activity data availability. 

A research & academia stakeholder commented that soil carbon is critically lacking activity 
data. While some practices that improve soil carbon sequestration have been identified, many 

184 

142223125111111112153421210246810121416Remote Sensingdata andproductsLPIS and IACSLUCAS and othersoil inventorydataStatistical andgeostatisticalmodellingInversemodellingPrivate andindependentdataOtherHow can the accuracy and uncertainty of LULUCF estimates be improved and verified? Business & Trade associationsNGOsResearch & academiaNational authoritiesEU institutionsInternational institutionsIndependentUnspecified 
 
 
Member States are lacking tools to record the data and this creates a blind spot in the current 
inventory. 

An EU institution stakeholder asked for further reflections on what is stopping the collection 
of this type of data. 

A  research  &  academia  stakeholder  explained  that  one  element  is  the  fact  that  soil 
inventories would not be conducted by inventory teams, and what constitutes an obstacle is 
the lack of soil inventories in Member States. Another element is that more use could be made 
of LIPS and IACS data, as some of the practices that improve soil carbon is subsidised by the 
CAP, yet we don’t see this data being used. 

A research & academia stakeholder added that in some Member States having accurate soil 
maps is an issue because of the lack of adequate soil inventories. When dealing with reporting, 
the question that arises is how much to invest if the emissions or removals are very small. 

A  national  authority  stakeholder  responded  that  the  link  between  science  and  reporting 
could be useful if data were to be combined and used to calibrate models, rather than having 
a soil inventory in each Member State. 

A national authority stakeholder drew the attention on the category of settlements, where 
there are many difficulties in finding data on soil carbon content, and there seems to be a gap 
in the guidelines on how to deal with this. 

An EU institution stakeholder provided an institutional perspective on reporting. Forestry has 
been  receiving  support  in  the  last  15  years  through  many  ways,  including  the  LULUCF 
workshop at ISPRA. However, soil monitoring had not been supported and what we managed 
to achieve for forests was not achieved for agriculture. 

The moderator asked to comment on whether all emissions and removals should be reported, 
or whether a threshold should be considered. 

A research & academia stakeholder stated that the UNFCCC regulation gives a threshold to 
other sectors, but it is also suitable to be used for LULUCF.  

An EU institution stakeholder commented that we cannot say that the pool is significant if it 
is not reported. One approach could be to use as a proxy the significance of the pool used by 
other/neighbouring  Member  States.  It  was  stated  that  the  steps  should  evolve  for  such  an 
approach to assess first the significance to set a threshold and later request the reporting. 

An  international  institution  stakeholder  concluded  that  regarding  the  threshold,  Member 
States must show that they are under the threshold for their country in the GHG review. 

The  moderator  asked  the  audience  to  comment  on  potential  issues  with  knowledge 
shortcomings in inventories. 

A  research  &  academia  stakeholder  responded  that  a  short-coming  is  given  by  the 
resourcing  issue  and  the  fact  that  money  is  invested  in  research  but  does  not  reach  the 
inventory. Projects should be run by the inventory agency. 

A  national  authority  stakeholder  commented  that  everything  related  to  cropland  and 
grassland is less developed than for forest land. Some of the products suggested to improve 
the accuracy and uncertainty of LULUCF reporting do not necessarily resolve the issue (e.g. 
remote  sensing  data).  There  is  a  great  improvement  from  Copernicus  in  the  data  being 
produced, but it is not fully understood how it can improve reporting. 

The moderator  asked the  audience  to comment  on  the  improvements  of the  accuracy  and 
uncertainty of LULUCF estimates. 

A  research  &  academia  stakeholder  commented  that  remote  sensing  and  statistics  go 
together, as it is the combination of the two which provides estimates. 

185 

 
 
An  EU  institution  stakeholder  added  that  in  order  to  identify  areas  for  improvements  it  is 
important  to  compare  countries  with  similar  ecological  regions  and  management  practices. 
Might serve the inventory compilers to challenge their own numbers and verify their data. 

An  NGO  stakeholder  commented  that  in many  countries  the  issue  is  human  resources  as 
there seems to be reluctance to work on open-source tools across countries. 

10.8.2. Wall-to-wall data (e.g. Satellite-based remote sensing, aerial 
photography, polygon layers at very fine level of  details) for 
LULUCF 

Martin Herold (Wageningegn  University)  provided  a presentation  on remote  sensing  and 
spatial data for GHG estimation and reporting. 

He showed that there is already a widespread use of remote sensing data, particularly when it 
comes to forest area and change estimation. He further explained that the uptake of remote 
sensing  and  spatial  data  provides  a  way  to  contribute  to  the  existing  data  sources  and 
information. As the focus is on change, this data can be used for stratification and sampling 
measurements in the areas that are changing. 

He  concluded  his  presentation  by  informing  the  audience  of  an  ongoing  survey  for  GHG 
inventory  agencies  on  the  need  for  spatially  explicit  estimations.  He  showed  that  the  main 
motivation  for  their  use  include  LULUCF  mitigation  policy  development  related  to  land 
management and tracking of activities. 

10.8.2.1. 

Interactive polls 

Mr. Christian Holzleitner (DG CLIMA) also provided the closing remarks on the workshop. 
He  stated  that  the  workshop  has  given  an  overview  of  the  overall  market  size  for  carbon 
removal  and  what  it  will  look  like  in  the  future.  There  is  a  need  to  continue  to  push  this 
discussion forward.  

He remarked about the importance of finding a balance between food production and carbon 
farming. Carbon removals should be a business integrated into European sustainable farming 
and provided with additional funding mechanisms that ensures further progression in the field. 
Ongoing  initiatives from  the  European  Commission  will  further  incentivise  action for  carbon 
farming schemes.  

He concluded by confirming that it will not be a low-cost transition and that funds need to be 
mobilised from different sources, such as from major polluters, from the CAP budget, abd from 
the better use of the revenues from the Emission Trading System (ETS). 

The discussion developed on four poll questions, asked to the audience via Mentimeter. 

The  first  poll  asked  the  audience  for  their  opinion  on  the  role  of  wall-to-wall/seamless 
geospatial data in LULUCF reporting by 2030. 28 stakeholders responded, with the majority 
responding either “key” (11) or “supplementary” (8).  

186 

 
 
 
Figure 61: Responses by stakeholder category (poll N°1) 

The second poll question investigated on the barriers for using wall-to-wall geospatial data in 
LULUCF  reporting.  24  stakeholders  participated  in  this  poll.  The  most  common  barrier 
identified was “time series consistency with historic emission reporting”. Multiple answers were 
allowed. 

Figure 62: Responses by stakeholder category (poll N°2) 

The third poll question asked the audience whether wall-to-wall data would be used as activity 
data for mapping land use and land use change and/or land use management practices. 23 

187 

112222111111115221024681012KeySupplementaryDepends on landcategoryNone or littleOtherWhat should be the role of wall-to-wall/seamless geospatial data in LULUCF reporting by 2030?Business & Trade associationsNGOsResearch & academiaNational authoritiesEU institutionsInternational institutionsIndependentUnspecified13111213123232222311111111232264251610246810121416Access to rawdataAccess toenhanceddata andproductsready-to-useDataownershipData qualityDataresolutionCompatibilityof dataLack ofawareness ofdataLack of skillsLack oftechniquesfor processingandintegrationTime seriesconsistencywith historicemissionreportingOtherWhat are the current barriers for using wall-to-wall geospatial data in LULUCF reporting?Business & Trade associationsNGOsResearch & academiaNational authoritiesEU institutionsInternational institutionsIndependentUnspecified 
 
 
 
stakeholders responded to this poll. The preferred answer were “yes, together with inventory 
data”, followed by “yes, together with statistical data”. Multiple answers were allowed. 

Figure 63: Responses by stakeholder category (poll N°3) 

The fourth and last poll asked the audience their opinion on the greatest benefit of using wall-
to-wall data. 21 stakeholders responded to this poll. The preferred answer was “The results 
will help me targeting mitigation action”. All other options were considered as relevant benefits 
of the use of wall-to-wall data. Multiple answers were allowed. 

188 

13314211211121343211024681012141618Yes,unconditionallyYes, togetherwith inventorydataYes, togetherwith statisticaldataOnly as ancillarydataOnly assupportive dataOnly forverification andcross checkingOtherShould wall-to-wall data be used as activity data for mapping land use and land use change and/or land use management practices? Business & Trade associationsNGOsResearch & academiaNational authoritiesEU institutionsInternational institutionsIndependentUnspecified 
 
 
Figure 64: Responses by stakeholder category (poll N°4) 

10.8.2.2. 

Discussion 

The moderator asked the audience to comment on the role of wall-to-wall/geospatial data in 
LULUCF reporting. 

A research & academia stakeholder commented that from the Earth observation side, there 
is limited information that can be provided on soil and the best approach is to use models. 

A research & academia stakeholder added that remote sensing can be very useful and that 
inventory  agencies  should  develop  the  capacity  to  use  it,  keeping  in  mind  divergences  in 
classification and regional differences. 

The  moderator  asked  the  audience  to  comment  on  the  barriers  for  using  wall-to-
wall/geospatial data, especially time series consistency with historic emission reporting. 

A research & academia stakeholder commented that for Earth observation, the availability 
of data is limited in 1990 and suggested 2005 as a better starting point for availability of better 
quality remote sensing data. 

A research & academia stakeholder added that reporting requirements should look at what 
data is available and which period we can accurately report on. Starting from 1990 might not 
be sensible. 

A  research  &  academia  stakeholder  commented  that  there  is  not  one  approach  for  all 
situations and that achieving ownership and understanding of a new tool requires an approach 
at  the  country  level.  The  participant  stressed  the  importance  of  integrating  the  tool  in  the 
country’s  current  system.  When  the  requirements  indicate  a  need  to  improve  the  quality  of 
data,  national  agencies will  open  to  new  data  sources,  to  be  able  to  turn  satellite  data  into 
useful information. 

An  EU  institution  stakeholder  asked  the  audience  their  opinion  on  the  use  of  wall-to-wall 
data to provide a better planning tool for action. 

189 

2111111123231211132111133334102468101214The approach ismore automatedThe results aremore correctThe information ismore granularThe LULUCFresults can beverifiedThe results willhelp me targetingmitigation actionThere is no addedvalueWhat will be the greatest benefit by using wall-to-wall data? Business & Trade associationsNGOsResearch & academiaNational authoritiesEU institutionsInternational institutionsIndependentUnspecified 
 
 
A research & academia stakeholder responded that this is possible, but that the tools should 
have the capacity to derive useful information. 

10.9. Part 3: Policy options 

The  third  part  of  the  workshop  was  moderated  by  Christian  Holzleitner  (DG  CLIMA)  and 
focused on policy options. This part of the workshop included one presentation followed by a 
discussion with the audience. 

10.9.1. Overview of stakeholder categories 

Christian  Holzleitner  provided  a  presentation  to  conclude  the  discussions  of  the  day  and 
showed how the European Commission aims to go forward with the review of the LULUCF 
Regulation by June 2021. 

He  introduced  the  current  challenge  that  we  are  facing,  namely  the  decreasing  carbon 
removals from the land sector. He stressed the need for carbon removals to balance the non-
CO2 agriculture emissions to reach carbon neutrality and concluded that this would allow us 
to reach carbon neutrality in the whole land sector at EU level by 2035 

Christian Holzleitner presented two key questions currently being addressed. The first referred 
to setting more ambitious targets for LULUCF and agriculture. Here, he stressed the need to 
provide more support to Member States and better incentives to use a higher share of their 
CAP budget for carbon removals. The second question referred to bringing better incentives 
to farmers and foresters and create a better business model for them. Here, he stressed the 
importance of making it more attractive for them to store carbon and informed the audience 
that the European Commission is looking into the role of carbon farming and a certification of 
carbon removals. In addition, he mentioned the Innovation Fund as a useful tool which can 
support technical solutions for carbon removals. 

He continued his intervention by explaining the three policy options of the Impact Assessment 
of the review of the LULUCF Regulation, namely: a more ambitious LULUCF target; a review 
of  the  flexibility  with  the  ESR;  and  merging  the  LULUCF  and  non-CO2  emissions  from 
agriculture into a single sector. 

Christian Holzleitner concluded his presentation by providing an overview of ongoing activities. 
He mentioned the ongoing work with DG AGRI on recommendations on how to make the CAP 
more climate friendly. He highlighted the importance of carbon farming initiatives as blueprint 
(especially rewetting drained peatland). He mentioned the creation of a certification of carbon 
removal credits for the EU. Finally, he referred to a number of strategy documents that are 
particularly relevant to the discussions of the day, such as the Farm-to-Fork Strategy (focusing 
on  a  sustainable  value  chain  for  food),  the  Methane  Strategy  (on  non-CO2  emissions  in 
livestock) and the Forest Strategy (relevant to carbon removals).  

10.9.1.1. 

Discussion 

A research & academia stakeholder commented on the three policy options for the Impact 
Assessment.  On  carbon  farming,  the  participant  raised  the  issue  of  making  sure  the 
environmental integrity of having private actors funding carbon removals, and to ensure there 
is  no  double  counting.  Private  actors’  sources  might  eventually  dry  up  as  they  reduce  their 
emissions,  and  this  might  have  impacts  on  farmers.  With  regards  to  trading,  there  is  still 
reluctance from Member States to see it as an option as they need to reach net-zero by 2050. 
Lastly, the participant welcomed the AFOLU option and asked whether there have been any 
thoughts on setting up an EU wide ETS-like trading system, rather than another ESR sector 
with national targets. 

190 

 
 
 
An  EU  institution  stakeholder  responded  that  private  companies  want  to  become  carbon 
neutral over their entire lifetime and therefore they might have to compensate in the future for 
their past emissions. The definition of good quality standards needs to be done carefully, to 
get the incentives right. The question on how to get to a removals trading system remains and 
that it can provide an efficient way to develop the bioeconomy concept. 

10.10. Summary 

Christian Holzleitner concluded the workshop by thanking the speakers and the participants 
for their valuable contributions. He invited the audience to provide comments on the Inception 
Impact Assessment, participate in the public consultation and comment on the Commission’s 
“Fit for 55” proposal including the review of the LULUCF Regulation.  

191 

 
 
 
 
 
 
 
 
11.  Workshop  II  Report:  The  Role  of  Agriculture  and 

Land-use Sectors in a Climate Neutral EU in 2050 

11.1. Overview 

The following report contains a summary of the second workshop that was held as part of a 
four workshop series under the study “Reviewing the contribution of the LULUCF sector to the 
Green  Deal”  commissioned  by  DG  CLIMA  to  experts  from  COWI,  Technopolis  Group  and 
Exergia.  The  workshop  entitled,  “The  role  of  agriculture  and  land-use  sectors  in  a  climate-
neutral EU in 2050” was held on the 25th of February 2021.  

The  background  information  on  the  workshop  was  published  one  month  before  the  event 
through an Eventbrite webpage and official invitations were distributed to specific stakeholders 
connected to the topic and DG CLIMA.  

11.2. Workshop Objectives  

As the second in a series of four workshops, the objective was to extract key information on 
the role of the land-use sectors in contributing to a climate neutral EU in 2050. The main topics 
in the workshop were the vision for 2050, exploring the role of agriculture and land-use sectors 
in reaching climate-neutrality in the EU, including the role of farmers, of private markets, and 
data and technology. The workshop was structured in a conference style, including keynote 
speeches and a panel debate. 

11.3. Introduction  

The  workshop  began  with  an  introduction  from  the  moderator,  Asger  Olesen  (COWI).  He 
welcomed the  participants  and  introduced  some guidelines for  the  workshop.  He  presented 
the agenda for the day as presented in  

. 

192 

 
 
                        
 
 
 
 
 
 
 
 
 
 
 
 
 
 
11.4. Participants 

Figure 65: Agenda of the workshop. 

Overall, 429 stakeholders registered to attend and participate in the workshop, representing 
different stakeholder categories. A total of 332 stakeholders participated in the workshop and 
provided their association beforehand, which is presented in the figure below. 

Figure 66. Makeup of the stakeholders participating in the workshop.  

11.5. Welcome and setting the scene 

193 

 
 
 
 
 
 
Christian Holzleitner (DG CLIMA) provided an introductory presentation to set the scene for 
the  workshop.  He  emphasised  the  overarching  objective  of  the  workshop  to  discuss  how 
climate policy will look like in 2050. 

Mr. Holzleitner painted a picture of the vision for 2050, which will see an economy where most 
fossil fuels will have been phased out and where the remaining emissions will derive primarily 
from the bioeconomy (e.g. from livestock and the use of fertilisers); at the same time, the land 
sector  will  contribute  to  climate  neutrality  via  the  sequestration  of  CO₂.  Therefore,  climate 
policy in 2050 will place the bioeconomy into the spotlight.  

In order to achieve climate-neutrality in 2050, the capacity of land to capture CO₂ will have to 
increase so that there can be a balance with remaining emissions. Technology also plays an 
important role in this transition, such as Carbon Capture and Storage.  

He then presented what the European Commission is currently doing in this context. Firstly, 
he mentioned the review of the LULUCF Regulation - in the framework of the Fit for 55 Package 
–  providing  an  opportunity  to  simplify  and  modernise  it  towards  the  objective  of  climate 
neutrality by 2050.  

Additionally,  he  referred  to  two  EU  initiatives  which  aim  to  bring  further  incentives  for  land 
managers, in order to create better business models for more climate friendly agriculture and 
forestry.  The  first  initiative  is  about  carbon  farming,  which  promotes  private  or  regulated 
business models for providing incentives for carbon removals. The second initiative regards a 
certification  mechanism  for  carbon  removals,  which  focuses  on  a  high-quality  market  for 
carbon removals. 

11.5.1. Interactive discussion 

In order to stimulate the discussion, an interactive software – Mentimeter – was used to gather 
the stakeholders’ views through a number of poll questions. The first poll question asked the 
participating stakeholders to select their stakeholder category. 

136 stakeholders participated in the poll with the same breakdown of participant categories as 
presented below. 

Figure 67: Breakdown of respondents by participant categories. 

The second poll question asked the participating stakeholders how they felt about stronger 
financial incentives for the reduction of GHG emissions and the increase of carbon removals 
in the land sector. 

194 

 
 
 
 
 
162 stakeholders participated in this poll. 

The large majority of respondents – representing all stakeholder categories, with a majority of 
Business & Trade Associations and Research & Academia - indicated that they feel positive 
about  stronger  financial  incentives  for  the  reduction  of  GHG  emissions  and  the  increase  of 
carbon removals in the land sector.  

Very few respondents – representing Business & Trade Associations, NGOS and unspecified 
categories - indicated that they feel negative. 

Figure 68: Respondents' answers to poll question 2.  

11.6. Keynote  #1:  Carbon  farming  in  the  EU:  Pilots  and 

potentials 

Asger Olesen (COWI) introduced the concept of carbon farming and presented a study on 
carbon farming carried out by COWI, IEEP and Ecologic for DG CLIMA.  

The  study  applied  an  open  understanding  and  definition  of  carbon  farming,  made  of  three 
components: 

 

 

It is about managing carbon flows in farming and forestry 

It turns carbon sequestration and GHG emission reductions into a business for land 
managers. 

 

It provides result-based incentives at farm or forest level 

The study had the objective to explore how carbon farming could be adopted in the EU, what 
the global experiences on similar schemes are, and what can be learnt from these. Five case 
studies were carried out to test and validate solutions and delivery models for carbon farming 

195 

 
 
 
 
 
in the EU. A technical guidance handbook was produced on how to operationalise carbon 
farming in the EU. The Handbook together with  the final report on the case studies will be 
published at the end of March 2021. 

Mr. Olesen concluded his presentation by providing an overview of the advantages and 
challenges of carbon farming as identified in the study. Examples of advantages include 
increased investability and access to markets, flexibility for the farmers, and a clear link 
between carbon benefits and payments, among other. Challenges to carbon farming include 
a potential higher risk exposure for farmers, higher transactions costs, and inadequate 
monitoring, reporting and verification (MRV) systems. 

11.7. Keynote #2: Ongoing work to support the design of an EU 

carbon removals certification mechanism 

Following  Mr.  Olesen's  presentation  of  the  carbon  farming  project,  Christian  Heller  (UBA) 
presented the ongoing project supporting the European Commission in the design of an EU 
carbon removals certification mechanism (CRC-M) carried out by UBA, Ecologic, Rambøll and 
Carbon Counts. 

All  the  scenarios  that  are  consistent  with  1.5  degrees  decarbonisation  and  net-neutrality 
require some sort of carbon removals. In the context of the European Green Deal, a CRC-M 
is proposed in the Circular Economy Action Plan to incentivise the uptake of carbon removals 
and  increased  circularity  of  carbon,  and  in  the  Farm  to  Fork  Strategy  as  a  way  to  enable 
payments to farmers and foresters for the carbon sequestration they provide. 

The  project  aims  to  provide  an  overview  of  existing  CRC  mechanisms  and  solutions  and 
provide  a  set  of  design  options  for  an  EU  CRC-M,  assessed  for  their  advantages  and 
disadvantages. 

Mr. Heller laid out the objectives of the different tasks of the project: 

  Task 1 will look at existing CRC mechanisms and methodologies to form the basis of 
the  design  and  development  of  an  EU-wide  CRC-M.  The  task  will  assess  different 
aspects  of  the  mechanism  architecture  (e.g.  governance,  participants,  scope,  and 
coverage of carbon removal solutions, etc) and of the methodologies (e.g. scope, MRV 
rules, permanence management).  

  Task  2  will 

look  broadly  at  selected  nature-based  solutions,  such  as 
afforestation/reforestation,  agroforestry,  and  sustainable  forest  management,  and 
technology-based  solutions,  such  as  Direct  Air  Capture  and  Storage  (DACCS), 
Bioenergy Carbon Capture and Storage (BECCS), and  Carbon Capture and Utilisation 
(CCU). The analysis in this task will focus on different aspects, such as the maturity 
and future costs, the EU removal potential, permanence/reversibility, among others. 

  Task  3  will  involve  stakeholders  to  give  them  the  opportunity  to  share  views  and 
experience on the potential of CRC-M and validate interim results, through an expert 
roundtable, a survey, and a conference. 

  Task 4 will gather the findings of the previous tasks and propose options for a CRC-M, 

focusing on the scope, the certification rules and governance. 

  Task  5  will  provide  a  pilot  phase  to  develop  design  elements  and  accompanying 

monitoring. 

196 

 
 
He concluded the presentation by informing the audience that the results of the study are 
expected for Q1 2022. 

11.7.1. Interactive discussion 

Another set of poll questions were raised using Mentimeter to stimulate the discussion among 
the audience. The third poll question asked the participants what the focus of climate policies 
in light of the 2050 climate neutrality objective should be today. 

153 stakeholders participated in this poll. 

The large majority of stakeholders - representing all stakeholder categories, with a majority of 
Research & Academia, Business & Trade associations and National authorities – responded 
that the focus should be both on decreasing emissions and increasing removals. 

A  smaller  number  of  stakeholders  –  representing  primarily  Business  &  trade  associations, 
Research & Academia and NGOs – responded that the focus should be only on decreasing 
emissions. 

Figure 69: Poll answers to question 3.  

The  fourth  poll  question  asked  the  stakeholders  their  views  on  the  best  type  of  policy  to 
promote better financial incentives (carbon farming) in the land sector. Multiple answers were 
allowed. 

146 stakeholders responded to this poll. 

The majority of stakeholders – representing primarily Research & academia, Business & Trade 
associations and National authorities - indicated that subsidies at the national level (e.g. CAP) 
are  the  best  type  of  policy,  followed  by  an  EU-wide  carbon  pricing  for  the  land  sector  (e.g. 
emission trading including non-CO2 emissions and LULUCF removals and emissions). 

197 

 
 
 
Figure 70: Responses to question 4.  

11.8. Inspirational speeches 

The moderator, Asger Olesen, introduced five speakers to provide inspirational speeches on 
their vision for 2050. 

11.8.1. Inspiration speech #1: Samuel Masse (Ceja) 

Samuel Masse (Ceja) presented his vision for agriculture in the EU in 2050, representing the 
generation that will enable the achievement of the objectives for 2050. 

The presenter painted a picture where, in 2050, most objectives of the green transition will be 
reached  with  the  help  of  new  technologies,  research  and  innovation  but  also  by  protecting 
agricultural  land.  He  proceeded  to  emphasise  the  role  of  the  agricultural  sector  for  climate 
action in 2050. 

Firstly,  climate  action  will  be  embedded  into  business  actions,  indicating  that  diversity  of 
farming practices will be a strength and there will be several pathways for climate action. In 
order to enable agriculture to sequester carbon, a mix of public and private funds will be made 
available,  including  contributions  from  other  industries.  By  2050,  a  framework  for  carbon 
farming  schemes  will  be  put  in  place.  In  addition,  by  2050  we  will  have  found  a  way  to 
remunerate farmers through the market for land-use management practices useful to climate 
action (e.g. recognition of high-value nature agriculture). 

The socio-economic obstacles to climate action will be considerably reduced. There is a high 
probability that by 2050 farmland will be a very rare resource, a reality which young farmers 
are already confronting. But by 2050 we will have fixed inadequate access to land through land 
property  and  long-term  leasing  contracts  to  ensure  long-term  climate  action,  and  access  to 
finance to invest in land and its management. Biodiversity and agricultural production will no 
longer be opposed. 

198 

 
 
 
 
11.8.2. Inspiration speech #2: Imke Lubbeke (WWF) 

Imke  Lubbeke  (WWF)  started  her  presentation  by  stressing  the  importance  of  the  road  to 
2050, and of the steps to be taken in the next two decades. 

It is clear that all sectors have to reduce emissions rapidly, including agriculture. In particular, 
the  restoration  of  ecosystems  was  mentioned  as  crucial  for  many  of  the  set  objectives, 
including addressing the biodiversity crisis, and for carbon removals. WWF is advocating for 
50% of land to be restored and to help with carbon removals.  

The importance to focus on ecosystem restoration was mentioned against a full reliance on 
the role for technology approaches, which the presenter considered likely to remain expensive, 
speculative, and high-risk.  

The presenter also mentioned the risk of focusing too much on offsetting emissions with carbon 
removals. The way forward requires climate action to be done and supported by citizens, policy 
makers and farmers in order to make a change.  

Bioenergy was mentioned as relevant for biodiversity and sustainability issues but the impact 
of bioenergy in terms of emissions was challenged by the presenter who called for the need to 
avoid  locking  ourselves  into  using  forest  biomass  and  agricultural  land  to  produce  biofuels. 
Consistency of policies and practices was mentioned as a crucial aspect. 

Imke Lubbekke emphasised the need to incentivise farmers to into carbon removals activities. 
The Common Agricultural Policy (CAP) was mentioned as a very powerful instrument, which 
could be used in a smarter way. She called for the need to make sure that the CAP encourages 
farmers to restore marginal or abandoned land into carbon and biodiversity-rich landscapes. 

Lastly, the role of farmers was stressed in terms of emission reductions to make the difference, 
while recognising that they are also impacted the hardest by changes in the sector.  

11.8.3. Inspirational speech #3: Bart Vandewaetere (Nestlé) 

Bart  Vandewaetere  (Nestlé)  started  his  presentation  with a flashback to  the  past,  showing 
that in the agricultural sector there is now more awareness on the need for action to address 
climate change and biodiversity loss. 

He presented Nestlé's plan to halve their emissions by 2030 and reach net-zero by 2050. He 
emphasised  that  the  focus  is  no  longer  simply  on  mitigating  the  negative  impacts  of  food 
production, but it is about recovery and regeneration of soil and water by using nature-based 
solutions.  

This is the biggest transformation ever for the food sector and it is clear that not taking any 
action would translate in the disruption of the supply chain, the costs and availability of raw 
materials. In addition, consumers are also challenging the sector and their needs cannot be 
disregarded. 

He  stressed  the  importance  of  the  action  of  policymakers,  keeping  in  mind  planetary 
boundaries and the well-being of people. 

In the carbon footprint of Nestle, 70% is linked to agricultural raw materials. For this reason, 
Nestlé supports regenerative agriculture and the need to work with farmers. 

Bart Vandewaetere concluded his contribution by presenting the LENS initiative (Landscape 
Enterprise Networks) which brings businesses together interested to procure all sustainability 
outcomes from regenerative agriculture. 

199 

 
 
 
11.8.4. Inspirational speech #4: Simon Henry (IETA) 

Simon Henry (IETA) provided an optimistic view about the role of carbon markets to achieve 
a climate-neutral EU in 2050. One of the benefits is that carbon markets can simultaneously 
put a price on emissions but also place a value on removals. The EU is a global leader on 
carbon markets, but the land sector has broadly been excluded. 

Simon  Henry  pointed  out  lessons  that  can  be  learnt  from  other  countries’  experiences.  For 
instance, the Emission Trading System in New Zealand integrates the forestry sector and has 
proved  successful  in  providing  a  strong  source  of  income  for  removals.  The  presenter 
encouraged  the  European  Commission  to  look  at  similar  examples,  including  Australia, 
California, Colombia, and Canada (Alberta). 

Discussion  are  ongoing  on  how  the  EU  can  incorporate  the  land  sector  in  carbon markets, 
through the creation of a new regulated sector for agriculture, forestry and land use to become 
climate-neutral by 2035 and then generate more removals than emissions. One policy tool that 
could work is a new Emission Trading System for this sector, setting an emission cap that goes 
negative after 2035. CRC-M could then be deployed to verify removals in the EU. 

The question that arises if we set an emission cap that goes negative after 2035 is where the 
demand could  come  from.  Simon  Henry  mentioned  that  the  obvious  option  is  the  EU  ETS, 
otherwise  he  proposed  that  removals  could  be  bought  by  governments.  Lastly,  as  a  more 
ambitious scenario, the presenter suggested that removals could be exported from Europe. As 
the EU is ahead of the world on decarbonisation, this could become a new export industry for 
Member States.  

He concluded his intervention by stressing that the end goal is not climate neutrality in 2050, 
but there is a need to go beyond net zero and therefore think about would need to happen 
after 2050 - for instance, how removals from other technologies could be incorporated. 

11.8.5. Inspirational speech #5: Inge Jonckheere (FAO) 

Inge  Jonckheere  (FAO)  introduced  the  work  of  the  FAO,  focusing  on  food  security  in 
developing countries. Her intervention focused on the potential of technological development 
in 2050. Innovation was mentioned as the central driving force behind a world free of hunger 
and malnutrition.  

The speaker presented different tools being used in developing countries, such as FAO Digital, 
aiming to develop climate resilient food systems, OpenForis and SEPAL, to enable advanced 
data collection and processing.  

As regards to tools, remote sensing has become much more accessible and feasible compared 
to the past, as since 2011 remote sensing data has become an open archive. Remote sensing 
is widely applied in the land sector, and it can enable farmers to monitor their GHG footprints. 
For this reason, having accurate monitoring, reporting and verification (MRV) systems in place 
is key, which is one of the building blocks towards 2050.  

Inge Jonckheere agreed with the previous speakers on the objective for the EU to go beyond 
net zero, to become net-negative. In the context of technological development, she stressed 
the need to keep investing in data, as well as in its proper use. She concluded her intervention 
by emphasising the unlimited role of technology. 

11.8.6. Interactive discussion 

A last set of poll questions were raised to gain feedback from the audience. 

The fifth poll  question asked  the stakeholders how  synergies between climate  action  and 
biodiversity can be promoted. Multiple answers were allowed 

200 

 
 
 
116 stakeholders participated in this poll. 

The majority or stakeholders – representing primarily Research & Academia and Business & 
Trade  associations  -  responded  “integrated  incentive  payments”,  followed  by  “integrated 
monitoring”, “targets and standards” and “Integrated planning”. 

Figure 71: Answers to poll question 5.  

The sixth poll question asked who should pay landowners for the climate and environmental 
benefits that they provide. Multiple answers were allowed. 

120 stakeholders responded to this poll. 

The preferred option for who should pay landowners for the climate and environmental benefits 
they  provide  was  “polluters,  via  regulated  carbon  markets”,  selected  by  the  majority  of 
stakeholders,  representing  primarily  Research  &  Academia  and  Business  &  Trade 
associations. 

The second preferred option was “public subsidies (e.g. CAP, national schemes)”, followed by 
“users of biomass (e.g. bioenergy plants, food producers). 

201 

 
 
 
 
Figure 72: Answers to poll question 6.  

The seventh and last poll question asked the stakeholders whether additionality is relevant 
in an economy-wide climate-neutral 2050 scenario. 

95 stakeholders responded to this poll. 

The large majority of respondents – representing primarily Research & Academia, Business & 
Trade Associations and unspecified categories -  indicated that additionality is always relevant.  

A smaller share of respondents indicated that additionality will only be relevant for emission 
reductions. Fewer respondents indicated that additionality will not be relevant at all. 

202 

 
 
 
Figure 73: Answers to poll question 7.  

11.9. Panel discussion 

Following  the  inspirational  speeches,  a  panel  discussion  took  place,  moderated  by  Asger 
Olesen (COWI). 

Asger Olesen, the moderator, directed the first question to Inge Jonckheere (FAO) and asked 
her  view  on  whether  we  will  have  in  2050  high-resolution,  high-frequency,  digital,  low-cost, 
field-level MRV through a combination of tools and technologies for all land uses. 

Inge  Jonckheere  responded  that  from  a  technical  point  of  view  it  is  more  than  possible, 
especially by looking at what is already possible in countries such as Africa. Whether this will 
be achievable or not in 2050 is a political question. She added that a factor to determine in the 
future is whether there will be willingness to pay for data and how it will be organized. 

The moderator asked Samuel Masse (CEJA), from the point of view of farmers, what would 
be the opportunity of new business models if all required data was made available. 

Samuel Masse responded that data needs to be better managed but the issue to be defined 
is data ownership. He added that the major problem, especially for young farmers, is getting 
financial access to these new technologies, which are often very expensive. 

Imke Lubbekke (WWF) commented on the data issue and agreed on the importance of data 
(e.g. for monitoring of carbon removals from farmers) and on the issue of data ownership. She 
added that the focus should also be on the need of farmers to change the way they manage 
data to ensure environmental benefits and work towards climate neutrality.  

Imke Lubbekke added a comment in relation to previously mentioned examples of emission 
trading systems, such as Australia and California, to point out that these are hotspots for forest 
fires. Therefore, the nature and permanence of their carbon removals is very different. 

203 

 
 
 
 
The  moderator  asked  Simon  Henry  (IETA)  to  articulate  on  his  understanding  of  climate 
neutrality in 2050 for the land sector, for a business or a value chain.  

Simon Henry responded that from an EU point of view, climate neutrality by 2050 implies all 
sources of emission being balanced by an equivalent number of removals. However, there will 
still be emissions which will have to be balanced with removals. The question that persists is 
how  emissions  will  be  regulated  in  the  next  30  years.  He  explained  that  the  ETS  helps 
regulating emissions by setting a cap, but the challenge of the system is that it covers only half 
of the emissions. He proposed that one solution could be to include more emissions into the 
ETS or alternatively to create another ETS. 

The moderator asked Bart Vandewaetere (Nestlé) whether 2050 company-level, supply-chain 
level or footprint-level carbon neutrality can be seen as a key part of the policy framework. 

Bart Vandewaetere responded that Nestle has committed as a company to net-zero which is 
based on “insetting”, referring to action inside the supply chain to create ownership as well as 
to  onboard  the  consumers.  He  stressed  importance  of  regenerative  agriculture,  as  well  as 
standard setting at European level. 

The moderator asked Samuel Masse (CEJA) to articulate his views on the feasibility of setting 
climate neutrality at farm-level. 

Samuel Masse responded that there is a lot of diversity in farms, depending on the location 
and weather impacts, which would make it difficult to implement climate neutrality at farm-level. 
He  added  that  there  are  already  challenges  for  farmers  to  know  exactly  what  the  current 
situation in terms of neutrality is. He concluded by stating that the target should go beyond 
landowners, but rather focus on land users as well. 

The moderator asked Inge Jonckheere (FAO) her undersndating of climate-neutrality for the 
EU. 

