This post is a rather technical note on how we set and interpret climate targets where the underlying data series are subject to frequent revisions. In the EU’s climate architecture, the level of ambition is usually expressed in terms of reduction commitments relative to a base year. Sometimes these reduction commitments are in percentage terms but are then converted into absolute figures using data from the National Inventory Reports for a recent year or period. In other cases, the reduction commitments are already expressed in absolute terms, but the size of the required reduction has previously been determined by reference to national inventories in a base year or period. But what happens to these targets if the data used in these National Inventory Reports are later subject to recalculation?
For example, the Effort Sharing Regulation (EU) 2018/842 as amended by Regulation (EU) 2023/837 has an Annex I which sets out for each Member State the required percentage reduction in covered emissions in 2030 relative to their 2005 levels. The Commission then establishes what these percentage reductions mean for the annual emission allowances (AUAs) allocated to Member States between 2021 and 2030 in an Implementing Decision, most recently revised for the years 2023-2025 in Implementing Decision (EU) 2023/1319. These percentage reductions are calculated based on “a comprehensive review of the inventory data for the years 2005 and 2016 to 2018” (Article 4 of Regulation (EU) 2018/842). In turn, the allocation of AUAs for the years 2026-2030 will be determined following a comprehensive review of the inventory data for 2021, 2022 and 2023 to be carried out in 2025. This will allow the precise annual targets for 2026-2030 to reflect any recalculations in the inventories up to that point.
However, there is no explicit mention in the ESR that there should be a change in the AUAs for 2021-2025 if the inventory data for the base years 2005 and 2016 to 2018 should subsequently change. This is even though the revised inventory data for the years 2021-2025 will be used to check compliance with the AUA ceilings. A recalculation of some series covered by the ESR could thus make it either easier or more difficult to stay within a Member State’s AUA ceiling without this reflecting any change in its climate policies. This will also be the case for the 2026-2030 data if recalculations occur after the 2025 review.
The LULUCF Regulation (EU) 2018/841 revised by Regulation (EU) 2023/839 has a different approach. The EU-wide target in 2030 is not set in percentage terms but is already an absolute figure (a sink of 310 Mt CO2e). This figure is then allocated between Member States in Annex IIa of the Regulation according to their average 2016-2018 inventory data as reported in the 2020 National Inventory Report. This gives the required reduction (‘the target’) in LULUCF emissions and removals to be achieved in 2030 as the difference between the 2030 ceiling for each country relative to this base period. The Regulation makes explicit provision for potential changes in the national inventory figures. The obligation on a Member State is to ensure that the sum of its LULUCF greenhouse gas emissions and removals reported for the year 2030 in its greenhouse gas inventory as submitted in 2032, compared to the average of its greenhouse gas inventory data for the years 2016, 2017 and 2018 as submitted in 2032, does not exceed the target set out for that Member State in Annex IIa of the Regulation (my italics).
The Regulation also sets a carbon budget for each Member State for the years 2026-2029 that also includes this updating mechanism. The budget is set as the sum of the differences in each year between annual limit values set on the basis of a linear trajectory towards 2030 and the average value for a Member State’s greenhouse gas inventory data for the years 2021, 2022 and 2023, as submitted in 2025. Member States must keep the sum of the difference in each year between their reported LULUCF emissions and the average value for their greenhouse gas inventory data for the years 2021, 2022 and 2023, again as submitted in 2032, below this budget. Because the constraint is operationalised in terms of differences, a recalculation of the LULUCF series does not automatically change the nature of the target (making it either easier or more difficult to achieve). However, the effort needed to achieve a fixed target may be greater or less. For example, if a revision means that the same action delivers half the emissions saving, then achieving a fixed reduction target becomes twice as hard.
