COMMISSION STAFF WORKING DOCUMENT Subsidiarity Grid Accompanying the document REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) 2018/842 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
Date: 2021-07-14
Institutions: Directorate-General for Climate Action, European Commission
Subjects: EU Member State, EU emission allowance, EU environmental policy, adaptation to climate change, climate change, environmental monitoring, greenhouse gas, international agreement, pollution control, reduction of gas emissions

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   EUROPEAN COMMISSION  Brussels, 14.7.2021  SWD(2021) 553 final  COMMISSION STAFF WORKING DOCUMENT Subsidiarity Grid Accompanying the document REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) 2018/842 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 {COM(2021) 555 final} - {SEC(2021) 555 final} - {SWD(2021) 611 final} - {SWD(2021) 612 final}  
 
 
Subsidiarity Grid 

1.  Can the Union act? What is the legal basis and competence of the Unions’ intended action? 

1.1 Which article(s) of the Treaty are used to support the legislative proposal or policy initiative? 

The legal basis for this proposal is Article 192 of the Treaty of the Functioning of the European Union 
(TFEU). In accordance with Article 191 and 192(1) TFEU, the European Union shall contribute to the 
pursuit, inter alia, of the following objectives: preserving, protecting and improving the quality of the 
environment;  promoting  measures  at  international  level  to  deal  with  regional  or  worldwide 
environmental problems, and in particular combating climate change.  

1.2 Is the Union competence represented by this Treaty article exclusive, shared or supporting in 
nature? 

In the case of environment, the Union’s competence is shared.  

Subsidiarity does not apply for policy areas where the Union has exclusive competence as defined in 
Article 3 TFEU1. It is the specific legal basis which determines whether the proposal falls under the 
subsidiarity control mechanism. Article 4 TFEU2 sets out the areas where competence is shared 
between the Union and the Member States. Article 6 TFEU3 sets out the areas for which the Unions 
has competence only to support the actions of the Member States. 

2.  Subsidiarity Principle: Why should the EU act? 

2.1 Does the proposal fulfil the procedural requirements of Protocol No. 24: 

-  Has there been a wide consultation before proposing the act? 
- 

Is there a detailed statement with qualitative and, where possible, quantitative indicators 
allowing an appraisal of whether the action can best be achieved at Union level? 

The  revision  of  the  Effort  Sharing  Regulation  builds  upon  the  feedback  received  during  the 
preparation and after the presentation of the 2030 Climate Target Plan 
The Commission published on 29 October 2020 an inception impact assessment specific to the 
revision of the Effort Sharing Regulation where it outlined the initial considerations and policy 
options of the revision. The inception impact assessment was open for feedback from 29 October 
2020 to 26 November 2020 and it received 101 contributions. In addition, the Commission carried 
out a public consultation from 13 November 2020 to 5 February 2021. In addition, the Commission 
services engaged in extensive bilateral consultations with public authorities within the EU and third 
countries, as well as with business associations, social partners, individual companies and NGOs. 
The Effort Sharing Regulation sets national targets for greenhouse gas emission reduction by 2030 in 
accordance with the different capacities of Member States and enabling the Union to achieve its 
2030 emission reduction target set in the European Climate Law. By its own nature, this framework 
cannot be established at national level.  
Articles 191 to 193 of the TFEU confirm and specify EU competencies in the area of climate change. 
Climate change is a trans-boundary problem, which cannot be solved by national or local action 
alone. Coordination of climate action must be taken at European level and, where possible, at global 
level. EU action is justified on grounds of subsidiarity as set out in Article 5 of the Treaty of the 
European Union. Since 1992, the European Union has worked to develop joint solutions and drive 

1 https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:12008E003&from=EN  
2 https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:12008E004&from=EN  
3 https://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:12008E006:EN:HTML  
4 https://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=CELEX:12016E/PRO/02&from=EN  

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forward global action to tackle climate change. More specifically, action at EU level will provide for 
cost effective delivery of the 2030 and long-term emission reduction objectives while ensuring 
fairness and environmental integrity.  
In light of the emission reduction target for 2030, and in the perspective of the climate neutrality 
objective to be achieved by 2050, stronger EU action is needed.  