Inge Jonckheere responded that for the UNFCCC climate neutrality is seen at country-level, 
but a much smaller scale can be considered if data is available. She agreed on the diversity of 
farms  and  the  difficulty  to  look  at  the  level  of  the  farm.  She  explained  that,  from  a  data 
perspective, there is no limit on the level of sub-aggregation below country-level we can reach 
but we should ask ourselves what it makes sense to focus on. She stressed the importance to 
integrate  different  sectors  when  we  speak  of  climate-neutrality,  rather  than  focusing  on 
agriculture alone. 

The moderator asked the panelists what would be the role of subsidies and market incentives 
in 2050 to ensure balance. 

Imke  Lubbekke responded that  ambitious  targets  should be set  at  Member  State  level  but 
should be separate from the emission side, avoiding to create one pillar. The Climate Law was 
mentioned as an important element for climate neutrality. Regarding subsidies, she added that 
the  CAP  can  play  an  important  role  as  a  powerful  instrument,  but  that  pollution  avoidance 
should  be  the  main  goal.  There  is  clear  need  for  support  to  farmers,  to  incentivize  carbon 
dioxide reduction and organic farming. 

Samuel Masse mentioned the example of the French region of Normandie where a low carbon 
label recognition was implemented at farm-level and questioned the feasibility of implementing 
this in all farms. He added that farmers now have access to several opportunities to get income, 
including  through  carbon  sequestration.  The  best  way  would  be  to  involve  both  the  public 
funding  and  private  funding  from  companies  for  payments  for  carbon  sequestration,  which 
could be achieved by 2050. However, he warned that there could also be negative side effects 
to  this  approach,  such  as  the  impact  on  the  price  of  land,  as  well  as  potential  impacts  on 
landscape if farmers are incentivized to move to pasture. 

The moderator asked Bart Vandewaetere (Nestle) how incentives could be transferred from 
producers to consumers. 

204 

 
 
Bart Vandewaetere responded that some consumers are ready for the transition to net-zero 
and Nestle is already trying to provide less carbon intensive products. The objective is climate 
neutral  products,  but  this  should  be  connected  to  ongoing  discussions  on  products’ 
environmental  footprints  and  labels.  He  called  for  a  framework  to  be  set  at  EU  level  and 
stressed the important role to be played by governments in this direction.  

11.10. Closing remarks 

Christian Holzleitner (DG CLIMA) provided some closing remarks on the event. He stated 
that there is a need to push this discussion forward, on how the land sector should look like in 
2050, in terms of production of food, of biomass and biodiversity. 

He mentioned that a lot of change has already been achieved, for instance in diets, which has 
a significant  impact  on  land  use. There is  a need to mobilise public  money  and give better 
incentives from more sustainable farming.  

He referred to some ongoing initiatives from the European Commission, such as the Farm to 
Fork Strategy to explore how to get more sustainable food production across the value chain, 
the Forest Strategy, and the Fit for 55 Package. 

He concluded by confirming that it will not be a low-cost transition and that funds need to be 
mobilised from different sources, such as from polluters, from the CAP budget of from better 
use of the revenues from emission trading systems. 

205 

 
 
 
 
 
 
 
 
 
 
                              
 
                                
 
 
 
 
 
  
12.  Workshop  III  Report:  gathering  Ideas  on  the  Next 

Steps for Carbon Farming 

12.1. Overview 

The following report contains a summary of the third workshop that was held as part of a four 
workshop  series  under  the  study  “Reviewing  the  contribution  of  the  LULUCF  sector  to  the 
Green  Deal”  commissioned  by  DG  CLIMA  to  experts  from  COWI,  Technopolis  Group  and 
Exergia. The workshop entitled “Gathering ideas on the next steps for carbon farming” was 
held on the 21st  of April 2021.  

 The  workshop  was  structured  as  a  targeted  event  with  breakout  rooms.  The  relevant 
stakeholders were selected to participate based on an expression of interest process.  

12.2. Workshop objectives 

The  objective  of  the  workshop  was  to  extract  key  information  on  the  next  steps  for  carbon 
farming  on  the  following  main  topics:  linkages  between  biodiversity  and  carbon  removals, 
monitoring carbon removals and the policy framework. 

12.3. Introduction 

The  workshop  began  with  an  introduction  from  the  moderator,  Tomasz  Kowalczewski  
(COWI). He welcomed the participants and introduced some guidelines for the workshop. He 
presented the agenda for the day as presented in Figure 74.  

Figure 74: Agenda of the workshop 

12.4. Participants 

Overall, 113 stakeholders expressed interest in the event and 77 were selected to participate, 
representing different stakeholder categories, as presented in the figure below. 

206 

Agenda10:00 –10:05Welcome & housekeeping rules•Tomasz Kowalczewski, COWI 10:05 –10:15Policy context and objectives of the event•Christian Holzleitner, DG CLIMA, European Commission10:15 –10:20Explanation of breakout rooms•Tomasz Kowalczewski, COWI10:20 –11:45Parallel breakout rooms•BR1: Linkages between biodiversity and carbon removals•BR2: Monitoring carbon removals•BR3: Policy context11:45 –12:05Break12:05 –12:50Main takeaways•BR1:TomaszKowalczewski,COWI•BR2:PeterSøllingJørgensen,COWI•BR3:KarolinaSaraKenney,COWI12:50 –13:00Closing remarksValeria Forlin, DG CLIMA 
 
 
 
EU institutions
23%

Initiatives

2% International 
organisations
3%

Business & 
Agricultural 
associations

12% Foundations & 

NGOs
9%

Companies
12%

Consultancies
8%

Nationa/ Regional 
authorities
12%

Research & 
Academia
19%

Figure 75: Participants by stakeholder category 

12.5. Welcome and setting the scene 

Christian Holzleitner (DG CLIMA) provided an introductory presentation to set the scene for 
the  workshop.  He  informed  the  participants  about  the  Climate  Law,  including  the  climate-
neutrality target for 2050 and the 55% reduction target for 2030. 

Mr. Holzleitner described the vision for 2050 with an economy where most fossil fuels will have 
been phased out and where the remaining emissions will be balanced out by carbon removals. 
He  then  provided  an  overview  of  the  role  of  the  LULUCF  sector,  of  agriculture  and  of  the 
bioeconomy. The remaining emissions in 2050 will derive primarily from the bioeconomy (e.g. 
from livestock and the use of fertilisers) and will have to be balanced by carbon removals. 

In  this  context,  the  LULUCF  sector  will  play  a  central  role  towards  the  objective  of  climate 
neutrality as it has the potential to reach net carbon removals of up to 300 million tonnes CO2eq  
and to reduce non-CO2 emissions from agriculture by 20% by 2030.  

He then presented what the European Commission is currently doing in this context. First, he 
mentioned the review of the LULUCF Regulation - in the framework of the Fit for 55 Package 
– which has the objective to modernise and simplify the current Regulation and to adapt it to 
the climate neutrality target for 2050.    

Additionally,  he  referred  to  two  EU  initiatives  which  aim  to  bring  further  incentives  for  land 
managers, in order to create better business models for more-climate friendly agriculture and 
forestry. The first initiative is about carbon farming, which promotes a new business model for 
providing  incentives  for  carbon  removals.  The  second  initiative  regards  a  certification 
mechanism for carbon removals, which focuses on a high-quality market for carbon removals. 

A number of policies are in place that have the potential to create better incentives for farmers 
and foresters, as presented in the figure below.  

207 

 
 
 
 
Figure 76 : Overview of policies 

Mr. Holzleitner concluded his presentation by introducing the three main topics of the event, to 
gather ideas on the next steps for carbon farming: 

  Linkages between biodiversity and carbon removals 

  Monitoring carbon removals 

  Policy framework 

Three breakout groups were formed to discuss the abovementioned topics. 

12.6. Main takeaways of breakout rooms 

Tomasz Kowalczewski  (COWI) introduced the moderators and rapporteurs of the breakout 
rooms and invited them to present the main takeaways. 

12.6.1. BR1: Linkages between biodiversity and carbon removals 

The  first  breakout  room  was  moderated  by  Florian  Clayes  (DG  CLIMA)  and  Tomasz 
Kowalczewski  (COWI)  acted  as  rapporteur.  The  breakout  group  had  18  participants 
representing environmental NGOs, forest certification organizations, research institutions as 
well as civil servants.   

The discussion was structured around three main questions, namely: 

  How to value the biodiversity co-benefits of carbon removals in carbon farming? 

  How to ensure that carbon farming activities do not significantly harm biodiversity? 

  What  tools  and  data  could  be  mobilized  to  monitor  impacts  and  co-benefits  on 

biodiversity from carbon farming? 

Overall, there was agreement that carbon cannot be the only goal and carbon markets are not 
the best tools for biodiversity conservation. There is a need for an integrated approach at farm 
system level or landscape approach. Nature has a long-term perspective, and this should be 
taken into account. 

208 

 
 
 
In  addition,  farmers  should  be  involved  to  integrate  their  practical  knowledge  into  policy. 
Ensuring  policy  consistency  was  considered  key  to  avoid  overlapping  objectives,  including 
within, e.g. the CAP and within EU nature restoration targets59. 

How to value the biodiversity co-benefits of carbon removals in carbon farming? 

The discussion showed a consensus to jointly act on climate and biodiversity. In addition, the 
focus for carbon farming should be on ecosystem integrity.  

There is a need to incorporate the ecological dimension in the current economic signals (e.g. 
credit discount related to biodiversity performance).  

The relevance of engaging with insurance companies was stressed to reflect the biodiversity 
potential to reduce risk. 

Lastly,  participants  agreed  that  there  is  a  need  to  promote  win-win  solutions  through 
agroecology, agroforestry, conservation agriculture, organic farming, close-to-nature forestry 
and wetland rewetting.  

How to ensure that carbon farming activities do not significantly harm biodiversity? 

In order to ensure that carbon farming activities do not harm biodiversity, there is a need to 
ban  or  avoid  pervasive  practices,  such  as  monoculture,  synthetic  fertilizers  and  peatland 
drainage. 

Market signals should not be the only ones to drive biodiversity conservation on land. 

There is a need to explore and strengthen the ecological dimension in models of sustainable 
forest management and sustainable land management. 

Lastly, there is a preference for long-term carbon removals rather than short-term, the latter 
being generally detrimental to biodiversity.  

What  tools  and  data  could  be  mobilized  to  monitor  impacts  and  co-benefits  on 
biodiversity from carbon farming? 

The importance of regular auditing was emphasized by participants, alongside the possibility 
to rely on existing certifications of sustainability. 

Monitoring should not only be based on remote sensing, but also on surveys and field data. 

There is a need for an integrated system of indicators, rather than focusing on single indicators, 
such as species counting. 

Participants  agreed  that  while  there  are  currently  enough  technologies  and  datasets  to  get 
started, there is a continuous need for improvement. 

Several  existing  schemes  were  mentioned  which  could  provide  a  basis  for  future 
developments,  such  as  the  low-carbon  label  (Label  bas  carbone)  in  France,  the  carbon 
calculator in Finland, and peatland experience in Germany and in the Netherlands. 

The conceptboard of the discussion is provided in Appendix A. 

12.6.2. BR2: Monitoring carbon removals 

Breakout  room  two  was  moderated  by  Nicola  Di  Virgilio  (DG  AGRI)  and  Peter  Sølling 
Jørgensen (COWI) acted as rapporteur.  

The discussion was structured around three main questions: 

59 The legislative proposal which is one of the key measures announced in the EU’s 2030 Biodiversity Strategy. It will propose 
legally binding nature restoration targets, subject to an impact assessment. The publication of this initiative is expected for 4th 
quarter of 2021. 

209 

 
 
                                                 
  What are some examples of monitoring schemes and methodologies? 

  How can issues linked to costs of monitoring and implementation be addressed? 

  What is the right monitoring for the right land-use? 

What are some examples of monitoring schemes and methodologies? 

Six examples of methodologies were mentioned, including: 

  A  cyber  infrastructure  approach  in  Finland.  The  infrastructure  is  part  of  the  Carbon 
Action  Platform,  which  is  developing  a  measurement  and  verification system.  This 
system  is  available  for  implementation  even  though  there  is  not  sufficient  data 
availability.  The  Observatory  is  an  open-access  online  platform  for  visualizing 
measurement data from 20 pilot carbon farms and intensive study sites, as well as the 
results of carbon calculations.60 

  The  French  certification  framework,  Voluntary  Carbon  Land  Certification  project 
(VOCAL), to monitor GHG emissions introduced a novelty approach to discounts based 
on uncertainty61 

 

Indigo’s remote sensing approach for agricultural mineral soils62 

  The Australian OpenGeoHub using remote sensing (for a 30/30 meter) 

  Two tools from Wageningen University: one for grassland monitoring and one for peat 

soil monitoring63 

 

IFEU fast navigation program, a calculation tool for GHGs at farm level 

How can solutions linked to costs of monitoring and implementation be addressed? 

Initiatives for bringing down costs were discussed. For instance, it was mentioned that while 
remote sensing can bring down costs, it is not a silver bullet. Additional initiatives referred to 
soil sampling in the initial phase and lean administration. In addition, soil spectroscopy was 
discussed and its potential to create open calibration libraries to share knowledge. 

What is the right monitoring for the right land-use? 

The  discussion  revolved  around  grassland,  forests  and  peatland.  For  grassland,  remote 
sensing can be very useful, but more research is needed. Regarding forests, the discussion 
focused on permanence.   

For peatlands, permanence is easier to monitor but there are difficulties concerning the fact 
that volume changes and it requires deep measurements such as LIDAR to catch changes in 
flux. Groundwater-based measurements could be used to measure peatlands, integrating both 
soil type and groundwater. 

The importance of uncertainties was also discussed. It was mentioned that uncertainties also 
occur due to asymmetry of information. These uncertainties are not necessarily linked with the 
efficiency of a scheme.  

The conceptboard of the discussion is provided in Appendix B. 

60 https://carbonaction.org/en/front-page/  
61 https://www.i4ce.org/go_project/project-voluntary-carbon-land-certification-vocal/  
62 https://www.indigoag.com/atlas-insights  
63  https://www.wur.nl/en/Research-Results/Research-Institutes/plant-research/show-wpr/Aerial-monitoring-for-more-biodiversity-
.htm  

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12.6.3. BR3: Policy framework 

This breakout room was moderated by Valeria Forlin (DG CLIMA) and Karolina Sara Kenney 
(COWI) acted as rapporteur. 

The  concept  board  was  developed  in  such  a  way  to  reach  concrete  policy  solutions  from 
observed issues. The discussion started with problems and barriers to implementing carbon 
farming approaches. Then, objectives or goals and targets that stem from these problems were 
discussed.  Finally,  participants  discussed  some  concrete  solutions  to  these  problems  and 
proposed options for a carbon farming policy framework. 

The eleven problems that were identified can be grouped under four overarching themes. The 
first problem theme concerned the lack of knowledge among land managers, for example 
the risk of a high administrative burden in entering a carbon farming scheme. In line with this 
is the fact that there is a lack of training or advisory services.  

With regard to this problem, participants noted that policies must help farmers assess their net 
carbon balance (both emissions and removals) as well as the specificities of their land areas. 
Proposed  solutions  to  achieve  these  goals  included  a  wide-reaching  knowledge  campaign, 
making  sure  that  good  practices  are  encouraged  through  the  CAP,  for  instance  through 
advisory systems (including “training the trainers”). This knowledge campaign could also be 
fine-tuned  to  fit  different  geographical  regions  and  soil  conditions,  so  that  farmers  receive 
tailored advice about what works on their farm.  

The  second  problem  theme  concerned  understanding  the  impacts,  and  more  precisely 
ensuring that farmers are made aware of the benefits of carbon farming practices (including 
financial  benefits).  In  general,  the  issues  of  farmer  awareness  were  the  most  poignant 
throughout the entire brainstorming session.  

Goals  with  regard  to  this  lack  of  understanding  are  to  alter  misconceptions  of  the  financial 
benefits  and  make  sure  that  landowners  are  aware  of  both  the  long-term  and  short-term 
benefits.  Proposed solutions for farmer awareness are encompassed within the knowledge 
campaign  suggested  under  the  first  problem.  A  specific  issue  was  the  profitability  for  the 
farmer, given that the costs of participating in carbon farming activities may be higher than the 
value of carbon credits; public/private interaction was presented as a solution, e.g. the CAP 
sets minimum quality standards and provides financial support for implementation of certain 
practices  (thus  driving  down  costs  for  the  farmer),  while  private  markets  pay  for  very  high-
quality carbon credits beyond the CAP (ambitious) baseline. The UK LENs approach was also 
mentioned as an example of public/private cooperation. In addition, it was proposed for the 
costs of MRV to be covered by public support and not at the cost of the landowner.  

The third problem theme concerned the need for high-quality MRV, which also measures co-
benefits  for  productivity  and  adaptation  and  ensures  good  balance  between  action-based 
versus  result-based  payments.  Some  participants  mentioned  that the main challenge is  not 
measurement in itself, but rather the establishment of baselines and additionality. MRV does 
not  need  to  be  very  expensive,  as  the  example  of  the  project  Moor  Futures  has  shown. 
Generally, however, it was concluded that there is a lack of harmonised, user-friendly and cost-
efficient tools to certify carbon removals. 

One of the objectives within this theme is achieving collaboration across institutions such that 
underlying science is the basis for policy. Proposed solutions included public sector support 
(e.g. through the CAP) to farmers to invest into and learn how to use high-quality MRV tools, 
while credits would then be bought by the private sector. In addition, it was proposed that the 
public sector could provide a common methodology, keeping in mind regional differences. The 
importance of coordination between private companies was stressed to ensure the purchase 
of high-quality credits. In terms of timing, it was mentioned that the lack of “perfect” emission / 
sequestration factors for some practices should not stop the development of carbon farming 
approaches:  policy  signals  and  carbon  farming  schemes  need  to  be  created  now,  while 

211 

 
 
mitigation  impacts  and  payments  can  be  fine-tuned  later,  within  an  ongoing  research  and 
calibration process. 

The fourth problem theme concerned perverse incentives and legal barriers. It was stressed 
that a regulatory framework which ensures the authenticity of removals is critical in order to 
ensure high-quality carbon credits.  

Solutions proposed included to halt perverse incentives, e.g. some of the subsidized practices 
within CAP, and to raise the minimum climate baselines in the CAP. One suggested solution 
was the application of the polluter-pays-principle. Some participants noted that tthe agricultural 
sector remains a source of emissions, so it is important to prioritise the reduction of emissions 
before looking into carbon removals.  

The conceptboard of the discussion is provided in Appendix C. 

12.6.4. Closing remarks 

Valeria  Forlin  (DG  CLIMA)  thanked  the  participants  for  the  active  participation  and  invited 
them to check the DG CLIMA web-page for updates on carbon farming. 

She informed the audience of the next workshop to be held on May 25th, which will focus on 
carbon farming in the CAP Strategic Plans. In addition, it will present the publication of  the 
final  report  of  a  two-year  study  on  how  to  set  up  and  implement  carbon  farming  in  the 
EU: https://ec.europa.eu/clima/news/commission-sets-carbon-farming-initiative-motion_en 

212 

 
 
 
 
Appendix  A  Breakout  Room  1:  Linkages  between  biodiversity 
and carbon removals  

213 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
214 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Appendix B Breakout Room 2: Monitoring Carbon Removals 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Appendix C Breakout Room 3: Policy Framework 

216 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
217 

 
 
 
13.  Workshop  IV  Report:  Carbon  Farming  in  the  CAP 

Strategic Plans 

13.1. Overview 

The following report contains a summary of the fourth workshop that was held as part of a four 
workshop  series  under  the  study  “Reviewing  the  contribution  of  the  LULUCF  sector  to  the 
Green  Deal”  commissioned  by  DG  CLIMA  to  experts  from  COWI,  Technopolis  Group  and 
Exergia. The workshop entitled “Carbon farming in the CAP Strategic Plans” was held on the 
25th May 2021.  

13.2. Workshop objectives  

The objective of the workshop was to explore design options for carbon farming schemes in 
the  CAP  Strategic  Plans  and  to  facilitate  the  exchange  of  experiences  and  good  practices 
among relevant stakeholders. 

The workshop, that was held as open webinar, was organised by DG AGRI and DG CLIMA 
and was divided into two main parts:  

  Carbon farming as a new business model  

  Lessons learnt from existing carbon farming projects  

The workshop gave an overview on the Common Agricultural Policy (CAP) and its intertwining 
with carbon farming and presented the role of the land sector towards climate neutrality through 
different experiences in the Member States and from EU funded ongoing projects related to 
carbon farming.  

Several interactive polls were introduced during the workshop to obtain direct feedback from 
the participants together with a survey that was collected subsequent to the event. 

13.3. Introduction  

The workshop began with an introduction from the moderator, Tomasz Kowalczewski (COWI) 
who welcomed the participants and introduced the guidelines for the workshop. The agenda is 
presented in Figure 77 below. 

 
 
 
 
 
 
 
 
 
13.4. Participants 

Figure 77: Agenda.  

Overall,  532  individuals  registered  to  the  workshop,  from  a  broad  range  of  stakeholder 
categories.  Of  these  415  participated  in  the  workshop  and  provided  their  association 
beforehand, which is shown in Figure 78 below.64 

Other
20%

Business/ 
Agricultural 
Association
16%

Company
15%

EU institution
8%

Farmers' 
representative
3%

Research & 
Academia
13%

NGO
11%

National/Regional 
Authority
14%

64  While  National/Regional  Authority  was  one  of  the  selection  options  for  participants  to  identify  themselves,  the  category  is 
generalized as 'Public authority' within this report. 

219 

 
 
 
 
                                                 
Figure 78: Makeup of stakeholder background of workshop participants   

13.5. Welcome and setting the scene 

Pierre  Bascou  from  the  European  Commission  (DG  AGRI)  provided  an  introductory 
presentation to set the scene for the workshop. He emphasised the overarching objective of 
the  workshop,  namely,  to  discuss  the  link  between  carbon  farming  and  the  Common 
Agricultural Policy. 

Mr. Bascou pictured the vision for 2050, in which he highlighted that land and agriculture will 
have  an  important  role  in  achieving  climate  neutrality.  Carbon  farming  can  represent  a 
promising method to incentivise farmers to uptake more sustainable practices and therefore 
play a key role in the green transition for the EU economy, he remarked.  

He then referred to the potentials of the new CAP for Member States to begin the testing of 
carbon farming schemes.  

Mr.  Bascou  concluded  that  increasing  organic  matter  and  organic  soils  in  land  will  be 
particularly relevant along with the protection of carbon stocks. 

13.5.1. The role of the land sector towards climate neutrality 

Yvon  Slingenberg  from  the  European  Commission  (DG  CLIMA)  introduced  the  role  of  the 
land sector towards climate neutrality.  

Ms. Slingenberg stated the need to reduce greenhouse gas (GHG) emissions and pointed that 
in  the  2050  scenario,  agricultural  emissions  from  livestock  and  fertilisers  will  make  for  the 
largest part of the EU emissions. 

However, not only the land sector will contribute to the decarbonisation in other sectors through 
the development of a circular bioeconomy, but it will also provide large part of the removals 
needed to balance the hard-to-abate emissions, restoring the carbon sinks in soils and forests 
whilst increasing biodiversity and preserving ecosystems.  

As a result, the European Commission is promoting carbon farming as a new green business 
model that is expected to provide new income opportunities for land managers. This model will 
become  a  pivotal  example  of  how  climate-driven  action  can  lead  to  the  generation  of  new 
revenues for the involved stakeholders.  

Furthermore,  Ms.  Slingenberg  emphasized  the  importance  of  establishing  a  credible 
governance  system  that  guarantees  additionality  and  permanence  of  carbon  removals  and 
pointed  at  the  current  development  by  the  Commission  of  the  regulatory  framework  for  the 
certification of carbon removals.  

Finally,  Ms.  Slingenberg  referred  to  the  recently  published  “Technical  Guidance  Handbook” 
that shall help practitioners start up and upscale carbon farming initiatives in the EU, which 
was presented more in detail by Mr. Asger Olesen (FSC) and Ms. Clunie Keenleyside (IEEP) 
later in the workshop. 

13.5.2. Interactive session 

An interactive software was used to gather the participants’ views through a number of poll 
questions.  

The first poll question asked them to select their stakeholder category. 165 participants took 
part  in  the  poll  with  the  same  breakdown  of  participant  categories  presented  in  Figure  78. 
Another  99  participated  in  various  parts  of  the  polls  but  did  not  indicate  their  stakeholder 
category. While the unspecified category is not indicated below, it is included as part of the 
other poll questions.  

220 

 
 
The largest groups of participants identified itself as coming from Research & Academia (21%) 
and public authorities (19%).   

The second poll question asked the participants what should be the scope of Carbon farming 
within the CAP. Multiple options were allowed, in particular:  

Figure 79: Responses to poll question 1.  

 

Increased carbon soil 

  Protecting carbon in organic soils 

  Carbon sequestration in biomass (e.g. afforestation) 

  Carbon storage in biomass (e.g. harvested wood products) 

  Reduction of emissions from livestock 

  Reduction of emission from fertilizers use 

203 participants took part in the second poll question. As shown in Figure 80 below, the 
most participants selected increased carbon soil as scope for Carbon farming within the 
CAP, followed by protecting carbon in organic soils and reduction of emissions from livestock 
and fertilizers use. Most categories were aligned across these options with only a few 
choosing other options with a higher frequency. Only participants from NGOs chose 
protecting carbon in organic soils over increased carbon in soil.  

The  least  selected  option  was  carbon  storage  in  biomass  (e.g.  Harvested Wood  Products) 
followed by carbon sequestration in biomass (e.g. afforestation), particularly from participants 
identified as NGOs as well as from international organisations and farmers' representatives. 
Still, within Research & Academia, carbon sequestration in biomass was selected with nearly 
the same frequency as the other options.  

221 

Business/Agricultural Association 12%National/Regional authority19%NGO12%Research & Academia21%EU institution8%International organisation4%Farmers' representative8%Company16%Stakeholder categories 
 
 
Figure 80: Respondents' answers to poll question 2.  

13.5.3. The common Agricultural Policy and carbon farming 

Gijs Schilthuis from the European Commission (DG AGRI) presented the main elements of 
the ongoing reform of the Common Agricultural Policy (CAP) in the context of Carbon Farming.  

Mr.  Schilthuis  highlighted the  importance  of the CAP  in contributing to the objectives of the 
European Green Deal, remarking that climate challenges were already embedded in the new 
CAP  proposal.  The  major  change  comes  from  the  shift  from  compliance  to  performance 
supported  by  a  set  of  indicators  and  an  upgraded  set  of  environment  and  climate  related 
instruments. He emphasized the ongoing negotiations between the European Parliament and 
the Council as paramount to ensure that the CAP reform will contribute to the goal of climate 
neutrality. 

The CAP offers several policy instruments that will provide viable ways to strengthen climate 
change mitigation. Core actions will be undertaken by the Member States through their national 
CAP Strategic Plans due to be submitted to the European Commission by the end of 2021. 
The plans will be assessed in 2022 and subsequently implemented from 2023. Member States 
will develop their CAP Strategic Plans based on a SWOT analysis of their agricultural sector 
and rural areas, such as by examining, among the others, emissions and sinks, soil organic 
carbon.  The  SWOT  will  form  the  basis  of  a  needs  assessment,  which  will  feed  into  an 
intervention strategy built around the necessary agricultural practices through mandatory and 
voluntary actions, budget allocations, and targets set at the level of result indicators such as 
for  areas  under  specific  agricultural  practices.  CAP  Strategic  Plans  will  have  to  take  into 
account the findings, ambitions and targets developed in relevant national planning tools for 
environment and climate. 

222 

131081058282114112019101252910271918816179944774413457516719151091213282620172321020406080100120140Increased carbon soilProtecting carbon inorganic soilsCarbon sequestration inbiomass (e.g afforestation)Carbon storage in biomass(e.g. harvested woodproducts)Reduction of emissionsfrom livestockReduction of emissionsfrom fertilizers useWhat should be the scope of Carbon farming within the CAP?Business/Agricultural AssociationNational/Regional authorityNGOResearch & AcademiaEU institutionInternational organisationFarmers' representativeCompanyUnspecified category 
 
 
In December 2020 the Commission issued recommendations to all Member States for their 
CAP plans, addressing their specific problematic areas including in relation to the ambitions of 
the European Green Deal. It will be for Member States to decide on concrete approaches and 
tools appropriate in their national context. Depending on their assets and challenges, Member 
States can ground their agriculture’s contribution to climate protection in a mix of practices. 
The CAP is a substantial instrument but will need to be employed in combination with other 
EU and national regulatory measures and sources of funding. 

Furthermore,  Member  States  have  to  reach  out  and  involve  stakeholders  in  preparing  and 
monitoring the implementation of the forthcoming CAP instruments. All CAP plans will be made 
public. 

13.5.4. Interactive session 

The  third  poll  question  asked  the  participants  what  practices  are  more  suitable  for  carbon 
farming via the CAP Strategic Plans. Multiple options were allowed, in particular: 

  Peatland restoration and rewetting 

  Grassland management  

  Management of mineral soils 

  Agroforestry 

  Afforestation 

  Decrease of livestock emissions 

  Other 

  Not possible to define 

203 participants took part in the third poll question. As shown in Figure 81 below, there were 
three  options  that  were  selected  with  the  highest  frequency,  starting  with  grassland 
management,  followed  by  agroforestry  and  peatland  restoration  and  rewetting.  Whereas 
grassland management was the most equally chosen option across the respondent categories, 
those  from  public  authorities  as  well  as  farmers'  representatives  were  more  likely  to  select 
management of mineral soils, rather than peatland rewetting.   

In addition to the options of 'Other' and 'Not possible to define’, afforestation was the practice 
that  received  the  least  amount  of  responses,  whereas  management  of  mineral  soils  and 
decrease in livestock emissions had almost the same amount of responses with a big share 
represented by the respondents falling in the unspecified category.  

223 

 
 
Figure 81: Respondents answers to poll question 3.  

13.6. Part 1: Carbon farming as a new business model 

This part of the workshop covered the various elements necessary for deployment of carbon 
farming as a new business model in the EU and experiences to date. Along with a presentation 
of  the  Technical  Guidance  Handbook  on  the  implementation  process,  several  examples  on 
how  to  set  up  and  implement  result-based  carbon  farming  mechanisms  (e.g.  peatland 
restoration or agroforestry), were provided and discussed in greater detail. The presentations 
gave  concrete  examples  of  existing  carbon  farming  schemes  in  Denmark,  Finland  and  the 
Netherlands.  

The perspective of Member States in the development of their Strategic Plans to implement 
carbon farming was also provided. The speakers presented and referred to different EU and 
national  funding  mechanisms,  including  eco-schemes  under  the  new  CAP,  noting  that  the 
potential of carbon farming implementation varies greatly among the Member States. 

224 

11108104231021131571111067133831818111761212644444123241229633211999682229281925153241020406080100Peatlandrestorationand rewettingGrasslandmanagementManagementof mineralsoilsAgroforestryAfforestationDecrease oflivestockemissionsOtherNot possibleto defineWhat are the practices which are more suitable for carbon farming via the CAP Strategic Plans?Business/Agricultural AssociationNational/Regional authorityNGOResearch & AcademiaEU institutionInternational organisationFarmers' representativeCompanyUnspecified category 
 
 
13.6.1. The Common Agricultural Policy and carbon farming  

Asger  Olesen  (FSC)  and  Clunie  Keenleyside  (IEEP)  presented  the  Technical  Guidance 
Handbook commissioned by the European Commission, to provide analytical support for the 
Operationalisation of an EU Carbon Farming Initiative.  

Mr.  Olesen  noted  that  the  study  had  relied  on  previous  work  developed  within  the  Kyoto 
Protocol, national schemes in Australia and New Zealand as well as private and local initiatives 
in  the  EU.  Five  case  studies  were  developed  within  the  field  of  peatland  restoration  and/or 
rewetting,  agroforestry,  livestock,  grassland,  and  soil  organic  carbon.  These  case  studies 
explored the technical readiness and implementation of carbon farming. Peatland restoration 
and/or rewetting is considered the most technically complete and available good practice, so 
the speaker focused on presenting examples of action on peatlands during their presentation, 
presenting  the  analysis  carried  out  on  initiatives  in  different  countries from  the  EU  such  as 
MoorFutures  (Germany),  Peatland  Code  (UK),  MaxMoor  (Sweden)  and  Green  Deal 
implementation  procedures  in  the  Netherlands.  Such  schemes  rewarded  ex-ante  avoided 
emissions through ending of drainage, whereas incentives for removals revealed to be not yet 
developed. 

Mr. Olesen concluded that:  

 

for  pre-operational  and  pilot  phases,  all  schemes  have  relied  on  a  mix  of  funding 
instruments (public and private grants, expert support, etc.), 

  scalable operation for revenue needs a downstream delivery model carefully designed 

and 

 

three different delivery models from existing practices were of relevance.  

Ms. Keenleyside further explained the Technical Guidance Handbook.  

First,  she  explained  how  result-based  payments  (RBP)  can  achieve  a  range  of  specific 
environmental  objectives,  among  which  reducing  GHG  emissions  and  promoting  carbon 
sequestration. RBP are based on indicators to monitor the environmental objectives. From the 
land’s  manager  point  of  view,  the  RBP  is  linked  to  verifiable  indicators  of  either  the  direct 
environmental  objective  or  a reliable  proxy  of  that  indicator.  As  such,  it  results  in  a  system 
where the higher the quality of the indicator, the higher the payment. This system minimises 
the risk for the land manager while he oversees the management and choice of indicators.  

Ms.  Keenleyside  also introduced  the  different  costs  associated  to  a  shift to  carbon farming. 
Up-front investments in land-use change are the main source of expenses for land managers. 
There are also additional opportunity costs and ongoing implementation costs. On the other 
side, scheme manager should bear the costs for pilots, knowledge and innovation, monitoring, 
reporting and verification. 

Ms. Keenleyside gave examples of two RBP pilot carbon farming projects. The first example 
is the Swiss regional pilot Ebenrain that was funded by a Swiss bank to offset emissions locally. 
This  provided  a  six-year  commitment  for  farmers,  ensuring  them  wider  benefits  to  include 
advice, a menu of measures, and staged payments linked to soil sampling in the first, third and 
sixth year.  

In the Portuguese project Montado a wide variety of result-based indicators was developed:  

  Valorise effective management of natural regeneration system 

  Preserve soil health and functionality 

  Tree layer capable of regeneration 

225 

 
 
  Biodiversity of Mediterranean grassland and other elements conserved 

Lastly, Ms. Keenleyside presented how the Technical Guidance Handbook should enable land 
managers to find the suitable and relevant type of carbon farming scheme for their proposed 
area  of  development  with  a  decision-tree  approach,  including  the  selection  of  rewarding 
mechanisms,  for  example  based  on    action-based  payments,  result-based  payments  and 
hybrid schemes. 

13.6.2. CAP instruments for sinks 

Emmanuel Petel and Christine Falter from the European Commission (DG AGRI) presented 
the instruments available in the CAP. 

Mr. Petel introduced the definition and eligibility rules for agricultural land and remarked that 
the basic definition will not change with regard to agricultural activity and the three land use 
types: arable land, permanent grassland and permanent crops. Nevertheless, there will be a 
better recognition for  paludiculture  as  activity  as  well  as for  agroforestry  systems  under  the 
three land use types.  

Enhanced conditionality is an integral part of the future CAP framework. It must cover farmers 
receiving CAP payments, including small farmers as they manage a significant share of the 
area.  

Common minimum rules are necessary to safeguard the level-playing field between farmers. 
In  this  regard,  enhanced  conditionality  includes  three  GAEC  relevant  for  mitigating  and 
adapting to climate change which are as follows: 

  GAEC  1:  Maintenance  of  permanent  grassland  based  on  a  ratio  of  permanent 

grassland in relation to agricultural area;  

  GAEC  2:  Protection  of  wetland  and  peatland  under  the  topic  of  Climate  Change 

(mitigation and adaption); 

  GAEC 10: Ban on converting or ploughing permanent grassland in Natura 2000 sites 

under the topic of Biodiversity and Landscape.  