Recalculations can have a significant impact on inventory numbers
The National Inventory Reports (NIR) make clear that there is very significant variation in the uncertainty that is attached to estimates of emissions from different economic sectors. Using data from the Irish NIR 2024, the cumulative uncertainty coefficient from both the activity data and emissions factors for CO2 emissions from fossil fuel use is around 2-5%, 15-30% for CH4 emissions from livestock and manure management, but can be up to 100-125% for some of the LULUCF categories such as grassland and forestry. This difference in uncertainties may explain why the ESR does not pay attention to the potential impact of recalculations on the achievement of targets while the LULUCF Regulation does.
The significance of recalculations for LULUCF activities is evident in recent Irish data, but similar variations occur in other Member State inventories. Table 1 shows reported LULUCF net emissions in Ireland in successive National Inventory Reports from 2021 to 2024. In Ireland, unlike most other EU Member States, the LULUCF sector is a net source of emissions due to large emissions from wetlands and organic soils. I use the Recalculations Excel spreadsheet which is a mandatory part of the national inventory submissions each year to show how the LULUCF inventories have changed from year to year. This gives the reported emissions in the previous year’s NIR, the impact of recalculations in the current year’s NIR, and the percentage change arising from the recalculation. The inventory figure for specific years can vary by as much as 50% or more from one year to the next. In the 2024 NIR, net emissions for the years 2011 to 2022 were all around 30% or more smaller than reported in the 2023 NIR. On the other hand, recalculation increases of similar orders of magnitude had been reported in the 2021 and 2022 NIRs compared to the previous year.

I want to emphasise that highlighting these variations from year to year is not a criticism of those who compile the national inventory. The inventory methodology undergoes constant improvement and the figures can change for many reasons – a change in the metric used to aggregate different GHG gases, a change from Tier 1 to higher Tier methodologies, greater granularity in the activities captured in the inventory, as well as improvements in the models used to estimate appropriate emission factors. The rationale for the changes in any year is always justified in the National Inventory Reports.
Table 2 shows how the approach in the LULUCF Regulation works in practice. Instead of setting a fixed target for the size of LULUCF removals in 2030 which would leave the required level of ambition very vulnerable to recalculations, the level of ambition (namely, the required reduction in net emissions) is fixed allowing the 2030 level of removals to be determined by the inventory numbers reported in any year. Table 2 shows how this would work using inventory data from recent years. In practice, the 2030 target will be set using the numbers reported in the 2032 National Inventory Report.

The target in the LULUCF Regulation is calculated as the difference between Ireland’s contribution to the overall EU LULUCF target of a sink of 310 Mt CO2e in 2030 and its average 2016-2018 net emissions. The table shows how the 2030 ceiling can vary with successive recalculations of the LULUCF net emissions series, holding the target reduction as set out in the Regulation constant. The ultimate ceiling will be determined by the 2032 NIR.
Source: Own calculations based on Ireland’s National Inventory Reports.
Thus, unlike in the ESR, the LULUCF Regulation does not fix an absolute ceiling for net emissions and removals in 2030 which would be very sensitive to the impact of recalculations on the level of ambition required of a Member State. Instead, the level of ambition is fixed and the ultimate 2030 ceiling will reflect any recalculations in the inventory in that year. This is clearly a desirable feature of a target when significant recalculations are likely to be made.
Ireland’s Sectoral Emissions Ceilings – a case study
I now comment on a case where this lesson has yet to be learned. Using Ireland’s climate targets as an example, I show how failure to allow for recalculations can lead to distorted messages and incentives with potential negative consequences for climate action.
By way of background, Ireland has legislated for an ambitious 51% emissions reduction target in 2030 relative to 2018 on a pathway towards its legally binding net zero emissions target in 2050. What makes this target ambitious is that around 37% of national emissions in the base year (excluding LULUCF) arose in the agricultural sector where technological mitigation options are limited. Under Ireland’s Climate Action and Low Carbon Development Act 2015 through 2021, Ireland’s Climate Change Advisory Council is required to propose five-year carbon budgets to the government. The government considers and may amend the proposed carbon budgets which are subsequently approved by the Parliament.
