Under the Effort Sharing Decision, Member States were required to limit their greenhouse gas emissions in the Effort Sharing sectors each year from 2013 to 2020. They were also required to collectively deliver a reduction of around 10% in total EU emissions from the sectors covered by 2020, compared to 2005 levels.
In 2020, the EU emissions covered by the Effort Sharing Decision were 16.3% lower than in 2005. The EU has thus overachieved its 2020 target by six percentage points.
The compliance period of the Effort Sharing Decision ended on 17 February 2023. All Member States met their effort sharing obligations in all years in the period between 2013 and 2020.
Member States targets: Annual emission allocations
The annual emission limits – also known as annual emission allocations (AEAs) – were determined on the basis of a linear trajectory, a straight line between a starting point defined for 2013 and the target established for 2020.
Member States had to ensure that emissions in 2013 did not exceed their average annual emissions between 2008 and 2010.
Additionally, for Member States that are allowed to increase their emissions, their emissions in 2013 could not exceed a level defined by a linear path starting in 2009. The linear path was based on the Member States’ average annual emissions between 2008 and 2010.
The AEAs for each Member State and year were adopted by the European Commission in March 2013. In October 2013, the AEAs were adjusted to ensure consistency with the enlarged EU Emission Trading System (EU ETS) scope for 2013-2020.
In August 2017, the AEAs for 2017-2020 were updated to ensure consistency with the latest international guidelines and methodologies for reporting emissions.
The greenhouse gas (GHG) emissions for the reference years 2005, 2008, 2009 and 2010 used in AEA calculations were reviewed as a part of a comprehensive review in 2012 and 2016 by technical experts, in consultation with each Member State. More details on the 2012 and 2016 comprehensive review can be found in the documentation section below.
The latest AEAs for each Member State and year are published on the European Union Transaction Log.
Flexibility in meeting targets
To increase the cost-effectiveness of their emissions path, Member States were allowed some flexibility in meeting their AEAs.
In years where emissions were lower than their annual emission allocations, Member States could carry over their surpluses and use them in later years. For high cumulative surpluses, carry-over limits were added.
In years where emissions were higher than the annual limit, Member States could carry forward a limited amount of allocations from the following year.
This gave Member States the flexibility to deal with annual fluctuations in emissions due to weather or economic conditions.
Member States could also transfer, i.e. buy and sell AEAs, from and to other Member States. This was an important vehicle to ensure cost-effectiveness. It allowed Member States to access emissions reductions where they were the cheapest, and the revenue could be used to invest in modernisation.
From 2013 to 2020, Member States could use international credits representing investments in projects that have reduced emissions in developing countries (Clean Development Mechanism) or other industrialised countries (Joint Implementation).
Monitoring of results and compliance
A strong monitoring and compliance system was in place to monitor Member States' action and help them take corrective measures if they fail to meet their targets.
Member States had to report on
- their annual emissions;
- the use, geographical distribution and types of Joint Implementation / Clean Development Mechanism credits and qualitative criteria applied
- projected progress towards meeting their emission limits from 2013 to 2020;
- information on planned additional national policies and measures to meet commitments beyond those in the Decision.
Member States have been reporting their greenhouse gas emissions annually through inventory reporting. According to international and EU rules, reporting needs to be done two years after the activity year. For example, 2018 emissions were reported in early 2020.
From 2013 to 2020, Member States were required to include in their national inventory reports not only their greenhouse gas emissions, but also information on international project credits used for compliance, and a summary of concluded transfers under the Effort Sharing Decision. Once every two years, Member States have been publishing reports on the policies and measures they undertake and projections of their future progress. The rules for this reporting were set in the Monitoring Mechanism Regulation.
This should enable Member States to take timely action to ensure that they comply with their annual emission allocations.
Implementation of the Effort Sharing Decision
To ensure that compliance with the AEAs was assessed in a credible, consistent, transparent and timely manner, a Union review of Member States' greenhouse gas inventories took place every year. The review was carried out by the technical expert review team contracted by the Commission, and coordinated by a secretariat at the European Environment Agency. The final review reports can be found in the Documentation section below.