Other  GAECS  referring  to  soil  erosion,  burning  of  residues,  landscape  features  are  also 
contributing to climate objectives. 

Another key part of the CAP is the eco-schemes under the funding of Pillar I. Member States 
will have to allocate a portion of their Pillar I funding to eco-schemes aiming to directly benefit 
the environment and climate (without co-financing). Participation will be voluntary for farmers. 
Agricultural  practices  that  could  be  supported  by  eco-schemes  will  need  to  meet  certain 
conditions related to their environmental objectives, ambitions and areas of action. In relation 
with eco-schemes, the Commission has issued in January 2021, an indicative list of practices 
to be supported including agroforestry and carbon farming measures. 

Furthermore, Ms. Falter presented on the topic of Pilar II for the new CAP, the possibilities of 
rural development funding for agroforestry and peatland restoration. In terms of agroforestry, 
there  will  be  continuity  with  the  current  CAP.  The  EAFRD  support  will  be  available  for 
establishment,  regeneration  or  renovation,  and  maintenance  of  agroforestry  systems. 
However,  maintenance  will  be  situated  under  a  different  intervention  than  for  the 
establishment,  regeneration  and  renovation.  Additionally, 
the 
establishment, regeneration or renovation will go up from 80% (current CAP) to up to 100% in 
the new CAP. 

the  support 

rate  of 

Concerning the support for peatland under Pillar II, it will be available for:  

  Restoration of drained peatland / rewetting 

226 

 
 
  Payments to conserve and restore wetland and peatland in Natura 2000 areas 

  Diversification of the rural economy (e.g. recreational or touristic infrastructure etc.) 

Lastly, it was concluded that good articulation between the different CAP instruments in the 
CAP strategic plans to address carbon farming in the future will facilitate for the advancement 
of the field. 

13.6.3. Agro-forestry within the CAP 

Patrick Worms and Garry Lawson (EURAF) presented the topic of agroforestry within the 
CAP.  

Mr. Worms introduced the presentation defining the differences between the two terms “forest” 
according to the definition based on the UNFCCC Marrakesh Accords and the EU definition of 
“agroforest”. The latter definition leaves an open interpretation for Member States to define the 
maximum and minimum number of trees per hectare.  

Mr. Lawson presented an overview of the forest areas and existing trees in the Member States. 
While the planting rates can be considered remarkable with high levels of reforestation and 
planted seedlings, there are still great differences between Member States such as Slovenia 
or Spain, where notable higher percentages of trees are situated outside forest areas.  

Agroforestry  mitigates  3  tonnes  carbon/ha  per  year  and  it  meets  the  requirements  for 
permanence  (as  it  produces  construction  timber  and  has  deep-soil  impacts),  has  some 
environmental  benefits  (N2O  and  ammonia  leakage  reduction,  animals  can  stay  longer 
outdoors, increase farm biodiversity, increase soil organic carbon). Agroforestry needs anyway 
incentives to cover the establishment and maintenance costs. 

Despite the presence of agroforestry within the last CAP, the figures show that the uptake by 
Member States and farmers has not achieved the expected results. For instance, only 2.5% of 
the  planned  expenditure  by  2019  of  EUR  64M  was  actually  spent.  Member  States  tend  to 
targets  and 
underspend 
achievements  set  up  by  the  CAP.  As  such,  Member  States  should  clarify  and  extend  the 
conditions  required  for  full  basic  payment  eligibility  in  parcels  containing  trees  (e.g.  when 
agriculture is conducted on more than 50% of the surface area).  

forestry  and  agroforestry  budgets,  directly 

influencing 

the 

In the  context  of the  new  CAP, five  agroforestry  eco-schemes  could be offered  by  Member 
States to farmers through a satisfactory completion of various stages covering: planning for 
trees  on  farms;  establishment  of  landscape  features;  enrichment  of  landscape  features; 
silvopasture or silvoarable establishment; regeneration of mature silvopasture or silvoarable 
lands.  

Lastly, it was stressed that it shall be ensured that agroforestry is included in the CAP Strategic 
Plans of each Member State. 

13.6.4. Carbon 

farming  schemes 
examples of possible combined support  

from  Denmark  –  concrete 

Thomas  Skovgaard  and  Adam  Høyer  Lentz  (Danish  Ministry  of  Food,  Agriculture  and 
Fisheries) presented carbon farming schemes in Denmark.  

The Danish government has put forward two plans with ambitious goals, namely, to reach 70% 
greenhouse gas reductions by 2030 and climate neutrality by 2050. The agriculture sector in 
Denmark  has  an  incentive to reach  this target  as  the  country  has  almost  two-thirds of  land 
under  cultivation.  This  land  accounts  for  30%  of  all  GHG-emissions  in  the  country.  In  this 

227 

 
 
context,  carbon rich  peat  soils  represent  one  of  the  primary  emission  sources,  emitting  4,8 
million tonnes of CO2eq (in 2019). 

Mr.  Skovgaard  presented  the  Danish  objective  to  reduce  CO2  emissions  from  carbon  rich 
(organic) soils within the area of peatland restoration and rewetting. To accomplish this goal, 
Denmark offers landowners a variety of payment schemes. Such schemes are financed either 
as lowland schemes under the Rural Development Programme (RDP), as a Climate Lowland 
scheme 100% nationally financed, or as a Climate Forest Fund financed with a combination of 
national and private funds. The scope of this project is the total area of cultivated organic soil, 
accounting for 7% of the total cultivated area and equal to 170,000 hectares of land. 

All  schemes  will  be  based  on  voluntary  efforts  due  to  the  uneven  location  of  organic  soils 
throughout the country. Landowners are compensated for their loss of income, and from 2023 
they expect to pay the compensation as a one-time compensation. 

Moreover,  the  government  proposal  towards  2030  is  to  restore,  rewet  or  set  aside  at  least 
88.500 hectares of carbon rich peat soils, which is expected to have a climate impact of 0,9 
million tonnes of CO2 emission reduction. 

A  varied picture  of the  upcoming  challenges  was  then  presented, focusing on  both barriers 
and synergies. Barriers could include the risk of emission of phosphorus to the environment; 
the possibility of peatland projects to be in conflict with regulation related to the protection of 
nature (e.g. Natura 2000); the level of compensation and the implementation time required by 
peatland projects. On the other side, peatland projects have the advantage to enhance nature 
and biodiversity and reduce nitrogen leaching. Moreover, Denmark can count on high level of 
data and ongoing national research and the flexibility accorded by the fact that there is more 
than one scheme.  

Lastly, the ‘Targeted nitrogen regulation’ scheme was given  as an example of maintenance 
and enhancement of soil organic carbon with a primary objective to reduce leaching of nitrogen 
to the aquatic environment. This is obtained through establishing catch crops or implementing 
alternative  nitrogen  reducing  measures  (e.g.  set-aside  or  sowing  energy  crops),  for  which 
farmers will be financially compensated. As a result, catch crops will maintain or enhance the 
level  of  organic  carbon  in  the  cultivated  soils  for  an  expected  climate  impact  of  0,5  million 
tonnes of CO₂ emissions reduction in 2030. 

13.6.5. Carbon farming under Nordic conditions 

Perttu Virkajärvi (Luke) and Pia Lehmusvuori (Finnish Ministry of Agriculture and Forestry) 
followed  up  with a presentation  of  a  case  study of  carbon farming  under  Nordic  conditions, 
focusing on Finland. 

Mr. Virkajärvi began the presentation giving insights about the Finnish agricultural conditions, 
remarking  that  the  soil  organic  carbon  content  is  high  in  most  part  of  Finland  which  is  a 
challenge  for  LULUCF  emissions.  Additionally,  the  cold  winter  and  long  snow  cover  have 
implications for the choice of crops and forage species, as well as a larger presence of spring 
types of cereals and rape seed.  

Mr.  Virkajärvi  presented  further  the  results  of  a  study  concerning  agricultural  emissions  in 
organic soils. The data showed that annual crops have the highest emission factor in relation 
to other agricultural systems. Although the mitigation potential per tonne of CO₂ is lower, there 
is  a  larger  application  area  on  mineral  soils  that  partly  compensates  this  lower  change  in 
emission per hectare compared to the organic soils. 

Ms. Lehmusvuori followed with a separate presentation on the carbon farming eco-schemes 
that  Finland  intends  to  include  within  the  CAP  strategic  plan  to  achieve  environmental  and 
climate objectives. Finland has planned to offer eco-schemes for crop cover during winter and 
grass cultivation without plant protection products and fertilizers and with certain species.  

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With regard to the agro-environmental commitments under the RDP, Finland has planned to 
include several measures, namely catch crops; soil improving crops; grass cover on peatland 
fields after arable crops without plant protection products and fertilizers; application of organic 
matter to arable land; controlled drainage management; constructed wetlands management; 
grazing of semi-natural pastures; and organic production. 

13.6.6. Carbon farming in the Netherlands  

The presentation by Mr. Sjoerd Miedema (De Nije Mieden) gave the local perspective of an 
organic farmer implementing carbon farming in the Netherlands. He was the first Dutch carbon 
farmer working with peat meadows who has also achieved lower carbon emissions through 
peatland activities.  

Mr. Miedema’s main point is that soil can play a key role in increasing the sink with a direct 
effect  on  improving  biodiversity.  He  proposed  implementing  measures  that  avoid  mineral 
fertilisation,  the  use  of  chemicals  and  tillage.  He  stressed  the  importance  to  reward  front-
runners and rethink the role of farming as key to the solution. 

13.6.7. Interactive session 

The fourth poll question asked participants to identify the barriers to the uptake of carbon 
farming schemes. Multiple options were allowed, in particular: 

  Lack of tailored advisory services 

  Uncertainty about funding opportunities 

  Regulatory obstacles 

 

Insufficient reward for co-benefits 

  Lack of MRV capabilities 

  Cooperation or collective actions insufficiently supported 

143 participants took this poll. As shown in Figure 82 below, the most relevant barrier to the 
uptake of carbon farming schemes is uncertainty about funding opportunities. This choice was 
homogenously given across the respondent categories, except for international organisations 
and companies that  stressed more  the  importance of  insufficient  support for cooperation  or 
collective actions (both categories) and the lack of MRV capabilities (companies).   

Beyond funding opportunities, the other two barriers that stood out within this poll question are 
insufficient rewards for co-benefits as well as lack of tailored advisory services.  

Regulatory obstacles was the least selected option with respondents from public authorities 
selecting  it  among  the  less  important  barriers  and  those  from  NGOs  considering  it  on  the 
contrary the most relevant one.  

229 

 
 
 
Figure 82: Respondents' answers to poll question 4.  

The fifth poll question targeted participants from public administrations. They were asked if 
they  were  planning  to  include  Carbon  farming  schemes  in  their  CAP  Strategic  Plan. 
Respondents could choose among the following options: 

  Yes 

  No 

  Possibly 

  Not yet decided 

  Already did 

89 participants identifying themselves as coming from all categories took this poll. As shown 
in Figure 83, almost half of the respondents replied positively to the inclusion of Carbon farming 
schemes in the CAP Strategic Plans. 50% of the respondents identifying themselves as from 
public  authorities signalled  the  plan  to  include  carbon farming  schemes in their  CAP  plans, 
whereas 25% replied, respectively, that this is a possibility or that it hasn’t yet been decided.  

230 

573643887862467145310498522152215272512452466202915221410010203040506070Lack of tailored advisoryservicesUncertainty aboutfunding opportunitiesRegulatory obstaclesInsufficient reward forco-benefitsLack of MRV capabilitiesCooperation or collectiveactions insufficientlysupportedWhat are the barriers to the uptake of carbon farming schemes?Business/Agricultural AssociationNational/Regional authorityNGOResearch & AcademiaEU institutionInternational organisationFarmers' representativeCompanyUnspecified categories 
 
 
 
Figure 83: Respondents' answers to poll question 5.  

13.7. Part  2:  Lessons  learned  from  existing  carbon  farming 

projects 

The  second  part  of  the  workshop focused  on  the  lessons  learned from  the  existing  carbon 
farming projects. The presentations gave an overview of the implementation of carbon farming 
schemes  facilitated  through  EU  funding  and  presented  existing  carbon  farming  business 
models.  

The lack of awareness about carbon farming in the agricultural sector and the fact that certain 
policies  are  considered  by  farmers  restrictive  rather  than  supportive  were  emphasised. 
However,  there  is  a  market  for  carbon  farming  as  actors  become  increasingly  attentive  to 
aspects of sustainable farming. Nevertheless, motivation should be the guiding principle rather 
than obligation. A European framework should be tailored to the needs of local initiatives to 
encourage local and regional investment in carbon farming.  A particularly promising carbon 
farming  option  is  climate  action  on  peatlands,  due  to  its  mitigation  potential  and  lower 
implementation challenges. Moreover, actors would greatly benefit from more information on 
the  advantages from  restored  peatland, a common  certification  and  accreditation system,  a 
centralised organisation for coordinating GHG monitoring standard, and a common framework 
of incentives and (eco-)credit systems. 

231 

 
 
 
13.7.1. LIFE Carbon Farming Scheme 

Jenni Kähkönen (ST1) presented the outlines of their project, LIFE Carbon Farming Scheme, 
financed by the EU LIFE program.  

The project’s main objectives is to:  

  Develop understanding how to incentivise carbon farming 

 

Identify the factors that compose an efficient market 

  Demonstrate carbon sequestration in different regions in Europe 

In order  to  address the supply  and demand of carbon removals, the  project  has  developed 
“The case farm pilot”, where viable carbon farming methods are tested and reviewed, and the 
carbon sequestration potential is estimated in test farms located in different European climate 
zones.  

Additionally,  an  open  survey  for  farmers  has  been  launched  that  aims  at  increasing  the 
knowledge  of  stakeholder  priorities  regarding  various  aspects  of  nature-based  carbon 
sequestration, and to better understand how to incentivise actions through policy and market 
mechanisms. 

The project has also developed a trading pilot in Puro.earth marketplace, which quantifies the 
achieved carbon removal using soil amendment fibre from pulp and paper mill sludges to store 
stabile carbon into agricultural soils.  

With regard to funding mechanisms to support carbon farming, Mrs. Kähkönen emphasised 
that the certification of carbon removals and measuring, reporting and verification are key pre-
requisites to incentivise a favourable environment for funding. Furthermore, she put forward 
the key actions to improve the funding market:  

  Ensuring initiation of carbon sequestration activities through public financing 

  Sales of negative emissions through voluntary markets  

  Regulatory markets will enable growth of carbon sequestration activities 

Finally, the following next steps of the LIFE project were presented: 

  Report  on  how  to  incentivise  farmers  and  foresters  to  take  up  scalable  carbon 

sequestration actions in EU including the study of the cost of value chain 

  Summary of review of the risk assessment and policy aspects for best practices for a 

carbon farming scheme 

  Report of the results of carbon credit trading demonstration in Puro.earth marketplace 

with test farmers and foresters 

  Report  on  5-10  best  methods  to  bind  carbon  in  European  agricultural  and  forest 

ecosystems and prevention of the carbon loss (soil management, fires) 

  Final Guidance at the end of project in spring 2022 

13.7.2. Interreg North Sea Carbon Scheme 

Marjon  Krol  (ZLTO)  presented  the  Carbon  Farming  project,  undertaken  by  seven  partners 
including farmers associations, knowledge institutes and public institutions from four different 
countries.  The  project  is  50%  funded  by  the  Interreg  North  Sea  Region  program  under  the 
European  Regional  Development  Fund  for  the  period  of  2018-2022.  The  project’s  main 

232 

 
 
objective  is  to  develop  business  models  for  carbon  sequestration  to  incentivise  farmers  to 
invest in carbon farming.  

Ms. Krol presented the results of a survey conducted to map the barriers farmers encounter 
when  starting  carbon  farming.  These  show  that  there  is  a  lack  of  knowledge  about  carbon 
farming.  Additionally,  economic  uncertainty  and  contradictory  and  restrictive  policy  are 
considered main obstacles for farmers. Based on these results, the project developed three 
work packages focusing on developing techniques for carbon sequestration (W1), the study of 
four  different  business  models  for  carbon  farming  (models  within  and  outside  the  agri-food 
chain, models at the farm level and models including government institutions) (W2), and the 
development of 15 pilot projects to test the different business models (W3).  

Ms.  Krol  emphasised  that  carbon  farming  serves  multiple  goals  and  has  the  potential  to 
increase climate  ambitions due  to  the motivation of  companies to  distinguish themselves in 
sustainability. The project encourages local farmers to work together in a transparent, unique 
and visible manner that creates additional benefits for biodiversity, landscape and water.  

Ms. Krol recommended focusing on motivation instead of obligation. This can be provided by 
an  integral  framework  where  policy  goals  are  connected  and  do  not  conflict  with  local 
aspirations. The focus should remain on the benefits for the farmers. Knowledge dissemination 
remains a powerful tool to create awareness and make transparent the added value of carbon 
farming for famers. A motivating reward system should stimulate the blending of public and 
private rewards, allowing customisation for farmers. Further actions should continue to support 
the  market  and  embrace  and  support  local  initiatives  and  an  efficient  measuring,  reporting 
verification system. 

13.7.3. Interreg North-West Europe Carbon Connects 

Valentina Sechi (Wetsus) presented the Carbon Connects project, which is an Interreg project 
funded by the European Regional Development Fund. The project is carried out by 18 partners.  

The  main  objective  of  Carbon  Connect  is  to  change  the  traditional  GHG-emitting  land 
management  practices  to  sustainable low  carbon alternative practices in  the main peatland 
containing regions of North-West Europe. The program provides a farmer-to-farmer learning 
programme that  promotes  the  benefits  of  alternative land management and  the  adoption  of 
sustainable low carbon farming practices. So far, a report was produced to evaluate potential 
business  models  of  low  carbon  alternative  practices,  and  established  pilots  for  field-testing 
these practices.  

When  working  with  peatland  restoration,  the  project  identified  an  uncertainty  in  terms  of  a 
missing market for peatland related products. Additionally, there exists a technical challenge 
for rewetting and for alternative crop establishment. There is also a lack of societal recognition 
of the importance of peatlands among farmers.  

Finally, the project detected a policy gap revealing that there is:  

  no common matrix to estimate the benefit from restored peatland;  

  no common certifications and accreditation system;  

  no centralised organisation for coordination of GHG monitoring standard;  

  and no common framework of incentives and (eco) credit systems. 

Ms. Sechi concluded that the current carbon-credit systems and incentives do not effectively 
support sustainable peatland management practices and restoration. Although a few examples 
at  national  and  regional  level  have  been  implemented,  international  standards  are  far  too 
expensive  for  most  small  peatland  areas.  Ms.  Sechi  suggested  that  an  easy  and  less 

233 

 
 
expensive  accreditation  system  based  on  proxies  to  assess  GHG  emission  reduction  (e.g. 
GEST) can be suitable for the peatland context.  

Quality can be guaranteed, and costs lowered if the accreditation is carried out to a regional 
standard. To ensure that the work continues in the expected progression, common guidelines 
are needed that measure and account for carbon credits and other ecosystem services. 

13.8. Q&A and closing remarks 

Following  the  presentations,  a  discussion  took  place,  moderated  by  Christian  Holzleitner 
from the European Commission (DG CLIMA) and based on the questions obtained from the 
interactive polls and the discussion in the chat. The most commonly raised ones concerned 
the current state of rewarding of farmers that are frontrunners in implementing carbon farming, 
the feasibility of combining public and private funds, and the co-benefits of carbon farming. 

With regard to the possibility to reward farmers that are already practising carbon farming, Gijs 
Schilthuis (DG AGRI) pointed to the experiences already shared in the workshop, specifically 
the  example  from  the  Netherlands,  showing  that  farmers  in  Member  States  are  indeed 
rewarded for their implementation locally, although there might be more efforts needed to make 
this universal.  

With regard to the possible combination of public and private funds, he remarked that the role 
of  public  authorities  is  not  necessarily  the  provision  of  public  capital  but  also  to  ensure the 
certainty in the planning process as this will most likely attract additional funding streams from 
private capital.  

He  encouraged  the  audience  to  have  a  look  at  the  Technical  Guidance  Handbook,  as  it 
provides  examples  on  how  activities  can  have  additional  local  environmental  benefits.  He 
concluded by underlining how the carbon farming initiative which will be launched this year by 
the Commission is part of the European Green Deal in combination with other initiatives and 
actions that aim to change the way we consume, farm and transport. All these aspects need 
to be coordinated and developed in the same direction, which is precisely the challenge that 
we are currently tackling. 

Christian Holzleitner (DG CLIMA) provided the closing remarks on the workshop. He stated 
that the workshop has given an overview of the overall market size for carbon removals and 
how could look like in the future. There is a need to continue to push this discussion forward.  

He stressed the importance of finding a balance between food production and carbon farming. 
Carbon removals should be a business integrated into EU sustainable farming that should be 
provided  with  additional  funding  mechanisms  that  ensure  further  progression  in  the  field. 
Ongoing  initiatives from  the  European  Commission  will  further  incentivise  action for  carbon 
farming schemes.  

He concluded by noting that the transition will not be at low-cost and that therefore funds need 
to  be  mobilised  from  different  sources,  such  as  from  the  CAP  budget  as  highlighted  in  the 
workshop, but also from major polluters. 

13.9. Survey analysis 

13.9.1. Background for survey 

On top of the polls that were taken and commented during the workshop, a specific survey 
was launched after the workshop. The objective of the survey was to collect relevant input with 
regard to the funding mechanisms to support carbon farming initiatives, as well as to the drivers 
and barriers faced  by  stakeholders  in  the  implementation  process. The survey  included  the 
following specific questions:  

234 

 
 
  What  type  of  stakeholder  are  you?  (Options:  Academic/research  institutions, 
Environmental Organisation, Public authority, Business association, EU Citizen, Trade 
Union, Company/Business organisation, Non-EU Citizen, Training provider, Consumer 
organisation, Non-governmental organisation (NGO), Other with if you selected Other, 
please specify) 

  How do you see the interaction between CAP funding and other financing opportunities 

such as State aid or private markets? 

  What  are  the  biggest  or most  common  implementation challenges for the  setting  up 

and implementation of Carbon Farming schemes under the CAP? 

  What kind of action could be taken at EU level that would enable a stronger uptake and 
upscaling of carbon farming initiatives (for examples, foster peer-to-peer knowledge, 
remove or simplify regulatory barriers etc.)? 

  What is the scope of Carbon farming (for example, should it aim at incentivising carbon 
sequestration in soil or biomass or to protect or store carbon or reduce emission)? 

13.9.2. Overview of respondents’ categories 

44  responses  were  collected65.  The  highest  number  of  replies  was  provided  by  participants 
from  public  authorities  making  up  23%  of  all  respondents,  followed  by  those  from 
academic/research institutions and NGOs as well as a few environmental organisations. The 
category ‘other’ was made up of farmers and their representatives and one non-EU citizen. 
Participants  identified  as  EU  citizens,  trade  unions,  training  providers  or  consumer 
organisations did not provide any contribution. The figure below presents the breakdown of the 
respondents’ categories. 

Stakeholder Categories

Public authority
(10) 23%

Academic/research institution
(8)
18%

Other (4)
9%

Business 
association/company/business 
organisations (9)
20%

NGOs/Environment
al orgnaisations (13)
30%

Figure 84: Breakdown of type of stakeholder that took part in the survey after the workshop.  

65 45 responses were collected in  total, but one was removed as it was a copy of another response. 44 responses were then 
analysed.  

235 

 
 
 
 
                                                 
13.9.3. How do  you see the interaction between CAP funding and 
other  financing  opportunities  such  as  State  aid  or  private 
markets? 

Public  authorities  (9  replies).  Respondents  supported  the  interaction  between  different 
funding opportunities, remarking that private carbon markets can act as an example for the 
CAP to ensure that the focus from the CAP is on climate mitigation and adaption within the 
LULUCF sector. State aid, on the other hand, will remain the subject of further negotiations 
and is currently driven by different national priorities than the CAP plans. While one respondent 
remarked that carbon farming schemes should be fully market-based in the end, others added 
that the information on the interaction between funding schemes is still unclear and should be 
approached more coherently in the Member States. It was suggested that CAP funding, state 
aid and private markets should jointly contribute with broader policy measures. 

Academic/research  institutions  (8  replies).  There  was  a  consensus  among  these 
respondents  that  CAP funding remains crucial  and  they  welcome  modalities between CAP, 
state  aid and  private  markets  as  long as the framework  is  well  designed. They  agreed  that 
farmers are the base of bioeconomy. Cost-effectiveness and a focus on environmental aspects 
and  biodiversity  was  mentioned  as  important  elements  with  regard  to  double  funding  (e.g. 
carbon farmers receiving financial benefits from both the CAP as well as from a private market). 
Concerns  were  expressed  regarding  the  use  of  CAP  funding  to  reward  carbon  farming, 
especially in terms of the risk associated with greenwashing (i.e. CAP money will be received 
by farmers anyway with no additional incentive to go beyond baseline practices).  

Business  associations/company/business  organisations  (9  replies).  There  was  high 
support to the interaction between CAP funding and other financing opportunities. Remarks 
included their support for a hybrid solution that fosters a transition to regenerative agriculture 
and carbon farming practices. CAP funding will complement private markets that have a role 
to  cover  a  share  of  ongoing  management  and  profit  requirements.  One  of  the  respondents 
suggested that farmers could access in particular both CAP funding as well as carbon credits 
on the market, whereas one respondent remarked that a private market carbon credit-system 
may not be a good option due to requirement of ‘additionality’ and the lack of consensus on 
soil  carbon  measurement  methods  and  carbon  sequestration-certification.  Focus  on 
certification  standards  was  highlighted.  Attention  to  forestry  and  agroforestry  was  also 
highlighted  as  a  relevant  distinction  so  that  ecosystem  services  are  properly  compensated 
through a carbon market.   

Environmental  organisations/NGOS  (13  replies).  Respondents  highlighted  that  the 
interaction  between  CAP  funding  and  other  funding  opportunities  should  be  a  priority, 
mentioning  that  CAP  funding  contributes  to  lowering  barriers  for  entry  and  to  the  costs  of 
change of operations and behaviour. They highlighted that CAP should provide incentives to 
continue low carbon agriculture based on results from pilots. It was also remarked that funding 
for  carbon  farming,  especially  on  forestry,  should  be  supported  outside  the  CAP  including 
measures  such  as  mandatory  investments  in  carbon  certificates  to  stimulate  industry 
participation. Furthermore, it was suggested that the interaction should be put on public funding 
in  combination  with  private  non-market-based  financing  such  as  Extended  Producer 
Responsibility mechanisms and value chain financing. Some respondents were less in favour 
of  an  interaction  in  funding  and  remarked  that  the  current  system  is  not  climate  focused 
enough,  often  steering  public  and  private  funding  towards  greenwashing.  The  concern  was 
raised  that  large amounts  of  private funding  can lead to perverse  effects and disincentivise 
farmers from transitioning to forming systems that deliver more benefits. They also remarked 
that that funding should be paid directly to farmers who can show results that improve carbon 
storage in soil and that climate perverse subsidies need to be phased out (e.g. CAP payments 
that encourage the drainage of soils). 

236 

 
 
Other  (3  replies).  It  was  remarked  that  the  CAP  and  other  funding  mechanisms  should 
integrate carbon credit supply from agriculture into the EU ETS or to benchmark prices. It was 
also mentioned that there is a need for public-private partnerships and an understanding of 
how the farmer can measure sustainability and the impact on the environment. A further remark 
pointed out to the possibility of better funding forestry through well-functioning private market 
solutions rather than the CAP. 

13.9.4. What  are  the  biggest  or  most  common  implementation 
challenges for the setting up and implementation of Carbon 
Farming schemes under the CAP? 

Public authorities (9 replies). A range of challenges were mentioned and no clear consensus 
about the main challenge was identified. There was the mention of lobbying activities from the 
big  players  that  are  not  motivated  by  sustainability;  the  lack  of  knowledge  and  training  to 
farmers in implementation of interventions and best practices; coordination across policy fields 
and  departments;  MRV  and  ensuring  performance  and  liability  of  emission  reductions;  a 
control  framework  for  the  EU-wide  carbon  farming  scheme;  the  lack  of  identified  areas  of 
peatland and wetland in Member States; low level of compensation and long-term stability and 
low profitability in the forestry sector; and the conceptual conflict between food security and 
the increase of non-productive land. It was additionally noted that it is not clear if it is the state 
or the individual that will benefit in setting up and implementing carbon farming schemes under 
the CAP. 

Academic/research institutions (8 replies). There was agreement that one big challenge is 
to  develop  robust  monitoring,  reporting  and  verification  with  cost-effective  tools,  including 
environmental  indicators,  ensuring  quality  markets  and  removals.  Some  respondents 
highlighted the challenges linked to permanence and leakage, the payment unit and the long-
term responsibility and to helpful cost-benefit models and robust result-based schemes.  

(9 

replies).  This  group 
Business  associations/company/business  organisations 
highlighted as big challenges to decide on the importance of additionality, how to define carbon 
leakage,  to  find  scientific  consensus  on  soil  carbon  measurement  and  to  communicate 
agronomical  advice  on  carbon  farming  techniques  to  EU  farmers.  Moreover,  the  economic 
equation  (i.e.  the  balance  between  costs  and  compensation),  the  lack  of  economic  impact 
calculation of  co-benefits,  a missing  legal framework  that recognises  standards, the  cost  of 
MRV, the difference between annual payments in Pillar I and multi-annual payments in Pillar 
II, and the permanence and the remuneration of farmers for protecting carbon stocks remain 
crucial obstacles. According to some respondents, an effective MRV system, the timeframe 
with different speeds of carbon farming, competing ecosystem services, sequestration below 
the root zone and bordering practices, lack of a clear carbon market, costs of investments to 
transition to regenerative agriculture, implementation of carbon credits and carbon certification 
standards, and soil carbon measures are the biggest challenges.  

Environmental  organisations/NGOs  (13  replies).  The  biggest  challenge  is  to  ensure  a 
trustworthy  and  acceptable  monitoring,  reporting  and  verification  system  of  carbon  removal 
and  an  appropriate  pricing  mechanism.  Other  challenges  mentioned  are  the  reduction  of 
livestock  and  ruminant  emissions  in  oversaturated  soil;  keeping  transaction  costs  low  to 
maintain confidence in results and to deal with the risk of non-permanence, risk of leakage and 
additionality; the coherency with overall climate policy given the different priorities of the CAP 
and  coherency  with  EU  Climate  Law;  and  the  lack  of  a  CAP  performance  framework  that 
incentivises  Member  States  to  implement  ambitious  carbon  farming  schemes  based  on  the 
impacts of GHG rather than on the assessment of uptake. Another key issue mentioned was 
the  lack  of  homogeneity  as  regards  knowledge,  skills,  natural  conditions,  and  baselines  of 
farmers across the various Member States. There are costs linked to ensuring efficiency with 

237 

 
 
consultancy,  training  and  adoption  to  the  specific  farm  context,  including  accuracy  and 
accountability of carbon sequestration in arable land. There is a need to link carbon farming to 
EU nature restoration plans, promote biodiversity, and ensure clear guidance on the benefits 
to  small  farmers.  For  peatland  in  particular,  the  biggest  challenge  is  losing  the  access  to 
payments from Pillar I as well as certain protection for grassland that can hinder paludiculture. 
Moreover, synthetic pesticides remain an issue along with the lack of a systematic approach 
that focuses on increasing sequestration. Finally, there should be a strict separation from the 
EU ETS to limit the disincentives for other sectors in need of decarbonisation.  

Other  (4  replies).  Bringing  many  actors  together  and  ensuring  that  they  understand  what 
carbon  sequestration  is  and  how  to  measure  and  reward  these  practices  constitutes  a  big 
challenge.  Additionally,  proving  additionality  and  avoiding  double  payments  for  the  same 
services,  as  well  permanence  were  mentioned  as  further  challenges.  It  was  suggested  to 
develop the carbon credits market and provide blended finance. Finally, the lack of general 
funding,  the  administrative  burden  and  the  need  to  acknowledge  the  carbon  already 
sequestered by farmers were also addressed. 

13.9.5. What  kind  of  action  could  be  taken  at  EU  level  that  would 
enable  a  stronger  uptake  and  upscaling  of  carbon  farming 
initiatives  (for  example, 
foster  peer-to-peer  knowledge, 
remove or simplify regulatory barriers etc.)? 

Public authorities (9 replies). Lobbying should be regulated and there should be educational 
programmes  for  communities,  farmers,  public  authorities  on  the  importance  of  rewarding 
carbon farming. Additionally, the respondents expressed the opinion that the best regulatory 
practices  are  through  information  sharing  through  advisers  and  EU  innovation  partnerships 
and through removing and simplifying regulatory barriers such as the administrative burden of 
MRV  or  investments  in  new  technology  on  the  landowner  side.  The  remote  sensing 
technologies were supported as a desirable tool to improve farm and forest level monitoring. 
Clear and affordable carbon farming schemes with a certification system for different types and 
sectors of agriculture should be in place. 

Academic/research  institutions  (8  replies).  There  was  not  a  common  consensus  on  this 
question.  Some  respondents  indicated  that  the  payment  for  carbon  should  go  directly  to 
farmers/ foresters/land managers to pay for their contribution to carbon sequestration. Also, 
there was a call for large scale experimentation alongside research and practice to propose 
schemes  that  are  well  researched  scientifically  and  can  be  adapted  to  different  MS  and 
bioclimatic  conditions.  There  was  broad  agreement  that  more  technical  assistance  and  the 
building up of knowledge should be supported by the EU. In addition, eco labelling, networks 
for competitive business approaches and good advisory boards for farmers might be desirable. 
There was one indication that action to be taken at EU level should integrate the agricultural 
sector into a carbon pricing scheme and put a stronger emphasis on climate mitigation in the 
CAP Strategic Plans by also removing barriers related to CAP funding schemes. One point 
was made to focus on promoting biochar in soil.  

Business  associations/company/business  organisations  (9  replies).  The  EU  should 
create a community of practice, develop independent advice and provide a legal framework 
for recognition of carbon farming standards. Further, the respondents indicated that there is a 
need to identify national and regional task forces to work on the topic of soil fertility, soil carbon, 
and  climate  mitigation  and  adaption.  The  respondents  also  called  for  the  avoidance  of 
administrative burden on farmers and foresters in order to secure efficiency for compensation 
for ecosystem services. It was mentioned that regional approaches with knowledge building 
help  farmers  to  better  understand  and  appreciate  their  own  efforts  in  the  long-term.  Public 
private  partnerships  with  incentives  from  CAP  funding  and  encouraging  enrolment  in  high 
quality carbon farming to issue verified soil carbon credits were presented as the best solution. 

238 

 
 
Important  input  was  focused  on  MRV  requirements  as  well  as  on  the  introduction  of  new 
technologies and a clear certification standard governance. Other solutions proposed the use 
of  CAP  as  a  platform to  increase knowledge  and  human  barriers  currently faced  by  carbon 
farming  schemes;  use  the  Farm  Advisory  Services  as  a  platform  for  farmer-to-farmer 
exchanges  and  events  to  disseminate  information  and  expertise  on  the  uptake  of  new 
practices;  make  use  of  the  possibilities  for  allowing  testing  of  new  types  of  market-based 
carbon  farming  schemes  by  using  the  EIP-AGRI  Operational  Groups;  and  facilitate  carbon 
farming  practices  (conservation  agriculture,  soil  cover  with  cover  crops,  afforestation, 
grassland management) by enabling a result-based system for CO₂ equivalents removed or 
emissions avoided. The need for actions that should be focused on information, advice and 
training to raise carbon literacy amongst farmers was highlighted. Public and private reward 
schemes can support mutual compatibility.  

