In a Nutshell

The LULUCF Regulation is designed to ensure that emissions and removals from land use, land use change and forestry (LULUCF) activities are accurately accounted for in the EU’s climate targets. The LULUCF sector covers the use of soils, trees, plants, biomass and timber and is responsible for both emitting and absorbing CO2 from the atmosphere. The Regulation’s objective is to progressively increase removals and reduce emissions in the sector.

Following its latest amendment, the Regulation aligns with the legally binding target to reduce greenhouse gas (GHG) emissions by 55% below 1990 levels by 2030 and strengthen the sector’s role in climate action.

The amended Regulation sets out an overall EU-level objective of 310 Mt CO2e of net removals in the LULUCF sector by 2030. Member states are be responsible for caring for and expanding their carbon sinks to meet the new EU target. To that end, the Regulation introduces rules enhancing the quality of monitoring, reporting and verification of emissions and removals, using more accurate and precise data monitoring.

The amended Regulation maintains the “no debit rule” that emissions (debits) from LULUCF sectors should not exceed removals (credits) until 2025. Should emissions exceed removals, the member state is obliged to increase sink capacity through afforestation or reforestation, or by making use of flexibility mechanisms (e.g., trading emissions credits). In 2026, removals should start exceeding emissions. Each member state will be assigned a binding national target for 2030 and a commitment to achieve a sum of net GHG emissions and removals for the whole period of 2026-2029, the budget for which will be set in the future.

The amended Regulation keeps the possibility to trade removals between member states and use surplus annual emission allocations under the Effort Sharing Regulation to reach LULUCF targets. There is also a mechanism to account for natural disturbances affecting a member states’ ability to deliver on the national target (e.g., wildfires or pests), provided that the EU as a whole meets its 2030 target.

What's on the Horizon?

Looking further ahead, the Commission will submit a report within six months of the first global stocktake under the Paris Agreement (to be carried out in 2023), on including non-CO2 GHG emissions from agriculture in the scope of the Regulation and the setting of post-2030 targets for the LULUCF sector.

Within one year of the implementation of the proposed certification framework for carbon removals, the Commission will have to assess the potential inclusion of carbon storage in products in scope of the LULUCF Regulation.

As part of the first evaluation of the LULUCF Regulation, a call for evidence is open until 11 July 2024.

Deep Dive

A more ambitious regulation

The LULUCF Regulation was amended to include the EU’s revised 2030 climate target to reduce GHG emissions by 55% below 1990 levels, which acknowledged the need to enhance the EU’s carbon sink. The revision was proposed as part of the ‘Fit for 55 package’ (together with the EU emissions Trading System and the Effort Sharing Regulation).

The key objectives for the revision were:

  • reversing the current trend of declining removals in the land sector and delivering, by 2030, 310 Mt CO2e removals from the LULUCF sector;
  • a climate-neutral land sector by 2035, combining emissions from agriculture with net removals from LULUCF;
  • simplification of reporting requirements for member states.

The agreement tightens the criteria to assess whether the EU-wide target is being met and consequently if the flexibility mechanism can be used. Member states will be allowed to use the flexibility mechanism up to a fixed limit, provided, among other conditions, that they submit evidence to the Commission following a well-defined methodology.

To ensure delivery, the revised LULUCF includes stricter reporting requirements, improved transparency and a review by 2025. During the period 2026-2029, member states can be penalised by an additional 8% on their national 2030 target, if the reporting shows insufficient progress towards their national targets.

…that risks not delivering

In 2020, the EU LULUCF sector removed 230 Mt CO2e from the atmosphere. However, carbon sinks have been declining in almost every member state. Based on projections, current measures will not be sufficient to reverse this trend. By implementing the additional measures planned by member states, the EU’s carbon sink would increase between 2021 and 2040, but by only by 3%. This would mean 209 Mt CO2e by 2030, missing the proposed target of 310 Mt CO2e. If the EU is to achieve the LULUCF goal, more ambitious removal measures are needed from Member States, along with further emissions reductions.

Coverage

The Regulation is comprehensive in scope – it covers all land use, land use change, and forestry activities, ensuring that emissions and removals from these sectors are accurately accounted for in the EU’s overall emissions reduction target. Overall, however, the scope for emissions reductions is limited– LULUCF activities account for a relatively small share of the EU’s total greenhouse gas emissions (equal to 7% of the EU’s annual GHG emissions).

The proposed revision also extends the scope to cover emissions from biomass used in energy production and ensures these will be recorded and counted towards each member state’s 2030 climate commitments. This is particularly relevant for bioenergy with carbon capture and storage (BECCS), which extracts bioenergy from biomass, and captures and stores the carbon. As forest management is the main source of biomass for energy and wood production, the more robust accounting rules and governance for forest management will affect the availability and sustainability of the biomass feedstock for BECCS.

Timeline

9 July 2018
14 July 2021
11 November 2022
11 May 2023
Q1-Q2 2024
11 July 2024
2025 (tbd)
9 July 2018

Entry into force of the original LULUCF Regulation

14 July 2021

European Commission proposal for a revision of the LULUCF Regulation released as a part of the Fit for 55 package

11 November 2022

Provisional political agreement on the LULUCF legislative proposal between co-legislators

11 May 2023

Entry into force of the revised regulation

Q1-Q2 2024

Commission to report on including non-CO2 GHG emissions from agriculture in the scope of the regulation and the setting of post-2030 targets for the land-use sector

11 July 2024

Deadline for call for evidence as part of first evaluation of the LULUCF Regulation

2025 (tbd)

Commission to report on the potential inclusion of carbon storage in products in scope of the LULUCF Regulation

Status

Unofficial Title

LULUCF

Year

2022

Official Document

Last Updated

24/04/2023