2.2 Does the explanatory memorandum (and any impact assessment) accompanying the 

Commission’s proposal contain an adequate justification regarding the conformity with the 
principle of subsidiarity? 

The explanatory memorandum accompanying the legal proposal and the impact assessment (section 
3) contain sections on the principle of subsidiarity. 

Subsidiarity  is  a key  and  inbuilt  element of the  Effort  Sharing  Regulation.  While  establishing  Union 
and national targets on emission reductions, it leaves up to the Member States to decide how to be 
better achieve  them. Action at  the  EU  level is therefore  indispensable and coordinated EU policies 
have a much bigger chance of leading to a true transformation towards a climate neutral economy by 
2050,  while  avoiding  fragmentation  of  the  internal  market.  Coordinated  action  at  the  EU  level 
furthermore  facilitates  the  full  consideration  of  the  different  capabilities  to  act  among  Member 
States. Nevertheless, the role of Member State action is crucial to achieve the increased overall EU 
ambition, in particular in areas where the competence for specific policies and measures lies mainly 
with Member States for reasons of subsidiarity.

Climate  change  is  a  transboundary  problem  where  coordinated  EU  action  supplements  and 
reinforces national and local action effectively. Coordinated action allows for high EU-wide ambition 
while  recognising  subsidiarity  and  different  capabilities  to  act  among  Member  States,  since  the 
Regulation primarily addresses Member States, while allowing for increased cost efficiency through 
appropriate  flexibilities  within  and  between  Member  States  and  with  other  sectoral  legislation 
(Emission Trading System, Land Use, Land Use Change and Forestry Regulation).   

2.3 Based on the answers to the questions below, can the objectives of the proposed action be 

achieved sufficiently by the Member States acting alone (necessity for EU action)? 

No. Climate change is a global transboundary problem it needs to be tackled by all Member States, 
and  can  only  be  tackled  if  all  Member  States  contribute.  The  absence  of  a  Union  initiative 
coordinating the efforts  at national level would compromise  the  attainment of the Union’s climate 
change goals.  

(a)  Are there significant/appreciable transnational/cross-border aspects to the problems being 

tackled? Have these been quantified? 

The problem tackled, i.e. climate change, is inherently of a transnational/cross-border nature.  

(b)  Would national action or the absence of the EU level action conflict with core objectives of 

the Treaty5 or significantly damage the interests of other Member States? 

The  absence  of  a  Union  initiative  coordinating  the  efforts  at  national  level  would  compromise  the 
attainment of the Union’s climate change goals. The Effort Sharing Regulation also ensures that the 
efforts made by some Member States are not in vain due to the inactivity of other Member States 
(which  could  be  the  case  if  Member  States  were  let  free  to  decide  on  whether  or  not  to  take 

5 https://europa.eu/european-union/about-eu/eu-in-brief_en  

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measures  to  reduce  greenhouse  gas  emissions).  Coordinated  action  at  the  EU  level  furthermore 
facilitates the full consideration of the different capabilities to act among Member States. Action at 
the  EU  level  is  therefore  indispensable  and  coordinated  EU  policies  have  a  much  bigger  chance  of 
leading  to  a  true  transformation  towards  a  climate  neutral  economy  by  2050,  while  avoiding 
fragmentation of the internal market. The EU single market moreover acts as a strong driver for cost-
efficient change. 

(c)  To what extent do Member States have the ability or possibility to enact appropriate 

measures? 