The Documentation section also contains for each year a Commission Implementing Decision, in which the final ESD emissions per Member State are determined, after taking into consideration the technical corrections and revised estimates calculated during the review. After the publication of this Decision in the Official Journal, Member States had four months to apply flexibilities under Articles 3 and 5 of the ESD (borrowing or buying allocations/international project credits) to ensure annual compliance with their ESD targets.
Information on compliance and the use of flexibilities by Member States is publicly accessible on the EUTL public website.
The Commission also assessed progress made by the Member States toward their ESD targets in the annual Climate Action Progress Report published every autumn.
2016 evaluation of the ESD
In July 2016, the Commission presented an evaluation of the implementation of the legislation up to 2015. The evaluation concluded that:
- While still in the early stages of implementation, commitments under the Effort Sharing Decision have contributed to stimulating new national policies and measures promoting effective reductions of greenhouse gas emissions. A number of policies which were part of the 2020 climate and energy package, in particular on energy efficiency and renewable energy, also reduced emissions.
The EU was on track to overachieve its 2020 target of reducing greenhouse gas emissions by 10% compared to 2005 in the sectors covered by the legislation. Total emissions in these sectors in 2013 were 9.7% below 2005 levels. In 2014, they were 13% lower than in 2005. Total emission reductions between 2005 and 2013 were achieved in all sectors, ranging from -3 % in agriculture to -25 % in the waste sector. For several sectors, including buildings, transport, agriculture and waste, a significant part of the emission reductions to date can be attributed to factors such as technological changes influenced by policy interventions resulting from the 2020 package. As well as EU-wide and national climate and energy policies, the economic crisis and growth in economic activity in some countries have also had an impact on greenhouse gas emissions.
- Overall, the ESD has resulted in Member States becoming more active in considering new measures to reduce emissions in their sectors, how to best design the measures, as well as in improved coordination between national, regional and local governments. The ESD has resulted in limited additional administrative burden at Member State level, although there may be opportunities to reduce administrative costs, for example by simplified and less frequent compliance checks.
More details can be found in the Report on evaluating the implementation of the ESD and in the accompanying Staff Working Document.
The results of the evaluation were used when preparing the proposal for continuing effort sharing legislation from 2021 to 2030.
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Questions and Answers on annual emission allocations (October 2013)
The annual level of Clean Development Mechanism (CDM) and Joint Implementation (JI) mechanism credits any Member State could use from 2013 to 2020 was limited to 3% of their 2005 emissions.
However, the Effort Sharing Decision also allowed certain Member States that had emission reduction targets, or that were allowed to increase emissions by up to 5% of 2005 levels, to use an additional 1% of credits. These credits could come only from CDM projects in least developed countries and small island developing states, and were not bankable or transferable. The Member States concerned are Austria, Finland, Denmark, Italy, Spain, Belgium, Luxembourg, Portugal, Ireland, Slovenia, Cyprus and Sweden.
Greater use of credits could increase the cost-effectiveness of reducing emissions. However, it also meant that the emission reductions took place outside the EU, reducing the domestic benefits for the EU in terms of technological leadership and pollution reductions. The limits on credits aimed to ensure that investments in cleaner technologies and renewable energy are triggered, thus putting Europe on the way to becoming a low carbon economy. From the same perspective, Member States were encouraged to use fewer credits than the maximum allowed.
To increase the cost-effectiveness of the emissions reduction path, several flexibility measures were provided. These included allowing Member States to bank and borrow emission budgets (5% max.) between years and to transfer (for example, by selling) over-achieved emission reductions to another Member State.
These flexibilities did not increase the total amount of greenhouse gas emissions in the EU; they only change the location of reductions and allow small changes in timing.
In addition, Member States might use Clean Development Mechanism credits and Joint Implementation mechanism credits from countries outside the EU (see point 5 above).
The national targets under the Effort Sharing Decision (ESD) foresaw a linear reduction or limitation path in 2013-2020 (as does the EU ETS). In the ESD, Member States took on binding annual emission limits – known as annual emission allocations (AEAs) – in accordance with the reduction path and they reported their emissions to the European Commission each year. This ensured a gradual move towards the agreed 2020 targets was achieved in sectors where changes take time, such as buildings, infrastructure, and transport.