The government is then required, under the Act, to prepare Sectoral Emissions Ceilings consistent with the carbon budgets which specify the maximum amount of greenhouse gas emissions that are permitted in different sectors of the economy during a budget period. Table 3 shows the expected reduction in emissions by 2030 compared to 2018 for each sector as well as the individual Sectoral Emissions Ceilings (SECs) for the first two carbon budget periods 2021-2025 and 2026-2030. The bolded bottom row shows the legal obligations arising from the Climate Act and the adopted carbon budgets for the first two budget periods. No SEC was set for the LULUCF sector because of the uncertainty around the inventory numbers previously discussed (subsequently, the EU 2030 target shown in Table 2 has been adopted as the LULUCF target also for the national Irish climate target in 2030). However, the sum of the SECs in each budget period leaves some room for net emissions from the LULUCF sector. In the second carbon budget period, the SECs imply a requirement for further reductions of 26 Mt CO2e from as yet unidentified activities which might be realised from additional technological breakthroughs not foreseen at this point.

Source: Government of Ireland, Sectoral Emissions Ceilings, September 2022.
Our interest is in the SEC for Agriculture. Agriculture is the single largest emitting sector but was given the lowest (but still challenging) 2030 percentage reduction target. However, the key point for our story is that this reduction target was then translated into absolute SECs for the two carbon budget periods 2021-2025 and 2026-2030, amounting to 106 and 96 Mt CO2e, respectively.
Ireland’s Environmental Protection Agency is the national inventory compiler. Each year it produces a provisional set of GHG emissions for the previous year and assesses progress towards both EU and national climate targets. Its 2024 report published in July 2024 included provisional estimates for GHG emissions in 2023 and was thus able to assess progress over the five years since climate targets were set relative to the 2018 baseline (Table 4). It shows that emissions fell by 8% in the period 2018-2023, leaving a very large stretch to achieve the legally-binding 51% reduction in the period 2018-2030. For agriculture, emissions have fallen by 3% in the 2018-2023 period, indicating a significant acceleration will be required to reach the SEC targets of a 10% reduction in the 2018-2025 period and a 25% reduction in the 2018-2030 period.

Source: EPA Ireland’s Provisional GHG emissions 1990-2023, July 2024
The EPA report also looks specifically at the use each sector has made of its SEC for the first carbon budget period 2021-2025 in the first three years. It further estimates the required rate of reduction in emissions if the sector is to remain within its SEC for the first carbon budget period. In its 2023 report on provisional GHG emissions (which only took the first two years 2021 and 2022 into consideration) it estimated that agricultural emissions would have to fall by on average 8.3% per annum over the following three years for agriculture to remain within its SEC.
Agricultural emissions fell by a further 4.6% in 2023 compared to 2022, a significant fall but still less than what the EPA had estimated would be necessary to remain within the SEC. However, the 2024 assessment tells a very different story (Figure 1, labelled as Figure 5 in the original). It now assesses that Agriculture is comfortably within its SEC. Provided its emissions do not increase beyond the 2023 level in 2024 and 2025 (more specifically, a fall of 0.1% in each of those years is required), then Agriculture will comply with its SEC, even though clearly emission reductions are not on track to meet the 2030 reduction target of 25%.
How to explain this turnaround? Readers of this post so far will not be surprised to learn that it has to do with a recalculation of agricultural emissions. The EPA makes this clear in the footnote to Figure 1 where it writes that “Change in distance to SEC is largely the result of refinements to the Agricultural inventory”. Specifically, estimates of CH4 and N2O emissions associated with non-dairy cattle and sheep categories have been revised. For sheep emissions, the methodology has changed to a Tier 2 approach, while for non-dairy cattle there has been additional disaggregation of production systems which allows for more refined estimation of daily average liveweight gain. Again, it must be stressed that these methodological refinements are highly desirable and to be welcomed.