Environmental  organisations/NGOs (11 replies).  According to  the  respondents,  the focus 
should be on the rewilding of marginal landscapes as well as the rewetting of peatlands without 
allowing  for  continued  emissions  in  other  sectors.  In  that  regard,  separate  accounting 
frameworks should be implemented. It was also stated that the CAP's policy instrument already 
addresses  some  challenges  and  takes  action  at  the  EU  level  to  enable  stronger  uptake. 
Investment  support,  cooperation  measures,  advisory  services,  agri-environment  climate 
measures,  and  eco-schemes  are  measures  that  make  carbon  farming  more  attractive  to 
farmers.  Solutions  included  enhancing  evidence  through  climate  tracking  methodology; 
monitoring innovation in the CAP administrative system more focus on knowledge co-creation 
and exchange (e.g. through living labs and demonstration farms); attention to the demand-side 
levers; support for a shift to the management of grasslands; and a new framework to underpin 
carbon farming with mandatory baselines and ambitious targets. Some respondents believe 
that  emitting  industries  should  be  held  responsible  to  reduce  their  carbon  balance  and 
implement sustainable practices through a carbon market not within the CAP. Others called 
for the eligibility of paludiculture in the upcoming CAP whereas peatlands should be taken into 
account in the Green Deal and LULUCF regulation. The need for independent MRV as well as 
for training to farmers for accuracy of measurements were highlighted. It was mentioned that 
there should be a consideration of co-funding of inputs and tools required for successful soil 
management towards increase of carbon removals.   

Other  (4  replies).  Good  practices  can  be  spread  through  communication  and  knowledge 
transfer. In addition, there should be a condition of increasing soil organic carbon to receive 
CAP payments. One respondent mentioned that carbon farming should be a green business 
model  based  on  carbon  markets.  Finally,  industries  should  reduce  their  carbon-balance 
through, e.g. carbon farming certificates, and the contribution to carbon farming through the 
use of wood from sustainable forestry should also be acknowledged. 

13.9.6. What is the scope of Carbon farming (for example, should it 
aim at incentivizing carbon sequestration in soil or biomass or 
to protect or store carbon or reduce emissions)? 

Public  authorities  (8  replies).  The  respondents  remarked  that  incentivizing  a  change  in 
agricultural  management  would  inherently  result  in  more  removals  and  that  carbon 
sequestration  is  part  of  some  interventions  planned  in  the  CAP  strategic  plans,  e.g. 
agroforestry, which has the potential for sequestration in soil and biomass. 

Academic/research institutions (8 replies). It was noted that the biggest challenge would be 
to combine four scopes: reduce emissions, protect existing carbon, improve sequestration in 
biomass  with  respect  to  permanence,  and  improve  carbon  sequestration  in  soils.  Other 
respondents flagged the need to optimize carbon management on-farm to incentivize carbon 
sequestration in soil and to protect or store carbon and reduce emissions. The scope has to 

239 

 
 
give  priority  to  the  climate  mitigation  goals  and  take  into  consideration  all  options  with 
appropriate measures that can more easily tackle barriers such as MRV or long-term planning. 
Also,  it  was  mentioned  that  the  scope  should  be  wide  and  country  specific.  Further  it  was 
indicated that the proposed approach should be effective and profitable at the same time. One 
respondent stressed that biochar is the best option for soil carbon in climate mitigation and for 
direct negative emissions.  

Business  associations/company/business  organisations  (9  replies).  It  was  highlighted 
that the scope should be as wide as possible, but under the condition that each farmer should 
be able to implement their own tailor-made mitigation strategy. There was agreement that it is 
important to take into account both the external climate factors that influence ecosystems as 
well as the natural biogeophysical aspects of carbon when establishing this approach to take 
into  account  the  multifunctionality  of  forests.  It  was  also  underlined that  the  objectives  vary 
depending  of  the  different  types  of  land.  For  example,  peatlands  need  protection  while  in 
agricultural  land,  increasing  sequestration  is  more  important.  The  need  for  large  scale 
implementation  of  farm  practices  to  reduce  the  agricultural  carbon  footprint,  via  carbon 
sequestration  or  reducing  emissions  was  highlighted.  Existing  stocks  should  be  protected 
through  regulatory requirements for the maintenance  of  existing stocks rather  than  ongoing 
payments and grant-aid to help with upfront capital investments (e.g. for peatland restoration). 
It  was  also  noted  that  the  scope  of  carbon  farming  should  include  a  step-wise  approach 
supported by a regulatory framework which starts with soil carbon and carbon stored in trees, 
leading to the development of carbon schemes that can be adapted and improved. 

Environmental organisations/NGOs (13 replies). The focus was given to the fact that carbon 
farming should help the food systems to adapt to planetary boundaries, restore biodiversity 
and  implement  animal  welfare.  Further  it  was  mentioned  that  the  scope  has  to  be  global, 
focusing  first  on  storing  carbon  in  soil  and  biomass  and  second  on  decarbonization.  The 
improvement of soil fertility through carbon farming practices was mentioned. Carbon farming 
should  ensure  the  increase  of  nature-based  carbon  removals  without  affecting  emission 
reductions  and  to  include  other  metrics  beyond  carbon  removal  to  avoid  trade-offs  with 
biodiversity.  It  was  also  highlighted  that  carbon  farming  should  cover  land  management 
practices and not be limited to carbon dioxide or costly result-based schemes that require high 
precise results measurement. Avoided emissions should only be included if they are a result 
of  an  active  change  in  management.  Objectives  such  as  biodiversity  restoration/protection, 
climate  adaptation,  water  quality,  and  soil  health  should  all  be  fully  integrated  in  a  carbon 
farming scheme. In addition, there should be more stringent penalties for activities that remove 
forest  materials  unsustainably.  It  was  said  that  peatland  rewetting  is  the  most  effective 
measure for storing carbon in the ground. Existing carbon stocks must be protected, and only 
additional carbon removals must be counted.  

Other (4 replies). The replies were not homogeneous. Whereas on one side it was remarked 
that carbon farming is beyond the scopes listed and should promote good practices, on the 
other side it was noted that it should include incentives for additional carbon sequestration in 
the soil as well as in products with a compensation for keeping soils with high carbon stocks 
in good  shape.  A  broad scope  should focus  on  innovative practices  as  part  of regenerative 
farming.  

13.9.7. Summary 

The  survey  shows  that  the  respondents  are  overall  positive  with  regard  to  the  interaction 
between  CAP  funding  and  other  funding  opportunities.  Respondents  emphasise  the 
importance  of  keeping  the  focus  on  raising  awareness  and  on  support  for  farmers  who 
implement local initiatives. Some stakeholders agree that CAP direct payments to farmers is a 
better method for incentivising them to improve carbon storage in soil rather than relying on 
carbon  market  schemes  as  main  solution,  as  large  amounts  of  private  funding  can  lead  to 
perverse  effects  and  ultimately  disincentivise  farmers.  However,  some  respondents  also 

240 

 
 
remarked that private carbon markets can act as a good example for the CAP in ensuring that 
the focus remains on climate mitigation and adaption in the LULUCF sector. Some scepticism 
is shown with regard to the use of CAP funding for carbon farming, especially in relation to 
additionality  and  the  lack  of  consensus  on  soil  carbon  measurement  methods  and  carbon 
removal certification. The interaction between funding schemes is still unclear and should be 
approached more coherently in the Member States. However, respondents mostly support a 
hybrid solution of funding mechanisms, indicating a need for a careful overview and monitoring 
of private markets.  

A wide range of implementation challenges was pointed out. The most common challenge 
is the lack of robust monitoring, reporting and verification systems and knowledge about the 
relevant costs. Furthermore, the importance of additionality and how to define carbon leakage 
on  one  side,  as  well  as  the  relevance  of  knowledge  awareness  and  agronomic  advice  on 
carbon farming techniques for farmers on the other side could be identified as second and third 
most mentioned challenges.  

In addition, the following challenges were mentioned as relevant:  

 

 

lack of a clear carbon market 

lack of homogeneity in knowledge, skills, natural conditions and baselines of farmers 
across the various Member States 

  balance between costs and compensation for the transition to regenerative agriculture 

 

lack of economic impact calculation of co-benefits 

  missing legal framework that recognises standards 

  difference between annual payments in Pillar I and multi-annual payments in pillar II 

  ensuring coherency between the EU Climate Law and the overall climate policy and 

the different priorities of the CAP  

 

 

lack  of  a CAP performance  framework  that  incentivises  the  Member  states  to 
implement carbon farming based on the assessment of uptake rather than on the GHG 
impacts  

lack of identified areas of peatland and wetland in Member States 

  as  regards  peatland,  losing  the  access  to  payments  from  Pillar  I  as  well  as  certain 

protections for permanent grassland that can hinder paludiculture 

  conflict between food security and the increase of non-productive land 

 

 

 

low  level  of  compensation  and  long-term  stability  and  low  profitability  in  the  forestry 
sector 

reduction of livestock and ruminant emissions 

low transaction costs to maintain confidence in results 

  administrative burden in the implementation process 

When  respondents  were  asked  the  same  question  during  the  workshop,  the  lack  of  MRV 
capabilities  was  the  third  most  common  answer.  There  is  therefore  a  certain  divergence  of 
views in the two stakeholder feedbacks. However, the lack of knowledge about the MRV costs 
and the relevance of knowledge for farmers that are frequently mentioned in the survey as big 
challenges connect to the uncertainty about funding and the lack of tailored advisory services 
which are, respectively, the first and third most common barrier to uptake of carbon farming in 

241 

 
 
the  poll  question.  Moreover,  several  challenges  highlighted  in  the  survey  relate  directly  or 
indirectly  to funding  as well  as  to  the  need to reward  co-benefits  in a more  robust manner, 
which was the second most common option chosen in the poll.  

With regard to the type of actions that would encourage uptake, there was agreement that 
larger  information  for  landowners  on  the  benefits  of  carbon  farming  would  promote  uptake. 
Advisory  services  at  EU  level  was  one  of  the  main  suggestions  across  all  categories  of 
respondents.  Better  MRV  through,  e.g.  better  training  of  farmers  on  improved  accuracy  in 
measurement, was also cited as a key action for setting up a highly effective carbon farming 
initiative. In addition, forms of cooperation for the implementation of good practices for climate 
and environment  should  be  promoted  whereas  lower  administrative burden for farmers  and 
landowners would be key to encourage uptake within carbon farming and this goes hand in 
hand with a strong regulatory backbone.  

As regards the last question on the possible scope of carbon farming it was repeatedly stated 
that incentivizing carbon sequestration and storage in soil or biomass and emission reduction 
goes hand in hand. The scope should be broad in order to maximize uptake. Many respondents 
referred to the country-specifics and how it is important to take into consideration the different 
biogeoclimatic conditions of the Member States when evaluating the scope of carbon farming.  

The results from the survey are partially in line with the replies given by the respondents during 
the workshop. There is convergence in the respondents' feedback to the poll and the survey 
with  regard  to  increased  carbon  in  soil  as  key  scope  of  carbon  farming.  Still,  many  survey 
respondents  mentioned  that  while  increased  carbon  in  soil  is  highly  important,  the  scope 
should  also  include  increased  carbon  storage  in  biomass,  whereas  this  -  together  with 
sequestration in biomass - were the two answers in the workshop that had the lowest response 
frequency. When comparing the response levels given to the poll and the survey, it can be 
concluded that they are similar (with some small deviations) indicating that on a general level 
there is an overall agreement on a broad scope for carbon farming.  

Also the poll question regarding the practices that are more suitable for carbon farming via the 
CAP Strategic Plans had some cross-over with the survey answers. The answers to the poll 
question highlight key areas of land management that could help shape the scope of carbon 
farming due to their potential for uptake. The survey answers frequently mention the need for 
attention  to  agroforestry  and  peatland,  which  are,  respectively,  the  second  and  third  most 
common  answers  to  the  poll.  Another  point  of  convergence  is  with  regard  to  grassland 
management as this practice is mentioned several times across the survey answers as falling 
within the scope of carbon farming, while constituting the most common answer to the poll.  

242 

 
 
 
 
 
 
 
 
 
 
 
 
 
14.  Inception Impact Assessment Analysis 

14.1. Introduction  

This report presents and analyses stakeholder feedback on the Inception Impact Assessment 
(IIA) on the review of the EU rules on land use, land use change and forestry (LULUCF).  

The  IIA  on  the  review  of  the  EU  rules  on  LULUCF  received  a  total  of  93  responses  from 
different stakeholders/user groups as  shown in the figures  below. The  private  sector  with a 
combined share of responses of 39% represents the largest share of responses. This includes 
business  associations  with  a  total  of  22%  (20  responses)  and  companies/business 
organisations  with  a  total  share  of  17%  (16  responses)  of  all  submitted  responses.  Non-
governmental  organisations  contributed  28%  of  responses  (25  responses),  followed  by 
environmental organisations with 10% (9) of responses. There are also a number of responses 
from EU citizens (9%, 8 responses), academic/research institutions (8%, 7 responses), from a 
stakeholder  group  which  was  not  predefined  (6%,  6  responses)  and  from  public  authorities 
(2%, 2 responses). 

Figure 85: Respondent profile: type of organisation, Source: Technopolis Group (n=93) 

The largest share of respondents from the private sector was represented by the bio-based 
sector (25% of the total of respondents), including the Harvested Wood Products (HWPs) value 
chain and biofuels, as well as the agricultural sector (8%) and energy sector (6%).  

Figure 86: Respondent profile: sector. Source: Technopolis Group (n=93) 

Responses were collected from across 21 EU members states. The largest number of replies 
came  from  Belgium  (23%,  21  respondents),  which  includes  responses  from  European 

243 

 
 
 
 
 
 
representative bodies based in Brussels. A further 12% of respondents were from Finland (11 
respondents). A larger number of responses came also from Germany (11%, 10 responses), 
and  non-EU  countries  which  included  the  United  States  and  the  United  Kingdom  (8.6%,  8 
responses), Sweden (6.5%, 6 responses). 

Figure 87: Respondent profile: country. Source: Technopolis Group (n=93) 

14.2. Results of IIA feedback consultation 

14.2.1. A. Context, Problem definition and Subsidiarity Check 

Figure 88: Feedback on context definition, understanding of the problem and basis for EU intervention in the revision of the 
LULUCF Regulation. Source: Technopolis Group. 

82 respondents provided feedback on the context of the revision of the LULUCF regulation as 
presented  in  the  Inception  Impact  Assessment.  A  majority  of  them  (87%,  72  respondents) 
explicitly agreed with the context, meaning that they support the need to amend the LULUCF 
regulation to align with the higher climate target set in the European Green Deal. A further 6% 
(5)  explicitly  disagreed  with  the  context,  and  another  6%  (5)  neither  agreed  nor  disagreed, 
providing a more nuanced answer.   

Among the 72 respondents who agreed with the context, the most common reasons given for 
support were the more ambitious targets, the need for the LULUCF sector to contribute through 
carbon  removals,  including  by  replacing  fossil-based  materials  and  energy  with  bio-based 
ones. While most stakeholders agreed with the context, some also pointed out that the targets 
were not ambitious enough, and a concern with increasing the flexibility between sectors. Many 
respondents  also  expressed  a  strong  disagreement  with  the  replacement  of  fossil-based 
materials and energy with bio-based ones. These concerns were often linked to the objectives 
and policy options, the most prominent points raised are outlined in the chapters B and C of 

244 

5%1%0%1%10%4%6%26%41%35%25%33%52%38%23%0%10%20%30%40%50%60%Context (82)Understanding of the problem (77)Basis for EU intervention (79)Context, problem definition and subsidiarity checkStrongly disagreeDisagreeNuanced / neither agree nor disagreeAgreeStrongly agree 
 
 
 
 
 
this report. The 5 respondents who explicitly disagreed with the context raised the following 
points:  a disagreement with  increasing  removals  in  the  LULUCF sector; a concern  with the 
targets  not  being  ambitious  enough;  and  a  concern  with  increasing  the  flexibility  between 
sectors. The 5 respondents who neither agreed nor disagreed with the context expressed that 
although  they  agree  with  an  increase  in  carbon  sequestration  in  the  LULUCF  sector,  they 
believe the focus  should  be  on  emissions reductions  within the  Emissions Trading Scheme 
(ETS) and Effort Sharing Regulation (ESR).  

77 respondents provided specific feedback on the section of the IIA presenting the problem 
the initiative aims to tackle. Most of them (63%, 48 respondents) agreed with the understanding 
of the problem presented. Fewer respondents (11%, 9 respondents) from a variety of sectors 
explicitly disagreed with the understanding, while a larger number of respondents from the bio-
based sector, agricultural sector and environmental NGOs (26%, 20 respondents) provided a 
more  nuanced  answer  or  neither  agreed  nor  disagreed.  This  means  that  whereas  some 
their  agreement/disagreement,  other  used  different 
respondents  explicitly  expressed 
formulations  e.g.,  highlighting  aspects  that  in  their  view  were  not  properly  presented  or 
addressed in the IIA, and that they were suggesting factoring in.   

79  respondents  provided  some  comments  on  the  IIA  section  describing  the  basis  for  EU 
intervention through coordinated EU policies. Of those who provided feedback related to this, 
56% (44) agreed with intervention at the EU level, 41% (32) neither agreed nor disagreed and 
4%  (3)  disagreed.  The  respondents  who  provided  a  more  nuanced  answer,  as  for  the 
presentation of the problem, highlighted aspects that in their view were not properly presented 
or  addressed  in the  IIA.  Some  expressed  the  following  specific  points:  the  importance  of  a 
place-based  approach 
local 
landscape  management  which 
stakeholders; the importance of coherent action through the various climate policies; the need 
for regulatory stability for industrial R&D; the need to take into account the local economy and 
not penalising some Member States. 

involves  all  relevant 

in 

14.2.2. B. Objectives and Policy options 

81 respondents provided feedback on the specific objectives of the revision of the LULUCF 
regulation to align to new Green Deal targets. 55% of respondents (45 respondents) expressed 
overall  agreement  with  the  objectives  of  the  review  of  the  LULUCF  regulation,  31%  (25) 
expressed a nuanced opinion which could not be classified as agreement/disagreement and 
13% (11) disagreed.  

Figure 89: Feedback on the objectives of the initiative revising the LULUCF Regulation 
Source: Technopolis Group n=81 

Specific comments regarding each objective are reported below: 

245 

 
 
 
  A large majority of respondents strongly agreed with the objective of enhancing land-
based sinks in the land use sector. However, respondents differed in their view of how 
to enhance the carbon sink: respondents from the bio-based sector favour an approach 
that rewards active forest management and views Harvested Wood Products (HWPs) 
as part of the sink, while environmental NGOs strongly disagree with this approach and 
would  rather  see  a  preservation  of  the  existing  land  carbon  sink.  The  minority  that 
disagreed  with  this  objective,  views  it  as  a  risk  to  the  bio-based  sector  if  further 
obligations are implemented that constrain the use of forests or soils or that require the 
land-based sector to offset emissions from other sectors.  

  Very  strong  views  were  expressed  regarding  incentives  for  substituting  fossil-based 
materials  with  bio-based  ones.  The  bio-based  sector  is  in  strong  and  uniform 
agreement  to  enhance  incentives  for  utilising  the  positive  carbon  effects  of  carbon 
storage in HWPs and for the substitution of fossil-based materials with bio-based ones. 
Some  representatives  from  the  agricultural,  chemical  and  life  sciences  and  energy 
sectors also support this view. On the other hand, environmental NGOs expressed a 
strong  opposition to  the idea  of further  incentives for the  use  of  bio-based  materials 
since this objective is in potential conflict with the enhancement of the forest carbon 
sink.  

  11 respondents provided specific feedback on market-based approaches to accelerate 
the  transition  towards  a  resilient  and  climate-neutral  bio-economy.  Of  these,  8 
respondents  provided  comments  on  carbon  farming,  with  stakeholders  from  the 
agricultural sector and the bio-based sector agreeing with the mobilisation of private 
funding through incentives for carbon removals and for sustainable land management 
practices, including afforestation. Disagreement was expressed by one environmental 
NGO, on the basis that MRV and accounting for such a scheme are likely to be complex 
and  controversial,  and  by  one  company  from  the  chemical  and  life  sciences  sector, 
which is concerned that such a scheme would reward a passive management approach 
to forestry.  

  While respondents discussed extensively the reduction of emissions in other sectors, 
a  reduction  of  land  emissions  was  approached  mainly  in  the  context  of  limiting 
emissions from the burning of forests caused by forest fires. Extensive ploughing of soil 
for  agriculture  was  also  mentioned  as  a  cause  for  land  emissions.  There  were  no 
particularly strong views on this objective. 

246 

 
 
Figure 90:  Feedback on proposed policy options to amend the LULUCF Regulation 
Source: Technopolis Group 

14.2.2.1. 

Policy option 1 

Of  all  responses  69  provided  feedback  on  the  Policy  Option  1  seeking  to  strengthen  the 
LULUCF  regulation  in  line  with  the  new  climate  targets.  Of  these,  57%  (39)  agreed  with  a 
strengthening of the current regulation to increase its ambition, 25% (17) neither agreed nor 
disagreed with the policy option presented, while 19% (13) disagreed.  

The most frequent reasons for agreement were the ambition to align the LULUCF sector with 
the  55%  2030  targets  by  increasing  sinks  and  lowering  emissions,  as  well  as  the  need  to 
increase ambition in protecting and increasing the current carbon sink.  

All  of  those  disagreeing  with  this  policy  option  expressed  a  concern  that  a  strengthened 
regulation would lead to further obligations on the part of the bio-based sector. 

A number of respondents who provided a more nuanced response, which could not be classed 
as agreement or disagreement, expressed that they would welcome further detail on the policy 
option outlined, and  that they would like the LULUCF regulation to include incentives for the 
substitution effect of wood.  

14.2.2.2. 

Policy option 2 

56 respondents provided feedback on Policy Option 2. A majority of those respondents (65%, 
36  respondents)  disagreed  with  increasing  the  flexibility  with  the  Effort  Sharing  Regulation. 
The stakeholder  types  who  expressed this  view  most frequently  were  environmental  NGOs 
and  respondents  from  the  bio-based  industry  (forestry  sector,  growing  media  sector).  Their 
disagreement was motivated by a concern that a increase in flexibility with LULUCF could lead 
to a decrease in the ambition to reduce emissions in other. A second concern was that the 
LULUCF sector would have to share a relatively higher economic burden if the carbon sink is 
increasing in the LULUCF sector to compensate other sectors. 

18% (10) of respondents agreed with this policy option and a further 18% (10) neither agreed 
nor disagreed. Those who agreed with this option see it as the best option to moderate the 
compliance costs of achieving the 55% target through carbon removal credits and as a solution 
to mitigate hard-to-abate emissions.  

247 

7%45%34%12%20%9%25%18%38%16%5%9%41%13%9%0%5%10%15%20%25%30%35%40%45%50%Option 1: to strengthen the current LULUCFRegulation and to increase its ambition in line withthe 2030 Climate Target Plan (69)Option 2: to strengthen the flexibility with the EffortSharing Regulation (56)Option 3: to combine the agriculture and LULUCFsectors into a single climate policy pillar with aseparate target (53)Policy OptionsStrongly disagreeDisagreeNuanced / neither agree nor disagreeAgreeStrongly agree 
 
 
14.2.2.3. 

Policy option 3 

53  responses  were  provided  for  Policy  Option  3.  43%  (23)  of  respondents  disagreed  with 
combining the agriculture and LULUCF sectors into a single climate policy pillar with a separate 
target, expressing concerns such as an expectation for the forestry sector to offset emissions 
from the agricultural sector or to reduce wood harvest rates.  

38%  (20)  of  respondents  neither  agreed  nor  disagreed  with  this  policy  option.  The  most 
frequent comments made were a request for additional evidence of the impact of this option 
on forest-based industries and a suggestion to consider incentives for the substitution of fossil-
based materials. 

18% (10) agreed with combining agriculture and LULUCF and creating a separate target. Of 
those who agreed with it, about half (4) would like to keep non-CO2 emissions within the scope 
of the ESR, while others did not discuss this point specifically.  

14.2.2.4. 

Additional 

information  on  policy  options  and 

MRV/coherence 

Respondents  also  raised  other  points  which  were  not  directly  related  to  the  policy  options 
presented in the IIA: 

  The need to set new more ambitious Forest Reference Levels based on a projection of 

a desired target for 2050. 

  The  need  to  ensure  coherence  of  the  LULUCF  regulation  with  the  EU’s  biodiversity 
goals,  in  support  of  the  implementation  of  the  new  Biodiversity  Strategy  for  2030. 
Planning for afforestation and reforestation needs to include ecological expertise. 

  The  issue  of  coherence  between  LULUCF  rules  and  incentives  for  the  burning  of 
biomass as part of the Renewable Energy Directive (RED II). The promotion of the bio-
based  economy  and  any  use  of  bio-based  products  for  climate  reasons  should  be 
accompanied by extensive life-cycle assessments to ensure that adverse impacts (for 
example deforestation in and outside the EU) and perverse incentives are limited. 

  Setting  direct  incentives  for  farmers  and  foresters  who  implement  sustainable 
practices.  There were mixed views on setting incentives through the Carbon Farming 
initiative and the Carbon Removal Certification Mechanism: while some respondents 
expressed strong agreement with the initiatives, others were in disagreement due to 
the current complex nature of MRV and accounting systems. 

  The  need  to  revise  Monitoring,  Reporting  and  Verification  (MRV)  of  data.  There  are 
mixed  views  on  the  use  of  satellite  imagery  to  strengthen  MRV  requirements:  while 
remote  sensing  tools  could  be  used  by  Member  States  for  identifying  landscape 
features, these tools are not yet developed enough to be used as the only method and 
the data must be verified by land-based methods. It was also raised that the data used 
as a basis for decision making must be accepted and validated by all parties involved. 

  The  need  to  revise  accounting  rules  for  the  regulation,  particularly  where  LULUCF 
removals  are  to  be  used  flexibly  with  other  sectors,  according  to  principles  of 
Transparency, Accuracy, Completeness, Consistency and Comparability (TACCC) of 
data. This would improve the quality and harmonisation of data coming from Member 
States. 

  Ensuring  synergies  with  other  climate  legislation  in  the  EU,  such  as  the  Common 
Agricultural Policy, ESR, ETS, Farm to Fork Strategy, Circular Economy Action Plan. 

248 

 
 
  The need to balance between the LULUCF objectives and progress in the bioeconomy 

by taking into account substitution of fossil-based materials. 

14.2.3. C. Preliminary Assessment of Expected Impacts 

A majority of respondents (81) expressed their views on the expected impacts of a revision of 
the LULUCF regulation through the policy options outlined.  

The economic impact mentioned most frequently by respondents was the growth of the bio-
based sector through increased use of HWPs in substitution to fossil-based materials. Another 
expected  impact  which  was  mentioned  by  a  large  number  of  respondents  was  a  just  and 
inclusive transition to climate neutrality which does not leave any sector behind, particularly 
within the context of the recovery from the impacts of COVID-19. This concern was expressed 
by respondents from the bio-based sector (including the wood products value chain) and the 
livestock farming sector.  

The likely social impacts of a review of the regulation include: the creation of new business 
opportunities and the generation of income for rural communities and for small businesses; the 
promotion  of  territorial  cohesion  where  there  are  significant  structural  and  economic 
differences between Member States and regions; repopulation in rural areas which have been 
abandoned due to lack of economic opportunities. 

The  following  expected  environmental  impacts  were  mentioned  most  frequently:  increased 
carbon sequestration; preservation of landscapes and ecosystems, including water systems 
and peatlands; preservation of forests as carbon sinks and biodiverse systems; afforestation 
and  reforestation  where  there  has  been  intense  logging;  improved  soil  fertility  and  carbon 
content; reduction of emissions and substitution of fossil-based materials. 

Some  respondents  also mentioned  some  expected  impacts  in terms  of  simplification  of  the 
administrative burden, such as a simplified MRV system with more coherent and comparable 
data across Member States and a simplification of LULUCF accounting rules. 

15.  Synopsis  Report  for  the  Analysis  of  the  LULUCF 

Open Public Consultation 

15.1. Introduction 

249 

 
 
 
 
 
 
 
 
 
 
 
                         
 
 
                               
This report  presents  and  analyses the  results  of the  responses collected through the Open 
Public Consultation (OPC) on the review of the EU rules on land use, land use change and 
forestry (LULUCF).  A detailed overview of the respondents, showing the distribution by user 
type,  and  country  is  followed  by  analysis  of  the  quantitative  and  qualitative  responses  per 
question. 

15.2. Status of consultation and profile of respondents 

The OPC on the review of the EU rules on LULUCF received a total of 235 replies from different 
stakeholders/user  groups.  The  private  sector  was  well  represented,  private  sector 
organisations  had  a  combined  share  of  the  responses  of  28%.  This  includes  business 
associations with a total of 18% (43 responses) and companies/business organisations with a 
total  share  of  10%  (24  responses)  of  all  submitted  responses.  There  was  also  a  large 
contribution from EU-Citizens, 26% (60 responses) of all responses came from EU-Citizens. 
17% of respondents represent a non-governmental organisation (NGO) (41 responses) and 
12% came from academia (29 responses). There are also a number of responses from public 
authorities (8% /18 responses), trade unions (2% /4 responses), environmental organisations 
(1%  /  3  responses),  and  a  non-EU  citizen  (1  response).  5%  (12  responses)  were  from  a 
stakeholder group which was not predefined. 

Stakeholder types

0%

20%

40%

60%

80%

100%

EU citizen(60)
Business association(43)
Non-governmental organisation (NGO)(41)
Academic/research institution(29)
Company/business organisation(24)
Public authority(18)
Other(12)
Trade union(4)
Environmental organisation(3)
Non-EU citizen(1)
Consumer organisation(0)

26%

18%
17%

12%

10%

8%

5%

2%
1%
0%
0%

Nr of observations=235

Figure 91:  Respondent type 

Responses were collected from across 22 EU Members States (MS), with no respondents from 
Croatia, Republic of Cyprus, Lithuania, Luxembourg, and Malta. As shown in the figure below, 
the  largest  number  of  replies  came  from  Belgium  (17%  /  39  respondents),  which  includes 
responses  from  European  representative  bodies  based  in  Brussels.  A  further  16%  of 
respondents were from Germany (38 respondents). A larger number of responses came also 
from Italy (9% / 20 responses), Hungary (8% / 19 responses), Sweden (8% /18 responses), 
France (7% / 16 responses), Finland (5% / 12 responses), and Spain (5% /12 responses). 14 
respondents were from outside the EU, these include stakeholders from Australia (2), Brazil 
(1), Ethiopia (1), Norway (1), Switzerland (5), United Kingdom (1), and the United States (3). 

250 

 
 
 
Stakeholder countries

100,00%
80,00%
60,00%
40,00%
20,00%
0,00%

17%

3%

0% 1% 1% 1% 5% 7%

16%

0% 8% 2% 9% 2% 3% 6% 0% 2% 2% 1% 1% 5% 8%

Nr of observations= 235

Figure 92: Respondent country 

15.3. Part I: Mobilising the mitigation and business potential of 

the land sector and the bioeconomy 

Q1. Among the following drivers behind the decline of the land-based net carbon sink,
which are the most important in your view

not at all important

low importance

neutral

important

very important

80%

60%

40%

20%

0%

29%

27%

30%

12%

3%

39%

15%

15%

13%

19%

27%

20%

15%

13%

27%

26%

29%

14%

17%

14%

45%

62%

27%

27%

19%

18%

18%

16%

12%

9%

9%

27%

24%

19%

16%

13%

15%

10%

10%

3%

Natural disturbances 
(weather events, 
fires, pest 
outbreaks…) that are 
caused or 
accelerated by 
climate change(206)

Unsustainable land
management
practices impacting
carbon stocks and
sinks(206)

Increase in wood
harvests(192)

Slowdown in forest
growth due to their
age(188)

Slowdown in
afforestation and
reforestation
activities(186)

Other...(71)

Use of biomass for
bio-energy instead
of long-lived
products(194)

Conversion of
carbon-rich land
(deforestation,
draining of wetland
or peatland), land
take and soil sealing
(expansion of built-
up and artificial
areas(203)

Nr of observations 1446

Figure 93: Q1. Among the following drivers behind the decline of the land-based net carbon sink, 
which are the most important in your view 

Stakeholders were asked which drivers behind the decline of the land-based net carbon sink 
they view as the most important. The driver which was seen by the most stakeholders as 
important was the Conversion of carbon-rich land (deforestation, draining of wetland or 
peatland), land take and soil sealing (expansion of built-up and artificial areas (63% / 
127 respondents see it as important or very important) this was also the driver which was also 
most frequently selected as very important. The driver which was seen as the second most 
important was Unsustainable land management practices impacting carbon stocks and 
sinks (58%  /  120  respondents  see  it  as  important  or  very  important), followed  by  Natural 
disturbances (weather events, fires, pest outbreaks…) that are caused or accelerated 
by  climate  change  (56%  /  117  respondents),  Increase  in  wood  harvests  (39%  /  75 
respondents  see  it  as  important  or  very  important),  Slowdown  in  afforestation  and 
reforestation activities (36% / 67 respondents see it as important or very important), Use 

251 

 
 
 
 
 
of biomass for bio-energy instead of long-lived products (32% / 63 respondents see it as 
important or very important), and at the bottom the Slowdown in forest growth due to their 
age (31% / 59 respondents see it as important or very important).  

The  3  drivers  which  were  most  often  selected  as  not  being  important  were  the  use  of 
biomass (52%), increase in wood harvests (41%), slowdown in forest growth due to their 
age (39%), and Slowdown in afforestation and reforestation activities (37%). As seen in 
the  figure  above,  some  drivers  such  as  the  increase  in  wood  harvests  had  very  polarized 
opinions. 

71 stakeholders provided additional drivers or additional comments to this question within the 
open text response. A number of stakeholders including MS’ public authorities highlighted that 
this  question  should  not  be  opinion  based  but  additional  scientific  empirical  analysis  would 
need to be conducted, ideally the Commission should provide in-depth analysis of the causes 
of the decline, preferably at MS level. It was also mentioned that the main loss of the sink is 
happening  outside  of  Europe  in  particular  by  deforestation  in  tropical  forests  and  it  will  be 
difficult to adress this only at EU level, especially given that the current LULUCF regulation 
already prevents decrease with the no-debit rule and the EU is a net-importer of Harvested 
Wood Products (HWPs). In this context also the lack of strong sustainability verification at the 
global  level  was highlighted.  Also it  was stated  that  drivers  vary  in Europe from  permafrost 
emissions in the north to logging in the South-East. It was also raised that the decrease in the 
sink since 2008 could be temporary due to, for example, bark beetle infestation. Another often 
mentioned  driver  was  artificialisation  of  the  sink  from  construction  i.e.  buildings  and  roads. 
Weak sink accounting methods were also mentioned by a number of stakeholders but it was 
not  made  clear  whether  these  overstate  a  decrease  of  the  sink.  One  stakeholder  also 
disagreed that the sink is decreasing at all. 

Q2. Among these potential EU policy approaches to promote climate change mitigation
in land-related sectors, which do you think are the most relevant to achieve a
higher climate ambition in 2030?
low importance

not at all important

very important

important

neutral

37%

22%

22%

14%

5%

34%

31%

17%

13%

4%

26%

25%

23%

18%

8%

22%

19%

20%

18%

21%

15%

9%

31%

25%

20%

66%

36%

25%

23%

18%

19%

15%

18%

19%

15%

12%

13%

11%

9%

1%

80%

60%

40%

20%

0%

EU sets national
targets which
Member States
can achieve in
different ways
(e.g. Common
Agricultural
Policy, national
forest policies,
other national
policies)(205)

An improved EU
framework on
monitoring,
reporting and
verifying
emissions and
removals(209)

Reinforce the
creation of
relevant EU
datasets (e.g.
dedicated
Copernicus
service)(193)

EU labels for
climate-neutral
products or
climate
footprints(199)

EU taxes or
subsidies(191)

EU market-based
policies (e.g. the
use of emissions
trading for land-
related
sectors)(192)

EU policies to
promote more
sustainable and
healthier
diets(188)

Other...(95)

Nr of observations 1472

Figure 94: Q2. Among these potential EU policy approaches to promote climate change mitigation in land-related sectors, which 
do you think are the most relevant to achieve a higher climate ambition in 2030? 

