The Effort Sharing Regulation establishes for each EU Member State a national target for the reduction of greenhouse gas emission by 2030 in the following sectors: domestic transport (excluding aviation), buildings, agriculture, small industry and waste. In total, the emissions covered by the Effort Sharing Regulation account for almost 60% of total domestic EU emissions.
Initially adopted in 2018, the Regulation was amended in 2023.With their new national targets Member States will collectively contribute to an emission reduction at EU level, in the Effort Sharing sectors, of 40% compared to 2005 levels. The revision was adopted as part of a package of proposals aimed at reducing the EU’s emissions by 55% by 2030 (compared to 1990 levels) and deliver the European Green Deal.
Member States’ targets
As you can see in the table below, EU Member States now have emission reduction targets ranging from 10 to 50% compared to 2005 levels.
|Country||Old targets (set in 2018)||New targets (since 2023)|
|Belgium||-35 %||-47 %|
|Bulgaria||-0 %||-10 %|
|Czechia||-14 %||-26 %|
|Denmark||-39 %||-50 %|
|Germany||-38 %||-50 %|
|Estonia||-13 %||-24 %|
|Ireland||-30 %||-42 %|
|Greece||-16 %||-22,7 %|
|Spain||-26 %||-37,7 %|
|France||-37 %||-47,5 %|
|Croatia||-7 %||-16,7 %|
|Italy||-33 %||-43,7 %|
|Cyprus||-24 %||-32 %|
|Latvia||-6 %||-17 %|
|Lithuania||-9 %||-21 %|
|Luxembourg||-40 %||-50 %|
|Hungary||-7 %||-18,7 %|
|Malta||-19 %||-19 %|
|Netherlands||-36 %||-48 %|
|Austria||-36 %||-48 %|
|Poland||-7 %||-17,7 %|
|Portugal||-17 %||-28,7 %|
|Romania||-2 %||-12,7 %|
|Slovenia||-15 %||-27 %|
|Slovakia||-12 %||-22,7 %|
|Finland||-39 %||-50 %|
|Sweden||-40 %||-50 %|
The Regulation recognises the different capacities of Member States to take action by differentiating targets according to Gross Domestic Product (GDP) per capita across Member States. This ensures fairness because higher income Member States take on more ambitious targets than lower income Member States. However, an approach for higher income Member States based solely on relative GDP per capita would mean that some would have relatively high costs for reaching their targets. To address this, the targets are adjusted to reflect cost-effectiveness for those Member States with an above average GDP per capita.
The 2023 amendment to the Regulation also included an adjustment to contain target increases for individual Member States to avoid some Member States’ targets from increasing much more than the collective target. Member States target increases were limited to 12 percentage points, compared to an increase of 11 percentage points at EU level. To maintain the overall EU wide ambition of the ESR, targets were increased by 0.7 percentage points for those Member States whose updated targets were not more ambitious than their cost-effective projections, that had already contributed to a target correction or that were already at the boundaries of the target range..
In addition to EU Member States, Iceland and Norway have agreed to implement the Effort Sharing Regulation and commit to binding 2030 emission reduction targets. They apply the same rules and have the same obligations and flexibilities as EU Member States, to allow for a fair and cost-efficient achievement of their targets. Moreover, they also adopted national plans describing their existing and planned policies and measures and how they intend to meet the requirements of the Effort Sharing and LULUCF (Land Use, Land Use Change and Forestry) Regulations.. The commitments of Iceland and Norway on the Effort Sharing Regulation will be revised in view of the amendments operated by the 2023 revision of the Effort Sharing Regulation.
Annual emission limits
In addition to establishing targets for the reduction of emissions in the Member States by 2030, the Effort Sharing Regulation also defines annual emission limits for the years 2021 to 2030. For that purpose, Member States are provided with a number of emission allocations (each corresponding to a tonne of CO2 equivalent) for each of the years in the period, and the number of allowances decreases every year.