The role of Member State action is crucial to achieve the increased overall EU ambition. 
The legally binding national targets under the Effort Sharing Regulation leave it to Member States to 
decide  how  to  achieve  them  allowing  for  certain  flexibilities  between  Member  States  and  other 
legislative  instruments,  such  as  LULUCF  and  ETS.  Other  EU  wide  policies  support  action  taken  by 
Member States and contribute to the achievement of the MS targets. 
While  Member  States  decide  and  implement  relevant  measures  at  national  level,  the  EU  legal 
framework provides for a monitoring and compliance mechanism designed to ensure that the 2030 
emission  reduction  targets  are  achieved  with  the  contribution  of  all  Member  States,  in  particular 
through  their  National  Energy  and  Climate  Plans  under  Regulation  (EU)  2018/1999  on  the 
Governance of the Energy Union and Climate Action (Governance Regulation).  

(d)  How does the problem and its causes (e.g. negative externalities, spill-over effects) vary 

across the national, regional and local levels of the EU? 

The problem and its causes are present across national, regional and local levels throughout the EU.  

(e)  Is the problem widespread across the EU or limited to a few Member States? 

The need to address climate change and reduce greenhouse gas emissions from the sectors covered 
by the Effort Sharing Regulation (road transport, heating of buildings, agriculture, small industrial 
installations and waste management) is widespread across the EU.  

(f)  Are Member States overstretched in achieving the objectives of the planned measure? 

The proposal is based on an in-depth assessment of the different policy options and respective 
impacts. The proposal sets targets that are at the same time ambitious and achievable. Fairness and 
cost efficiency will remain key principles for the Effort Sharing Regulation. This includes a target 
setting approach that takes into account differences in capacity to act while considering adjustments 
to take into account specific national circumstances. 

(g)  How do the views/preferred courses of action of national, regional and local authorities 

differ across the EU? 

The policy instrument of setting national greenhouse gas emission reduction targets is recognized as 
a key tool for reducing emissions from the sectors not currently covered by the EU ETS.  

2.4 Based on the answer to the questions below, can the objectives of the proposed action be 

better achieved at Union level by reason of scale or effects of that action (EU added value)? 

Reducing greenhouse gas emissions is a trans-boundary issue that requires effective action at 
the  largest  possible  scale.  Coordinated  EU  action  effectively  supplements  and  reinforces 
national and local action and facilitates the full consideration of the different capabilities to 
act among Member States. The EU single market moreover acts as a strong driver for cost-

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efficient change and gradual convergence of greenhouse gas emissions per capita.  

(a)  Are there clear benefits from EU level action?  

Yes 

(b)  Are there economies of scale? Can the objectives be met more efficiently at EU level (larger 

benefits per unit cost)? Will the functioning of the internal market be improved? 

Yes,
the  reduction  of  greenhouse  gas  emissions  across  the  European  Union  benefits  from 
coordination  at  the  EU  level  given  the  EU’s  single  market,    impacting  all  sectors  covered  by  the 
Regulation.  
The impacts of the 2030 ambition increase and related policies on growth and jobs creation, fairness 
and cost-effectiveness are examples of elements that can be better considered at the EU level. 
Coordinated EU policies have a much bigger chance of leading to a true transformation, particularly 
in  light  of  the  global  dimension  of  the  challenge.  The  approach  must  take  into  account  different 
mitigation potential between Member States, as well as the EU single market as a strong driver for 
cost-efficient change and gradual convergence of GHG emissions per capita. 

(c)  What are the benefits in replacing different national policies and rules with a more 

homogenous policy approach? 

The main target of the ESR is to reduce emissions at Union and national levels, ensuring that all 
Member States contribute to the common goal according to an equitable distribution of efforts. 
However, the ESR does not impose a homogenous policy approach in terms of what measures and 
policies should be adopted. 
Coordinated EU policies have a much bigger chance of leading to a true transformation, particularly 
in light of the global dimension of the challenge. The approach must take into account different 
mitigation potential between Member States, as well as the EU single market as a strong driver for  
cost-efficient change and upward convergence. 

(d)  Do the benefits of EU-level action outweigh the loss of competence of the Member States 
and the local and regional authorities (beyond the costs and benefits of acting at national, 
regional and local levels)? 