Stakeholders  were  asked which  potential  EU  policy  approaches  to  promote climate  change 
mitigation in land-related sectors they regard as the most relevant to achieve a higher climate 
ambition in 2030. The policy approach which was most frequently selected as important 
or  very  important was to create an  improved  EU  framework on  monitoring,  reporting 
and  verifying  emissions  and  removals  (MRV).  This  was  selected  by  66%  (137)  of 
respondents as important or very important. This was followed by national targets (59% 
/ 121 important or very important), EU taxes or subsidies (56% /107 important or very 
important),  EU  policies  to  promote  more  sustainable  and  healthier  diets  (54%  /  101 
important or very important), and EU market-based policies (41% / 79 important or very 

252 

 
 
 
important). The only option which was more often selected as being not important was 
having EU labels for climate-neutral products or climate footprints, 41% chose this to 
be not at all important or having a low importance compared to only 39% which found 
this important or very important. 

95 stakeholders selected the “other” option, and many of them only used it to further comment 
on their choice rather than suggesting alternative policy approaches. However, a large number 
of stakeholders also provided additional options to achieve a higher climate ambition in 2030. 
These include the promotion of a circular economy, as well as recycling of resources; the use 
of carbon farming; adaptation measures against natural disturbances such as forest fires; the 
obligation  to  compensate  for  any  artificialised  land,  especially  in  the  construction  sector; 
implementing  the  new  EU  targets  for  collection  and  recycling  of  organic  waste  and  more 
composting;  increasing  R&D,  for  example  for  precision  forestry  and  improving  silviculture; 
financial incentives to use sustainable fertilisation and sustainable forest management; making 
forest  management  funding  programmes  more  accessible;  mainstreaming  biodiversity;  and 
using forest-based products to replace hydrocarbons. It was also raised that binding targets 
on biodiversity are needed. Some stakeholders also raised that the incentives for using forest 
biomass for bioenergy should be reduced, together with a reduction of biomass imports or the 
implementation of policies which prevent carbon leakage.  

Comments which were aimed at how targets could be implemented include strict deforestation 
measures  in  the  Common  Agricultural  Policy  (CAP);  policies  which  produce  solutions  with 
synergies  e.g.,  combining  renewable  energy  (RE)  with  food/feed/material  production  or 
biodiversity/peatland restoration; an EU common forestry policy; higher aid for forests; and the 
implementation of a carbon tax. 

Regarding future monitoring approaches it was emphasised by a number of stakeholders to 
use existing MS expertise for monitoring as well as for example the European National Forest 
Inventory Network (ENFIN) and the national forest inventories as well as developing an EU 
forest information system. It was also raised that the EU needs to conduct more full life-cycle 
analyses for LULUCF sector products and focus more on material neutrality. 

80%

70%

60%

50%

40%

30%

20%

10%

0%

Q3. What is the best policy approach to harness
the substitution effect and carbon storage potential of long-lived wood products and bio-based and 
renewable materials?

72%

58%

46%

45%

41%

Support for research and
innovation into more
sustainable production of
woody biomass and more
sustainable use of wood-
based materials, products
and by-products

Training (e.g. for land
managers, engineers,
architects) and awareness
raising

Promote carbon storage in
wood products via carbon
farming approaches (e.g.
using wood products in the
construction sector leads to
issuing carbon credits that
can be sold on voluntary
carbon markets)

Promote carbon storage in
wood products via tax
incentives or financial
support

Promote carbon storage in
wood products via a
modification of the LULUCF
rules

% of respondents to Q3 selected this answer (n=212)

39%

Other…

Figure 95: Q3. What is the best policy approach to harness the substitution effect and carbon storage potential of long-lived 
wood products and bio-based and renewable materials? 

253 

 
 
 
 
Stakeholders  were  asked  about  what  they  see  as  the  best  policy  approach  to  harness  the 
substitution effect of bio-based and renewable materials, and the carbon storage potential of 
long-lived wood products. 72% of respondents (153) believe that the EU should follow a policy 
approach  that  supports  research  and  innovation into more sustainable  production of  woody 
biomass and more sustainable use of wood-based materials, products and by-products. 58% 
of respondents (122) support a policy approach focusing on training (e.g. for land managers, 
engineers, architects) and awareness raising.  46% of respondents (98) believe that a carbon 
farming approach would be an effective policy option to incentivise use of wood products in 
sectors  such  as  construction.  45%  respondents  (96)  selected  the  policy  option  seeking  to 
promote  carbon  storage  in  wood  products  via  tax  incentives  or  financial  support.  41% 
respondents  (86)  believe  a  modification of  LULUCF rules  would  promote carbon storage  in 
wood  products.  Finally,  39%  respondents  (83)  expressed  they  would  like  to  see  other  or 
additional policy approaches being pursued. 

82 stakeholders provided other policy suggestions or comments on the incentivisation of bio-
based materials and long-lived wood products. A large number of those respondents disagreed 
with the assumption made in the OPC questionnaire that the use of bio-based materials and 
use  of  long-lived  wood  products  delivers  climate  benefits  and  believe  these  should  not  be 
incentivised further. Instead they called for a detailed life cycle analysis of the carbon storage 
and  emissions  of  HWP.  Taxes  and  fees  on  the  use  of  fossil-based  materials  were  also 
mentioned as a policy approach. 

A variety of opinions were expressed by those respondents who agreed with incentivising long-
lived  wood  products.  The  most  frequently  mentioned  points  was  that  a  better  way  of 
incentivising the use of long-lived products would be to remove incentives to use wood as a 
short-lived  product,  such  as  for  bioenergy.  Respondents  had  different  opinions  on  how  to 
account for the substitution and storage effects of such products: some believe it should be 
counted towards the wood and forestry sector, others that carbon credits for the use of biomass 
or long-lived wood products should be allowed to be used in the Emissions Trading Scheme 
(ETS)  and  Effort  Sharing  Regulation  (ESR)  sectors.  A  number  of  stakeholders  believe  that 
fibre-based  textiles  should  also  be  recognised  in  carbon  accounting.  Finally,  some 
respondents  believe  that  policies  should  incentivise  a  reduction  of  the  overall  use  of  raw 
materials and recycling of wood.  

Q4. In which areas should the EU focus efforts to enhance carbon sinks and protect carbon stocks?

not at all important

low importance

neutral

important

very important

80%

60%

40%

48%

29%

39%

27%

21%

20%

16%

5%

2%

0%

14%

9%

3%

24%

23%

21%

18%

46%

36%

33%

21%

7%

3%

23%

15%

9%

7%

30%

24%

25%

39%

27%

14%

7%

17%

11%

7%

Afforestation,
reforestation, forest
restoration(209)

Agro-ecology and
agro-forestry(184)

Bioenergy coupled
with carbon capture
and storage
(BECCS)(188)

Soil carbon increase
in agricultural
lands(181)

Protection and
restoration of
wetland and
peatland
ecosystems(191)

Grassland
management(174)

Carbon storage in
long-lived wood-
based materials and
products(200)

68%

18%

7%

1%

5%

Other...(95)

Figure 96: Q4. In which areas should the EU focus efforts to enhance carbon sinks and protect carbon stocks? 

Nr of observations 1422

254 

 
 
 
Stakeholders were asked to rate the most and least important measures to enhance carbon 
sinks and protect carbon stocks. The measure which most stakeholders see as important is 
Afforestation, reforestation and forest restoration (77% / 162 respondents see this as important 
or  very  important).  The  measures  which  were  seen  as  the  second  most  important  are  Soil 
carbon increase  in agricultural  land and  Protection  and  restoration  of  wetland  and  peatland 
ecosystems which were both scored as important or very important by 69% / 124 respondents. 
Agro-ecology and agro-forestry and Carbon storage in long-lived wood-based materials and 
products  were  also  both  scored  as  important  or  very  important  by  66%  /  122  respondents, 
followed  by  grassland  management  (55%  /  96  respondents)  and  Bioenergy  coupled  with 
carbon capture and storage (BECCS) (39% / 73 respondents).  

The  area  which  was  selected  most  often  as  not  at  all  important  or  of  low  importance  was 
Bioenergy coupled with carbon capture and storage (BECCS) (38% / 72 respondents).  

93  stakeholders  provided  additional  comments  on  where  they  believe  the  EU  should  focus 
efforts  to  enhance  carbon  sinks  and  protect  carbon  stocks.  Comments  regarding  forests 
included  a  wish  to  see  measures  for  the  protection  of  forests  with  high  carbon stocks  (old-
growth,  primary,  naturally  structured)  and  implementing  preventive  forest  management  to 
protect forests  against  disturbances such  as fires.  Livestock grazing  in forests  was seen to 
reduce the risk of forest fires by some respondents from the Mediterranean area.  

Healthy and biodiverse soils are seen as central to climate solutions as they control the long-
term fluxes and flows of carbon in and out of soils. Respondents discussed ways to promote 
soil  carbon  increase  in  agricultural  land,  such  as  application  of  compost  to  soils  to  restore 
humus,  as  well  as  use  of  biodegradable  products  in  agriculture.  It  was  also  said  that  any 
farming model could contribute to restoring soil carbon with the right practices and tools (cover 
crops,  crop  protection  and  breeding,  no-till  farming,  fertilizer  management,  integration  crop 
management, and precision agriculture), which could be incentivised also through the CAP. 
There were a number of comments disagreeing with organic farming as it requires larger areas 
of land to be dedicated to agriculture and is therefore not consistent with climate objectives.  

Comments regarding carbon storage in long-lived wood products were polarised on two main 
positions,  namely  a  disagreement  with  an  increase  of  logging,  and  a  strong  support  for 
incentives to active forest management and storing carbon in such products. Protection and 
restoration of peatlands was mentioned as a space efficient carbon sink and stock, together 
with paludiculture. 

255 

 
 
 
Q5. How should more ambitious climate action in land-related sectors be financed? 

not at all important

low importance

neutral

important

very important

80%

60%

40%

20%

0%

47%

26%

14%

8%

5%

24%

23%

23%

14%

14%

33%

29%

23%

20%

26%

23%

20%

8%

8%

11%

Subsidies (e.g. Common
Agricultural Policy or
national policies)(188)

Higher product prices
(e.g. via label
mechanisms that allow
producers to set a higher
price)(180)

A dedicated EU or
national fund(181)

Revenues from selling
land-based carbon
credits(183)

57%

24%

11%

0%

8%

Other...(79)

Figure 97: Q5. How should more ambitious climate action in land-related sectors be financed? 

Nr of observations 811

Stakeholders  were  asked  to  rank  the  importance  of  approaches  to  finance  more  ambitious 
climate  action  in  land-related  sectors.  Financing  climate  action  through  subsidies  and  via  a 
dedicated fund received strong support from stakeholders. 72% (136) of respondents selected 
subsidies to be an important or very important option, only 13% (25) disagreed that subsidies 
are of high or very high importance. A dedicated fund was seen by 61% (111) of stakeholders 
as important or very important, only 16% (29) of stakeholders did see this as not at all important 
or of low importance. The picture was less clear for using revenues from selling land-based 
carbon credits where 49% (89) found this important or very important but also 20% (37) found 
it not at all important and 11% (21) of low importance. The most opposing views were given 
on  raising  product  prices  to  finance  climate  action  in  land-related  sectors,  37%  saw  it  as 
important or very important while also 38% (68) saw this option a not at all important or of low 
importance.  This  option  also  had  the  largest  number  of  stakeholders  remaining  neutral 
(24%/44 respondents). The main comment stakeholders had on this option which also partially 
explains  that  there  is  no  clear  opinion  is  that  low-income  consumers  would  need  to  be 
protected from high prices instead of using a flat-tax style approach.    

79  respondents  selected  the  option  “Other”,  beside  a  more  detailed  explanations  of  their 
chosen options, stakeholders also provided a number of alternative financing solutions:  

  Alternative modes of financing suggested included: Cross-financing from other sectors 
that  are  not  taxed  enough,  a  carbon  tax  on  imports,  financing  by  taxing  financial 
markets  (Robinhood  tax),  a  European  harmonized  forest  management  taxation, 
building  on  existing  CAP  instruments,  or  the  creation  of  a  specific  land-change  tax 
which is levied when soil is artificialised.  

  There  were  some  opposing  opinions  regarding  bioenergy.  Some  stakeholders 
suggested tax benefits for HWP/bioenergy, while others suggested to redirect existing 
subsidies  currently  going  to  increased  bioenergy  use  (Renewable  Energy  Directive) 
and  to  intensive  industrial  agriculture  (CAP)  to  allow  a  funding  of  ambitious  climate 
action in the land sector. 

  A point which was raised often was that any product price or consumer cost increase 
must avoid penalising citizens on low incomes and that the polluter should pay higher 
fees, alternatively also preferential taxation for sustainable land use products could be 
used.  It  was  also  raised  that  labelling  sustainable  products  will  make  them  more 

256 

 
 
 
expensive to meet labelling standards; this would make them less price competitive, 
which  could  lead  to  overall  less  sales  than  currently  compared  to  unsustainable 
products.  

  Many  stakeholders  strongly  expressed  their  views  against  offsetting  emissions  via 
carbon credits to not lead to lower emission reductions in other sectors. This point is 
addressed in more detail in comments to other questions in this report. In the context 
of  financing  the  LULUCF  sector  it  was  highlighted  by  a  stakeholder  that  gaining 
revenues  from  selling  carbon  credits  can  disturb  the  wood  markets  and  long-term 
positive development of forest resources and the bioeconomy. 

15.4. Part II: Overall policy approach 

Q6. Which is your preferred policy approach to revise the LULUCF Regulation in view of the increased 2030 
climate ambition?

45%

20%

35%

40%

50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%

Police Option 1: Strengthen
the current LULUCF
Regulation and increase its
ambition in line with the
2030 Climate Target Plan.

Policy Option 2: Strengthen
the flexibility with the Effort
Sharing Regulation.

Policy Option 3: Combine the
emissions from agriculture
and LULUCF sectors into a
single climate policy pillar
with a separate target.

% of respondents to Q6 selected this answer (n=212)

Other…

Figure 98: Q6. Which is your preferred policy approach to revise the LULUCF Regulation in view of the increased 2030 climate 
ambition? 

212 stakeholders responded to the question on the preferred overall policy approach to revise 
the  LULUCF regulation in  view  of the  increased 2030  climate  ambition. Stakeholders  could 
select  more  than  one  option.  The  most  frequently  selected  option  was  Policy  Option  1: 
Strengthen the  current  LULUCF Regulation  and  increase its ambition in line with the 
2030  Climate  Target  Plan,  45%  (95)  of  all  respondents  selected  this  option.  The  second 
most  frequently  selected  option  was  Policy  Option  3:  Combine  the  emissions  from 
agriculture and LULUCF sectors into a single climate policy pillar with a separate target, 
it was selected by 35% (75) of stakeholders. The least frequently selected policy option was 
Policy Option 2: Strengthen the flexibility with the Effort Sharing Regulation which was 
only selected by 20% (42) of stakeholders. 40% (84) of stakeholders provided another option 
or further explained their choices.  

257 

 
 
 
 
Figure 99: Q6. Which is your preferred policy approach to revise the LULUCF Regulation in view of the increased 2030 climate 
ambition? Breakdown by stakeholder 

Policy Option 1: Strengthen the current LULUCF Regulation and increase its ambition 
in line with  the  2030  Climate  Target  Plan  was  the  most  frequently  selected  policy  option 
among Academic/research institutions, Environmental organisations, EU citizens, and NGOs. 
The two Non-EU citizens, Trade unions also had it as their most frequently selected option, 
shared with other options. This policy option was also the second most selected option for the 
private sector and shares the second most frequent selection with Policy Option 3 for Public 
authorities. No stakeholder group beside the Other stakeholder group had Policy Option 1 as 
their third most frequent choice. 

Comments on this policy option overlapped strongly with the comments on other questions in 
this OPC. Most comments focussed on whether or not a target should be introduced for the 
LULUCF sector  and  some stakeholders  were  concerned that  a  LULUCF sector  wide  target 
would  put  an  unequal  burden  on  its  subsectors.  One  stakeholder  raised  that  the  LULUCF 
sector  should  have  a  climate  target  separate  from  the  EU’s  economy  wide  GHG  reduction 
target  which  is  not  merged  into  a  net-reduction  target.  Another  raised  that  the  inclusion  of 
waste management and waste-to-energy plants into the LULUCF sector should be considered 
when the ESR comes to an end. It was also mentioned that Policy option 1 needs more clarity 
in  the  upcoming  impact  assessment.  Respondents  also  mentioned  that  changes  to  the 
LULUCF  regulations  must  align  with  the  upcoming  EU  nature  restoration  target,  the 
Biodiversity strategy 2030, and the implementation of having 30% protected land by 2030. A 
number  of  stakeholders also  emphasised  to  separate  the  sectors more carefully  due  to the 
different carbon sequestration potential of the different LULUCF sub-sectors. Overall, also in 
comments  to  other  questions,  there  was  little  consensus  whether  this  problem  should  be 
addressed at the MS or EU level, but it was said it is important to use the expertise both at MS 
level (national monitoring data) and tools at EU level (e.g., Copernicus). A stakeholder further 
stated that policy changes related to LULUCF should be coordinated even higher at a global 
level in the UNFCCC and not through standalone action by the EU.  

Policy  Option  2:  Strengthen  the  flexibility  with  the  Effort  Sharing  Regulation  was  the 
most frequently selected option by Public authorities, the Other group, as well as for the small 
sample of trade unions in which all policy options were selected once. Policy option 2 was not 
the  second most frequent  choice for  any  stakeholder  group.  Out  of  all  three policy  options, 
option  2  was  the  least  frequently  selected  option  for  the  majority  of  stakeholders,  which 
includes Academic/research institutions, the Private sector, Environmental organisations, EU 
citizens, Non-EU citizens, and NGOs. 

258 

 
 
 
 
The policy option to strengthen the flexibility with the ESR received the strongest opposition in 
the  open text  response out  of  all  policy  options. While some stakeholders  wrote  supportive 
statements, a majority of the text-based responses were critical. Many stakeholders wanted to 
fully remove any flexibility with the ESR and have a separate LULUCF target. One stakeholder 
mentioned  that  non-CO2  agricultural  emissions  should  remain  in  the  ESR.  The  most  often 
named reason why stakeholders opposed this option was that it would lead to inaction in the 
ESR sectors by enabling offsetting. Other reasons included that the emitting sectors still need 
to lower emissions; the effect of agricultural emissions decrease on the enhancement of natural 
sinks; the risk that the flexibility would cause a zero-sum game; the permanence risk of sinks; 
and the uncertainty in current sink MRV.   

It was also mentioned that instead, or in addition to flexibility with the ESR, LULUCF could be 
merged with the ETS to sell CO2 credits stored in wood products on the ETS market. However, 
other  stakeholders  completely  opposed  this  in their  feedback  since  it  would  further  delay  a 
circular bioeconomy and because it would overall enable replacing reductions in fossil fuel-
based emissions with sinks which would harm the integrity of the ETS. 

Policy Option 3: Combine the emissions from agriculture and LULUCF sectors into a 
single climate policy pillar with a separate target was the most frequently selected option 
by the private sector as well as for the small sample of trade unions in which all policy options 
were selected once. It was the second most frequently selected option by Academic/research 
institutions,  EU  citizens,  NGOs,  Others,  and  Public  authorities.  Only  environmental 
organisation  had  this  option  as  their  least  frequently  selected  option,  none  out  of  the  four 
environmental organisations which responded selected this option.  

Stakeholders  provided  further  comments  on  Policy  Option  3  i.e.,  a  potential  Agriculture, 
Forestry  and  Other  Land  Use  (AFOLU)  sector.  Comments  included  the  need  for  separate 
targets for the LULUCF and agricultural sector and that the combination should not lead to a 
reduction of ambition in the agricultural sector. One stakeholder also made the point that if an 
AFOLU sector is created, this should happen at a much later stage, once sufficient efforts have 
been made to reduce agricultural emissions, with the presence of a 'negative cap' to maintain 
ambition, as opposed to simply financing removals by land sinks. Respondents also asked for 
a  thorough  impact  assessment  on  this  option.  A  stakeholder  also  suggested  that  the  non-
energy-related emissions from agriculture with the LULUCF sector should be complemented 
with the non-energy-related emissions of the waste treatment sector – in particular with respect 
to biogas production from biowaste and wastewater treatment. 

Stakeholders which were critical about combining the sectors raised a number of critical points 
including that a new AFOLU sector risks undermining emission reductions in the agricultural 
sector and that for example forests cannot be equated with agricultural commodities. 

15.5. Part III: Setting more ambitious rules for the Land Use, 

Land Use Change and Forestry sector 

259 

 
 
Q7. In your opinion, should there be more stringent targets for the LULUCF sector?

25%

23%

52%

Yes, there should be more stringent targets than the current “no-debit” rule

No, continue with the current no-debit rule

Other...

Figure 100: Q7. In your opinion, should there be more stringent targets for the LULUCF sector? 

215 stakeholders provided an answer to whether there should be more stringent targets with 
a large majority (52%) preferring more stringent targets than the current “no-debit” rule. 23% 
of stakeholders oppose more stringent targets and would like to continue with the current no-
debit rule. 25% would prefer a totally different option.  

Q 7. In your opinion, should there be more stringent targets for the LULUCF sector?

100%

100%

100%

80%

69%

72%

60%

40%

20%

0%

39%

34%

26%

19%

12%

52%

33%

14%

16%

12%

0%

0%

0%

0%

56%

45%

33%

23%

22%

22%

40%

33%

27%

50%

25%

25%

Academic/research
institution (26)

Business
association (38)

Company/business
organisation (21)

Environmental
organisation (3)

EU citizen (58)

Non-EU citizen (1) Non-governmental
organisation (NGO)
(40)

Other (9)

Public authority
(15)

Trade union (4)

Yes, there should be more stringent targets than the current “no-debit” rule

No, continue with the current no-debit rule

Other...

Figure 101: Q 7. In your opinion, should there be more stringent targets for the LULUCF sector? - per stakeholder 

More  stringent  targets  are  strongly  supported  by  Academic/research  institutions  (69%), 
Environmental organisations (100%/out of only 3 respondents), EU citizens (72%), and NGOs 
(45%). The  private  sector  (Business    associations and Company/business  organisations)  is 
split with 33% (22) supporting more stringent targets and 31% (21) opposing more stringent 
targets.  Company/business  organisations  respondents  disagree  more  frequently  with  more 
stringent  targets  compared  to  Business  associations.  Out  of  the  15  public  authorities  most 
(40%) support another option while 33% want to continue with the current no-debit rule and 
27% want more stringent targets than the current no-debit rule. 

A quarter of respondents chose to not select the options of either having more stringent targets 
or continuing with the no-debit rule. Those 25% who selected the “other” option mainly used it 
to comment on the question but most of these still either agreed or disagred with the question. 
In addition, there were general comments on the question. Comments primarily focussed on 
how the targets should be set and that whether or not a more stringent target should be used 

260 

 
 
 
 
 
will also depend on what accounting rules will be used to measure progress against a new 
target target.  

Those  who  agree  with  more  stringent  targets  also  raised  the  following  points:  that  more 
stringent targets need to include safeguarding of ecosystems functions and biodiversity; that 
more  stringent  targets  would  need  to  be  part  of  an  EU-wide  approach  and  include  climate 
adaptation and environmental objectives; that carbon certificates for sequestrated carbon in 
long-lived wood products should count against targets; that targets should be consistent with 
the Paris Agreement. 

Those who disagree with more stringent targets raised a number of points including: that the 
no-debit rule can in reality make the sink decline; that there is a need to focus on incentives 
for  farmers  and  foresters  instead  of  disincentives,  since  more  stringent  targets  would 
disincentivize  using  forestry  for  substitution  of  fossil  materials  and  fossil  fuels;  and  that  the 
EU’s approach should be to work towards 2050 goals instead of 2030 and not sacrifice long-
term goals for short-term gains in the LULUCF sector. Some stakeholders also criticised that 
targets are based on the Forest Reference Levels (FRL) and that they are set at national levels 
with methodological baselines which differ among MS. 

Q8. In case there would be national targets for the LULUCF sector, what criterion should these targets be 
based on?

35%

30%

25%

20%

15%

10%

5%

0%

30%

28%

22%

13%

Other...

The Member State’s 
potential to increase the net 
sink in a cost-efficient way

The Member State’s share of 
agricultural land, forest land 
and wetland

A percentage increase 
compared to the Member 
State’s net sink in a baseline 
that is specific to each land 
use category (historic 
baseline for agricultural land, 
the Forest Reference Level 
for existing forests)

6%

4%

The Member State’s wealth 
(GDP per capita)

A percentage increase 
compared to the Member 
State’s past net sink

% of respondents to Q8 selected this answer (n=200)

Figure 102: Q8. In case there would be national targets for the LULUCF sector, what criterion should these targets be based 
on? 

*2 stakeholder who submitted by email provided more than one response for this question 

When asked about what criterion should national LULUCF targets be based on, about a third 
of respondents (30% / 60) selected the option “other” and provided a different view or agreed 
with the criteria outlined but added comments, as explained below. Another large proportion 
of respondents (28% / 55 respondents) indicated that national targets for the LULUCF sector 
should  be  based  on  the  MS’  potential  to  increase  the  net  sink  in  a  cost-efficient  way.  The 
second preferred criterion for setting national targets (of those presented in the OPC) was a 
percentage increase compared to the MS’ net sink in a baseline that is specific to each land 
use category (22% / 43 respondents). This was followed by a criterion based on the MS’ share 
of agricultural land, forest land and wetland (13% / 25 respondents), the MS’ wealth, based on 

261 

 
 
 
GDP per capita (6% / 12 respondents), and a percentage increase compared to the MS’ past 
net sink (4% / 7 respondents).  

58  stakeholders  provided  additional  feedback  on  the  preferred  criteria  for  setting  national 
LULUCF  targets.  A  large  number  of  respondents  from  a  variety  of  sectors  expressed  that 
LULUCF targets should be based on the MS’ share of overall EU GHG emissions, for example 
through a requirement to create a net carbon sink amounting to a percentage of their emissions 
by  2030.  Another  significant  number  of  respondents  said  that  they  would  like  to  see  a 
combination of the criteria described.  

There were some comments on the need to decide targets collaboratively  with the MS and 
one comment expressing that a percentage increase based on a baseline is unfair, because it 
penalises  countries  which  have  already  taken  measures  to  increase  their  sink  in  the  past. 
Another respondent disagreed with using historical baselines as they are not representative of 
the potential of a MS to increase the sink, but only of actions carried out so far. 

The  state  of  biodiversity  loss  and  the  ecological  potential  to  increase  the  sink  were  also 
mentioned  as  criteria  which  should  be  considered  for  setting  LULUCF  targets,  including 
metrics for ecosystem restoration, for ex. soil health, water quality and retention, reduction in 
pollutants, biodiversity restoration and climate resilience.  

Finally, there was a comment offering an alternative option where the EU would additionally 
allow for country pledges that go beyond a minimum EU average benchmark, based on the 
historic sink. 

Q9. In the current LULUCF Regulation, emissions and removals from existing forests are compared to a 
Forest Reference Level.  Should the EU continue with the Forest Reference Level concept?

30%

25%

20%

15%

10%

5%

0%

28%

Other…

22%

21%

16%

14%

No, take into account the 
entire net sink in existing 
forests, without comparing it 
to any baseline (“gross-net” 
accounting)

Yes, continue to use Forest
Reference Levels, but
harmonise the methodology
to establish them across
Member States

Yes, continue to compare the
net sink from existing forests
to a Forest Reference Level
which is based on the
continuation of past
management practices

No, compare the net sink in 
existing forests to a historic 
baseline (“net-net” 
accounting); such a baseline 
corresponds to a larger sink 
than the Forest Reference 
Level.

% of respondents to Q9 selected this answer (n=179)

Figure 103: Q9. In the current LULUCF Regulation, emissions and removals from existing forests are compared to a Forest 
Reference Level.  Should the EU continue with the Forest Reference Level concept? 

For  the  question  of  whether  the  EU  should  continue  with  the  Forest  Refence  Level  (FRL) 
concept, about a third of respondents (28% / 50) selected the option “other” and provided a 
different view or agreed with the options outlined but added comments, as explained below. 
Another 22% / 39 respondents believe that the EU should discontinue the FRL approach 
and instead take into account the entire net sink in existing forests, without comparing 
it to any baseline (gross-net accounting). Another 21% / 37 respondents believe that the 
EU should continue to use the FRL concept, but harmonise the methodology across MS. 

262 

 
 
 
16% / 28 respondents also believe the EU should continue to compare the net sink from 
existing  forests  to  an  FRL  which  is  based  on  the  continuation  of  past  management 
practices.  Finally,  14%  /  25  respondents  believe  the  FRL  approach  should  be 
discontinued  in  favour  of  comparing  the  net  sink  in  existing  forests  to  a  historic 
baseline (net-net accounting). 

49 comments were provided by those respondents who selected the option “other”. Of these, 
a large number expressed agreement with a net accounting of sinks compared to a historic 
baseline as this approach would be the most coherent with actions in other sectors and the 
2050 carbon neutrality target. Two specific suggestions were made as to what the baseline 
should  be:  a  baseline  when  the  country's  ecological  footprint  was  in  equilibrium  with  its 
biocapacity; and the year 2005. 

Some respondents would favour a gross-net accounting method combined with a national no-
debit target. A smaller proportion of respondents suggested that accounting should include the 
substitution  effect  and  be  based  on future  sustainable forest  yields rather than  on  historical 
harvesting intensity. One stakeholder suggested following the example of the Swedish SKA15 
methodology; such calculation does not include protected areas where harvest is not allowed. 

It was also suggested that the EU should consider the concept of “reference level with band”, 
where only emissions or removals exceeding the band are accounted for. 

Q10. Among these options to reinforce the LULUCF monitoring, reporting and verification (MRV) rules, 
which are your preferred ones?

60%

50%

40%

30%

20%

10%

0%

56%

45%

34%

Use high resolution and
wall-to-wall satellite
imagery to identify
where land use change
happens

Reinforce biodiversity,
ecosystem and
adaptation
considerations into the
reporting requirements

Use more precise
emission factors or
emission modelling (i.e.
tier 2 or tier 3)

26%

Other…

23%

22%

Introduce new
requirements to report
estimates for all carbon
pools and greenhouse
gases

Make the uptake of up-
to-date data and
advanced reporting
methodologies a
precondition for
flexibilities with other
sectors

% of respondents to Q10 selected this answer (n=201)

Figure 104: Q10. Among these options to reinforce the LULUCF monitoring, reporting and verification (MRV) rules, which are 
your preferred ones? 

Stakeholders were asked about their preferred options to reinforce the LULUCF monitoring, 
reporting and verification (MRV) rules. A majority of respondents (56% / 113 respondents) 
supports the use of high resolution and wall-to-wall satellite imagery to identify where land 
use change happens. The second preferred option is to reinforce biodiversity, ecosystem 
and adaptation considerations into the reporting requirements (45% / 91 respondents), 
followed by the use of more precise emission factors or emission modelling (34% / 68 
respondents),  the  introduction  of  new  requirements  to  report  estimates  for  all  carbon 
pools and greenhouse gases (23% / 46 respondents) and finally, to make the uptake of 
up-to-date data and advanced reporting methodologies a precondition for flexibilities with 
other sectors (22% / 44 respondents).  

263 

 
 
 
50  stakeholders  provided  comments,  or  a  different  view  on  options  to  strengthen  the  MRV 
rules. Many comments were provided on the use of remote sensing satellite imagery, which 
generally  is  supported  as  an  MRV  methodology but  only  in combination with verification  by 
land-based methods, since remote sensing is not seen as precise or developed enough to be 
used  on  its  own.  One  stakeholder  from  an  academic/research  institution  expressed  that  a 
combination of ground truthing with remote sensing by model assisted approaches would be 
an optimal approach and, by collapsing data into one land use category, the uncertainty would 
be  less  than  2%  (change  in  living  biomass),  if  based  on  permanent  sample  plots  from  a 
National Forest Inventory. 

Verification  uniquely  by  land-based  methods  was  also  expressed  as  a  preferred  option  to 
monitor changes in forests and soils. This should be carried out by national experts for National 
Forest Inventories and through established sampling procedures, for example by measuring 
forest biomass in situ to determine the quantity of carbon stored.  

Other  stakeholders  expressed  the  following  points  of  feedback  regarding  the  options 
suggested  in  the  OPC:  that  Horizon  Europe  needs  to  support  research  on  the  IPCCC 
methodology development to ensure better data quality in the national inventory reports; that 
more precise emission factors and emission modelling would provide clear standards across 
MS;  that  accounting  of  all  six  land  use  categories66  should  be  mandatory,  and  include  also 
marine coastal ecosystems like saltmarshes and seagrass meadows. 

One  respondent  suggested  that  the  default  half-life  values  in  Annex  V  in  the  LULUCF 
regulation should be revised as they do not reflect realistic half-life values. It was also said that 
the EU should seek to spread best practices from existing MRV systems in MS.  

Finally, one stakeholder expressed the concern that in the arable land sector the cost of data 
collection is high and there is not enough available data on carbon sequestration triggered by 
any new agricultural practice. 

15.6. Part IV: Links between land use and agriculture 

66 A: Forest Land, B: Cropland, C: Grassland, D: Wetlands, E: Settlements and F: Other (IPCC, 2006: Guidelines for National 
Greenhouse Gas Inventories). 

264 

 
 
                                                 
 
Q11. How should the architecture of EU climate policy be designed when it comes to agriculture and 
land use?

35%

30%

25%

20%

15%

10%

5%

0%

33%

32%

Create a new policy strand,
which covers agricultural non-
CO2 and land use emissions
together.

Other…

15%

12%

9%

Continue to include agricultural
non-CO2 emissions under the
Effort Sharing Regulation;
continue to allow for the use of
LULUCF credits in the Effort
Sharing Regulation up to the
current limit.

Continue to include agricultural
non-CO2 emissions under the
Effort Sharing Regulation;
increase the possibility to use
LULUCF credits in the Effort
Sharing Regulation, independent
of a change to Effort Sharing
Regulation target levels.

Continue to include non-CO2
agricultural emissions under the
Effort Sharing Regulation;
increase the possibility to use
LULUCF credits in the Effort
Sharing Regulation, but only in
case Effort Sharing Regulation
targets are increased.

Figure 105: Q11. How should the architecture of EU climate policy be designed when it comes to agriculture and land use? 

% of respondents to Q11 selected this answer (n=186)

Stakeholders  were  asked  how  they  believe  EU  climate  policy  for  agriculture  and  land  use 
should  be  designed.  About  a  third  of  respondents  (33%  /  61  respondents)  believe  the  EU 
should create a new policy strand which covers agricultural non-CO2 emissions and land use 
emissions together. Another third of respondents selected the option “other” and provided a 
different view or agreed with the options outlined but added comments, as explained below. 
15%  /  27  respondents  believe  that  agricultural  non-CO2  emissions  should  continue  to  be 
included under the Effort Sharing Regulation (ESR) and LULUCF credits allowed in the ESR 
up  to  the  current  limit.  Another  12%  /  22  respondents  believe  that  agricultural  non-CO2 
emissions should continue to be included under the Effort Sharing Regulation (ESR) and the 
possibility to use LULUCF credits should be increased regardless of a change in ESR target 
levels.  Finally,  9%  /  17  respondents  believe  that  agricultural  non-CO2  emissions  should 
continue to be included under the Effort Sharing Regulation (ESR) and the possibility to use 
LULUCF credits should be increased, only if ESR targets are increased.  

59 stakeholders provided additional comments on the design of an EU climate architecture for 
agriculture and land use. The feedback shows a spectrum of opinions ranging from not allowing 
flexibility from LULUCF with any other sector, to a desire to see LULUCF credits used towards 
ETS  emissions  too.  A  large  number  of  respondents  disagreed  with  the  idea  of  flexibility 
between the LULUCF sector and other sectors, including agriculture and other land use, as 
well as ESR. This was seen as the best option to maintain transparency around emissions in 
each sector and to not compromise ambition in those sectors.  

