On 20^th July, the European Commission announced the allocation of climate change targets for the Non-Emission Trading Scheme (ETS) sectors, which includes agriculture, transport, waste, and residential emissions. Overall, Ireland will have to reduce Greenhouse Gas Emissions by 30% below 2005 levels by 2030.

This target must be achieved during the period 2021-2030, with limits assigned for each year, decreasing in a linear trajectory. The proposal, also includes flexibilities related to the transfer of ETS allowances and the inclusion of land use, land use change and forestry credits. The inclusion of flexibilities may ultimately reduce Ireland’s non-ETS 2030 target to 20.4%.

The target of 30% allocated to Ireland (including flexibilities) represents a significant challenge to all sectors of the economy. The EPA has estimated that Ireland will reduce its non-ETS emissions by 9-14% below 2005 levels by 2020, which is significantly below our 2020 reduction target of 20%. Ireland’s Greenhouse Gas emission profile is unique within Europe, heavily weighted towards agriculture due to the lack of heavy industry within our overall economy. However, it is important to stress that since 1990, agricultural emissions has reduced by 9.7% in Ireland, while other areas such as transport has increased emissions by over 120%.

Member States 2030 Non-ETS Climate Change Targets including Flexibilities:

Ireland’s target of 30% is set at the EU average. The diagram above shows the allocation of targets to each EU Member State:

• Land use, land use change and forestry (LULUCF)

The inclusion of land use, land use change and forestry within the scope of the new EU climate change framework is a welcome development. This is a sensible approach, which broadens the tools available for Ireland to reduce GHG emissions, through carbon sequestration.

The Commission proposal includes the allocation of 280 million tonnes (CO2 eq) of LULUCF credits, of which Ireland is allocated 26.8 million tonnes over the 10 year period (5.6% of 2005 base year emissions). The Commission confirmed that Member States with a larger share of emissions from agriculture, were allocated a higher share of LULUCF credits. This is in line with the decision of EU Leaders in October 2014, which recognised the lower mitigation potential for emissions from the agriculture sector.

• Flexibility to access allowances from the ETS sectors

The Commission proposal also introduces a new flexibility for certain Member States including Ireland. On a once off basis, Ireland can switch ETS allowances (4% of the 2005 base year emissions) to the non-ETS sectors. Under normal circumstances these allowances would be auctioned via the ETS system. On an EU wide basis, no more than 100 million tonnes CO2 eq over the period 2021-30 can be allocated in this manner. In addition, Member States have to notify the Commission before 2020, the amount of flexibility they will use in order to preserve the certainty of the ETS system.

Concluding Remarks

Finally, the Commission proposal also includes a reduction target for the UK. In the context of the Brexit negotiations, it is unclear at this stage if Britain will commit to their target, despite exiting the EU. Furthermore, the Commission proposal will be adopted under the EU’s co-decision procedure, with the proposal subject to the final agreement of the European Parliament and Council of Ministers.

By Eamonn Farrell

Agri-Food Policy Executive