REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the operation of Regulation (EU) 2018/841 ("LULUCF Regulation") pursuant to Article 17(2) as amended by Regulation (EU) 2023/839
Date: 2024-05-15
Institutions: Directorate-General for Climate Action, European Commission
Subjects: EU Member State, EU environmental policy, European forestry policy, adaptation to climate change, carbon neutrality, environmental monitoring, greenhouse gas, land use, social impact, sustainable forest management

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   EUROPEAN COMMISSION  Brussels, 15.5.2024  COM(2024) 195 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the operation of Regulation (EU) 2018/841 ("LULUCF Regulation") pursuant to Article 17(2) as amended by Regulation (EU) 2023/839  
 
 
1.  Introduction 

The land use, land-use change and forestry (‘LULUCF') sector covers soils, plants and other 
biomass which can be both a CO2 source (i. e. emitting CO2 into the atmosphere) and a CO2 
sink  (i.  e.  removing  CO2  from  the  atmosphere).  Emissions  and  removals  by  the  sector  are 
integrated into the EU's 2030 climate target by means of Regulation (EU) 2018/8411 (‘LULUCF 
Regulation’) which entered into force in 2018.  

As part of the European Green Deal2, the European Climate Law3 set out an EU economy-wide 
net emission reduction target of at least -55% by 2030 as compared to 1990 levels, and a climate 
neutrality  target  by  2050  at  the  latest.  With  the  Fit  for  55  climate  package4,  the  LULUCF 
Regulation was amended in 20235 to reflect the enhanced ambition. It introduced new targets 
for the sector for 2030 and simplified the reporting obligations. 

The land sector plays a key role in achieving the EU climate neutrality  objective. It has the 
potential  to  provide  long-term  climate  benefits,  both  in  terms  of  climate  mitigation  and 
adaptation, as well as to contribute to the long-term climate goals of the Paris Agreement6. In 
addition, the sector offers multiple other vital services to society. These include: the production 
of  sustainable  biomass  that  can  substitute  fossil  or  carbon-intensive  products,  materials  and 
energy,  also  contributing  to  the  transition  to  a  circular  and  climate-neutral  bioeconomy; 
production  of  food;  biodiversity;  and  ecosystem  services  which  are  of  key  importance  for 
increasing resilience to the impacts of climate change. 

As stipulated in Article 17(2) of the LULUCF Regulation, the Commission is tasked to take 
stock of the operation of the Regulation within 6 months after the first global stocktake under 
the Paris Agreement, which was concluded at COP28 in December 2023. 

2.  Assessment of the operation of the LULUCF Regulation 

The key revised LULUCF Regulation target is to increase land-based net removals in the EU 
by an additional -42 million tonnes of CO₂ equivalent (Mt CO₂-eq) by 2030, as compared to the 
yearly average over the period 2016-2018. This is expected to result in a total net sink at the 
Union level of -310 Mt CO₂-eq. For the period 2021-2025, Member States are to apply specific 

1 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, OJ L 156, 
19.6.2018, p. 1. 
2 https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal_en 
3 Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing the 
framework for achieving climate neutrality (‘European Climate Law’), OJ L 243, 9.7.2021, p. 1. 
4 Communication from the Commission to the European Parliament, the Council, the European Economic and 
Social Committee and the Committee of the Regions 'Fit for 55': delivering the EU's 2030 Climate Target on the 
way to climate neutrality, COM(2021) 550 final. 
5 Regulation (EU) 2023/839 of the European Parliament and of the Council of 19 April 2023 amending 
Regulation (EU) 2018/841 as regards the scope, simplifying the reporting and compliance rules, and setting out 
the targets of the Member States for 2030, and Regulation (EU) 2018/1999 as regards improvement in 
monitoring, reporting, tracking of progress and review, OJ L 107, 21.4.2023, p. 1. 
6 https://unfccc.int/files/meetings/paris_nov_2015/application/pdf/paris_agreement_english_.pdf 

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accounting rules for different land accounting categories and are to comply with the ‘no-debit’ 
rule,  meaning  that  accounted  emissions  must  not  exceed  accounted  removals,  in  line  with 
Articles  7  to  9.  For  the  period  2026-2030,  the  additional  -42  Mt  CO₂-eq  target  covers  all 
LULUCF  reporting  categories  and  is  distributed  among  Member  States  through  individual 
targets, based on their share of total managed land area. The national 2030 targets require each 
Member State to increase its climate ambition in the land use policies.  