Many respondents would like to see a separate emissions reduction target for the agricultural 
sector  for  CO2  emissions  and  other  emissions  (including  non-CO2)  caused  by  livestock 
farming, fertilisation and soil-based emissions, while keeping the forest sink separate. These 
stakeholders expressed disagreement with the idea of an AFOLU sector because it would lead 
to considering non-CO2 emissions from agriculture under the same climate policy pillar. The 
idea that the forestry sector should stay separate was expressed quite strongly. 

A  number  of  stakeholders  agreed  with  the  idea  of  an  AFOLU  pillar  offering  flexibility  to the 
agricultural sector, which is seen as a sector where possibilities to cut emissions are low. Two 
respondents  were  in  favour  of  an  AFOLU  pillar  with  payments  for  ecosystem  services  to 

265 

 
 
 
agricultural  and  forest  producers  protecting  and  restoring  natural  sinks  including  peatlands, 
grasslands and using agroecology. 

Another number of stakeholders expressed they would like to see increased flexibility to use 
LULUCF  credits  also  with  the  ETS  sector,  as  well  as  increasing  the  flexibility  with  ESR, 
particularly for those industries where emissions are going to be hard to abate in the future. 
Fewer stakeholders, among those providing comments, would like to see a continuation of the 
current  approach,  where  non-CO2  emissions  are  considered  under  the  ESR  and  LULUCF 
credits are allowed under ESR, with one respondent expressing this should be done regardless 
of the change in target. 

Other comments were made by stakeholders who did not have a strong opinion on the design 
of  a climate  policy  architecture for  agriculture  and  other  land emissions, but  who  wished to 
express  a  specific  point.  Two  respondents  said  that  the  chosen  policy  should  account  for 
differences  in  regions  and  landscapes  as  highlighted  by  territorial  policy,  but  also  increase 
harmonisation across sectors and Member States. Another respondent added that, in order to 
estimate total sequestration and emissions from terrestrial ecosystems, carbon balance from 
all  ecosystems  must  be  estimated,  not  just  forests.  This  includes  all  green  biomass,  also 
grasslands and shrublands which store carbon below ground.  

Q12. In case there were to be a single policy strand covering emissions from the land sector (agriculture, 
forestry and other land use), should there then be a specific target for this sector?

40%

35%

30%

25%

20%

15%

10%

5%

0%

34%

28%

Yes, there should be legally-
binding national targets

Yes, there should be an EU-
wide target, and then 
Member States should be 
required to ‘pledge’ their 
contribution to this target

22%

Other…

17%

No

Figure 106: Q12. In case there were to be a single policy strand covering emissions from the land sector (agriculture, forestry 
and other land use), should there then be a specific target for this sector? 

% of respondents to Q12 selected this answer (n=186)

Stakeholders were asked about their views on the need for target, if the EU created a single 
policy strand covering emissions from the land sector (agriculture, forestry and other land use). 
in 
shown 
As 

266 

 
 
 
40%

35%

30%

25%

20%

15%

10%

5%

0%

Q12. In case there were to be a single policy strand covering emissions from the land sector (agriculture, 
forestry and other land use), should there then be a specific target for this sector?

34%

28%

Yes, there should be legally-
binding national targets

Yes, there should be an EU-
wide target, and then 
Member States should be 
required to ‘pledge’ their 
contribution to this target

22%

Other…

17%

No

% of respondents to Q12 selected this answer (n=186)

Figure 106 more than a third of respondents (34% / 63 respondents) agree with setting legally 
binding national targets. Another third (28% / 52 respondents) believe there should be an EU-
wide target to which Member States should be required to pledge their contributions. 22% / 40 
respondents selected the option “other” and provided a different view or agreed with one the 
options outlined but added comments, as explained below. 17% / 31 respondents believe there 
should be no targets for the land sector.   

Q13. In case there were to be national targets for the land sector (agriculture, forestry and other land use), 
what criterion should these targets be based on?

40%

35%

30%

25%

20%

15%

10%

5%

0%

34%

The Member State’s potential 
to achieve climate neutrality 
in the EU land sector in a 
cost-efficient way

22%

Other…

17%

15%

13%

The Member State’s share of 
agricultural land, forest land 
and wetland

A percentage increase 
compared to the Member 
State’s past emissions and 
removals from the land 
sector

The importance of land-
related activities in the 
Member State’s economy

% of respondents to Q13 selected this answer (n=174)

Figure 107 - Q13. In case there were to be national targets for the land sector (agriculture, forestry and other land use), what 
criterion should these targets be based on?  

*1 stakeholder who submitted by email provided more than one response for this question 

As shown by the responses to question 12 a majority of respondents is in favour of a specific 
target  for  the  land  sector,  including  agriculture,  forestry  and  other  land  use  (62%  /  115 
respondents). Stakeholders were further asked what criterion a potential national target for the 
in 
land 

should 

shown 

sector 

based 

on. 

As 

be 

267 

 
 
 
40%

35%

30%

25%

20%

15%

10%

5%

0%

Q13. In case there were to be national targets for the land sector (agriculture, forestry and other land use), 
what criterion should these targets be based on?

34%

The Member State’s potential 
to achieve climate neutrality 
in the EU land sector in a 
cost-efficient way

22%

Other…

17%

15%

13%

The Member State’s share of 
agricultural land, forest land 
and wetland

A percentage increase 
compared to the Member 
State’s past emissions and 
removals from the land 
sector

The importance of land-
related activities in the 
Member State’s economy

% of respondents to Q13 selected this answer (n=174)

Figure 107  more than a third of respondents (34% / 60 respondents) believe the criterion for 
a target should be the Member State’s potential to achieve climate neutrality in the EU land 
sector in a cost-efficient way. 22% / 39 respondents selected the option “other” and provided 
a different view or agreed with one the options outlined but added comments, as explained 
below. The second most popular criterion (of the ones outlined in the OPC) was the MS’ share 
of agricultural land, forest land and wetland (17 % / 29 respondents). This was followed by a 
percentage increase compared to the MS’ past emissions and removals from the land sector 
(15% / 26 respondents), and the importance of land-related activities in the MS’ economy (13% 
/ 22 respondents).  

The open text answers given by respondents for the questions 12 & 13 which focus on the 
AFOLU sector often overlapped with the open text answers given for question 6 on the best 
policy approach. Stakeholders often mentioned that a new sector should be subject to separate 
or no overarching targets and that there should be no flexibility (i.e. offsetting) between it and 
other sectors. The majority of responses were in support of having a separate LULUCF target 
but not an AFOLU target. Furthermore, the subsectors in an AFOLU sector should still have 
their  own  respective  targets  for  which  MS  would  need  to  pledge  their  contributions.  One 
stakeholder also suggested that while the base should be national targets, there should be an 
opportunity for member states to "pool" their contributions. 

One stakeholder expressed that, if an AFOLU target were to be created, it would have to take 
into account the specific territorial challenges that impact food production in each country to 
prevent the reduction of agricultural land.  As for the  responses to question 6, stakeholders 
asked for an impact assessment assessing the potential effects of the creation of an AFOLU 
sector. Many stakeholders expressed they would prefer a combination of criteria for setting the 
targets. A concern was raised regarding the criterion of the potential to increase the net sink 
of a MS in a cost-efficient way, because of the challenge of estimating this in a consistent way 
across  MS  to  produce  comparable  numbers.  It  was  said  that  more  transparency  could  be 
achieved by using the criterion of a percentage increase compared to the Member State’s net 
sink in a baseline specific to each land use category, since such an approach could build on 
publicly available and reviewed reporting data on historic emissions and removals. 

268 

 
 
 
 
16.  Synthesis Report on Article 10 Reports 

Abstract 
This synthesis report covers the analysis of the final submission of EU Member States' (MS) 
reports covering the period 1st January 2013 to 31st December 2020 based on the requirements 
laid  out  in  Article  10  of  the  Land  use,  land  use  change,  and  forestry  (LULUCF)  Decision 
529/2013.  These  reports  describe  national  policies  and  measures  (PaMs)  in  the  LULUCF 
sector. Summarising the reports involved the development of a set of parameters such that the 
content of the reports could be cross-compared. MS take a wide variety of policies and actions 
in the  LULUCF sectors  (forestry,  agriculture,  and  wetlands),  and conclusions  can  be drawn 
from these reports to grasp how the sector can be improved. The state of the EU LULUCF 
sector  is  one  where  the  net  removals  from  the  land  sector  are  decreasing  slowly  due  to  a 
variety of factors. The report herein covers 398 different PaMs presented by the MS. 24 reports 
were  evaluated  as  the  UK  is  no  longer  in  the  EU  and  Germany,  Portugal  and  the  Czech 
Republic have not yet provided their submissions. Much of the content within this synthesis 
report can also be connected and compared to the previous analysis of the mid-term Art. 10 
reports conducted in 2017. 

269 

 
 
 
 
Abbreviations 

AECM 

CAP 

CEE 

EAFRD 

EAGF 

FRL 

GAEC 

GHGI 

GVA 

HWP 

LPIS 

Agri-Environmental Climate Measures  

Common Agricultural Policy 

Central and Eastern Europe 

European Agricultural Fund for Rural Development 

European Agricultural Guarantee Fund 

Forest Reference Levels 

Good Agricultural and Environmental Conditions 

Greenhouse Gas Inventory 

Gross Value Added 

Harvested Wood Products 

Land Parcel Identification Systems 

LULUCF 

Land use, land use change, and forestry 

MRV 

MS 

NECP 

PaMs 

RDP 

SOC 

Measurement, Reporting and Verification 

Member State 

National Energy and Climate Plans 

Policies and measures 

Rural Development Programme 

Soil organic carbon 

EU COUNTRY 
CODES 

AUSTRIA (AT) BELGIUM (BE) BULGARIA (BG) CYPRUS (CY) 
CZECH REPUBLIC (CZ) GERMANY (DE) DENMARK (DK) ESTONIA 
(EE) GREECE (EL) SPAIN (ES) FINLAND (FI) FRANCE (FR) 
CROATIA (HR) HUNGARY (HU) IRELAND (IE) ITALY (IT) LITHUANIA 
(LT) LUXEMBOURG (LU) LATVIA (LV) MALTA (MT) NETHERLANDS 
(NL) POLAND (PL) PORTUGAL (PT) ROMANIA (RO) SWEDEN (SE) 
SLOVENIA (SI) SLOVAKIA (SK) 

270 

 
 
 
 
 
 
 
16.1. Introduction 

Under the European Green Deal's new 2030 EU Climate target plan, the European Union set 
a goal to reach a 55% greenhouse gas reduction by 2030 compared to 1990 levels and, even 
more ambitiously, reach climate neutrality by 2050. A key player in these targets is the land 
sector and its ability to remove carbon from the atmosphere and counterbalance emissions 
from,  e.g.  industrial  sources.  The  emissions  from  forestry,  agriculture,  grasslands,  grazing 
lands and wetlands are regulated under the Land use, land use change and forestry (LULUCF) 
Regulation.  Under  the  most  recent  impact  assessment  of  the  2050  climate  neutrality  plan 
concluded  in  Spring  2020,  the  current  policy  framework  is  insufficient,  and  several  climate 
policies will be subject to revisions. Among these is the LULUCF Regulation.  

Due to its role as a net sink in the EU, the LULUCF sector must be carefully examined and 
regulated in order to achieve its full potential. The treatment of the land sector in general should 
be  done  with  a  certain amount  of  sensitivity  as  it  also  has  a  function  of  producing  material 
biomass  and  agricultural  products.  Not  to  mention,  the  sector  also  provides  numerous 
ecosystem  services  such  as  protection  of  biodiversity,  temperature  regulation,  as  well  as 
nutrient and water management. While the sector has been a net sink in the EU, with forestland 
doing a majority of the removals, the sink has slowly been decreasing. Based on projections 
towards 2050, as stipulated under the European Green Deal, the sink will only experience a 
slight  decrease  followed  by  an  increase  until  emissions  from  transport,  power,  industry, 
residential sources, etc. will be balanced by the removals from land use and forests (alongside 
carbon removal technologies).  

Figure 108: Pathway to climate neutrality. Source: European Commission, 202067. 

A comprehensive synopsis of the state of the LULUCF sector and the actions that are currently 
in place to improve the land sector sink can help to boost the sector's mitigation capacity and 
pave the way to 2050. This synthesis report provides an overview of the national policies and 
measures in place within the EU MS. The overview is based on final reports submitted by the 

67 European Commission, (2020). Commission Staff Working Document Impact Assessment. Stepping up Europe's 2030 climate 
ambition 
the  benefit  of  our  people.  https://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=CELEX:52020SC0176  

in  a  climate-netureal 

investing 

future 

for 

271 

 
 
 
                                                 
MS,  within  the  LULUCF  Decision68  (Decision  no.  529/2013).  The  decision  set  reporting 
obligations for MS. Article 10 of the Decision requires MS to submit three reports covering the 
information  on  their  current  and  future  LULUCF  actions  to  limit  or  reduce  emissions  and 
maintain  or  increase  removals  resulting  from  the  LULUCF  activities  such  as  afforestation, 
deforestation,  forest  management,  cropland  and  grassland  management,  and  wetlands 
management. More information on this Decision can be found in Appendix A of this report.  

16.2. Background 

The aim of this report is to provide a qualitative summary of the MS reports submitted to the 
European Commission based on Article 10 of Decision 529/2013. The methodology used to 
produce  this  report  can  be  found  in  Appendix  B.  The  Art.  10  reports  cover  the  accounting 
period of 1 January 2013 to 31 December 2020 and include information on emission estimates 
and removals for the accounting period, an analysis of potential to limit or reduce emissions, 
as well as a description of measures and policies that are in place or under implementation. 
This synthesis report provides a systematic summary of the reports. It is important to note that 
due to Brexit, the United Kingdom did not submit the report to the Commission and the Czech 
Republic, Germany and Portugal did not submit reports in time for the writing of this report. 
Therefore 24 reports were analysed.   

The nature of these reports is such that while the subsections required by the Commission are 
the same, the content within the subsections are not homogenous. The length of the reports 
and content within varies so in certain parameters, the MS are not comparable. Yet, this report 
will attempt to present standout cases and a broad overview of the reports and the state of the 
LULUCF sector in the EU.  

The basis for the synthesis report is the policies and measures (PaMs) that are presented by 
the MS in the Art. 10 reports. PaMs are not strictly defined as each MS presents its national 
actions in a different manner. In some cases, MS have referred to their legal requirements and 
regulations  (e.g.  Forest  Codes  or  Acts)  as  a  PaM  through  which  standards  are  set  for  the 
LULUCF  sectors.  In  other  cases,  a  PaM  is  simply  an  action  or  measure  that  is  embedded 
within a larger  programme  or  initiative.  Under this  study  a PaM  is  to be understood as  any 
relevant,  currently  implemented  action  that  is  presented  by  the  MS  while  taking  into 
consideration the different definitions of PaMs across the MS.  

Due  to  the  fact  that  three  member  states  did  not  submit  their  reports  to  the  European 
Commission, it was agreed that for the purpose of this study and maintaining the coherence 
of  the  report,  data  from  the  mid-term  evaluation  report  would  be  used  to  extrapolate  the 
information for the countries that did not submit their final Art. 10 report.  

16.3. Overview of the LULUCF Policies and Measures in the 

EU Member States 

68 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 

272 

 
 
                                                 
Within the MS reports, the PaMs have varying degrees of detail and specificity. The difference 
in granularity within the report means that the data presented herein should be interpreted with 
some  level  of  trepidation.  For  example,  in  some  cases  the  measures  within  the  Rural 
Development Programmes (RDP) are listed out separately by the MS, while in other cases, 
RDP  as such  is  an  overarching  measure  in forestry  or  agriculture. To this  point,  398  PaMs 
were  reported.  Following  the  methodology  of  the  previous  study,  the  PaMs  per  MS  per 
intervention are shown in the graph below.  

30

25

20

15

10

5

0

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

Forest management

Biomass for energy use

Restoration of degraded land

 Afforestation and reforestation

Protection against natural disturbances in forests

Biodiversity/nature conservation measures

Substitute of GHG intensive materials with HWP

Grassland, grazing land and/or pasture measures

 Nutrient, tillage and water management

 Conservation of carbon in existing forests

 Organic farming

Figure 109. Reported PaMs per type of intervention by MS.  

While this presentation of the MS and the most frequent intervention types is useful, it is also 
necessary to look at the types of interventions in a more focused way. The Figure 110 below 
shows the overall count of intervention types across the analysed PaMs. These set the scene 
for the section below as it gives a thorough breakdown of all of the PaMs from the important 
land sectors in LULUCF (forestry, agricultural soils, organic soils). 

Figure 110. Number of PaMs per type of intervention (overall count). 

Most common PaMs presented by the MS 

273 

 
 
 
As it is clear from Figure 110, the main focus for forestry policies is in forest management. In 
the case of this report, forest management is viewed as any management for preserving and 
protecting forests in order to make them the most economically and ecologically valuable. Most 
MS have overarching forestry policies that promote the incomes of forest owners while also 
boosting long term sustainability. The potentials for forest management in terms of emissions 
are very significant and the mitigation potentials going forward presented by a number of MS 
are very high.  

With regard to agriculture, there are two main pathways that MS employ, the first being through 
the RDPs within Pillar II of the CAP and the second being EU directives on fertilizers. Both of 
the  intervention  Nutrient,  tillage  and  water 
these  pathways  are  categorised  within 
management. Many of the MS cited the Nitrates Directive69 as one of their key policies within 
LULUCF and nutrient management. The main pathway though, is through the CAP. MS are 
highly reliant on the CAP and in most of the Art. 10 reports, the importance of the mechanisms 
under the CAP Greening Payments and within the RDPs have set the scene for the entirety of 
the LULCUF sector. The CAP Strategic Plan which is under development for 2023-2030 will 
have extremely broad impacts on the MS. IE, PL and HU outline their plans within the new 
CAP thoroughly and emphasize their reliance on the funding that is coming from the current 
policy period. Yet, there are still some standout PaMs that are undertaken by MS outside of 
the CAP that should be highlighted.  

MS PaMs beyond CAP 

The main actions within forestry are within forest management for improving sustainable timber 
production, but there are also a few countries that have a focus on natural forest regeneration. 
NL has a PaM within 'trees, forest and nature' for expansion of forest and trees into woodland 
areas. This encompasses multiple goals including increasing recreational areas, urbanisation 
challenges,  spatial  quality,  etc.  These  areas  are  assumed  to  undergo  management  in  the 
future but not harvest. Another unique case is CY's activities in LULUCF as they all revolve 
around indigenous tree afforestation. The goal within these activities is to plant 300,000 trees 
per year by 2030 (currently they are planting around 70,000 per year).  

Many of the MS that have much smaller areas or have problems with over-urbanisation are 
stuck between using land area for domestic agriculture to support the growing population and 
afforesting the limited land area that is left. MT, for example, has no commercial forestry and 
all  the  afforestation  measures  are  strictly  to  improve  nature  areas  for  conservation  and 
recreational purposes. On the other side, LU has a sizeable wood product sector and therefore 
is  not  active  in  any  natural  afforestation  measures.  This  is  cited  multiple  times  within  the 
relevant report and as a key challenge for the country. 

With regard to  reforestation  after  natural  disturbances, the  main measure  type  is  within the 
RDP, as part of CAP Pillar II. Both HR and EE use RDP to co-finance restoration of forests to 
improve resilience against fires. Yet, there are multiple MS that have policies outside of the 
CAP with attention to protection and regeneration after natural disturbances. The SI Forest Act 
for example provides full funding through subsidies to regenerate areas in which spontaneous 
regrowth is too slow. In HR, one of main concerns and drivers of their LULUCF PaMs is the 
degraded land and forest area from the post-war period. The consequences of the war caused 
a disruption in the structure of forest stands and led to a decrease in growth in forests due to 
lack of cultivation planning. HR's Forest Management Plan for the period has been and will 
continue to be focused around establishment of proper stand structures.  

FR has multiple PaMs that standout, particularly with their attention to soil carbon. Their most 
pioneering  initiative is  Label  Bas Carbone,  a  voluntary  carbon  market  programme  certifying 

69 Council directive of 12 December 1991 concerning the protection of waters against pollution caused by nitrates from agricultural 
sources (91/676/EEC) 

274 

 
 
                                                 
and providing payments for carbon sequestration through, e.g. afforestation, hedge planting, 
orchard preservation, etc. This type of measure has a sweeping trickle-down effect into other 
MS' attention and potential to pay landowners per ton of carbon. 

Sources of financing 

As outlined above, the funding from CAP is the most important source for agricultural PaMs. 
Most MS state the value of the CAP for rural development, yet the distribution of the funding is 
often not abundantly clear within the reports. Within some reports the contribution from national 
vs EU funding is explicitly stated for each measure under RDP. In other reports, this value is 
not reported at all. BE, AT, HR, and BG are examples where the exact amount of funding that 
is coming from EU sources and from national funding is explicitly expressed. LT provides exact 
costs associated with all national programmes (mainly through the Inter-institutional action plan 
for  the  Strategy  for  the  National  Climate  Change  Management  Policy).  The  main  source  of 
funding for the LULUCF measures stated is typically through The European Agricultural Fund 
for Rural Development (EAFRD), CAP Pillar II or the European Agricultural Guarantee Fund 
(EAGF), CAP Pillar I. National support apart from CAP for LULUCF by MS covers research 
programmes,  large  scale  strategies  or  national  climate  change  policies.  Co-financing  is 
supported through the EAFRD and other EU funds.  

While not every country outlines its specific finance objectives or amounts, it is important to 
highlight some of the MS that have directed a significant amount of money outside of EU funds 
to LULUCF (see Table 21). 

Table 21. Some examples of the pure national funding within the EU MS .  

Sector 

Source  

Amount 

Trees, Forest and Nature 

State climate funds  

EUR 51 million 

Peat meadows  

State funds for peat restoration 

EUR 100 million  

Forest regeneration 

2018 investment  

Agriculture  

Organic soils  

Biochar research  

Accounting for emissions from 
organic soils  

EUR 252 million  

EUR 3 million 

EUR 1.2 million 

Afforestation 

Afforestation for recreation  

EUR 400,000 

Forestry 

Forest subsidies (2003-2019) 

EUR 2.3 million 

Afforestation 

Tree planting along roads 

EUR 85 million 

MS 

NL 

FI  

DK 

ML 

SE 

CY 

IE 

Peatlands 

FR  

Agriculture and forestry 

Funding for peatland restoration 
(33,000 ha) 

Recovery plan will support 
preservation and strengthening of 
land sector  

EUR 108 million  

EUR 1.2 billion  

16.4. Policies  and  Measures  (PaMs)  introduced  by  MS  in 

LULUCF sector 

While the main types of measures and sources of funding are outlined in the section above, it 
is necessary to go more into depth within the individual MS as well as understand the types of 

275 

 
 
 
  
PaMs that are the most common. There are several ways in which the PaMs from all the MS 
can be classified. Knowing the most frequent pathways for LULUCF action can promote policy 
advisory and inform decision makers the ways in which the highest uptake for environmental 
management is achieved. To this extent, seven different classifications as seen in Figure 111 
below  were  chosen  to  organize  the  most  typical  policy  instruments  and  further  classify  the 
analysed PaMs.  

Figure 111. Breakdown of main policy instruments per the PaMs  

It is clear from the figure above that the highest percentage of PaMs fall within the CAP either 
within Pillar I or Pillar II. This is not a surprising result as nearly every Art. 10 report stressed 
their reliance on the CAP. The second most typical type of policy instrument falls within both 
the  categories  of  Legal  requirements  and  standards  and  Plans  or  strategies.  Legal 
requirements  or  standards  are  defined  as  either  overarching  country  acts  or  required 
management standards for forests (e.g. requirement to submit forest management plans every 
10 years). Plans and strategies are typically action plans developed in connection to a certain 
sector  and  sometimes  further  support  legal  acts.  State funded  economic  incentives  include 
subsidy  programmes,  tax  breaks  or  other  financial  incentives  for  carbon  removals.  IE,  for 
example,  provides  grants  from  their  Agricultural  Department  to  increase  and  support  the 
production of HWPs. Other EU economic incentives is the catchall for EU funded initiatives 
outside of the CAP (i.e. funding through Natura 2000). Other national initiatives are PaMs that 
may not be strictly defined by the MS within the Art. 10 reports. Information/awareness PaMs 
are ones that include research or public awareness initiatives such as SI's Public Awareness 
PaM aimed at promoting the efficient use of woody biomass and its use to improve ambient 
air quality. 

16.4.1. Forestry  

The  forestry  sector  is  highly  important  to  the  MS  both  economically  and  environmentally 
speaking,  yet  many  of  the  forestry  policies  are  old  policies  with  the  motive  to  promote 
production,  as  opposed  to  climate  mitigation  or  LULUCF  activities.  Some  of  the  MS  within 
Central  and  Eastern  Europe  (CEE)  that  were  under  the  communist  block  also  have  newer 
policies that were spurred by the economic transition. The reports from these MS (LT, LV, EE) 
pointed out that the opening of markets in the early 90s caused arable land to be abandoned 
and unplanned, thus natural reforestation took place. MS have cited that this abandoned land 
is  overgrown  with  vegetation  that  lacks  proper  management.  As  this  area  has  not  been 
managed over the past 30 years, there has been a levelling off of the land's potential to have 
sustainable and efficient removals.   

Forestry 

276 

 
 
 
 
The intervention pathways within the forestry sector are forest management, protection against 
natural  disturbances,  afforestation  and  reforestation,  and  conservation  of  carbon  in  existing 
forests. Within  this  scope,  biodiversity  and  conservation  PaMs  are  included.  It  is  difficult  to 
differentiate the countries that rely the most on forestry as the sector is significant in most MS. 
According to Eurostat data, the countries with the highest output of forestry and logging are 
SE, DE, FR, FI and PL with varying levels of Gross Value Added (GVA) as a percentage of 
GDP. For FR, a majority of their forestry PaMs are devoted to promoting wood products by 
removing barriers to using HWPs in construction for example. Their 'Tall buildings made out of 
wood'  Plan  is  a  standout  policy  among  forestry  reliant  MS.  In  LV,  forestry  and  logging 
contributed to 1.9% of total GVA in 2018 while having a relatively smaller forestry sector with 
regard to output.70 FI, despite a high reliance on the forestry sector has limited PaMs, one of 
which  being  a  broader  Climate  Strategy  that  is  not  connected  explicitly  to  LULUCF.  It  is 
important  to  note  that  most  of  the  forestry  policies  across  nearly  all  MS  are  partnered  with 
timber production; economic and environmental sustainability are dual objectives.   

AT  has  nine  PaMs  in  relation  to  forestry,  some  of  which  are  simply  to  safeguard  forest 
conservation and improve the stability of forest ecosystems. There are also PaMs within AT 
that are in connection to timber production, yet it is one of the few countries that recognizes 
the need for conservation and biodiversity protection within forests (i.e. through Natura 2000). 
A similar case to AT, is BE that has forest expansion and afforestation initiatives for long term 
conservation purposes across its three regions (Flanders, Wallonia and the Brussels Capital 
Region). The Foret de Soignes for example is a region where no deforestation is allowed and 
is under strict protection. CY is an interesting case as the only PaMs listed are connected to 
afforestation,  yet  they  are  only  regarding  afforestation  of  indigenous  trees  along  roads  and 
highways and in urban areas.  

Biomass for bioenergy 

The use of biomass (woody biomass or crop residues) for energy purposes to replace GHG 
intensive feedstocks was a common theme across the MS, yet the PaMs mentioned usually 
referred to the  use of  woody  biomass for  bioenergy.  Bioenergy  can  help MS  to meet goals 
within the EU, especially related to the Renewable Energy Directive but woody biomass for 
energy can in turn have a detrimental effect on forest areas. It is also a cross-cutting PaM as 
it is related to the use of residues from agriculture in bioenergy. The countries with specific 
PaMs relating to biofuels from the forest or agricultural sector are SI, SK, IE, FR, LI, and MT 
(partly through their RDP). BG and AT both have renewable energy action plans for boosting 
agriculture and forestry in bioenergy. 

Another intervention type in the forestry sector is in promoting the HWP pool to increase the 
already significant climate mitigation potential. From Figure 110 it can be seen that this is one 
of the least common PaMs from the Art. 10 reports. Still, BE, IE, LU, and SK all have policies 
related explicitly to HWP. In recent years, the HWPs have been touted as a central player in 
climate mitigation objectives as wood products are able to store carbon outside of the forest 
area and can replace more energy intensive materials such as steel, cement or plastic. SE 
reported a removal from HWP as high as -18,000 kt CO₂ in 2018 as well as in projections for 
2019, which is well beyond the average removal across the rest of the EU.  

Mitigation potential in forest areas is significantly higher than in agricultural areas. In the EU 
Commission's  Impact  Assessment  of  2020,  the  need  for  technical  management  and  forest 
conservation is imperative for soil carbon sequestration and in ensuring that MS can remain 

Eurostat, 

70 
explained/index.php/Forests,_forestry_and_logging#:~:text=The%20growing%20stocks%20of%20timber,and%20Poland%20(1
0.0%20%25)  

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

Forests, 

logging. 

forestry 

(2020). 

and 

277 

 
 
                                                 
sinks,  especially  with  the  Green  Deal's  target  of  climate  neutrality  by  2050.71  From  the  five 
countries  that  are  overall  emitters  within  the  LULUCF  sector  (IE,  DK,  MT,  SI  and  LT),  the 
necessity to have highly productive forestland to counteract the emissions that typically come 
from cropland is clear. In IE, the national target of 8,000 ha of afforestation per year is expected 
to result in an initial decrease in removals peaking in 2035 at zero net emissions and removals 
followed  by  an  increase  resulting  in  net  removals  of  around  -3,100  kt  CO₂eq  by  2050  (a 
decrease in removals from the current value). SI provided the technical mitigation of potential 
forestry measures showing that increasing the carbon stock in living biomass has a 5,201 kt 
CO₂eq per year potential. The measure with the next highest potential is much lower at 1,668 
kt CO₂eq per year demonstrating the weight of this type of PaM.  

16.4.2. Agricultural lands and soils  

The PaMs that were the most common for agriculture and soils among the MS reports were 
mainly encompassed within broad EU policies such as the Natura 2000 legislation, the Nitrates 
Directive,  and  in  some  cases  the  Renewable  Energy  Directive.  The  most  significant  PaMs, 
though, were within the MS' RDPs as part of CAP Pillar II. There are three main agriculture 
measures under the RDP that were reported by almost all MS and are presented within the 
EAFRD measure codes: 

Table 22. RDP Measures related to agriculture and MS implementation.  

RDP Measure Code 

Description 

Measure 01 – Knowledge 
Transfer 

Provision of information and training to improve 
performance and social environmental sustainability 
of businesses operating in rural areas.  

Member State 

SI, EE, AT, HR, IE 

Measure 10 – Agri-
environment climate 

Many sub-measures related to biodiversity, soil, 
carbon sequestration. Typically, these include 
permanent grasslands, orchard preservation, etc.  

IE, RO, AT, BE, MT, 
LV, SK, PL, ES 

Measure 11 – Organic 
Farming  

Support per hectare of agricultural land to farmers 
who convert to or maintain organic farming practices 
and methods.  

MT, IE, RO, AT, BE, 
SK, PL, ES 

While the RDP is highly valuable in funding for MS, it is still focused on income boosting in 
rural areas and has less of a focus on carbon sequestration or soil organic carbon. Organic 
farming (RDP Measure 11 and part of Pillar I, Greening Payments) for example clashes with 
some land-use sink objectives as it requires more land area for cultivation. While it maintains 
nutrients in the soils better and results in more sustainability in the long term, it still might cause 
that land that would otherwise be used for forest or even wetland area is needed to produce 
organic  produce.  AT  goes  beyond  simply  stating  organic  farming  as  a  measure  and  has 
introduced soil-friendly farming systems to help the humus contents of organically farmed soils; 
this is significant as nearly a quarter of AT's agriculture is organic.  

16.4.2.1. 

Agri-environmental climate measures 

Many of the PaMs within the agri-environmental climate measures (AECMs) are connected to 
using crops that can fix nitrogen (i.e. legumes) and use of cover crops. MS are given flexibility 
with regard to these types of measures and it is clear that certain measures may have a higher 

71 European Commission. (2020). Impact Assessment: Stepping up Europe’s 2030 climate ambition Investing in a climate-neutral 
future for the benefit of our people. Available at: https://ec.europa.eu/clima/sites/clima/files/eu-climate-action/docs/impact_en.pdf  

278 

 
 
 
                                                 
impact on one MS than another due to the makeup of their soil. LV focuses on using legumes 
in a  mixture  with other  crops  resulting  in  higher  inputs  of  organic  material  and  aiding  in  the 
replacement of mineral fertilizers with nitrogen fixing plants. PL has a voluntary commitment 
programme  such  that  farmers  can  choose  to  employ  more  sustainable  ways  of  crop  and 
livestock production management through specific tillage management, a ban on using urea 
in granular form, and regeneration of soils through liming. IE also implemented a farm scale 
liming programme among other methods for extra attention to nitrogen application (as part of 
the derogation review of the Nitrates Directive). 

Within  AECMs  and  other  environmental  measures  of  rural  development,  MS  encourage 
farmers to employ more sustainable soil management focused on less fertilization (FI, IE, BE), 
better nutrient management (IE, PL), use of organic fertilisers (HR), and support of extensive 
farming  systems  (PL,  IE,  HR).  Agroforestry  systems  are  also  reported  by  a  few  MS  for 
increasing of sequestration and protecting soils alongside operations related to maintenance 
of landscape features (BE, HR, PL), establishing rows of trees along agricultural lands (DK, 
FR). 

Attention to biodiversity 

The  connection  between  agricultural  production  and  biodiversity  protection  is  a  key  theme 
across the EU and is the third most common type of PaM reported in Art. 10 (see Figure 110), 
especially through payments under the Natura 2000 directive. BE, HR and HU all have AECMs 
connected  to  biodiversity  within  maintaining  permanent  grasslands,  while  EE  is  focused  on 
protecting biodiversity in horticulture. The use of buffer strips, wetlands protection (HU, BG, 
AT, BE), and agro-forestry helps to protect local flora and fauna within the MS. IE, through the 
LIFE Programme, implemented a LIFE IP Peatlands and People PaM, which aims at restoring 
and enhancing rehabilitation of National Parks and Wildlife Services.   

16.4.2.2. 

Policies and Measures (PaMs) related to soils   

While  most  of  the  LULUCF  PaMs  across  the  MS  are  related  to  agricultural  production  on 
mineral  soils,  there  are  many  MS  whose  PaMs  promote  carbon  removals  in  organic  soils. 
There  are  a  few  key  countries  who  have  PaMs  that  prevent  drainage  in  wetlands  and  limit 
peatland  extraction.  BE,  BG,  DK,  LU,  SK,  SE,  IE  and  HR  all  have  wetlands  protection 
programmes and DK has four separate policies on wetlands and provides subsidies for the 
restoration of wetlands on private land. The countries with the highest percentage of wetlands 
and all over the EU average are IE (5.6%), SE (5.4%), FI (5%), EE (4.4%), LV (2.4%) and DK 
(1.9%).72 Across these countries, only SE, IE and DK have wetland protection and drainage 
limitations; the rest are not focused on wetland areas at all.  

PaMs related to wetlands 

There are a few MS that do not have any organic soils, according to their Art. 10 reports. LU, 
for instance, states that the country has no organic soils or peatlands and therefore, has no 
PaMs connected to organic soils. Nevertheless, there is one PaM that is under implementation 
and is partially relevant to the country; according to the report 'Measures to prevent drainage 
and to incentivise rewetting of wetlands' is partially in place and partially relevant for LU yet 
with no plans for additional policies related to this. Due to the nature of their soils, both CY and 
EL have very low areas of wetland and organic soils. FI, despite having 5% wetland cover and 

72  Note  that  this  data  is  pulled  from  Eurostat  data  from  2015  including  the  United  Kingdom  within  the  EU  average, 
https://ec.europa.eu/eurostat/web/products-eurostat-news/-/EDN-20180201-1  

279 

 
 
                                                 
wetlands being the second largest land area after forest land there are no explicit PaMs on 
rewetting.  The  climate  programme  for  Finnish  agriculture  stipulates  peatland  protection  as 
nearly  6 million  ha  are  drained for  peat  production which makes  up  4%  of the total  primary 
energy supply. The FI PaMs are focused on conservation and directing any peat extraction to 
sites that have already been drained or degraded. SK has an Action Plan on wetlands which 
covers four strategic goals on addressing the drivers of wetland loss then further conserving 
and managing them based on these drivers.  

