Yesterday, the European Commission published its proposed policy framework for climate and energy policy to 2030. It proposes two high-level goals while retreating from setting more specific targets for individual sectors and technologies. The over-arching goal is a greenhouse gas emissions reduction target for domestic EU emissions of 40% in 2030 relative to emissions in 1990. The proposal met with a mixed reaction and must still go through the legislative process in both the Parliament and the Council.
The Commission’s assessment is that the policies and measures implemented and envisaged by member states in relation to their current obligations to reduce greenhouse gas emissions, if continued after 2020 and fully effective, would deliver a 32% reduction relative to emissions in 1990. Therefore, it sees the 40% target as achievable with some additional effort. If a more ambitious target emerged from international negotiations, the Commission proposes that this additional effort could be balanced by allowing access to international credits.
It also proposes a second target that the share of renewable energy in the EU should be at least 27% by 2030. Its modelling suggests that a greenhouse gas reduction target of 40% should, by itself, lead to this share, so that adopting it as a target, in its view, does not imply an additional binding constraint. It would be binding on the EU as a whole, but it would not be binding on the member states individually. How the EU would ensure that the individual commitments undertaken by member states would add up to the achievement of this overall EU target is left unclear.
Nor is there any specific target proposed for the share of biofuels in transport fuels as in the 2020 package. The Commission has previously concluded that, because of indirect land-use change emissions, first-generation biofuels have a limited role in decarbonising the transport sector. In its proposed directive on fuel and energy from renewable sources, it indicated that food-based biofuels should not receive public support after 2020. However, this directive has met with opposition in both the Parliament and the Council and its ultimate fate in the legislative process remains unclear.
The EU-level target of a 40% reduction in GHGs by 2030 relative to 1990 must be shared between the sectors covered by the Emissions Trading Scheme ETS (power and large industrial plants) and what the member states must achieve collectively in the sectors outside of the ETS (this currently includes agriculture in addition to transport, industrial processes, household and waste). The Commission proposal is that the ETS sector would have to deliver a reduction of 43% in GHGs in 2030 and the non-ETS sector a reduction of 30% both compared to 2005. Currently, ETS emissions amount to about 2 billion tonnes CO2 equivalent annually and non-ETS emissions to about 2.5 billion tonnes, so the latter are slightly larger for the EU as a whole.
The Commission proposes to continue to allocate the collective effort for the non-ETS sector among the individual member states. Currently, the attribution is made on the basis of relative wealth using GDP per capita which results in a wide spread of obligations ranging from a 20% reduction to a 20% increase in non-ETS emissions. In the future, it seems that targets will be set higher in the low-income member states. This should reflect their relatively higher carbon intensity, lower energy efficiency as well as smaller capacity to invest. The Commission considers that, in implementing a 2030 framework, each member state’s GHG reduction target should continue to take into account these distributional factors.
Agriculture must meet additional obligations
It will be up to the individual member states to decide how their specific targets should be allocated among the separate non-ETS sectors including agriculture. However, the Commission paper suggests that the treatment of agriculture needs further analysis and it identifies a menu of possible options. In particular, it suggests that the land use, land use change and forestry (LULUCF) sector should be included in the EU’s domestic reduction commitments. It also identifies the possibility, for the first time, that agricultural emissions might be treated as an explicit third pillar, separate from both the ETS and non-ETS sectors. This idea has been pushed hard by the Irish Minister for Agriculture given the huge and disproportionate role that agricultural emissions play in the non-ETS sector in Ireland. Another option with similar effect, though not explicitly mentioned, would be to include reliance on agriculture as a criterion in the allocation of non-ETS ceilings to member states, given the well-known difficulties in reducing emissions in this sector while also maintaining and increasing food production.
Currently these emissions and removals are treated in different parts of the EU’s climate policy. Non-CO2 emissions from agriculture are treated in the Effort Sharing Decision while CO2 emissions and removals related to land-use and forestry are excluded from the EU’s domestic reduction target but are accounted for under international commitments. To ensure that all sectors contribute in a cost-effective way to the mitigation efforts, agriculture, land use, land use change and forestry should be included in the GHG reduction target for 2030. Further analysis will be undertaken with the aim of assessing the mitigation potential and most appropriate policy approach which could, for example, use a future Effort Sharing Decision governing the non-ETS GHG emissions or an explicit separate pillar, or a combination of both. Accompanying policy measures should also build on the experiences from “greening” under the Common Agricultural Policy and ensure coherence with other Union policies.