The targets set out for the period 2026-2030 align the Regulation reporting requirements to the 
reporting  rules  as  required  under  the  greenhouse  gas  (GHG)  inventories  submitted  to  the 
UNFCCC. This will provide policy makers at both national and EU level with better data to 
timely plan, prepare and implement additional policies and measures in the sector. 

In accordance with Article 17(2) of the LULUCF Regulation, this report includes: 
•  an assessment of the impacts of the flexibilities; 
•  an  assessment  of  the  contribution  of  the  LULUCF  Regulation  to  the  climate  neutrality 

objective and to the goals of the Paris Agreement; 

•  an assessment of social and labour impacts, including on gender equality; 
•  an assessment of progress made at international level on the rules governing Article 6(2) 

• 

and 6(4) of the Paris Agreement; 
the current trends and future projections on emissions and removals of greenhouse gases 
(GHG)  from  the  land  sector  and  agriculture,  as  well  as  regulatory  options  to  ensure 
consistency of those trends and projections with the objective of achieving long-term GHG 
emission reductions  in  all sectors of the economy  in  line  with  the  EU climate-neutrality 
objective. 

2.1. Impact of flexibilities 

To  help  Member  States  comply  with  the  targets,  they  can  make  use  of  the  flexibility 
mechanisms, under certain conditions. Achieving the overall EU ‘no-debit’ commitment (for 
the  period  2021-2025)  or  the  overall  EU  target  (for  the  period  2026-2030)  collectively  is  a 
prerequisite for making use of these flexibility mechanisms. 

Common to both compliance periods, a ‘general flexibility’ will apply whereby a Member State 
can  decide  to  compensate  its  deficit  under  the  LULUCF  Regulation  with  a  deduction  of  an 
equivalent amount of that Member State’s annual emission allocations under the Effort Sharing 
Regulation (ESR)7, provided the Member State has met its ESR target. The same applies in the 
opposite  direction;  if  a  Member  State  fails  to  meet  its  ESR  target,  the  surplus  under  the 
LULUCF Regulation, subject to a limitation, can be transferred to the ESR.  

In addition, for the period 2021-2025, Member States may use the flexibility for managed forest 
land due to natural disturbances. For the period 2026-2030, Member States will have access to 
a  new  land  use  flexibility  mechanism  to  address  excess  net  emissions  due  to  natural 

7 Regulation (EU) 2018/842 of the European Parliament and of the Council of 30 May 2018 on binding annual 
greenhouse gas emission reductions by Member States from 2021 to 2030 contributing to climate action to meet 
commitments under the Paris Agreement and amending Regulation (EU) No 525/2013, OJ L 156, 19.6.2018, p. 
26. 

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disturbances,  long-term  impacts  of  climate  change  or  an  exceptionally  high  proportion  of 
organic soils. 

Flexibilities will only be applied for the first time during the compliance check in 2027 against 
Member States’ commitments, based on the GHG inventory data for the period 2021-2025. 