The annual emission limits per year per Member State are calculated on the basis of a trajectory system (leading to the 2030 emission reduction targets) and a set of adjustments established in articles 4 and 10 of the Effort Sharing Regulation.
To address challenges which might be faced by certain lower income Member States, an additional adjustment of 41 million tonnes was provided in the year 2021.
The Commission Implementing Decision (EU) 2020/2126 of 16 December 2020 provides the result of such calculations, assigning to each Member State the corresponding number of emission allocations, often named AEAs (annual emission allocations), for each year from 2021 to 2030.
The 2023 revision of the Effort Sharing Regulation amended the 2030 targets and the system of trajectories leading to them. Therefore, in 2023, the Commission amended the Commission Implementing Decision (EU) 2020/2126 to update the number of AEAs assigned to Member States in the years 2023-2030. The 2023 revision of the Regulation maintained the emission limits for the years 2021 and 2022, and therefore the number of AEAs assigned to each Member State in those two years remains the same as in 2020. The annual emissions allocations for the years 2026-2030 will be determined in 2025, following a comprehensive review of the emission data.
The Regulation also has a safety reserve of a maximum of 105 million tonnes. The reserve is subject to the collective achievement of the EU's target of a 40% reduction by 2030. Member States struggling to meet their national targets may obtain, through the safety reserve, access to a limited number of additional allocations to cover their emissions. Such additional allocations will only be available in 2032, when carrying out the last the compliance check of the emissions in the 2021-2030 decade, and as a last resort mechanism to be used under strict conditions (e.g. only if the 2013-2020 targets have been overachieved).
Achieving the targets in a fair and cost-effective manner
The Regulation provides Member States with a set of flexibilities.
Flexibility to access allowances from the EU ETS
The Effort Sharing Regulation allows nine Member States the choice to use a limited amount of ETS allowances for offsetting emissions in the effort sharing sectors. It concerns Member States that have national reduction targets significantly above both the Union average and their cost-effective reduction potential, or which did not allocate any EU ETS allowances for free to industrial installations in 2013. This flexibility was not available under the Effort Sharing Decision governing the 2013-2020 period.
The Member States with this option are, Belgium, Denmark, Ireland, Luxembourg, Malta, the Netherlands, Austria, Finland, and Sweden. The maximum limit that Ireland and Luxembourg can use annually is set at 4% of their Effort Sharing emissions in 2005. The 2023 revision of the Regulation increased the maximum limit for Malta from 2% to 7%. All other beneficiaries have a maximum limit set at 2% of their Effort Sharing emissions in 2005.
Iceland and Norway, who have agreed to implement the Effort Sharing Regulation, are also eligible, having the following maximum limits: 4% for Iceland and 2% for Norway.
Under the earlier version of the Regulation in 2018, eligible Member States needed to notify the Commission by 31 December 2019 how much of the maximum amount of this flexibility they intended to use during the Effort Sharing compliance period in 2021 to 2030.
Six Member States, as well as Iceland and Norway, have notified that they intend to use their full amount of this flexibility, whereas Belgium intends to use 1.89%. The Netherlands and Sweden have decided not to use the flexibility.
The 2023 revision of the Regulation provided Belgium, Malta, the Netherlands and Sweden with the option to notify the Commission by 31 December 2023 of how much of the unused maximum amount of this flexibility for the period 2025-2030 they intend to use.
In 2024 and 2027, all Member States will have the possibility of revising their notified percentages.
For each Member State, the amounts, as notified by 31 December 2019, are set out in Commission Implementing Decision (EU) 2020/2126.
The allowances notified to be used for compliance under the Effort Sharing Regulation are deducted from the amounts that would normally be auctioned under the EU ETS. The deductions/cancellations are not taken into account for calculating feeds into the ETS market stability reserve.
Access credits from the land use sector
To stimulate additional action in the land use sector, Member States can use up to 131 million credits over each of the 2021-2025 and 2026-2030 periods to comply with their national targets.