The annual reports that Member States were required to make under the Effort Sharing Decision covered not only their emissions but also the policies and measures they were undertaking and projections of their future progress. Together with the various flexibilities at their disposal, this enabled Member States to take timely action to ensure that they complied with their annual emission allocations.
If a Member State's reported for a given year showed it was not in line with its annual limits, however, it had to take corrective action.
Any shortfall in emission reductions would have to be achieved in the following year, multiplied by a factor of 1.08 as a penalty. On top of this, Member States would have to submit a corrective action plan to the Commission detailing, among other things, how and when they intended to get back on track towards meeting their 2020 targets. The Commission and the EU Climate Change Committee (comprising the Member States) could comment and give recommendations on the plans. In addition, there would be a temporary suspension of the Member State's eligibility to transfer any AEAs and JI/CDM rights to another Member State.
The Commission could also launch an infringement procedure against the Member State concerned.
The combination of the mechanism for corrective action and the potential use of the infringement procedure strengthened the credibility of the EU's mitigation measures under the Effort Sharing Decision. It also gave greater certainty to Member States which achieve greater emission reductions than required and would like to sell their surplus emission allocations to another Member State.
This is because the 'global warming potential' (GWP) values for certain greenhouse gases that Member States use in their emissions reporting changed in 2013. Since then, greenhouse gas emissions are reported with two years delay, which means Member States reported on their emissions for the year 2013 in 2015. As the new GWP values did not yet apply when the Decision entered into force, the AEAs have been calculated by applying both the current GWP values and the future ones to ensure legal certainty and consistency between reported emissions and AEAs throughout the ESD commitment period. The new GWP values are taken from the Fourth Assessment Report of the Intergovernmental Panel on Climate Change.
Pursuant to Article 10 of the Effort Sharing Decision (ESD), the AEAs were to be adjusted if there was a change in the coverage of the EU ETS that affected the ESD. A general adjustment of Member States' AEAs was published by the Commission in October 2013 due to the extension of the EU ETS scope for the 2013-2020 period. As a result of activities included in the ETS that were previously covered by the Effort Sharing Decision, the AEAs were reduced by a quantity corresponding to the amount of ETS allowances issued to that Member State as a result of the scope extension.
In some cases, the AEAs also had to be adjusted because a Member State unilaterally (in addition to the general ETS scope change mentioned above) included an activity in the EU ETS that was not previously covered by the system, or because a Member State excluded certain small installations from the ETS from 1 January 2013.
Member States' annual emission allocations (AEAs) could have changed after 2013 for two reasons:
- if a Member State excluded from or included in the EU ETS any further installations or activities for the 2013-2020 period
- as a result of new guidelines for national greenhouse gas inventories that started applying in 2015.
In August 2017, the AEAs for 2017-2020 were updated to ensure consistency with the latest international guidelines and methodologies for reporting emissions.
Questions and answers on eligibility of international project credits under the Effort Sharing Decision (September 2016)
Yes, subject to the quantitative and qualitative restrictions defined in Article 5 of the Effort Sharing Decision.
For compliance with ESD, each Member State could annually use international project credits up to a limit which was calculated as 3% of their 2005 ESD emissions. Unused parts of this annual entitlement might have been transferred to other Member States or carried over to subsequent years.
12 Member States (Belgium, Denmark, Ireland, Spain, Italy, Cyprus, Luxembourg, Austria, Portugal, Slovenia, Finland, and Sweden) could annually use for compliance additional international project credits worth up to 1% of their 2005 ESD emissions. This additional entitlement was available when the first one had been exhausted. Contrary to the annual entitlement of 3%, unused parts of this additional entitlement might be neither transferred to other Member States, nor carried over to subsequent years.
To comply with the ESD, each Member State could use any project credits meeting the conditions established by ESD Article 5(1). In addition, for compliance with the ESD, 12 Member States (Belgium, Denmark, Ireland, Spain, Italy, Cyprus, Luxembourg, Austria, Portugal, Slovenia, Finland, and Sweden) could use any project credits meeting the conditions established by ESD Article 5(5). The list of such project credits was much shorter, as it contained only projects in the Least Developed Countries and the Small Island Developing States.