2.2. LULUCF contribution to the climate neutrality objective 

While the LULUCF sector currently represents a carbon sink, the worrying trend of a declining 
LULUCF sink of the last decade persists. In 2021, the EU’s carbon sink achieved a level of net 
removals  of  -230  Mt  CO₂-eq.  Cropland,  grassland,  wetlands  and  settlements  are  the  main 
sources  of  emissions  in  the  sector  at  the  EU  level,  with  managed  organic  soils  generating 
particularly  high  emissions  in  croplands.  Forests  play  a  key  role  as  they  constitute  the  vast 
majority of the total LULUCF sink. The decline of the Union sink is, to a large degree, due to 
a  decrease  in  net  sink  in  forests,  mainly  due  to  an  increase  in  harvesting  combined  with  a 
stabilisation or slight reduction in forest growth8. The drivers behind this development include 
economic drivers, ageing forests and salvage logging after natural disturbances. The growing 
frequency and severity of natural disturbances such as wind throw, insect outbreaks, wildfires 
and droughts, as well as decreasing efforts in afforestation, are increasingly prominent issues 
for European forests.  

Access  to  high-quality  data  is  a  prerequisite  for  tracking  progress,  evaluating  policies  and 
planning  for  future  measures.  This  is  why  under  the  revised  LULUCF  Regulation  Member 
States are obliged to gradually achieve better reporting accuracy, in line with more advanced 
methods of the IPCC guidelines9. Improved monitoring, reporting and verification (MRV) in 
the  sector  is  enabled  through  both  technological  advancements  and  policy.  New  monitoring 
solutions are being developed constantly and are becoming widely accessible, in particular air-
borne  or  space-borne  remote  sensing  technologies.  These  developments  offer  great 
opportunities for policy makers to design effective and efficient measures to promote enhanced 
and resilient land-based carbon removals. To support Member States in this important process, 
the Commission  has,  together with  the European  Environment  Agency (EEA), published an 
updated  ‘LULUCF  Handbook’10.  Its  purpose  is  to  help  various  stakeholders  familiarise 
themselves with the LULUCF Regulation and to facilitate its implementation on the ground. It 
aims to disseminate experience and good practices on how improved GHG monitoring in the 
land sector can support policies. For this purpose, the Commission also regularly organises a 
technical workshop dedicated to UNFCCC reporting11. 

Sustainably  sourced  biomass  will  play  an  important  role  in  fostering  a  climate  neutral  and 
sustainable circular EU bioeconomy. The European Biomass Report, recently published by the 
EEA, finds that there is strong competition for biomass in the EU due to its multiple end-uses, 

8 https://doi.org/10.1186/s13021-023-00234-0 
9 Improved GHG inventories should be based on more accurate, more detailed, more timely and geographically 
explicit data as stipulated in Part 3 of Annex V of the Governance Regulation – e. g. through digital databases, 
geographic information systems (GIS) and remote sensing, including the Copernicus Sentinel satellites and 
services, or other publicly or commercially available services.  
10 https://climate-energy.eea.europa.eu/topics/climate-change-mitigation/land-and-forests/reports 
11 https://forest.jrc.ec.europa.eu/en/activities/lulucf/workshops/ 

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such as in food, in raw materials, energy, climate mitigation and adaptation, biodiversity, and 
other  ecosystem  services12.  The  various  end-uses  should  be  carefully  balanced  through 
appropriate policies and incentives. 

2.3. Progress at international level 

Article 2 of the Paris Agreement sets out a long-term goal of limiting the global temperature 
increase to well below 2 °C above pre-industrial levels and pursuing efforts to keep it to 1.5 °C. 
It also sets out the objective of increasing the ability to adapt to the adverse impacts of climate 
change and foster climate resilience.  

The EU submitted an updated nationally determined contribution (NDC)13 in October 2023 in 
preparation  for  the  conclusion  of  the  first  global  stocktake14  which  took  place  at  COP28  in 
December the same year. The updated NDC provides further information on the policies and 
measures through which the EU will reduce its net GHG emissions by at least 55% by 2030. 

In relation to Article 6 of the Paris Agreement, limited progress was made at COP28 on adopting 
a  structured  approach  for  the  implementation  of  Article  6.2  on  bilateral  trading.  Regarding 
Article  6.4,  the  Parties  failed  to  adopt  the  recommendation  of  the  Supervisory  Body  on 
methodological guidance and on activities involving removals15. 

