The EEA recently published updated projections for LULUCF emissions and removals by Member State to 2030 and 2050. It is not good news. Although the fall in the LULUCF sink appears to have been halted over the past six years, the EU27 net sink in 2023 was just 198MtCO2e and estimated at 212MtCO2e in 2024. This compares to the 2016-2018 average of 268MtCO2e and the 2030 target of 310MtCO2e set in the LULUCF Regulation (Figure 1).
Source: EEA, 2025.
The projections show that, with existing measures (the WEM scenario), the EU27 net sink is projected to be 183Mt CO2e in 2030 (all subsequent figures are in CO2e units). This does not necessarily imply a further fall in removals, as the base year removals for the projections in 2023 and 2024 are lower in the projections than in the inventory figures (165Mt and 172Mt, respectively). These differences reflect the frequent revisions in the LULUCF inventory as new information becomes available. With additional measures (the WAM scenario), net removals could reach 233Mt, but this figure would still be well below the 2030 LULUCF target.
The overall target in the European Climate Law is for a net 55% reduction in emissions compared to the 1990 baseline. To reach this target, the LULUCF contribution is capped at removals of 225Mt. If removals surpass this level in 2030, the result would be a slightly higher overall reduction than the net 55% target. The WAM scenario if fully implemented would allow this over-arching target in the Climate Law to be met.
Member State targets
Member States have a ‘no net debit’ commitment for the five-year period 2021-2025, requiring that cumulative ‘accounted’ emissions from land use are compensated for by at least an equivalent amount of cumulative ‘accounted’ removals. Accounted emissions and removals for forest land are measured against Forest Management Reference Levels. The intention was to avoid crediting removals that are simply due to age-class dynamics or past management decisions, ensuring that only additional mitigation efforts count. Other deviations from simple net accounting include baseline accounting for cropland/grassland (relative to average emissions in the period 2005-2009), the voluntary accounting for wetlands also using baseline accounting if included, and the exclusion of natural disturbance emissions above a background level.
From 2026 onwards, the Regulation shifts from ‘no net debit’ to binding national targets based on reported net removals. Each Member State has a binding national target for 2030, derived from the EU-wide target for a sink of 310Mt. These national targets are translated into a five-year carbon budget for the period 2026-2030 with annual ceilings, representing a cumulative net removals budget for the period. The Commission will check whether the cumulative net removals reported by each Member State meet or exceed their allocated budget.
To avoid backloading increased removals into the final year, any exceedances above the annual ceilings in the period 2026-2029, after taking flexibilities into account, will be added to the 2030 inventory emissions figure, multiplied by a factor of 1.08. The Commission will assess compliance with the no-debit commitment for 2025 in 2027 and with the 2030 target in 2032.
The Commission will assess the progress of Member States towards their 2030 target annually, and if it finds that progress is insufficient, Member States must submit a corrective action plan. The Commission will assess the robustness of that plan and can issue an opinion. The Member State must publicly justify any decision not to address that opinion or a substantial part thereof.
Flexibilities
The revised LULUCF Regulation provides for several flexibilities to help Member States meet their targets, in addition to the exclusion of excessive natural disturbance emissions under certain conditions. There is a cross-sectoral ‘general flexibility’ whereby Member States can compensate deficits in their LULUCF accounts with surpluses in the Effort Sharing Regulation (ESR) sector, and vice versa.
Intra-EU trading of LULUCF credits is also possible, whereby countries with strong sinks can support those with deficits by transferring surplus credits. It is also possible for the deficit country to finance a greenhouse gas mitigation project in another country and to claim the credit, provided that double counting is avoided and traceability is ensured.
Finally, there are conditional flexibilities that can only be used if the EU as a whole meets its LULUCF target in each compliance period. There is a forest flexibility available in the period 2021-2025 that would allow Member States with structurally declining forest sinks (e.g. due to age-class dynamics) to generate limited additional credits. Member States can compensate excess accounted emissions from forest land provided they include measures to ensure conservation or the increase in forest sinks in their long-term strategies under the Governance Regulation, or they provide evidence of natural disturbances and plan measures to prevent or mitigate similar events in the future.
There is also a managed land flexibility for the 2026-2030 period that applies to cropland/grassland accounting to address excess net emissions due to natural disturbances, long-term impacts of climate change or an exceptionally high proportion of organic soils.
These flexibilities will 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.
Towards a cliff edge in 2021-2025?
The Commission made an assessment in its 2025 Climate Action Progress Report of the status of each Member State with respect to the ‘no debit’ rule for the first three years of the first compliance period 2021-2023 (Table 1). It notes that this is an approximate estimate of the status of a Member State’s trend towards compliance with its ‘no debit’ commitment. The table shows a preliminary cumulative debit for the EU for the three-year period of 52Mt (note that the positive numbers in the table refer to accounting debits, and the negative numbers to accounting credits). Countries should have a zero or negative balance for the whole period to meet the ‘no debit’ target.
Source: Commission, Climate Action Progress Report 2025.
The table shows that 16 countries are on track to meet their ‘no debit’ commitment in the 2021-2025 compliance period while 11 countries are not likely to do so on current trends. This does not necessarily mean that these countries will be in breach of their target commitment as this will depend on the extent to which they make use of flexibilities.
If the cumulative debit persists for the full compliance period, the conditional flexibility mechanisms would not be accessible. But individual countries could still achieve compliance making use of the general flexibility (reallocating surplus ESR credits), through trading by purchasing from surplus countries, or through claiming natural disturbance exceptions. Member States who transfer surplus credits to another Member State are obliged to inform the Commission and to make the information public in an easily accessible form. They should also use the revenue to tackle climate change in the Union or in third countries.