Restoration  of  degraded  soils  and  land  is  connected  both to mineral  and  organic  soils  and 
several MS take particular attention to nutrient management on organic soils (DK, NL SE, FI, 
LV). DK has five different PaMs connected to organic soil management. There are not many 
PaMs  that  explicitly  target  restoration  of  degraded  land  and  these  are  spread  across  both 
agriculture  and  forestry,  where  afforestation  may  be  used  to  restore  land  that  has  been 
degraded by agriculture to the point of abandonment.  

16.4.3. Research programmes  

Research initiatives can be classified under the Information/awareness policy pathway from 
Figure 111 as well as under RDP Measure 01 (Knowledge Transfer) from Table 22. Research 
programmes  or  initiatives  related  to  improving  data  and reporting  make up  a  much  smaller 
portion  of  the  PaMs  in  the  Art.  10  reports  but  are  highly  valuable  to  LULUCF.  LULUCF 
monitoring is rather resource-intensive and there is evidence of scarce data and insufficient 
reporting requirements such that MS do not feel obligated to take key attention to soil carbon. 
Soil organic carbon (SOC) measurement has been one of the topics of key interest in land use 
and it also presents a key barrier for incentivizing Measurement, Reporting and Verification 
(MRV) within payments for ecosystem services, for example. In general, improving data and 
consistency across MS will help to simplify monitoring and eventual reporting processes.  

Research on soil  

DK  will  begin  in  2021  to  conduct  research  on  emission  factors  for  organic  soils  in  order  to 
improve the validity of emissions reported to the Greenhouse Gas Inventory (GHGI) as well as 
to boost policy instruments related to the rewetting of organic soils. In addition, they have an 
ongoing research initiative on the potential for using biochar as a tool for carbon storage. NL's 
National  Knowledge  Programme  on  Soil  Subsidence,  Evaluation  and  Knowledge 
Development, addresses issues from specific meadow areas, including sustainable business 
and land management models, knowledge development from pilot projects (2019 – 2021) in 
order to identify the technical potential and feasibility of measures, like submerged drains. SE’s 
'Focus on Nutrients' initiative estimates the effect of cropping measures in order to determine 
the type that is most effective for carbon sequestration.  

FR has several research initiatives connected to both forestry and agriculture. Within the new 
Strategic Forest and Wood Fund FR will finance innovative projects connected to woodland 
management and marketing of HWPs. Alongside this, a call for projects within the AMELIO 
programme was launched in 2019 with the aim to improve poor and dying stands. In relation 
to  carbon  storage  in  agricultural  soils,  FR  also  has  multiple  PaMs  related  to  research  and 
improving carbon stock. The PaM, 4 for 1000 "Soils for Food Security and Climate" initiative, 
has resulted in findings regarding carbon stock improvement in the first 30 to 40 centimetres 
of soil to improve food security and slow emissions from mineral soils. EL has two PaMs funded 
by  the  EU  LIFE  Programme,  ClimaTree  and  OliveClima,  that  are  centred  on  defining  and 
developing accounting and monitoring frameworks for tree-crops' CO₂ sequestration as well 
as generally identifying farming practices that lead to higher carbon sequestration and passing 
this information onto farmers. Farmer awareness of these types of measures is very important 
for uptake and for the future of broader initiatives in the EU for carbon farming or results-based 
payments for tcarbon sequestration.  

280 

 
 
AT, HR, DK, EE, FI, NL and SI have programmes that are connected to raising awareness for 
nature conservation and environmental protection. These programmes alongside the RDP's 
knowledge  transfer  measure  help  to  support  educational  programmes  and  eventually 
increases farmer's attention to improving their land's potential as a carbon sink. EE and FI are 
actively  educating  farmers  on  environmentally  friendly  agricultural  practices  and  benefits  to 
nutrient retention for long term sustainable land. IE launched an online nutrient management 
planning programme to improve the nutrient status of soils and to lower fertiliser usage.  

In some MS, PaMs are connected to information on a broader level such that stakeholders are 
brought  together  on  a  common  platform.  In  SI,  one  PaM  aims  to  increase  the  level  of 
competence  of  target  groups  through  different  forms  of  knowledge  transfer.  With  improved 
competence, the target groups will be able to enhance their competitiveness, use resources 
more efficiently, improve environmental efficiency and contribute to sustainable development 
in rural areas. EL also has a dedicated platform for stakeholder communication and platforms 
for dissemination of knowledge.  

16.4.4. Reporting and Accounting 

While reporting and accounting PaMs are not common across the MS, there are several that 
deserve  attention  due  to  their  potential  for  upscaling  within  the  rest  of  the  EU.  The  main 
accounting measure as mentioned above is through the Forestry Accounting Plans as required 
by the most recent Commission report on implementing Forest Reference Levels (FRLs) and 
improving GHGIs. In DK, as mentioned above, the research programme to improve emission 
factors on organic soils has implications for LULUCF as it will improve validity of emissions 
reported  within  GHGIs.  In  IE,  plans  to  include  managed  wetlands  in  the  2021  to  2025 
commitment  period  is  a  challenging  measure  due  to  the  nature  of  wetland  emissions 
measurements.  This  PaM  is  important  as  a  majority  of  IE's  wetlands  are  used  for  peat 
extraction. While not explicitly related to reporting and accounting, RO's National Strategy for 
Sustainable  Development  includes  activities  related  to  traceability  and  data  to  ensure  that 
tracking and data consolidation are at the forefront. EL is actively working on new accounting 
and monitoring systems for tree-crops through ClimaTree and hopes to see uptake in other 
EU MS.  

16.4.5. Additional information on Member States' actions 

Three MS did not did not submit reports for the final round, however, the Commission believes 
that their previous actions within LULUCF are still relevant for the overall analysis of the sector. 
PT did not submit their first or second reports and DE did not submit a mid-term report so the 
information may be more limited for these MS. It was agreed with the Commission and the 
authors of this report that the summary of the three MS would be extracted from an "Analysis 
of LULUCF actions in EU member states as reported under Art. 10 of the LULUCF Decision: 
final study" prepared by IEEP in 201773 in order to provide a full picture of LULULCF actions 
within  the  EU.  The  data  from  these  countries  has  not  been  mixed  into  the  data  within  this 
report, as the scope of this task is to provide an overview of the most recent updates in the 
LULUCF sector.  

CZ  submitted  both  of  the  initial  and  mid-term  reports.  The  country  has  a  distinct  focus  on 
climate resilience and climate adaptation strategies for the LULUCF sector, which according 
to the analysis, is contrary to many of the other MS' strategies. Like most other MS, the CAP 

73 Paquel, K., Bowyer, C., Allen, B., Nesbit, M., Martineau, H., Lesschen, J. P., & Arets, E. J. M. M. (2017). Analysis of LULUCF 
actions in EU member states as reported under Art. 10 of the LULUCF Decision: final study. Institute for European Environmental 
Policy IEEP. 

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is of high significance to CZ for reducing emission from fertiliser use and enteric fermentation. 
The measures under cross-compliance standards in CAP are connected as well to the GAEC 
standards that are specifically defined for CZ, which is not necessarily the case for the other 
MS. In addition, CZ is one of five MS that has designated environmentally sensitive permanent 
grassland (ESPG) outside of the already designated Natura 2000 sites, indicating an attention 
to  biodiversity  conservation.  CZ  also  employs  multiple  interventions  that  highlight  the 
importance of soil protection and management including within the CAP Pillar II (RDP), urban 
and land use soil protection measures, and the Nitrate Directive.  

DE is applied a regional approache with a particular stress on the bioeconomy, namely through 
the supply of mainly forest biomass to replace fossil resources. In addition, there is a heavy 
emphasis  for  DE  on  grassland  management  as  well  as  the  restoration  and  protection  of 
peatlands through, e.g. the purchase of key peatlands by the state. One notable project is the 
rehabilitation of moorland with specific targets noted at state (Länder) level for converting 30% 
of  moorland to  natural  management  by  2020.  For forest  conservation, DE  also  has  several 
reported PaMs including actions towards taking forests out of production, a dedicated Forest 
Climate Fund, and some research initiatives on the capacity for carbon storage by HWPs. The 
last notable PaM in DE is an attempt to improve rules and reporting on grassland conversion.  

Due to the fact that PT did not submit any out of the three reports, there is no information that 
can be written about their LULUCF actions within the scope of this task.  

16.5. Potential mitigation actions for the 2021-2030 period  

The  data  across  the  MS  varies  with  regard  to  the  period  going  into  2030,  which  is  to  be 
expected as Decision no 529/2013 does not require a future projection beyond the year 2020. 
Some  MS  report mitigation  potentials for  each  measure  as  well  as yearly  projections,  while 
others simply provide a projection of the 2019 and 2020 period for the LULUCF categories. 
The methods for projections are also highly differing. Finding estimates on overall LULUCF is 
also difficult to capture as the MS all report different iterations of the main categories.  

16.5.1. Development of the strategies and future actions plans  

Much of the future possibilities for the sector across the MS is through PaMs classified as a 
Plan or Strategy. 23% of the total PaMs are within this category (see Figure 111) and typically 
have a broad target going into 2030 or 2050. The LULUCF sector is usually a sub-part but is 
still mentioned as a key sector to achieve the targets outlined within the PaM.  

Broader policies in the MS include LT's Strategy for the National Climate Change Management 
Policy until 2050 which also includes an inter-institutional action plan and thoroughly outlines 
the potential of measures within the LULUCF sector in environmental protection and rational 
use. MT's Sustainable Development Vision for 2050 employs a number of broad environmental 
measures  to  enhance  sustainability  and  includes  biodiversity  and  soil  protection  as  key 
features. RO has two separate overarching initiatives on climate change, namely the National 
Strategy  on  Climate  Change  and  Economic  Growth  and  National  Action  Plan  for  the 
Implementation  of  the  National  Strategy  on  Climate  Change.  IE's  Climate  Action  and  Low 
Carbon Development Bill 2020 plans to drive a 7% yearly reduction of GHG emissions across 
the next decade (to 2030). 

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16.5.2. Forestry  

In addition, the LULUCF Regulation74 (EU) 2018/841 requires MS to submit national forestry 
accounting plans including proposed FRLs for the 2021 to 2025 accounting period. Some MS 
do not discuss the accounting plans in their Art. 10 reports but many mention these plans within 
the most recent NECP submissions. In general the main type of plans and strategies, if they 
are  not  broad  climate  action  plans,  are  related  to  the  forestry  sector.  EE's  Forestry 
Development Plan is focused on sustainable forest management in order to improve diversity 
and productivity and capacity for regeneration. FI's National Forest Strategy aims to maintain 
a carbon sequestration level of 10-17 mtCO₂ per year across Finnish forests. In FR, the Forest 
Renewal  PaM  has  a  budget  of  EUR  150  million  and  aims  at  45,000  ha  of  improved, 
regenerated or reconstituted forests before the end of 2024. EL's National reforestation plan 
includes plans for reforestation of 50,000 ha of burned and degraded land by 2026. 

16.5.3. Agricultural land and soil  

The future aim of agricultural and soil PaMs will be characterized by the CAP Strategic Plan, 
yet only a few MS mention their actions within this plan as this only begins in 2023. IE, PL, HU 
and FR are the four MS that outline the future of CAP within their PaMs. IE provides a list of 
potential  measures  that  will  be  undertaken  as  part  of  this  and  has  involved  a  lengthy 
stakeholder and consultation process for implementation at its onset. These include new agri-
environmental  initiatives  such  as  the  rewetting  of  farmed  peatlands,  soil  organic  carbon 
improvement  measure  for  tillage  soils  (SOCIMTS),  National  Soil  Sampling  and  Analysis 
Programme  2021,  Farm  Environmental  Study  Initiative,  Re-Opening  of  Organic  Farming 
Scheme,  Pilot  on  Results-based  Agri-environment  Scheme,  and  New/enhanced  EIP 
measures. For HU, the CAP Strategic Plan will take into account objectives within biodiversity 
and  the  Farm  to  Fork  Strategy.75  PL  linked  the  initial  public  consultation  process  for  the 
upcoming submission for the post-2020 CAP Plan and explained that the process has been 
slow  due  to  such  high  interest  in  the  process.  FR  has  also  begun  its  post-2020  CAP 
stakeholder  consultation  process  to  devise  the  most  relevant  mechanisms  specific  to  the 
country's needs. Among the identified needs were, for example, the importance of maintaining 
permanent grasslands to preserve existing carbon sinks.  

In DK, the Climate Forest Fund for reestablishment of wetlands plans to reduce carbon loss 
through wetlands by 15 MtCO2eq/ha/year starting in 2021 as well as plans for 15,000 ha of 
rewetted  land  between  2021  and  2029  and  5,000  ha  between  2021-2024.  In  FI,  there  are 
multiple  PaMs  related  to  sustainable  food.  One  of  these  PaMs  is  called  “Steps  towards 
environmentally friendly food” and has future objectives to improve the efficiency and reduce 
emissions per litre or kilogram of agricultural production. In FR, the Good Carbon Diagnosis 
PaM aims to discern the potential for GHG reduction and carbon storage at farm level as well 
as ultimately result in 4,000 to 5,000 kt CO₂eq 'good carbon' between 2021-2022. In IE, the 
Ag-Climatise  contains  a  roadmap  for  climate  neutrality  in  the  agri-food  sector  by  2050 
(particularly through biogenic methane). NL plans for precision agriculture to be implemented 
on at least 50% of arable land by 2030 (i.e. strict nutrient management through time-specific 
dosage of fertilizer). On top of this, the Peatland Protection Plan will affect approx. 90,000 ha 
of peat meadows with 10,000 ha of conversion to peat moss cultivation. PL's Framework Action 

74 Regulation (EU) 2018/841 of the European Parliament and of the Council of 30 May 2018 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 No 529/2013/EU 

75 As these are already recommendations from the Commission within the EU CAP framework, this is not significant in the sense 
that  it  is  not  going  beyond  what  is  already  required.  Yet,  it  is  still  pertinent  to  point  out  the  countries  that  are  mentioning  the 
importance of the post-2020 CAP.  

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Plan for Organic Farming will be updated to improve organic food and farming; this framework 
is important as it is outside of the scope of CAP.   

16.6. Challenges and Solutions   

The MS reports have a wide variety of PaMs that can lead to some interesting insights. For 
example, there are a number of MS-defined challenges that can provide key understanding 
into the gaps that exist within the political sphere of LULUCF. Many of the main issues within 
the MS are associated with the fact that the LULUCF mitigation potential is decreasing. 

In many MS, the challenges listed come with potentials for solving them, as well as the drivers 
that lead to the listed challenged. The following section will outline the way each of the five 
main challenges are given attention within the Art. 10 reports, namely through the reasoning 
provided by the MS.  

The challenges can be summarized into five main categories and further addressed one by 
one through recommendations and/or solutions cited by the MS themselves: 

1.  Decreasing  sink/forested  area  or  significant  period  of  one  or  more  of  the  LULUCF 
sector being a source (DK, AT, BG, CY, FI, HU, IE, LV, LT, MT, NL, SK, and ES) 

2.  Mature forest stands (EE, IE, LV, SI, DK and SK) 

3.  Data fluctuations and gaps (BE, FI, EL, LU, MT, PL, SI, and FR) 

4.   Abandoned land (particularly in CEE countries) (EE, LV, MT, HR, and LT) 

5.  Nutrient management problems leading to unproductive soils (EE, MT, PL, and ES) 

16.6.1. Decreasing or stagnant sink 

In AT, cropland has been a net sink since 2000 and yet in 2016 has become a net source. This 
is  a  similar  problem  that  can  be  seen  in  BG  where  LULUCF  is  a  sink,  but  the  potential  to 
remove carbon has been steadily decreasing. Many countries have experienced decreases in 
their forestland and in DK the forestland recently has become a net source of 402 kt CO₂eq 
(the entire LULUCF sector is a source for DK in 2018). Between 2013 and 2017, deforestation 
exceeded  afforestation  in  NL resulting  in  a  net  deforestation  in  the  country  during  this  time 
period; similarly, FI saw a slight decrease in forested area due to land use change. Both NL 
and  FI  have  significant  LULUCF  PaMs  that  should  have  lasting  impacts  on  their  land  use 
sectors, yet it is still difficult to maintain the land area due to high land prices or competition for 
land (NL). As has been mentioned above, many smaller countries with high urbanization are 
plagued by land area issues such that afforestation is a trade-off for productive arable land.  

The decreasing or stagnant sink as mentioned in almost half of the MS has several connections 
across  the  MS  reports  analysed  herein.  In  CY,  the  sink  has  been  decreasing  due  to  an 
attributed  conversion  of land  to  cropland management  in  the  early  2000s.  In  FI,  decreased 
afforestation is directly tied to the halting of state subsidies in 2008 that provided payments for 
farmers willing to forest their arable lands. In addition, FI cites the need to afforest on organic 
soils but specifies that the emissions would not be large enough to see any real results. Instead 
of afforestation, the blocking of drains on these lands as well as afforestation with species that 
can  grow  in  wet  conditions  could  increase  the  removals  from  forestland.  In  NL,  net 
deforestation  is  due  to  the  fact  that  the  fight  for  land  in  the  country  is  high  and  therefore 
production on arable land overtakes any real push for afforestation. 

As is clear from several MS' PaMs that were established before 2000 or in the early 2000s, 
there is less focus on environmental management. These types of policies result in outdated 
management practices as they never undergo an overhaul that is strong enough to see any 
change. The need for brand new policies in the LULUCF sectors is necessary for the sector to 
increase its capacity for carbon removals.   

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16.6.2. Mature forest stands 

One of the main causes of a decreasing sink in forest land, is the ageing of EU forests: mature 
forest stands are slowly becoming less efficient with regard to carbon removals. This was cited 
explicitly in four reports, and is a common problem for forest lands and a crucial barrier to the 
sector's ability to be a sink; forests require attention and a time investment to grow back and 
regain their potential. This challenge goes hand in hand with the heavy reliance on forests in 
MS  to  balance  the  emissions  that  result  from  cropland  or  grassland  management.  Shifting 
attention  to  the  potentials  of  cropland  in  partnership  with  forestry  or  conservation  (agro-
forestry, buffer strips) could lower the pressure put on forestlands. 

In DK, mature forest stands are part of the reasoning behind the decreasing sink of forestland. 
DK specifically outlines how younger trees are needed to regenerate the old forests. Even with 
decreasing  emissions  from  cropland,  the  forestry  sector  in  DK  is  not  efficient  enough  to 
counteract these emissions and is a source. Yet DK is a country which pays particular attention 
to wetlands and their potential for carbon removals and is a standout MS in this regard. In SK, 
the  forest  age  (on  average  80  years)  is  also  due  to  ownership  fragmentation  making 
management  a  difficult  objective  on  this  type  of  land.  In  IE,  an  increase  in  recent  years  of 
harvest rates and a shift in the age class structure under standard silvicultural assumptions 
and rotation ages are the reason of the projected peak of removals from afforestation.  

Many PaMs in SI already address the issue of mature forests and in general tackling this issue 
is a long-term process that may cause net emissions at the start. This is clear from LT, where 
a reform for the forestry sector was established at the onset of their independence but with a 
focus on private ownership and management. The result was an inefficient policy that did not 
put effort into the replanting process such that forest areas are now overly mature. Policies 
take a long time to set in, so this should be taken into account when establishing new PaMs or 
initiatives in the MS. Many of the solutions that have potential to improve forest age problems 
are already reflected heavily in the PaMs presented in the MS.  

16.6.3. Data gaps and fluctuations 

Data and monitoring of the LULUCF sector has been a prominent problem driver within the 
sector and mentioned implicitly or explicitly in eight of the Art. 10 reports. In some cases, data 
on past emissions fluctuate wildly from one year to the next; in SI, there was a 6,200 kt CO₂eq 
increase from forestland between 2013 and 2014 causing an overall net emission of 900 kt 
CO₂eq in 2014. According to PL, the projected removals from afforestation are supposed to 
decrease by nearly 2,000 kt CO₂eq between 2018 and 2019 (from around -3,000 to -1,847) 
with no clear reasoning behind the drop. In EL, there is a lack of data on relative stock change 
factors;  carbon  stock  changes  have  been  assumed  to  be  equal  to  zero  for  the  cropland 
remaining cropland category and there is also no data on certain activities such as burning. 

In general, the reports are lacking with regard to the certainty of their quantitative data and 
each  MS  employs  a  different  methodology  and  different  sources  for  land  use  and  GHG 
emission determination. Several MS employ, for example, the CORINE land cover data base 
(CY, EL, MT, IT, IE), while some rely on their Land Parcel Identification Systems (LPIS) which 
are required as a critical source of data under the CAP. Discrepancies across data sources 
can also hinder comparability between the MS as well as result in inaccuracy in the data. 

In RO, the problems with inaccuracy are addressed in their own development of a new Organic 
Soil  Map  which  contributed  to  recalculations  over  the  entire  1989-2019  time  series.  These 
types of re-estimations are common in MS as reference levels are altered, for example, yet not 
many MS are active in developing and finding new forms of data, unless required by the EU. 
The increased inclusion of LPIS, as it is required for farmers under CAP, signals the potential 
that  the  EU  has  in  influencing  the  MS  actions  in  data  management  and  use  of  common 

285 

 
 
platforms.  For  forestry,  FI  has  a  high  fluctuation  in the  forest  land  category  but  this  can  be 
attributed to changes in the international market. Lack of data in MT is being tackled through 
the nitrates database where farmers are now required to map their land area. This mapping is 
still  in  progress,  but  could  contribute  to  better  data  within  the  country  and  surrounding 
geographies.  

Solutions  to  data  problems  can  be  partly  combatted  through  a  farmer  database  where  the 
potential benefits are explicitly stated (in partnership with RDP's knowledge transfer). Using 
these types of databases can start with simple information such as fertilizer use and land area 
and then upscaled to include information that can then be utilized further in improving LUUCF 
actions on the EU level.   

16.6.4. Abandoned  land  in  Central  and  Eastern  European  (CEE) 

countries 

Another significant challenge that is common across the MS, but primarily seen within the CEE 
countries, is abandoned and then mismanaged land. Understanding geographic challenges is 
necessary for improving the LULUCF sector as some solutions or attention can be directed 
into certain areas and may have a stronger effect than in across the rest of the EU. In four of 
the  CEE countries (EE, LV,  HR,  and  LT)  the  occurrence  of  post-Soviet (LV,  LT  and  EE)  or 
post-War (HR) land abandonment due to the opening of markets caused degraded land to be 
overtaken by natural regeneration. Due to insufficient planning in EE, the primary species that 
regrew in the abandoned land was grey alder wood, a tree species that is less economically 
or ecologically valuable than another species that may have been selected if regeneration had 
been state planned (i.e. spruce or broad-leaved species). In the case of LT, the transition to 
independence  in  1991  resulted  in  a  forest  are  that  was  poorly  accounted  for  due  to  the 
disregard for small, private forests.  

In CEE countries this issue has been explicitly stated so the awareness of the problems in their 
abandoned  lands  is  clear.  The  problem  solving  for  this  issue  comes  with  a  necessary  and 
broad overhaul of the areas that have been affected in order to maximize their potential. In 
many  cases,  the  natural  regeneration  of  land  with  grey  alder  wood,  for  example,  is  also 
connected to mature forests due to the fact that these forests have been growing unmanaged 
for over 30 years. HR has dedicated its entire national forest programme to improving the forest 
stands that grew back after the post-war period. This type of understanding is highly useful for 
development of future policies, as there is no one-size-fits-all solution.   

While  the  opening  of  markets  and  a  reduction  of  pressure  on  local  farmers  is  a  positive 
development for rural economic development, the ecological effects are important to consider 
as well. While the RDP in CAP Pillar II has made an initial attempt to cross-cut these objectives, 
the weight is on boosting rural incomes with a sub-focus on environmental management. This 
is not the case for the post-2020 CAP; environmental objectives will take the forefront for the 
new CAP and the MS' Strategic Plans. In some ways, the requirements through EU directives 
and regulations in the current sphere and in the Green Deal will prohibit land abandonment in 
this regard. 

16.6.5. Nutrient management  

The final challenge that was commonly cited by the MS was nutrient management problems 
leading to unproductive soils. As many of the Art. 10 reports listed the Nitrates Directive or the 
Water Framework Directive, this is in part already one of the main considerations for mineral 
soils in the MS. Protection of water bodies and retaining nutrients in agricultural land is often 
at the forefront of MS' PaMs. Some MS also mentioned the need for nutrient management to 
protect wetlands, for example. In MT a major issue has been the protection of wetlands that 
are located in proximity to agricultural areas and also within recreational parks where overuse 

286 

 
 
has caused erosion in some areas as well. Also, when land is degraded or poorly managed, it 
may be abandoned and left to overgrow. Both MT and LV mentioned this as a broad issue that 
should be considered when planning afforestation or revegetation in degraded land areas.  

In DK, there is a specific target to have 380,000 ha of catch crops in 2021 to reduce nitrate 
leaching. The country has also put significant funding into research on organic soils, including 
the potential for biochar to help soil store carbon. BE used to be one of the few countries that 
measured SOC, yet stopped in recent years due to its complexity. PL's understanding of its 
own soils being highly acidic has fuelled a number of PaMs in the country. LT also specifies 
ways in which its cropland is inefficient, namely through usage of outdated technologies, lack 
of proper machinery, unfavourable farm structure and a low level of producer co-operation.  

Nutrient  management  will  potentially  be  upscaled  in  the  upcoming  CAP  Strategic  Plan  for 
2023-2030. More focus on biodiversity as well as use of various types of AECMs will increase 
nutrient management in the entirety of the EU. CAP is currently the main measure employed 
across  MS  so  this  will  have  broad-reaching  agricultural  management  potential.  In  addition, 
improving SOC measurement on a wide scale will result in more accurate nutrient information 
as well as understanding of the PaMs that work best. For example, PL has done extensive 
research into tillage management as well as understanding how reduced tillage or no-till could 
impact its soils. This has larger effects on the understanding of LULUCF overall. The variability 
between the state of soils in the different MS also means that their PaMs should reflect this.  

16.7. Conclusion 

The Art. 10 reports from the MS provide a necessary look into the LULUCF sector in the EU. 
While there are many MS with highly effective and innovative LULUCF policies, there is still 
room for improvement at the EU and the MS level. EU climate policy through the Green Deal, 
for example, has made significant strides in its attention to the land-use sector and its role to 
climate neutrality. There are several ways in which the Art. 10 reports can set the path for a 
continued focus on LULUCF. One of the main strategies going forward is the new post-2020 
CAP that will be in effect starting in 2023. The CAP envelopes a majority of the agricultural 
PaMs cited across the MS and is a vital source of finance. With the new CAP's objectives of 
improving  attention  to  climate  action,  there  could  be  a  distinct  change  in  the  way  that  MS 
manage their cropland. 

The 24 final reports submitted within the accounting period to 2020 vary in terms of substance, 
specificity and policy-level. After the submission of the mid-term reports and the assessment 
that  followed,76  an  outline  for  the  Art.  10  reports  was  proposed  in  order  to  improve  the 
consistency  of  the  reports'  content.  However,  due  to  the  heterogeneity  of  the  MS  and  the 
complexity of the LULUCF sector, it was difficult to implement a strict requirement on how data 
on PaMs should be presented, with the consequence that reports do not contain the same kind 
of information. 

Focussing instead on the types of actions that have the most uptake across the EU can help 
paint  a  picture for  the  sector  going  forward.  Nutrient,  tillage  and water  management,  forest 
management,  and  biodiversity/conservation  measures  were  the  most  common  type  of 
intervention among MS. Forest management interventions typically were cited within the scope 
of  improving  timber  production  and  sustainable  harvest,  indicating  a  strong  tie  between 
economic objectives as well as environmental ones. Nutrient, tillage and water management 
PaMs  were  almost  entirely  CAP  financed,  most  often  through  RDP.  Again,  the  intersection 

76 Paquel, K., Bowyer, C., Allen, B., Nesbit, M., Martineau, H., Lesschen, J. P., & Arets, E. J. M. M. (2017). Analysis of LULUCF 
actions in EU member states as reported under Art. 10 of the LULUCF Decision: final study. Institute for European Environmental 
Policy IEEP. 

287 

 
 
                                                 
between income improvement and climate action is a clear pathway to effective PaMs within 
the MS.  

The main conclusion from this summary of the Art. 10 reports, is that through key attention to 
the challenges laid out above, the EU LULUCF sector can aid in the balancing out of emissions 
by  2050.  It  is  already  clear  from  the  PaMs  presented  that  many  MS  are  going  above  and 
beyond and have a very keen  understanding of the sector. Through short-term actions such 
as  strengthening  data  collection  the  sector  as  well  as  implementation  of  focussed  PaMs  in 
certain geographies (i.e. CEE countries), the sector can reach its full potential.  

288 

 
 
 
 
Appendix A Legal Background 
The LULUCF Decision (Decision no 529/2013) entered into force in May 2013 and  was the 
first  piece  of  legislation that  introduced the  LULUCF sector  into  EU  climate change  policy. 77 
The Decision set up the rules for reporting and accounting of the emissions from the sectors 
that  MS  were  obliged  to  follow.  However,  targets  or  further  interlinkages  with  other  climate 
change  polices  were  not  introduced.  The  Decision  was  prepared  as  a  basis  for  the 
development  of  the  UNFCCC  stage  and  at  the  COP  18  in  Durban  the  new  method  for 
accounting the LULUCF for Annex I countries was adopted.  

The Decision set a reporting obligation for MS. Article 10 requires MS to submit three reports 
covering  the  information  on  their  current  and  future  LULUCF  actions  to  limit  or  reduce 
emissions  and maintain or  increase removals  resulting from the  LULUCF activities  such  as 
afforestation,  deforestation,  forest  management,  cropland  and  grassland  management,  and 
wetlands management. The Commission provided the indicative list of elements that MS may 
include into the report.  

According  to  paragraph  4  of  Art.  10  of  Decision  no  529/2013,  MS  are  required  to  submit  a 
report at the onset, halfway through and at the end of each accounting period describing the 
progress in the implementation of their LULUCF actions. The reports summarised herein are 
the final reports covering the accounting period 1 January 2013 to 31 December 2020.  

77  European  Commission,  (2013).  Decision  No.  529/2013  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 
those  activities.  https://eur-lex.europa.eu/legal-
relating 
content/EN/TXT/?uri=celex%3A32013D0529  

concerning  actions 

information 

to 

289 

 
 
 
 
                                                 
Appendix B Report Methodology 
For this report, the methodology involved three steps to produce a meaningful summary: 

Step 1: Creating a 
consistent analytical 
framework

Step 2: Developing 
a LULUCF action 
matrix  

Step 3: Producing a 
synthesis report

As a first step, the Art. 10 reports were read and analysed by multiple members of the project 
team  in  order  to  create  a  consistent  framework  for  analysis.  The  team  created  a  matrix 
containing information from all 24 reports. The objective was to provide a consistent regulatory 
analysis such that the MS could be cross-compared and that the report can be decomposed 
to its most basic elements. 

Due to the fact that three MS (DE, PT, and CZ) did not submit their reports to the European 
Commission, it was agreed that for the purpose of this study and maintaining the coherence 
of  the  report,  data  from  the  mid-term  evaluation  report  would  be  used  to  extrapolate  the 
information for the countries that did not submit their final Art. 10 report. The information from 
these MS can be found in section 16.4.5.  

The development of the matrix is the second step for the analysis. The elements outlined in 
the  matrix  highlight  the  MS'  LULUCF  policies  and  measures  (PaMs).  These  elements  are 
mainly  qualitative  with  some  quantitative  data  on  emission  estimates  as  well  as  funding 
amounts. The main elements for the PaM analysis are: 

  Level of attention to forestry, agriculture and/or wetlands; 

  Mention of Common Agricultural Policy (CAP) measures; 

  Sources of finance; 

  Attention to reporting and accounting; 

  Linkage to National Energy and Climate Plans (NECPs) for 2020; and  

  Challenges and solutions. 

The final step was the extraction of information on LULUCF in the EU and the production of 
this synthesis report. The report presents PaMs that are connected to a type of intervention in 
forestry  (afforestation,  protection  against  natural  disturbances,  deforestation),  nutrient 
management,  grassland  and/  or  grazing  land  management,  biomass  for  bioenergy,  and 
biodiversity and conservation. This method provides an overview on the most common ways 
that MS take action in LULUCF and set the basis for the third report analysis. 398 different 
PaMs were found across the 24 MS. 