2.4. Social and labour impacts and opportunities 

The  natural  resources  of  rural  areas  are  key  assets  on  which  to  build  a  sustainable  and 
prosperous future, as emphasised by the Commission’s  Long-term  vision  for the EU’s rural 
areas16.  Across the EU there is a gap between male and female employment in rural areas of 
13 percentage points (versus 10 percentage points in cities), rising to over 20 in certain Member 
States.  The EU  Action Plan for Gender Equality  specifically  addresses gender disparities in 
rural areas. 

Well-managed rural landscapes help safeguard decent work and livelihoods, ecological systems 
and  biodiversity,  and  enhance  climate  and  risk  resilience.  Supporting  farmers,  foresters  and 
rural  entrepreneurs  who  are  the  enablers  of  the transition  towards  a  greener  society  and 
economy is essential. 

12 The European biomass puzzle, EEA Report 8/2023 
13 https://data.consilium.europa.eu/doc/document/ST-14286-2023-INIT/en/pdf 
14 The global stocktake established under Article 14 of the Paris Agreement is a process whereby, each 5 years, 
Parties assess the collective progress towards meeting the objectives of the Agreement, and to identify gaps and 
solution pathways to 2030 and beyond. 
15 https://unfccc.int/process-and-meetings/the-paris-agreement/article-64-mechanism 
16 Communication from the Commission to the European Parliament, the Council, the European Economic and 
Social Committee and the Committee of the Regions A long-term Vision for the EU's Rural Areas - Towards 
stronger, connected, resilient and prosperous rural areas by 2040, COM(2021) 345 final. 

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3.  Trends in the LULUCF and agriculture sectors 

The Governance Regulation17 constitutes the basis for a comprehensive governance system to 
meet  the  EU’s  climate  targets  and  objectives.  In  2019,  Member  States  submitted  their  first 
national energy and climate plans (NECP), which are the main strategic policy planning tool to 
pave the way towards achieving climate neutrality and resilience by 2050. In 2023, Member 
States reviewed and updated their NECPs to reflect the increased climate ambition for 2030 
under  the  European  Climate  Law  and  ‘Fit  for  55’  package,  including  for  the  LULUCF  and 
agriculture  sectors.  As  part  of  their  GHG  inventory  reporting,  Member  States  prepare 
projections of the effects of their existing and additional measures on emissions and removals. 

However, the Commission found in its assessment that most draft updated NECPs do not set 
out sufficient ambition nor sufficient land related climate action18. Very few Member States 
have included a concrete pathway to reaching their national net removal targets, or sufficient 
action to assist farmers, foresters and other stakeholders in building sustainable business models 
in line with these targets. 

3.1. Trends and projections in the LULUCF sector 

With the current LULUCF accounting rules applicable in the period 2021-2025, the provisional 
‘accounted’ balance for 2021 based on the 2023 GHG inventory submission  demonstrated a 
slight credit (i. e. accounted removals slightly exceeded accounted emissions) of -14 Mt CO₂-
eq19. As such, the Union collectively meets the ‘no-debit’ rule of compliance for the first year 
of the period 2021-202520. 

The EU is currently not on track to meet the 2030 net removal target. With existing measures, 
the total net removals are projected to reach -239 Mt CO₂-eq in 2030, and -260 Mt CO₂-eq with 
additional measures, falling short by around 50-70 Mt CO₂-eq to the EU target for 2030.  