All Member States are eligible to make use of this flexibility if needed to achieve their target. The flexibility is higher for Member States with a larger share of emissions from agriculture. This recognises that there is a lower mitigation potential for emissions from the agriculture sector.
Banking, borrowing, buying and selling
In years where emissions are lower than their annual emission allocations, Member States can bank surpluses and use them in later years. For high cumulative surpluses, banking limits have been added.
In years where emissions are higher than the annual limit, Member States can borrow a limited amount of allocations from the following year.
This gives Member States the flexibility to deal with annual fluctuations in emissions due to weather or economic conditions.
Member States can also buy and sell allocations from and to other Member States. This is an important vehicle to ensure cost-effectiveness. It allows Member States to access emissions reductions where they are the cheapest, and the revenue can be used to invest in modernisation.
Project-based mechanisms within the EU are a possible way to underpin these transfers.
Clear rules for reporting and following up progress
The Commission evaluates and reports annually on progress towards achieving the targets.
If any Member State is not on track, they will be required to submit to the Commission an appropriate action plan.
To reduce administrative burden and allow for the potential contribution from the land use sector (which has a 5-year compliance period), a comprehensive review of Member States' emissions reports and a more formal compliance check will be organised every five years. This closely aligns the proposal with the five-year review cycle set out in the Paris Agreement.
Where a Member State still does not meet its annual obligation in any year, taking into account the use of flexibilities, the shortfall is multiplied by a factor of 1.08 and this penalty is added to the following year's obligation.
Stakeholders were involved at various stages in the development of the Regulation and its 2023 revision, e.g. through:
- 27/04/2021 - Public consultation on the preparation of the proposal that led to the 2023 revision of the Effort Sharing Regulation
- Written stakeholder consultation on the Green Paper: A 2030 climate & energy framework
- 19/06/2015 - Stakeholder consultation on the preparation of the proposal that led to the adoption, in 2018, of the Effort Sharing Regulation. The results are summarised in Annex 8.2 of the Impact assessment.
- 28/06/2023 - Commission Implementing Decision (EU) 2023/1319 of 28 June 2023 amending Implementing Decision (EU) 2020/2126 to revise Member States’ annual emission allocations for the period from 2023 to 2030
- 26/04/2023 - Commission Decision 2023/863 - On the effort sharing safety reserve
- 19/04/2023 - Regulation (EU) 2023/857 - Amending Regulation (EU) 2018/842 on binding annual greenhouse gas emission reductions by Member States from 2021 to 2030
- 14/07/2021 - Commision’s proposal for a Regulation amending the Effort Sharing Regulation
- 27/04/2021 - Public consultation for the review of the Effort Sharing Regulation and respective Summary Report
- 01/2021 - Final review reports from the 2020 comprehensive review covering Member States' emission estimates for the years 2005, 2016, 2017 and 2018
- 16/12/2020 - C/2020/8865 - Commission Implementing Decision (EU) 2020/2126 - on setting out the annual emission allocations of the Member States for the period from 2021 to 2030 pursuant to Regulation (EU) 2018/842 of the European Parliament and of the Council (Text with EEA relevance)
- 13/03/2019 - Commission Delegated Regulation (EU) 2019/1124 - Amending Delegated Regulation (EU) 2019/1122 as regards the functioning of the Union Registry under Regulation (EU) 2018/842 of the European Parliament and of the Council
- 30/05/2018 - Regulation (EU) 2018/842 - 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
- 20/07/2016 - MEMO-16-2499 - Factsheet on the Commission's proposal on binding greenhouse gas emission reductions for Member States (2021-2030)
- 20/07/2016 - COM/2016/482 - Proposal for a Regulation on binding annual greenhouse gas emission reductions by Member States from 2021 to 2030 for a resilient Energy Union and to meet commitments under the Paris Agreement and amending Regulation No 525/2013 of the European Parliament and the Council on a mechanism for monitoring and reporting greenhouse gas emissions and other information relevant to climate change