Future agricultural emissions
The Commission’s paper on the future policy framework for climate change to 2030 is informed by a report published last month on trends in GHG emissions to 2050 on a business-as-usual reference scenario. The projections in the Reference 2013 scenario are for a 32% reduction in 2030 (as noted in the introduction) and a 44% reduction in 2050, suggesting a large gap with the EU’s declared 2050 target.
This report also includes projections for emission trends from agriculture and LULUCF. The projections help to explain the ambiguity and dilemma surrounding the setting of targets for agricultural emissions.
While non-ETS emissions in aggregate are expected to fall by 20% by 2030 compared to 2005, and would be required to fall by 30% under the Commission’s latest plan, agricultural emissions (counting just non-CO2 emissions from methane and nitrous oxide and excluding direct energy use in agriculture) are projected to fall by just 4% by 2030 according to the trends report. This would mean that agriculture’s non-CO2 emissions would increase as a share of total EU GHG emissions from around 9% to 14%, and from 17% to 24% as a share of the required non-ETS emissions.
The main source of agricultural non-CO2 GHGs are N2O emissions from microbial processes in soils due to nitrogen input from mineral and organic fertilisers and crop residues left on fields. They contribute to roughly half of agricultural non-CO2 GHGs in EU28 (see the diagram). The other major source of agricultural non-CO2 GHGs is livestock rearing (dairy and non-dairy cattle, pigs, sheep and poultry). CH4 emissions are released from enteric fermentation in ruminants as well as from management of animal manure.
Future LULUCF emissions
The LULUCF sector is at present a carbon sink in the EU as it sequesters more carbon than it emits. The LULUCF sink is expected to be maintained until 2050, but it is projected to decline from about -244 Mt CO2 in 2010, to -214 Mt CO2 in 2030 and -196 Mt CO2 in 2050 in the Reference scenario. This decline is the result of changes in different land use activities of which the forest sector changes are the most important. The figure below shows the projection of the total EU28 LULUCF sink in the Reference scenario until 2050 and the contribution from different activities.
The big negative trend (from the point of view of meeting climate targets) is forest management because of larger harvest removals due to the growing demand for wood both for wood products and biomass energy. This is only partly countered in the forest sector by afforestation, a reduction in deforestation and increasing carbon storage in harvested wood product.
Activities in the agricultural sector have a smaller impact on the total LULUCF sink compared to the forest sector. Net carbon emissions from cropland are projected to decline by some 40% compared to 2010 due to the increasing cultivation of annual (e.g. miscanthus, switchgrass) and perennial lignocellulosic crops (e.g. short rotation tree plantations) for renewable biomass based bioenergy production.
Typically, these plants provide more litter input into the soil and management activities are less disturbing of the soil, leading to a reduced loss or even an accumulation of soil carbon. The area for perennial crops (including annual lignocellulosic crops) for renewable energy production is projected to grow significantly and by 2030 7% of total cropland is cultivated with perennials (9% in 2050). Total emissions from grasslands are also expected to go down as more land is projected to be converted to grassland that typically tends to sequester additional carbon.
What these figures suggest is that, without changes in management to sequester additional carbon, integrating LULUCF into the EU’s domestic climate change targets for 2030 would require more onerous targets for the rest of the non-ETS sector, including agriculture. This is because the trend in LULUCF emissions is negative (even though it remains overall a carbon sink, the sink effect will be smaller in the future). Of course, this need not be the case for each member states as the non-ETS targets will be national ones and different trends in LULUCF emissions may occur depending on the status of forestry, cropland management and grassland change in each country.
Update 28 January 2014. This conclusion in the previous paragraph is in fact not correct because of the way that credits and debits from LULUCF emissions will be measured in the next Kyoto commitment period (2013-2020). LULUCF emissions are not measured from a base year, as I assumed in the previous paragraph, but rather from a reference level under a business-as-usual (BAU) scenario. Because the reference level is based on BAU projected emissions and removals for the period 2013–2020, it already incorporates the projected reduction in the carbon sink effect. This means that inclusion of LULUCF, in theory, should have a neutral effect on the ability of other non-ETS sectors to meet any given target. However, if relatively cost-effective mitigation options in the forestry sector exist, for example, countries would be expected to undertake those mitigation activities first which would imply less effort would be needed in other non-ETS sectors for any given overall target.
Indeed, there may be cost-effective opportunities for carbon management in the land use sectors – agriculture and forestry – which are not yet exploited. Integrating the LULUCF sectors into the EU’s climate targets can then give an incentive to exploit these opportunities. But how best this can be done, and how to remunerate land managers for their contribution to carbon sequestration, remain difficult questions. An important conference in Brussels in April this year will tackle this thorny question.
Picture credit: DG Clima, What scorching weather (picture book for children)