From 2025 onwards, net removals from forest land in the EU are projected to steadily shrink to 
approximately -310 Mt CO₂-eq by 2030 with existing measures and to -320 Mt CO₂-eq with 
additional measures. Net emissions from cropland, which currently represent roughly 38% of 
the EU LULUCF emissions, are projected to slightly increase or stagnate until 2025, followed 
by a gradual decrease to reach 32 Mt CO₂-eq with existing measures and 27 Mt CO₂-eq with 
additional measures by 2030. Net emissions from grassland, which currently represent roughly 
12%  of  the  EU  LULUCF  emissions,  are  projected  to  stagnate  until  2030  with  intermediate 

17 Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the 
Governance of the Energy Union and Climate Action, amending Regulations (EC) No 663/2009 and (EC) No 
715/2009 of the European Parliament and of the Council, Directives 94/22/EC, 98/70/EC, 2009/31/EC, 
2009/73/EC, 2010/31/EU, 2012/27/EU and 2013/30/EU of the European Parliament and of the Council, Council 
Directives 2009/119/EC and (EU) 2015/652 and repealing Regulation (EU) No 525/2013 of the European 
Parliament and of the Council, OJ L 328, 21.12.2018, p. 1 
18 Communication from the Commission to the European Parliament, the Council, the European Economic and 
Social Committee and the Committee of the Regions EU wide assessment of the draft updated National Energy 
and Climate Plans An important step towards the more ambitious 2030 energy and climate objectives under the 
European Green Deal and RePowerEU, COM(2023) 796 final. 
19 Due to improvements in GHG inventories, recalculations are still taking place that may affect this result. 
20 Climate Action Progress Report. European Commission, 2023. 

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fluctuations, reaching 12 Mt CO₂-eq with existing measures and 10 Mt CO₂-eq in 2030 with 
additional measures. Net emissions from wetlands are projected to gradually decrease to reach 
13 Mt CO₂-eq with existing measures and 12 Mt CO₂-eq with additional measures by 2030. Net 
removals from harvested wood products are projected to steadily increase to reach levels close 
to -35 Mt CO₂-eq in a scenario with existing or additional measures21. 

It  is  likely  that  the  impact  of  climate  change  and  the  loss  of  biodiversity  will  lead  to  more 
frequent and more intense natural disturbances. It will be essential to revert this negative trend 
rapidly to meet the EU climate objectives, while at the same time increasing the resilience of 
the EU land sector to ensure stable long-term sinks. 

3.2. Trends and projections in the agriculture sector 

Today,  non-CO2  emissions  from  agriculture  represent  around  11%  of  overall  EU  GHG 
emissions,  of  which  roughly  two-thirds  come  from  livestock.  Since  2005,  emissions  in  the 
sector have stagnated - inventory data show a slow annual decrease of 0.7 Mt CO₂-eq between 
2005 and 2021. The EEA22 has estimated that the emission reductions expected between today 
and 2040 will be insignificant to help achieve the long-term climate neutrality objective. Due 
to  reduced  emissions  in  other  sectors  and  the  difficulties  in  fully  abating  emissions  in 
agriculture, it is expected that by 2040 agriculture will become the sector with the largest share 
of GHG emissions, representing roughly half of the total emissions in the EU23.  

The latest projections from Member States indicate that under existing measures the pace of 
emissions reductions will not change significantly by 2030 (1% compared to 2021, or an annual 
average  reduction  of  0.6  Mt  CO₂-eq).  With  additional  measures  considered,  aggregated 
projected emissions from agriculture indicate a decline of around 5% by 2030 (2.2 Mt CO₂-eq 
annual  average  reduction). Further efforts are  needed to  identify and  implement appropriate 
mitigation measures in the agriculture sector. 

3.3. Recent policy developments 

In  addition  to  the  Fit  for  55-package,  several  other  European  Green  Deal  initiatives  aim  to 
increase  the  resilience  of  the  LULUCF  sector  while  protecting  and  promoting  ecosystem 
services and the transition to a resource efficient circular economy.  