Quantitative restrictions were applied through automatic checks in the Union registry, where both entitlements (3% and if applicable an additional 1%) are set for each year. For Belgium, Denmark, Ireland, Spain, Italy, Cyprus, Luxembourg, Austria, Portugal, Slovenia, Finland, and Sweden the additional entitlement of 1% became available when the entitlement of 3% had been exhausted.
Qualitative restrictions were tracked and controlled through the introduction of automatic checks in the Union registry, based on lists of project credits established in accordance with ESD Article 5(1) and ESD Article 5(5). A project credit not included in one of these lists was considered ineligible.
No. The legislators defined slightly different criteria for eligibility of international project credits for compliance with ESD and EU ETS.
- 12/2021 - Final review reports from the 2021 annual review covering Member States’ emission estimates for the year 2019
- 10/2021 - Commission Implementing Decision (EU) 2021/1876 on ESD emissions for the year 2019 for each Member State
- 01/2021 - Final review reports from the 2020 comprehensive review covering Member States' and UK’s emission estimates for the year 2018
- 12/2020 - Commission Implementing Decision (EU) 2020/1834 on ESD emissions for the year 2018 for each Member State
- 12/2019 - Commission Implementing Decision (EU) 2019/2005 on ESD emissions for the year 2017 for each Member State
- 12/2019 - Final review reports from the 2019 annual review covering Member States' emission estimates for the year 2017
- 11/2018 - Commission Implementing Decision (EU) 2018/1855 on ESD emissions for the year 2016 for each Member State
- 11/2018 - Final review reports from the 2018 annual review covering Member States' emission estimates for the year 2016
- 12/2017 - Commission Implementing Decision (EU) 2017/2377 on ESD emissions for the year 2015 for each Member State
- 12/2017 - Final review reports from the 2017 annual review covering Member States' emission estimates for the year 2015
- 06/2017 - Commission Implementing Decision (EU) 2017/1015 on ESD emissions for the year 2014 for each Member State
- 12/2016 - Commission Implementing Decision (EU) 2016/2132 on ESD emissions for each Member State for the year 2013
- 12/2016 - Final review reports from the 2016 comprehensive review covering Member States' emission estimates for the years 2005, 2008-10 & 2013-14
- 08/2016 - Supporting study for the evaluation of Decision No. 406/2009/EC (Effort Sharing Decision)
- 20/07/2016 - COM/2016/483 - Report on evaluating the implementation of Decision No. 406/2009/EC pursuant to its Article 14
- 20/07/2016 - SWD/2016/251 - Staff working doxument accompanying the report
- 10/08/2017 - Commission Decision (EU) 2017/1471 of 10 August 2017 amending Decision 2013/162/EU to revise Member States' annual emission allocations for the period from 2017 to 2020
- 31/10/2013 - 2013/634/EU - Commission Implementing Decision on the adjustments to Member States' annual emission allocations for the period from 2013 to 2020 pursuant to Decision 406/2009/EC
- 23/03/2013 - 2013/162/EU - Commission Decision on the effort of Member States to reduce their greenhouse gas emissions to meet the Community’s greenhouse gas emission reduction commitments up to 2020 pursuant to Decision No 406/2009/EC of the European Parliament and of the Council
- 23/04/2009 - Decision No 406/2009/EC of the European Parliament and of the Council of 23 April 2009 on the effort of Member States to reduce their greenhouse gas emissions to meet the Community’s greenhouse gas emission reduction commitments up to 2020
- Apr 2012 - Behavioural Climate Change Mitigation Options and Their Appropriate Inclusion in Quantitative Longer Term Policy Scenarios
- June 2012 - Final Report - Next phase of the European Climate Change Programme: Analysis of Member States actions to implement the Effort Sharing Decision and options for further community-wide measures
- June 2012 - Appendix 1- Greenhouse gas emissions projections, emissions limits and abatement potential in the Effort Sharing Decision (ESD) sectors
- June 2012 - Appendix 2 - Action Plan for Member States preparing for the ESD - (summary of potential activities that could be carried out by Member States, info on how and when they could be undertaken, and examples of good practices)
- June 2012 - Appendix 3 - Case study reports analysing best practices which may serve as examples of policies that could be implemented at a national level to meet the ESD targets