The problem lies in the fact that the recalculations lead to a reduction in reported agricultural emissions by, on average, 1.4 Mt CO2e per annum for each of the years 2018 to 2023, but the Agriculture SEC has not been updated to reflect this. As a result, a misleading message is being sent to the agricultural industry that it can rest on its laurels, whereas it is clear we need a significant acceleration in the rate of emissions reduction.

Source: EPA Ireland’s Provisional GHG emissions 1990-2023, July 2024
Conclusions
This post addresses a rather technical issue of setting climate reduction targets where recalculation of inventory series may leave the basis for those targets outdated. It contrasts the approach in the Effort Sharing Directive with the approach in the LULUCF Regulation. The ESR allows for updated inventory series when setting future targets but does not have a mechanism to review those targets once they are set. A recalculation of some series covered by the ESR could thus make it either easier or more difficult to stay within a Member State’s AUA ceiling without this reflecting any change in its climate policies. The LULUCF Regulation, on the other hand, protects itself from recalculations by defining the required reduction and letting the ultimate level of net removals reflect any recalculations in the final year.
I used the case study of Ireland’s Sectoral Emissions Ceilings to illustrate how failure to take account of the impact of recalculations on climate targets can give misleading signals regarding the urgency of climate action. It is important to underline that technical revisions to the inventory can be positive or negative in terms of their impact on the level of ambition required of the sectors affected. The specific revisions to Ireland’s agricultural emissions lowered reported emissions which appears to make it easier for the sector to comply with unaltered SECs, but I have shown (in the case of LULUCF emissions) how recalculations can also work the other way. Therefore, I welcome that Ireland’s Climate Change Advisory Council has drawn attention to this issue in its latest 2024 Annual Review. It writes “There needs to be a programmed re-evaluation of the levels of the carbon budgets so that they remain coherent with Ireland’s emissions statistics, which are constantly being improved and updated”. Similarly, the EPA in its press release announcing the provisional GHG inventory in July 2024, given the agriculture recalculations, noted: “In line with new research in the latest update to the inventory, the EPA refined the information underpinning the agricultural figures which has led to an 8.5 Mt CO2eq reduction in emissions from agricultural activities from 2018-2023. It is imperative that this is now incorporated into carbon budgets to ensure that they reflect latest science, data and knowledge on greenhouse gas emissions in Ireland”.
In Ireland’s case, a re-evaluation of the five-year carbon budgets is complicated by the fact that these carbon budgets must be approved in a parliamentary process which makes amending them more difficult. The Council’s recommendation is to adopt a scheduled technical re-assessment of carbon budgets based on inventory methodological changes only on a 5-yearly basis, and at a minimum in tandem with the end of the previous carbon budget period review. It foresees that the process under the Climate Act whereby carry-forward or exceedances of carbon budgets should be integrated into the carbon budget for the following five-year period either as a bonus or a penalty should at that point be adjusted to take account of recalculations.
This can make sense for the carbon budget figures which are legally binding. But the SECs are set by government alone and are thus easier to amend. There is no reason why the SECs should not be updated on an annual basis where recalculations lead to a significant revision in the inventory numbers even if the carbon budget totals are only amended later. Ideally, this would be a technical process rather than a political process. It should be delegated to the EPA to make these technical changes to the SECs whenever there is a significant recalculation in an inventory series, so that we avoid the publication of misleading figures such as Figure 1 above in EPA publications. This would have the advantage that the sectors concerned would have forewarning that the carbon budget totals are likely to change, and that this does not come as a surprise when it happens retrospectively. It also maintains the original level of ambition intended by the SECs. Otherwise, the risk remains that the targets lose their meaning and their ability to drive the necessary climate action.
This post was written by Alan Matthews.
Update 7 Nov 2024. The reference to the EPA press release calling for updating of carbon budgets in line with revisions in emissions series has been added. I also added a sentence noting that a change in a series with a fixed reduction target may still imply a change in the effort needed to meet that target.
Photo credit: Flooded towpath in Northern Ireland, © Copyright Albert Bridge and licensed for reuse under this Creative Commons Licence.