To increase the level of high-quality carbon removals, the Commission has proposed an EU 
regulatory  framework  for  the  certification  of  carbon  removals24,  which  has  recently  been 
adopted by the co-legislators. The framework includes three distinct types of activities: carbon 

21 Based on data reported by Member States on projections, 2023 submission (EEA) 
22 EEA, Briefing 17/2022 
23 Communication from the Commission to the European Parliament, the Council, the European Economic and 
Social Committee and the Committee of the Regions Securing our future Europe's 2040 climate target and path 
to climate neutrality by 2050 building a sustainable, just and prosperous society, COM(2024) 63 final. 
24 Proposal for a Regulation of the European Parliament and of the Council establishing a Union certification 
framework for carbon removals, COM(2022) 672 final. 

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farming,  carbon  storage  products,  and  permanent  removals.  In  addition,  private  initiatives 
linked to voluntary carbon markets can supplement and further promote large-scale deployment 
of carbon removals. The framework will not only provide land managers with new business 
opportunities,  but  also  support  growth  of  the  sustainable  circular  bioeconomy  by  certifying 
carbon storage products, such as wood-based construction. Ultimately, this can assist Member 
States  in  attaining  their  LULUCF  targets.  To  boost  the  industrial  capture  of  carbon  and  its 
utilisation in bio-based products or storing it permanently, the Commission has recently adopted 
the Communication on industrial carbon management25. 

Healthy ecosystems contribute to carbon sequestration and climate resilience and improve the 
wellbeing of populations. Activities such as the rewetting of peatlands can have a significantly 
positive  impact  on  biodiversity.  The  Nature  Restoration  Law26,  a  key  element  of  the EU 
biodiversity  strategy27,  calls  for binding  targets to restore  degraded  ecosystems,  in  particular 
those with the most potential to capture and store carbon and to prevent and reduce the impact 
of natural disasters. Meanwhile, the Deforestation Regulation28 aims to reduce the EU’s impact 
on global deforestation by promoting the use of ‘deforestation-free’ products. 

A number of funding mechanisms are available to upscale carbon removals, through public or 
private sector sources. The EU provides funding under the common agricultural policy (CAP) 
–  Member  States  have  the  opportunity  to  include  carbon  farming  measures  in  their  updated 
CAP  strategic  plans. They  can also  support the  uptake of sustainable management practices 
under state aid rules, which have been revised and allow for the provision of forest ecosystem 
services such as climate regulation and biodiversity restoration.  

Other available EU funds for increasing carbon removals include LIFE and Horizon Europe 
programmes, and the cohesion policy funds. Specifically, as healthy soils are one of the key 
aspects of climate mitigation, adaptation, and agricultural activities, the mission ‘A Soil Deal 
for Europe’ has been launched under the Horizon Europe programme29. The mission’s goal is 
to  set  up 100  living  labs  to  lead  the  transition  towards  healthy  soils  by  2030  by  promoting 
cooperation across sectors to address all land uses. 

In the area of monitoring the developments in the LULUCF sector, the proposal for a Forest 
monitoring framework30 sets out an EU-wide monitoring framework for forests that will ensure 

25 Communication from the Commission to the European Parliament, the Council, the European Economic and 
Social Committee and the Committee of the Regions Towards an ambitious Industrial Carbon Management for 
the EU, COM(2024) 62 final. 
26 Proposal for a Regulation of the European Parliament and of the Council on nature restoration, COM(2022) 
304 final. 
27 Communication from the Commission to the European Parliament, the Council, the European Economic and 
Social Committee and the Committee of the Regions EU Biodiversity Strategy for 2030 Bringing nature back 
into our lives, COM(2020) 380 final. 
28 Regulation (EU) 2023/1115 of the European Parliament and of the Council of 31 May 2023 on the making 
available on the Union market and the export from the Union of certain commodities and products associated 
with deforestation and forest degradation and repealing Regulation (EU) No 995/2010, OJ L 150, 9.6.2023, p. 
206. 
29 Communication from the Commission to the European Parliament, the Council, the European Economic and 
Social Committee and the Committee of the Regions EU Missions two years on: assessment of progress and way 
forward, COM(2023) 457 final. 
30 Proposal for a Regulation of the European Parliament and of the Council on a monitoring framework for 
resilient European forests, COM(2023) 728 final. 