Reducing GHG emissions is fundamentally a trans-boundary issue that requires effective action at the 
largest  possible  scale.  The  EU,  as  a  supranational  organisation  is  well-placed  to  establish  effective 
climate  policy  in  the  EU.  Member  States  do  not  lose  competencies  on  which  measures  should  be 
taken  in  order  to  reduce  greenhouse  gas  emissions,  the  initiative  updates  the  minimum  level  of 
emission  reductions  foreseen  in  the  Regulation,  leaving  to  Member  States,  local  and  regional 
authorities the choice of the best means to achieve it. 

(e)  Will there be improved legal clarity for those having to implement the legislation? 

The proposal is merely updating the emission reduction targets of the existing Regulation in line with 
the  increase  in  EU  climate  ambition  for  2030.  No  issues  of  legal  clarity  have  been  raised  for  the 
current Regulation.  

3.  Proportionality: How the EU should act 

3.1  Does the explanatory memorandum (and any impact assessment) accompanying the 

Commission’s proposal contain an adequate justification regarding the proportionality of the 
proposal and a statement allowing appraisal of the compliance of the proposal with the 

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principle of proportionality? 

This proposal complies with the proportionality principle because it does not go beyond what is 
necessary in order to achieve the Union’s objectives of reducing greenhouse gas emissions in a cost-
effective manner, while ensuring fairness and environmental integrity.   
The Climate Law agreed by the European Parliament and the Council has endorsed an overall 
economy-wide and domestic reduction in greenhouse gas emissions of at least 55% below 1990 
levels by 2030 and climate neutrality by 2050.  
Achieving increased ambition in greenhouse gas emission reductions will require additional action, 
both at the EU level and at Member States level. The Effort Sharing Regulation is a tool to ensure 
action by EU Member States in a flexible and appropriate manner, and does so in coherence with 
other EU legislation. The proposed action is proportionate in order to achieve the climate objectives 
that the EU has committed itself to.  

3.2 Based on the answers to the questions below and information available from any impact 
assessment, the explanatory memorandum or other sources, is the proposed action an 
appropriate way to achieve the intended objectives? 

The  proposed  action  builds  on  an  existing  and  well-functioning  policy  that  has  demonstrated  its 
ability to ensure emission reductions in the sectors covered.  

(a)  Is the initiative limited to those aspects that Member States cannot achieve satisfactorily on 

their own, and where the Union can do better? 

Yes. 

(b)  Is the form of Union action (choice of instrument) justified, as simple as possible, and 

coherent with the satisfactory achievement of, and ensuring compliance with the objectives 
pursued (e.g. choice between regulation, (framework) directive, recommendation, or 
alternative regulatory methods such as co-legislation, etc.)? 

The proposal sets out amendments to an existing Regulation. This instrument is suitable for achieving 
the objective of updating the nationally binding targets for the sectors covered. 

(c)  Does the Union action leave as much scope for national decision as possible while achieving 
satisfactorily the objectives set? (e.g. is it possible to limit the European action to minimum 
standards or use a less stringent policy instrument or approach?) 

Yes. 

(d)  Does the initiative create financial or administrative cost for the Union, national 

governments, regional or local authorities, economic operators or citizens? Are these costs 
commensurate with the objective to be achieved? 

The initiative primarily addresses Member States as institutional actors and thus mostly affects their 
national administrations directly. Without creating new obligations for Member States, the initiative 
will require Member States to revise and implement more ambitious climate action strategies. The 
Commission will support Member States in this endeavour with capacity building actions.  

(e)  While respecting the Union law, have special circumstances applying in individual Member 

States been taken into account? 

Yes. Fairness and cost efficiency remain key principles  for the Effort  Sharing Regulation. The target 

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setting approach takes into account differences in capacity to act while considering adjustments for 
specific  national  circumstances,  in  line  with  the  guidance  provided  by  the  European  Council  in 
December 2020 and May 2021. 

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