To date, I am not aware that any trades in LULUCF credits have been reported. But with the compliance year 2027 fast approaching, and a likely overall shortage of surplus credits, Member States likely to be in trouble may want to start thinking about bilateral deals. But such bilateral deals are politically sensitive. They are open to the criticism that they outsource responsibility for reducing net emissions and that the money paid to the supplier country could have been used to strengthen the incentives for domestic action at home.
What happens if a Member State fails to reach its LULUCF targets?
The LULUCF Regulation does not prescribe any penalties or sanctions if a Member State fails to achieve its targets in either compliance period. Failure to meet the LULUCF targets would, however, be a breach of EU obligations. The absence of a specific penalty clause in the LULUCF Regulation does not mean there are no consequences; it simply means the general enforcement mechanism of the EU legal order applies. The primary enforcement route is the general infringement procedure under the Treaty on the Functioning of the European Union (TFEU), which is not automatic and involves a political and legal process.
It is probable that the first preference of the Commission would be to request the non-compliant Member State to submit a detailed and credible corrective action plan (as we have seen, such plans are specifically provided for in the second compliance period even earlier in the compliance period if it is clear that the annual targets in the 2026-2029 period are being missed). If the Member State is non-cooperative, fails to submit a satisfactory plan, or fails to implement its own plan, then the Commission may initiate formal proceedings.
Infringement proceedings are lengthy with considerable Commission discretion along the way. First, the Commission sends a formal letter to the Member State, outlining the legal basis for the breach and giving it a deadline (usually two months) to respond and rectify the situation. If the Commission is not satisfied with the response, it issues a “reasoned opinion,” which is a formal legal analysis confirming the breach and setting a final deadline for compliance (e.g., by taking the necessary domestic measures to make up for the shortfall). If the Member State still does not comply, the Commission can refer the case to the Court of Justice of the EU (CJEU).
The CJEU will rule on whether the Member State has failed to fulfil its obligations under the LULUCF Regulation. A ruling against the Member State is highly likely if the facts of non-compliance are clear. If the Member State still does not comply with the CJEU’s initial ruling, the Commission can bring a second case before the Court, this time requesting financial penalties.
These are not specified in the LULUCF Regulation but are calculated by the Commission based on the seriousness, duration, and “nudge” effect needed. They can take the form either of a lump sum (a one-off fine for the period of non-compliance up to the point of the second judgment) or a recurring fine (e.g., daily or semi-annual) that continues to be paid until the Member State achieves compliance. This process mirrors enforcement in other environmental sectors (e.g., air quality directives, habitats directive) where specific penalties are not written into the law but are imposed via the TFEU infringement route.
Conclusions
Overall in the EU, removals in the LULUCF sector have decreased in the past 10 years, as a result of climate change and natural disturbance impacts on forests, increased harvest of wood, as well as lower sequestration of carbon by ageing forests. More recent data suggest some stabilisation in the net LULUCF sink albeit at a lower level than in the past. Nonetheless, recent data and projections released by the Commission and the EEA suggest that the targets in the LULUCF Regulation for the two compliance periods 2021-2025 and 2026-2030 including the 2030 target will not be met. The EEA projections show that much stronger measures to expand and protect sinks will be needed if the EU is to reach the 310Mt target by 2030.
The Commission, in its 2024 review of the operation of the LULUCF Regulation, noted that very few Member States had set out a concrete pathway to meet their national net removal targets in their updated National Energy and Climate Plans, nor had they identified sufficient action to assist farmers, foresters and other stakeholders in building sustainable business models in line with these targets.
The lack of detailed pathways in Member States’ updated National Energy and Climate Plans to address the gaps to target suggests they are sleepwalking towards a cliff edge that may lead to unpleasant consequences. The Commission assessed the LULUCF actions in the final submitted NECPs as follows:
“…several Member States have stepped up their ambition and have provided more concrete pathways to meet their 2030 target with additional policies in the land sector. 9 Member States (up from 5 in the draft plans) now project to reach their LULUCF targets… However, most of the plans lack sufficient details on the actions needed to reach the targets, and a quantification of their impacts.”
Member States may simply be betting that the Commission is unlikely to haul them over the coals for missing their targets. It is already clear that many Member States are not likely to reach their 2021-2025 ‘no net debit’ target, but the Commission has not rung any alarm bells.
The Commission is currently trying to get a 2040 climate target over the line. It took huge efforts by the Danish Presidency to achieve a Council general position on the 2040 target, that in turn allowed the EU to submit a 2035 Nationally Determined Contribution target to the COP30 meeting in Brazil. The Parliament has also adopted its first reading position, and it will now be up to the trilogues to agree the final legislation.
Following that agreement, the Commission must then prepare revisions to the legislation setting national targets and flexibilities in the EU climate framework, which according to the 2026 Commission work programme are scheduled for Q4 2026. Member States may calculate that the Commission is unlikely to initiate infringement proceedings just as negotiations on the proposals for further revisions to the LULUCF Regulation to bring it into line with the 2040 climate target get underway in 2027.
This is, of course, just speculation on my part. But to give greater credibility to the 2021-2025 targets due to be assessed in 2027, it would be helpful if the Commission were to lay out now the steps it plans to take in the event of non-compliance with these targets by Member States.
This post was written by Alan Matthews.
Photo credit: Photo of a beech forest was taken by Peter Prokosch and appears in the World Forest Ecosystems series, used under Creative Commons Licence CC BY-NC-SA 2.0.