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the availability of timely, high-quality data in a standardised format. This will enable Member 
States to apply efficient and cost-effective measures in a timely manner, thus fostering stronger 
and  more  resilient  carbon  sinks,  while  supporting  a  sustainable  circular  bioeconomy.  The 
Framework  is  a  key  deliverable  of  the  EU  forest  strategy  for  203031,  recognising  the 
multifunctional role of forests. Similarly, the proposal for a Directive on soil monitoring and 
resilience32 will support the achievement of the LULUCF targets. Healthy soils sequester more 
carbon, while better land and soil monitoring will help target measures that unlock the highest 
climate benefits. 

In 2023, the Commission adopted guidance on EU funding opportunities for healthy soils33. 
The  Guidelines  on  closer-to-nature  forest  management34  as  well  as  the  Guidance  on  the 
development  of  public  and  private  payment  schemes  for  forest  ecosystem  services35  were 
designed  to  strengthen  forest  multifunctionality.  To  further  facilitate  the  uptake  of  carbon 
farming  through  biodiversity-friendly  practices,  the  Commission  published,  in  2023, 
Guidelines  on  biodiversity-friendly  afforestation,  reforestation  and  tree  planting36,  and 
guidelines on defining, mapping and strictly protecting primary and old-growth forests37, which 
are among the EU’s richest ecosystems, storing significant carbon stocks. In November 2023, 
the revised Renewable Energy Directive38 entered into force, which recalls obligations to meet 
the LULUCF criteria when producing fuels from forest biomass. 

3.4. Regulatory options for land, food, energy and bioeconomy towards climate 

neutrality 

The recently published Communication on Europe’s 2040 climate target and path to climate 
neutrality  presents  a  90%  net  GHG  emissions  reduction  compared  to  1990  levels  as  the 
recommended target for 2040. In order to reach this target, the impact assessment39 shows that 
carbon  removals  (from  the  atmosphere  through  land-based  and  industrial  carbon  removals) 
should reach up to 400 Mt CO2-eq. This recommended target corresponds to the advice of the 
European Scientific  Advisory Board on Climate Change (’Advisory Board’)40 and is  in  line 

31 Communication from the Commission to the European Parliament, the Council, the European Economic and 
Social Committee and the Committee of the Regions New EU Forest Strategy for 2030, COM(2021) 572 final. 
32 Proposal for a Directive of the European Parliament and of the Council on Soil Monitoring and Resilience 
(Soil Monitoring Law), COM(2023) 416 final. 

33 Commission Staff Working Document Guidance on EU funding opportunities for healthy soils 
Accompanying the proposal for a Directive of the European Parliament and of the Council on Soil Monitoring 
and Resilience (Soil Monitoring Law), SWD(2023) 423 final. 
34 https://op.europa.eu/en/publication-detail/-/publication/2d1a6e8f-8cda-11ee-8aa6-01aa75ed71a1 
35 Commission Staff Working Document Guidance on the Development of Public and Private Payment Schemes 
for Forest Ecosystem Services, SWD(2023) 285 final. 
36 Commission Staff Working Document Guidelines on Biodiversity-Friendly Afforestation, Reforestation and 
Tree Planting, SWD(2023) 61 final. 
37 Commission Staff Working Document Commission Guidelines for Defining, Mapping, Monitoring and 
Strictly Protecting EU Primary and Old-Growth Forests, SWD (2023) 62 final. 
38 Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the 
promotion of the use of energy from renewable sources, OJ L 328, 21.12.2018, p. 82. 
39 The analysis is based on scenarios that reflect policies and measures until March 2023. Member States will 
submit their final National Energy and Climate Plans in 2024, which may include additional measures. 
40 ESABCC (2023). DOI: 10.2800/609405 

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with the provisions of European Climate Law to present a GHG budget in line with the EU 
commitments under the Paris Agreement.  