290 

 
 
 
 
 
 
 
 
 
 
17.  Final Presentation 

291 

Reviewing the Contribution of the Land Use, Land Use Change andForestry sector to the Green DealContract Number No 340201/2020/832904/ETU/CLIMA.C.3 implementing framework contract No CLIMA.A4/FRA/2019/0011Final project presentation REVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL2The ProjectREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL 
 
 
 
292 

The project synopsis 3›Title: “Reviewing the Contribution of the Land Use, Land Use Change and Forestry sector the Green Deal”›Consortium: COWI in cooperation with Technopolis, Exergia and Silvestrum ›The goal: Reviewing how the LULUCF sector contributes to the European Green Deal ›Duration: 11 months ›Outcomes:  ›SevenTopic Notes ›4 online Workshops  ›Open public consultation analysis ›Assessment of policies and measures reported by Member States intheirreports (accordingto art.10from the LULUCF Decision 529/2013)REVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEALProject Experts 4Asger Strange OlesenTomasz KowalczewskiValentin Bellassen (external)Peter Sølling JørgensenKarolina KenneySamuel LeistnerSusanna GionfraNeil BirdMoritz von UngerDerek EatonREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL 
 
 
 
293 

List of project deliverablesREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL5Task 1Synthesis report7 Topic notes Task 2Analysis of the feedback to the Inception Impact AssessmentOpen Public Consultation Synopsis report4 on-line WorkshopsTask 3Matrix with Article 10 Policies and Measures analysis  Summary reportTask 4Final  presentation of  project outputs6Background: Settingthe ContextREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL 
 
 
 
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Background: EU Climate Policy 7›The existing ambition of the 2030 climate and energy package sets up a reduction target of -40% in 2030 compared to 1990. ›The LULUCF Regulation is a key element to achieve this reduction target. ›In December 2019, the newly elected President of the European Commission presented an even more rigorous policy initiative with an overarching objective to make Europe climate neutral in 2050. ›The European Green Deal sets a minimum target of reductions of GHG emissions to at least 50% and toward 55% by 2030 compared to 1990.EU ratification of PADecember 2015Paris Agreement adopted4 Oct 2016PA enters into force2 Nov 2016October 2018UN IPCC releases 1.5 degree special report28 Nov 2019EU Parliament declares climate emergency 11 Dec 2019The Green Deal7 Oct 2020Proposal for a European Climate Law7 Oct 2020EU Commission adopted proposal for climate law REVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEALBackground: LULUCF Regulation Timeline  8›This Project aimed to look in depth into the LULUCF regulation and find the potential reduction capacity to be achieved by amending the regulation.  ›DG Climate Action has initiated the process of revising the LULUCF regulation with the aim to enhance the long-term contribution from the sector towards achieving the climate neutrality target for 2050 ›The European Commission has initiated the revisions of other climate change-related policy acts through the Impact Assessment (IA) ›The revision is necessary to find the most effective set of policy tools required for achieving the higher net emission reduction target ›Part of Fit for 55 Package 19 Oct2020Commission Work Programme for 2021 adopted17 Sep 20202030 Climate Target Plan published29 Oct202026 Nov2020Feedback period on inception Impact Assessment5 Feb 2021July2021Expected publication of LULUCF Reg revision with IAOpen public consultation for LULUCF RegulationREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL 
 
 
 
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The path to climate neutralityREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL9The current LULUCF accounting rules only require MS to preserve the carbon sink at the same level as it would be if the management practices applied before 2009 were continued. EU climate change policies creates a possibility to use the LULUCF allowances surplus to comply with the obligations set by the ESR such flexibility does not create a strong incentive for additional measures to increase the carbon sink. The agriculture sector is a source of emissions from different areas of its activityThe aim is to propose a more integrated climate approach for the land sector by linking the emissions caused by land management and other emissions released by agriculture production.This could lead to the establishment of a climate-neutral land sector already in 2035. Project results 10›Topic notes/themes covered:›7 main areas of investigation ›4 key divisions›Examination based on:›Revisions on available literature›Expert views  ›Outcomes from open public consultations›MemberStateLULUCFreports (final submissionsbasedon art. 10 of LULUCF Decision)›FourOnline Workshops Vision 2050SoilsForestsVisionaryProblem OrientedReporting & Accounting Policy FrameworkAccountingReporting FlexibilitiesMissing markets Impact AssessmentREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL 
 
 
 
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11Project Results: ForestryREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEALProblem Oriented: Forests12›EU holds annual forest sink of between 350,000 and 400,000 kt CO2.›Forest sink has been decreasing across the EU by 12,000 kt CO2/yr.›A reversal of the trend (towards advanced sink capacity) is key in achieving 2050 targets.23-06-2021REVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL 
 
 
 
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Forests: Key drivers behind sink decrease13›Lack of incentives for forest owners to increase carbon sink  ›Lack of funds for maintaining carbon sink in forest ›The slowing growth in the EU’s forest carbon sink is mainly due to increased harvests for forest-based bioenergy production (decreased by 12% from  2013),›Reduced afforestation activities (decreased by 4% from 2013)›The decrease in afforestation is most prevalent in MS with larger amounts of agricultural land›EU’s ageing forests continue to sequester carbon, but at decreasing rate.REVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEALFuture of carbon sinks in Forests14›Current and planned measures are not sufficient to halt and reverse the   decreasing trend.›The need for bioenergy can be expected to increase until enough renewable alternatives are offered broadly in the EU. ›Although EU forest sink helps  to mitigate the climate change effects so far, it is unclear whether this will continue in the near future due to increased  number of natural disturbances caused by the changing climate REVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL 
 
 
 
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Open public consultation (OPC): Forests IREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL15›Afforestation/reforestation was listed as the most important focus area for EU to enhance and protect carbon stocks2%3%24%3%7%7%7%7%5%9%14%7%9%14%11%1%16%21%23%21%15%24%17%18%29%27%18%36%23%30%27%5%48%39%21%33%46%25%39%68%0%20%40%60%80%Afforestation,reforestation, forestrestoration(209)Agro-ecology and agro-forestry(184)Bioenergy coupled withcarbon capture andstorage (BECCS)(188)Soil carbon increase inagricultural lands(181)Protection and restorationof wetland and peatlandecosystems(191)Grasslandmanagement(174)Carbon storage in long-lived wood-basedmaterials andproducts(200)Other...(95)Nr of observations 1422Q4. In which areas should the EU focus efforts to enhance carbon sinks and protect carbon stocks?not at all importantlow importanceneutralimportantvery importantOpen public consultation (OPC): Forests IIREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL16›The main drivers affecting forest sink in EU:›Conversion of carbon reach   land  -i.e. deforestation ›Unsustainable land management›Natural disturbances 3%15%27%26%19%9%27%15%12%15%15%14%18%16%24%3%29%13%20%29%27%12%16%10%27%19%13%17%27%18%13%10%30%39%27%14%9%45%19%62%0%20%40%60%80%Natural disturbances (weather events, fires, pest outbreaks…) that are caused or accelerated by climate change(206)Unsustainable landmanagement practicesimpacting carbon stocks andsinks(206)Increase in woodharvests(192)Slowdown in forest growthdue to their age(188)Slowdown in afforestationand reforestationactivities(186)Conversion of carbon-richland (deforestation, drainingof wetland or peatland),land take and soil sealing(expansion of built-up andartificial areas(203)Use of biomass for bio-energy instead of long-livedproducts(194)Other...(71)Nr of observations 1446Q1.Among the following drivers behind the decline of the land-based net carbon sink,which are the most important in your viewnot at all importantlow importanceneutralimportantvery important 
 
 
 
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Article 10 reports -Policies and measures (PaMs) related to Forests17›7 overarching types of interventions in forestry:1.Restoration of degraded land2.Afforestation/reforestation3.Conservation of organiccarbon 4.Protection against natural disturbances 5.Biomass for energy use 6.Substitute of GHG intensive materials with HWP7.Forest management ›Based on the Article 10 reports, forest management measures were the second highest reported PaM type›Mainly forest PaM were funded by  national forest polices ›Many PaMs related to promoting Harvested Wood Products as replacements to fossil-fuel based goods ›Conservation and biodiversity protection in forests enveloped mainly in Natura 2000REVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL18Project Results: SoilsREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL 
 
 
 
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Problem Oriented: SoilsREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL19›Central problem to the soil sink is lack of monitoring –identified in the project as the ‘most critical blind spot of land-related climate policy’›Drained organic soils are better monitored than mineral soil, yet only make up 5% of total land area, while also accounting for a majority of emissions›Reported area for mineral soils is estimated to be at most 37% of EU cropland›If soil carbon was properly monitored, additional emissions in order of 70 Mt CO₂/year could appear in all EU cropland areas.Reporting methods for soils20›Different MS use different levels/tiers to estimate the carbon content in the soils ›Tier 1 –typically ignores carbon stock changes›Many MS are still using this method  ›Tier 2 –applies an emission factor ›Best scenario is using country specific measurement-based emissions factor›Tier 3 –includes soil inventories or a soil model (e.g. Yasso, C-Tool)›Large uncertainty due to inability of models to reproduce recent trends›More information on reporting might be found in Topic Note 5 covering the inaccuracies and suggested improvementsREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL 
 
 
 
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Changes in soil carbon, excluding land-use changes211990201320182018-2013ktCO2ektCO2ektCO2ektCO2e% of 2013Forest mineral soils-38 761-40 867-42 573-1 7060.5%Cropland mineral soils-3 414-10 924-9 6871 237-0.4%Grassland mineral soils665-2 549-3 062-5130.2%Organic soils111 09298 94296 441-2 5020.8%Total69 58244 60141 119-3 4831.1%Total LULUCF-255 038-324 315-262 99661 318-18.9%›Reported changes in soil carbon –excluding land-use changes –are smalldecreased by 29 MtCO2/yr. between 1990 and 2018’›Changes could be much larger as the bulk of emissions and removals in these categories currently are unreported.›Reported changes in soil carbon did not contribute much to the 18% decrease in the reported total LULUCF sink between 2013 and 2018. REVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEALSource: Own production based on UNFCCC data.Key drivers of soil carbon changes that are not captured byGHG inventoriesREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL22›In the absence of a regular soil inventory or a valid Tier 3 model, a Tier 2 approach, monitoring the areas of key practices impacting soil carbon, is a suitable way of reporting soil carbon change›Key practices for which research indicates significant potential for soil carbon build up:AgroforestryCoverCropsSubstitutingfoddercropsWetland/peatlandrestorationBiophysical potential is coarsely assessed at an additional 200-300 MtCO2/yr.Current area (Mha)Carbon sequestration potential in the soil (MtCO2/yr.)Pellerin et al. 2019) upscaledLugato et al. (2014)Greifswald Mire Centre (2020)Arable agroforestry0.460Cover crops7.59446Grass/Maize substitutionN/A2546Wetland restorationNegligible 109 
 
 
 
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Status quo & priorities for futureREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL23›Soil carbon is expensive to monitor. ›In the absence of strong policy incentives to monitor and increase soil carbon storage, there is an important shortfall of soil carbon data, both at EU and MS level                 soil carbon is the blind spot of LULUCF policy. ›Large carbon gains and losses go unreported. ›Unreported losses could be around 70 MtCO2/yr. in croplands and unreported gains could be around 15 MtCO2/yr. in grasslands and 45 MtCO2/yr. in forests, but data shortage makes these estimates very uncertain. ›The share of EU forest area for which soil carbon is being accurately reported is at most 33%, and more likely close to 24%. ›The picture is even worse for grasslands and croplands. Improve monitoring Step up incentives towards practices with a large carbon storage potentialOpen public consultation: Soils24›Soils were mentioned several times in the LULUCF OPC, most prominently as EU focal area for enhanced efforts›The open comments section also had an emphasis on soils being central to climate solutions2%3%24%3%7%7%7%7%5%9%14%7%9%14%11%1%16%21%23%21%15%24%17%18%29%27%18%36%23%30%27%5%48%39%21%33%46%25%39%68%0%20%40%60%80%Afforestation,reforestation, forestrestoration(209)Agro-ecology and agro-forestry(184)Bioenergy coupled withcarbon capture andstorage (BECCS)(188)Soil carbon increase inagricultural lands(181)Protection and restorationof wetland and peatlandecosystems(191)Grasslandmanagement(174)Carbon storage in long-lived wood-basedmaterials andproducts(200)Other...(95)Nr of observations 1422Q4. In which areas should the EU focus efforts to enhance carbon sinks and protect carbon stocks?not at all importantlow importanceneutralimportantvery importantREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL 
 
 
 
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Article 10 reports -Policies and measures related to soilsREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL25›Based on the third submission of Art. 10 reports by MS, most reported measures related to mineral soils ›Many of the main measures for soil fall under the Pillar II of the Common Agricultural Policy (e.g. Rural Development Programme measures such as nutrient management, reduced tillage, cover crops)›Research initiatives are also becoming more common across the EU particularly in measuring carbon in organic soils:›France: 4 for 1000 "Soils for Food Security and Climate" ›Denmark: Accounting for emissions from organic soils 26Project Results: Missing MarketsREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL 
 
 
 
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Missing Markets: Expert viewsREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL27•No revenue from climate mitigation (or other ecosystem services) •No value assigned to carbon assets•No clear price signals•High costs, high debt limits risk appetite•Exposed to unabated climate risks •Forest ownership structure•Long rotation in forestsProblem drivers:•European farmers maintain GHG intensive agricultural practices•Low uptake of carbon farming practices in the EU•The unmonetized carbon asset is depleting•Unallocated cost and risk of reversals•Landowners show limited responsiveness to market incentives•Low investment levels •Externalities are not or only partially monitored and quantifiedMain problems:Boost willingness of European landowners to respond to climate incentivesREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL28›GHG emissions and carbon loss in the agricultural and land use sectors is an unpriced side-effect or negative externality.›Under the current land governance in the EU and with current pricing strategies in the agricultural markets, farmers can only earn revenue from their produce. ›What about sequestered carbon or biodiversity? Payments for ecosystem services›Eight drivers relating to the lack of internalisation of externalities and pricing of the climate mitigation benefits at the level of the individual land ownerNo revenue from climate mitigation (or other ecosystem services). No value assigned to carbon assets, and hence no incentive to protect. No clear price signals from consumers and other end users. High costs and high debt limits farmers’ risk appetite. Farmers and foresters are exposed to climate risks to their business, which are only partially abated.Farmers (less so forest owners) are not investable for private or institutional investors and hence have limited access to e.g. climate, restoration, conservation or biodiversity finance. A substantial part of forest area consists in small parcels owned by multiple small owners.Forest rotations range from 40 to 150 years, intrinsically conferring a substantial inertia to forest management and its responsiveness to price signals. 
 
 
 
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Carbon Farming -shy beginnings REVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL29›Climate externalities are not internalised so there is no clear, common and unionwide market signal from financial service providers, food industry, retailers, commodity traders or consumers that incentivise reduction in GHG emissions, sequestration of carbon and protection of the already existing carbon stock (or biodiversity). ›When making management, pricing and financing decisions, any landowner will seek a balance between incentives on offer, feasibility of the solution, regulatory constraints and own beliefs and willingness. ›There are only few and scattered carbon farming pilots or systems in place that offer a transparent, farm level incentive for climate action in the land use sector.Commission sets the carbon farming initiative in motion | Climate Action (europa.eu)Carbon farming: Workshop resultsREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL30Workshop 4“Carbon farming in the CAP Strategic Plans”Workshop 3“Gathering ideas on the next steps for carbon farming”Biodiversity and ecosystem services should be central to a carbon farming programmeFarmers should be provided with adequate advisory services to encourage uptake High quality MRV is needed beyond Remote SensingThe connection between the CAP and carbon farming was met with apprehension by many stakeholders and is not the ideal solution Spreading knowledge about carbon farming plays a central role in highlighting the financial and environmental benefits ›The workshops confirm the wide interest in Carbon Farming concepts in farmers/ farm organisations as well as in research institutions and national authorities. ›The discussions strongly indicated the positive pressure for further structuring an initiative and provide a basis for communication on Carbon Farming, expected to be published by the European Commission in Q4 21.  
 
 
 
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Art. 10 Reports: Member States’ attention to Carbon Farming andpayments for ecosystem services REVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL31›Within the art. 10 reports, carbon farming was not a common theme across the Policies and Measures presented by the MS. On the other hand are many subsidy and direct funding programmes that provide payments for ecosystem services. ›One standout measure was the Label Bas Carbone voluntary carbon market programme in France that provides payments for carbon sequestration for afforestation, hedges, etc.›Germany also reported multiple measures with top-down payments for environmental practices. ›One of these is a Forest Climate Fund to promote measures to maintain and expand CO₂ reduction potential in forests.›Poland reported on a ‘Direct Payments’ measure outside of the CAP that provides farmers with direct payments for afforestation, ecological management and require that they comply with the ban on burning of agricultural land. Ecosystem Services (e.g. nutrient cycling, soil health, carbon capture, biodiversity conservation, erosion reduction)Payments/compensation/incentives (e.g. direct payments, technical assistance, payments for carbon credits) Financingthe land sector: OPCREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL32›In the OPC, subsidies were considered an important source of finance for financing climate action. ›In the open responses a few alternative solutions were raised:›A carbon tax on imports›Polluter pays principle should be applied›Many stakeholders also expressed views against offsetting emissions via credits to not lower emission reductions in other sectors8%14%8%20%11%5%23%8%11%0%14%24%23%20%24%26%23%29%23%8%47%14%33%26%57%0%20%40%60%80%Subsidies (e.g.Common AgriculturalPolicy or nationalpolicies)(188)Higher product prices(e.g. via labelmechanisms thatallow producers to seta higher price)(180)A dedicated EU ornational fund(181)Revenues from sellingland-based carboncredits(183)Other...(79)Nr of observations 811Q5. How should more ambitious climate action in land-related sectors be financed? not at all importantlow importanceneutralimportantvery important 
 
 
 
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33Project Results: Vision 2050REVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEALVision for 2050: Expert viewsREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL34›The land use climate policy arena for the coming years will encompass a triple climate purpose:1.Reducing greenhouse gas (GHG) emissions to the absolute minimum 2.Producing biomass as biomaterial substitute and as feedstock to generate bioenergy3.Generating sufficient carbon sink capabilities and “land mitigation units” (LMUs)›Climate policy tools will shift their attention to ›(i) boosting biomass production and negative emissions, and ›(ii) providing an effective system that incentivises negative emissions responding to     the demand 
 
 
 
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Vision for 2050: Workshop outcomesREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL35›The two main components of a climate policy framework in 2050 would be carbon removals framework on the one hand and a future version of the Emission Trading Scheme on the other›In 2050:›Climate action is business for farmers ›Data and low-cost digital technologies are fully adopted in the land sector›As emissions have been significantly reduced, climate Policy is increasingly about not only reducing emissions, but also managing the balance of emissions and removals›Path to 2050 wont be low-cost transition and that funds need to be mobilised from different sources, such as from polluters, from the CAP budget of from better use of the revenues from emission trading systemsBeyond 2030: The road to 2050REVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL36›From the Art. 10 reports, MS reported their visions for national policies and measures towards 2050 through broad climate and strategy plans. ›Another key update in the coming years will be the implementation of the post 2023 CAP and the requirement for MS to submit CAP Strategic Plans. ›The EU’s land sector in 2050 will have to account for roughly 500 Mt CO₂ from the LULUCF sector. ›Achieving net-zero emissions to 2050 will imply strict bans of drainage of agricultural and forestry soils as well as restoring wetlands (encompassing 2030 and 2040 along the way).  
 
 
 
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37Project Results: ReportingREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEALReporting: Expert viewsREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL38•LULUCF MRV is resource intensive and requires a diverse skillset•MS do not have strong incentive to improve quality of reporting•Data scarcity makes soil carbon the blind spot •The economic, reporting and policy sectors are not corresponding Problem drivers:•Lack of data, timeseries and funding means that key sources/removals are not monitored•Insufficient granularity of data•Low uptake of real time digital data tools means that reporting system costs remain high•Stakeholders are frustrated that the contribution from the sector is not visible•Administrative costs and siloed processesMain problems:•Accurately monitor the contribution of all major sources of emissions and removals•Simplification and increased efficiency in monitoring and reporting •Make the entire contribution of sector and sub sector visible at a glanceGoals: 
 
 
 
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Reporting of the GHGs39›LULUCF monitoring is resource-intensive and requires a diversity of skills.›Incentives for MS to prioritise the necessary investments, resources and attention, to bring LULUCF inventories to the necessary level for full and high-quality removal reporting are insufficient.›The correspondence between sectors as defined in GHG inventories and economic sectors is not straightforward.›Scarce data and insufficient reporting requirements make soil carbon the blind spot of LULUCF reporting, accounting, policy development and target settingTier 1 -default dataTier 2 -country-specific dataTier 3 -advanced methods and detailed country dataREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEALCurrent process of GHG inventory report creation REVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL40›The red dotted lines show the scope of reviews, and the blue lines show some examples of the back-tracing process in this assessment. ›In this case, one fluctuation can be traced back to the “sources” section of “Activity data”, and another fluctuation can be traced back to the “QA/QC, approval, and submission” part. ›The process is repeated yearly.  
 
 
 
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Main challenges in GHG Reporting  REVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL41›The lack of data, timeseries/data trials, and funding means that key sources of emission and removals are not monitored by many MS.›There is insufficient granularity in data sources to satisfy conditions for land holding or parcel level reporting (and obligations).›The low uptake of real-time, digital data tools means that reporting system costs remain high and that data processing remains manual and labour-intensive.›Lack of incentive to improve the reporting systems.›Stakeholders are frustrated that the “just and entire” contribution of their sector is not visible.›High administration costsIndependent/international data produced by different data communities (e.g. remote sensing, flux net, modelling) could potentially be included in the reporting massNeed for science to produce emissions factors that are reflecting mitigation measures on the ground, to make inventories ready for tracking mitigation action and setting more incentives for management changes Need for reporting to be complete and accurate enough to reflect all changes in time and space. Use a proxy inventory based on best available data, as it exists for other sectors. Potential Focus AreasPotential solutionsREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL42›Experts proposed three groupings of solutions for identified problemsAccurately monitor the contribution of all major sources of emissions and removals Mandatory Tier 2 approach, with a requirement to monitor the activity data (area) of key practicesMandatory, spatially explicit, tier 2 based on wetland inventoriesSimplification and increased efficiency in monitoring and reportingDevelop a benchmark EU-level soil inventory based on LUCASEstablish LULUCF reporting help deskMake the entire contribution of sector and sub-sector visible at a glanceIllustrate CRF tables with sectors and subsectors “at a glance”A step towards a bio-based products category*Project experts have proposed 20 solutions which are presented in the topic note.  
 
 
 
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Reporting: Workshop responses IREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL43Outcomes of surveys made during the technical  workshop on reporting, October 2020›More information from different sources is needed for tracking mitigation measures and progress, ›There is a great expectation and desire to employ the remote sensing and existing databases [LUCAS, LPIS] into GHG reporting. ›WARNING! if the GHG inventories do not have enough resolution and granularity to detect changes, then no change will be detected against the agreed baseline. REVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL44›There is an understanding of the need to increase the accuracy of reported data by engaging a Tier 2 approach, however respondents agreed that this could be done only above certain level. ›There is was no  indication given for which carbon stock should be obligatory for reporting under Tier 2. Outcomes of surveys made during the technical workshop on accounting, October 2020Reporting: Workshop Responses II 
 
 
 
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45›Remote sensing should be widely applied. However, for earth observation, the availability of data is limited. The 1990 and/or 2005 was suggested as a better starting point for availability of better-quality remote sensing data. Reporting: Workshop responses IIIOutcomes of surveys made during the technical workshop on accounting, October 2020REVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEALReporting: Workshop outcomesREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL46›We can observe constant innovations in the methodologies developed for carbon removals.›Some technologies are moving fast -but they are still not the silver bullets.›Farmer incentives are important.›Uncertainties are not always as important as efficiency of schemes. Carbon Action PlatformThe French certification frameworkIndigo’s remote sensingThe Australian OpenGeoHubIFEU fast navigation programWageningen’s tools  
 
 
 
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Reporting: Workshop outcomes and OPCREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL47›Majority of workshop participants see remote   sensing as a strong ally but only in combination with verification by land-based methods›Remote sensing is not seen as precise or developed enough to be used on its own›Horizon Europe needs to support research on the IPCC methodology development to ensure better data quality in the national inventory reports.›More precise emission factors and emission modelling would provide clear standards across MS.›Default half-life values for HWP in the LULUCF regulation should be revised as they do not reflect realistic half-life values. 56%45%34%26%23%22%0%10%20%30%40%50%60%Use high resolutionand wall-to-wallsatellite imagery toidentify where landuse changehappensReinforcebiodiversity,ecosystem andadaptationconsiderations intothe reportingrequirementsUse more preciseemission factors oremission modelling(i.e. tier 2 or tier 3)Other…Introduce newrequirements toreport estimates forall carbon pools andgreenhouse gasesMake the uptake ofup-to-date dataand advancedreportingmethodologies aprecondition forflexibilities with othersectorsQ10. Among these options to reinforce the LULUCF monitoring, reporting and verification (MRV) rules, which are your preferred ones?% of respondents to Q10 selected this answer…Article 10 Reports: MS expected actionsREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL48Outcomes of surveys made during the technical  workshop on reporting, October 2020›While reporting PaMs are less common across the MS, there are several that deserve attention:›DK will begin in 2021 to conduct research on emission factors for organic soils in order to improve the validity of emissions reported to the Greenhouse Gas Inventory (GHGI),›IE plans to include managed wetlands in the 2021 to 2025 commitment period.›RO's National Strategy for Sustainable Development includes activities related to traceability and data to ensure that tracking and data consolidation are at the forefront.›DE is also attempting to improve rules and reporting on grassland conversion. 
 
 
 
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49Project Results: AccountingREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEALAccounting: Expert viewsREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL50•LULUCF sector excluded for years and designed for accounting outside targets•Sector built on natural processes as opposed to anthropogenic •Inertia and time lag issues •Land sector is key to climate neutrality by 2050Problem drivers:•Accounting rules offer limited incentives•High complexity creates noise for decision makers and policy planning •Forest and wetlands accounting not compatible with 2050 climate neutrality reporting Main problems:•Strengthen MS level incentives to increase the LULUCF sink through accounting rules •Prepare accounting for 2050 and simplify rules in the transition •Prepare for transfer of incentives to land category or landowner levelsGoals: 
 
 
 
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The goal for accounting by 2050REVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL51›Target based accounting for all LULUCF categories = full transparency ›Abandon the reference level approach›Several options for target setting:›Target setting based on the Effort Sharing Regulation (ESR) fairness (GDP-based) criteria –Merging LULUCF with all other non-ETS sectors ›Target setting based on potential –Discussions on distribution of efforts between MS are on the basis of a simplified proxy for potential for each MS to store carbon in biomass and soil ›No targets?Potential solutionsREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL52SolutionsElaborated by workshopsChanges to LULUCF accounting rulesDebate between using a net-net vs gross-net approach, using a net-net approach comparing 2005 ESR emission with 2030 emissions The gross-net approach is also a possibility as the LULUCF sink in 1990 becomes irrelevant to consider the target for a country in 2030 vs 2050Increasing stringency of benchmarks for 2030Discussion of more stringent targets, e.g. for EU forestland (FL-FL)National targets for HWP, removal, land category, etc. FRL accounting improvementsProposal to facilitate use of pre-existing and published models and projectionsDiscussion on this regard on removing distinction between net-net and gross-net, this is an approach introduced by the KP Stratification Explicit threshold estimate biasMissed opportunity to use FRLs in national climate strategiesSuggested to enforce no backsliding Review processBenefits of Open Public Consultation [OPC] and exposure of FRLs to public scrutiny to enhance transparency Avoiding double counting and additionality issues of voluntary schemes or initiativesSuggested to set up an EU-wide registry for all mitigation outcomesSettle double counting terminology to ensure integrity of removals 
 
 
 
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Accounting: Workshop responses IREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL53›Most common response to this question was to apply gross-net accounting ›Second most common was a net-net accounting approach›In alignment with expert analysis of a combined approachOutcomes of surveys made during the technical workshop on accounting, October 2020REVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL54›In a simplified accounting framework, the consensus was to revise the cap on credits, e.g. from forests›The emissions and removals outside of the scope of the LULUCF Regulation was the second most attractive choiceAccounting: Workshop responses IIOutcomes of surveys made during the technical workshop on accounting, October 2020 
 
 
 
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Accounting: OPC ResultsREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL55›In both the LULUCF OPC and expert analyses a departure from the Forest Reference Level to a different accounting method was the most attractive option›Some respondents believe that the EU should continue to use the FRL concept, but harmonise the methodology across MS.›Also, some respondents believe the FRL approach should be discontinued in favour of comparing the net sink in existing forests to a historic baseline (net-net accounting).28%22%21%16%14%0%5%10%15%20%25%30%Other…No, take into account the entire net sink in existing forests, without comparing it to any baseline (“gross-net” accounting)Yes, continue to use ForestReference Levels, butharmonise themethodology to establishthem across Member StatesYes, continue to comparethe net sink from existingforests to a ForestReference Level which isbased on the continuationof past managementpracticesNo, compare the net sink in existing forests to a historic baseline (“net-net” accounting); such a baseline corresponds to a larger sink than the Forest Reference Level.Q9. In the current LULUCF Regulation, emissions and removals from existing forests are compared to a Forest Reference Level.  Should the EU continue with the Forest Reference Level concept?% of respondents to Q9 selected this answer (n=179)56Project Results: FlexibilitiesREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL 
 
 
 
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Flexibilities: Expert viewsREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL57•Overall uneven conditions across MS•Decreasing carbon sink•Lack of data•Mitigation potential and abatement costs•Changes in timeProblem drivers:•Low uptake of flexibilities •Non-permanence for sequestered emissions make removal units less valuable•Lack of incentive effects from EU climate policy framework for LULUCF•Low predictability with high fluctuations in the sink Main problems:•Mobilisesink and emission reduction potential in EU for 2030•Enhance cost-effectiveness of mitigation in the sectors covered by the LULUCF and ESR•To leverage policy initiatives through conditional access for strategic flexibilities•Alleviate suboptimal policy development arising from the uneven sink distribution in the EU•Prepare for and test larger scale sector and MS level flexibilities necessary in a 2050 scenario Goals:REVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL58Current state of flexibilities›Current state of flexibility flows (green arrows) between sectors and MS ›Under the ESR,MShave binding annualGHGemission targets for 2021-2030 for economic sectors that fall outside the scope of the EU ETS (but excluding LULUCF).›The role of flexibilities will become more pronounced as both ESR and LULUCF targets become more pronounced. 
 
 
 
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Stakeholder views on Flexibilities: OPCREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL59›Public authorities within the OPC wanted to strengthen the options for flexibilities within the ESR›In the open comments, the policy option to strengthen the flexibility with the ESR received the strongest opposition ›Many stakeholders wanted to fully remove any flexibility with the ESR and have a separate LULUCF target. ›The most often named reason why stakeholders opposed this option was that it would lead to inaction in the ESR sectors by enabling offsetting. ›It was also mentioned that instead, or in addition to flexibility with the ESR, LULUCF could be merged with the ETS to sell CO₂ credits stored in wood products on the ETS market. 60Project Results: Policiesand MeasuresREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL 
 
 
 
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Policies and Measures (PaMs) in LULUCF sector 61051015202530ATBEBGCYDKEEELESFIFRHRHUIEITLTLULVMTNLPLROSESKSIForest managementProtection against natural disturbances in forestsBiomass for energy useBiodiversity/nature conservation measuresRestoration of degraded landSubstitute of GHG intensive materials with HWP Afforestation and reforestationGrassland, grazing land and/or pasture measures Nutrient, tillage and water management Conservation of carbon in existing forests Organic farmingThe overview is based on final Article 10 reports submitted by the MS, within the LULUCF Decision (Decision no. 529/2013). REVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEALPaMs and Intervention TypesREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL62›Most MS have overarching forestry policies that promote the incomes of forest owners while also boosting long term sustainability.›Two main pathways that MS employ for agriculture.›Through the RDPs within Pillar II of the CAP ›EU directives on fertilisers020406080100120140Forest managementSubstitute of GHG intensive materials with HWPBiomass for energy useProtection against natural disturbances in forestsConservation of carbon in existing forestsAfforestation and reforestationRestoration of degraded landOrganic farmingGrassland, grazing land and/or pasture measuresNutrient, tillage and water managementBiodiversity/nature conservation measures 
 
 
 
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Financing the PaMsREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL63›The main source of funding for the LULUCF measures stated is typically through The European Agricultural Fund for Rural Development (EAFRD), CAP Pillar II or the European Agricultural Guarantee Fund (EAGF), CAP Pillar I.›National support apart from CAP for LULUCF by MS covers research programmes, large scale strategies or national climate change policies.›Co-financing is supported through the EAFRD and other EU funds.›State funded economic incentives represent a small portion of reported PaMs.28%23%14%4%6%2%23%CAP (Pillar I, II)Legal requirement or standardsOther national initiativesState funded economic incentiveInformation/awarenessOther EU economic incentivesPlan or strategyIdentified challenges and potential solutionsREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL64›The challenges deriving from the MS reports can be summarized into five main categories and further addressed one by one through recommendations and/or solutions cited by the MS themselves:1.Decreasing sink/forested area or significant period of one or more of the LULUCF sector being a source (DK, AT, BG, CY, FI, HU, IE, LV, LT, MT, NL, SK, and ES)2.Mature forest stands (EE, IE, LV, SI, DK and SK)3.Data fluctuations and gaps (BE, FI, EL, LU, MT, PL, SI, and FR)4.Abandoned land (particularly in CEE countries) (EE, LV, MT, HR, and LT)5.Nutrient management problems leading to unproductive soils (EE, MT, PL, and ES) 
 
 
 
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65Project Results: WorkshopsREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEALWorkshops 66REVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL18 NOV 2020WORKSHOP 1LULUCFreporting & accounting approaches25 FEB 2021WORKSHOP 2The role of agriculture and land-use sectors in a climate neutral EU in 205021 APR 2021WORKSHOP 3Gathering ideas on the next steps for carbon farming25 MAY 2021WORKSHOP 4Carbon farming in the CAP Strategic Plans 
 
 
 
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Workshop 1: LULUCF Accounting & Reporting approachesREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL67›Objectives:›Initiating discussions on future policy design in the LULUCF sector, in the context of the impact assessment on increasing the ambition of European climate target of 55% of GHG reductions by 2030.›Discussing how to strengthen GHG reporting and how to adjust accounting methodologies to ensure that the LULUCF sector can effectively, efficiently and reliably deliver to the new target setting.›Participants: 70 Business & Trade associations16%National authorities29%NGOs7%Research & academia13%EU institutions34%International institutions1%›Maintakeaways:›The majority of stakeholders agreed that there is a need for more stringent targets for the LULUCF sector and that the target should be proportional to the MS potential to increase the net sink in a cost-efficient way›The majority of stakeholders did not agree with the continuation of the use of the FRL concept, and preferred net-net accounting›The majority of stakeholders agree that these is a need to improve LULUCF reporting, and that all emission and removals should be reported. ›Wall-to-wall/seamless geospatial data was considered by the majority as key, or supplementary in LULUCF reporting.Workshop 2: The role of agriculture and land-use sectors in a climate-neutral EU in 2050REVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL68›Objectives:›Extract key information on the role of the land-use sectors –including the role of farmers, private markets, data and technology -in contributing to a climate neutral EU in 2050›Discuss the vision for 2050›Participants: 429›Maintakeaways:›The large majority of stakeholders agreed that climate policies, in light of the 2050 climate neutrality objective, should focus both on decreasing emissions and increasing removals and felt positive about stronger financial incentives in the land sector.›EU-wide carbon farming and national subsidies were mentioned as key instruments to promote better financial incentives in the land sector (carbon farming)Business & Agricultural associations/ industries27%Research institutes, academia & consultancies28%National and regional authorities13%NGOs14%EU institutions7%International institutions7%Independents4%›The large majority of stakeholders agreed that additionality is always relevant in an economy-wide carbon-neutral 2050 scenario. 
 
 
 
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Workshop 3: Gathering ideas on the next steps for carbon farmingREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL69›Objectives:›Extractkeyinformationonthenextstepsforcarbonfarming›Discusslinkagesbetweenbiodiversityandcarbonremovals›Discussexamplesandissueswithmonitoringcarbonremovals›Discusstheproblemsandbarrierstodevelopingacarbonfarmingpolicyframework›Participants: 77›Maintakeaways:›Thediscussionshowedaconsensustojointlyactonclimateandbiodiversity.Thereisaneedtoincorporatetheecologicaldimensioninthecurrenteconomicsignalsandtoban/avoidpervasivepractices›RemoteSensingcanbringdowncostsofmonitoring,butitisnotasilverbullet.Additionalinitiativesthatwerementionedtoreducecostsreferredtosoilsamplingandsoilspectroscopy.›Anumberofproblemstodevelopacarbonfarmingpolicyframeworkwereidentified:lackofknowledgeontheimpactforlandmanagers,lackofunderstandingofbenefitsofcarbonfarmingforfarmers,needforhigh-qualityMRV,perverseincentivesandlegalbarriers.Business & Agricultural associations12%Foundations & NGOs9%Research & Academia19%Nationa/ Regional authorities12%Consultancies8%Companies12%EU institutions23%Initiatives2%International organisations3%Workshop 4: Carbon farming in the CAP Strategic PlansREVIEWING THE CONTRIBUTION OF THE LULUCF SECTOR TO THE GREEN DEAL70›Objectives:›ExploredesignoptionsforCarbonFarmingschemesintheCAPStrategicPlans›Facilitateexchangeofexperiencesandexamplesamongrelevantstakeholders(publicauthorities,representativesoflandmanagers,NGOs,academiaetc.)withaviewtocontributingtotheinclusionofcarbonfarmingschemesintheCAPstrategicplans›ProvideinputstotheEuropeanCommission’sCarbonFarminginitiative›Participants: 415Business/ Agricultural Association16%Research & Academia13%NGO11%National/ Regional authority14%Farmers' representative3%EU institution8%Company15%Other20%›TherewasaconsensusontheimportanceofEUandnationalfundingmechanismsandeco-schemes.StrategicPlansandthenewTechnicalGuidanceHandbookwillprovideimportantsupportintheimplementationprocess.›Thefocusshouldbeonmotivationinsteadofobligationforfarmers.Knowledgedisseminationremainsapowerfultooltocreateawarenessabouttheaddedvalueofcarbonfarming.›Anumberofproblemswereidentified:anintegralframeworkwherepolicygoalsareconnected,arewardsystemtostimulateaction,acommonmatrixtoestimatethebenefitfromrestoredpeatland,acentralisedorganisationforcoordinationofGHGmonitoringstandard,andacommonsystemforcertificationandaccreditation.›Maintakeaways:›ThediscussionemphasisedtheimportantroleoftheMemberStatestosupportlandmanagersintheimplementationofcarbonfarming.ImplementationshouldtakeintoconsiderationthegeographicalvariationsandeachMemberStates’potential. 
 
 
 
 
 
 
 
 
 
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