Like all other sectors, the LULUCF sector plays an important role in achieving the EU 2040 
climate  ambition,  while  contributing  to  EU  food  sovereignty  and  to  a  sustainable  circular 
bioeconomy.  With the right policies and measures, it should be possible to reduce non-CO2 
emissions from the agriculture sector41, while at the same time increasing the land-based carbon 
sink  by  enhancing  the  capacity  of  soils  and  forests  to  store  more  carbon.  This  win-win 
combination could result in the combined agriculture, land use, and forestry sectors becoming 
climate neutral. 

Land management is closely linked to food production and processing. The Advisory Board 
notes in  its  recent  report42  that a  whole-system  approach enables the identification of cross-
sectoral mitigation opportunities, including options for mitigation by producers, consumers and 
intermediate actors in the food supply chain, and ensures that a coherent approach is taken to 
balancing the different environmental, economic and social aspects. The report also notes that 
the introduction of market-based mechanisms in the agriculture and land use sectors could be 
an effective tool to incentivise actors in the food value chain to shift towards lower-emission 
processes. It will also enable emission reductions to occur where they are most cost-effective, 
and could provide substantial incentives for boosting carbon removals in the LULUCF sector. 
The Advisory Board also finds that a better alignment of the CAP with the EU climate ambitions 
could play a major role as well. 

An  integrated  policy  approach  in  the  food  sector  would  empower  land  managers  to  adopt 
climate mitigation and adaptation practices that are mutually supportive. Biodiversity-friendly 
land management will increase carbon removals, enhance the resilience of the EU carbon sink 
and improve soil fertility. 

Sustainably  sourced  long-lived  carbon  storage  products,  such  as  wood  used  in  construction, 
have the potential to increase carbon removals, as well as to contribute to the decarbonisation 
of other sectors. By using them, the sustainable circular bioeconomy can provide land managers 
with  new  business  opportunities  as  biomass  replaces  fossil  carbon  in  the  EU  economy.  In 
addition, new carbon farming approaches are emerging that can increase carbon removals, such 
as carbon sequestration resulting from sustainable activities in coastal marine ecosystems (blue 
carbon), which can also contribute to climate mitigation. 

3.5. Conclusion and next steps 

While the LULUCF sector remains a carbon sink, the worrying trend of a declining LULUCF 
sink over the past decade persists. Given the numerous policy developments since the entry into 
force of the LULUCF Regulation approximately 6 years ago, the Commission will launch an 

41 Commission Staff Working Document Impact Assessment Report accompanying the document 
Communication from the Commission to the European Parliament, the Council, the European Economic and 
Social Committee and the Committee of the Regions Securing our future Europe's 2040 climate target and path 
to climate neutrality by 2050 building a sustainable, just and prosperous society, SWD(2024) 63 final. 
42 ESABCC (2024). DOI: 10.2800/216446 

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evaluation of the Regulation in parallel with this report. Once the carbon removal certification 
framework has entered into force, the evaluation will assess the possible benefits and trade-offs 
of including  sustainably sourced long-lived  carbon storage products  that  have a net-positive 
carbon sequestration effect in the scope of the LULUCF Regulation43. 

The  purpose  of  the  evaluation  is  also  to  assess  the  Regulation  against  the  better  regulation 
principles (effectiveness, efficiency, relevance, coherence, and EU added value) and to explore 
the potential for simplification and reducing the administrative burden. It will allow the EU to 
draw lessons from the past to aid future decision-making and to identify areas of improvement 
in the future policy design post 2030. Ultimately, the aim is to ensure that the policy framework 
for the land sector remains fit for purpose, and that it is an effective means of delivering the key 
goal of climate neutrality of the sustainable circular bioeconomy.  

43 See Article 17(3) of the LULUCF Regulation. 

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