Climate Action

Implementing the Paris AgreementProgress of the EU towards

the at least -40% target

November 2016

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Table of Contents – Implementing the Paris Agreement -Progress Report-

1. GENERAL OVERVIEW ................................................................................................ 1

2. ACTING DOMESTICALLY AND INTERNATIONALLY THROUGH CLIMATE FINANCE.......................................................................................................................... 5

3. MITIGATING EU EMISSIONS ................................................................................... 8

4. ADAPTATING TO CLIMATE CHANGE.................................................................. 11

5. PARTICIPATING IN INTERNATIONAL CLIMATE POLICY ............................ 12

6. SHARING EXPERIENCE ............................................................................................ 13

Index of figures – Implementing the Paris Agreement -Progress Report- Figure 1: Progress towards meeting Europe 2020 targets.................................................... 1

Figure 2: Changes in GDP (in real terms), greenhouse gas (GHG) emissions, and emissions intensity of the economy (ratio between emissions and GDP) Index (1990 = 100)............................................................................................................................................. 2

Figure 3 Estimated (2015) and projected (2020) relative gap between emissions and ESD targets (in % of 2005 base year emissions). Negative and positive values respectively indicate over-delivery and shortfall........................................................................................ 3

Figure 4: Use of the auctioning revenues spent in climate and energy in the Member States by sectors (EU weighted average) in 2015 .................................................................. 5

Figure 5: Ex-post evaluation of the impact of the EU-ETS, Renewable, Taxation and other policies on CO2 emissions from combustion .............................................................. 14

Table of Contents – Staff Working Document-

1. TECHNICAL REFERENCES TO MAIN DATA & FIGURES ............................... 16

2. OVERVIEW OF CLIMATE TARGETS .................................................................... 17

3. EU WIDE TRENDS (INVENTORY) AND PROJECTIONS (MS WEM) PER SECTOR ......................................................................................................................... 20

4. MEMBER STATES PROGRESSES TOWARDS EFFORT SHARING DECISION TARGETS....................................................................................................................... 28

5. KEY FIGURES FOR KYOTO CP1 COMPLIANCE ................................................ 35

6. MEMBER STATES CLIMATE FINANCE................................................................ 39

7. ADAPTATION TO CLIMATE CHANGE.................................................................. 41

Index of Figures & Tables– Staff Working Document- Figure 1: Share of emissions by IPCC sector category in the EU-28; 2014 ...................... 20

Figure 2: Past change in EU-28 GHG emissions by IPCC sector categories.................... 21

Figure 3: EU- 28 GHG emissions per sector: inventory and WEM projections scenario.................................................................................................................................................. 23

Figure 4:GHG emissions intensity per GDP in the EU; 1990, 2005 and 2015. Percentages reflect annual average reduction between 2015-1990. ........................................................ 25

Figure 5: GHG emissions per capita in the EU; 1990, 2005, and 2015. Percentages reflect annual average reduction between 2015-1990. .................................................................... 26

Table 1: Overview of Climate targets................................................................................... 17

Table 2: Emissions (Mt CO2 eq) covered by the Kyoto Protocol ....................................... 27

Table 3: Emissions (MtCO2eq) covered by the Climate and Energy Package ................. 27

Table 4 : RELATIVE gap between historic emissions and ESD targets for 2013 and 2014 (in % of 2005 base year emissions) ....................................................................................... 28

Table 5 : Estimated (2015) and projected (2020) RELATIVE gap between emissions and ESD targets (in % of 2005 base year emissions).................................................................. 30

Table 6: Historic (2013-2014), estimated (2015) and projected (2016-2020) ABSOLUTE gaps between emissions and annual limits under the Effort Sharing Decision (in Mt CO2 eq)............................................................................................................................................. 32

Table 7: Initial Assigned Amount units, GHG emissions 2008-2012 (tCO2eq), and Kyoto Protocol units in the retirement account .............................................................................. 35

Table 8: Total quantity of Kyoto Protocol units requested to be carried over from first to the second commitment period ............................................................................................. 37

Table 9 : Climate finance provided to developing countries (2014). ................................. 39

EN EN

EUROPEAN COMMISSION

Brussels, 8.11.2016 COM(2016) 707 final

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL

Implementing the Paris Agreement - Progress of the EU towards the at least -40% target

(required under Article 21 of Regulation (EU) No 525/2013 of the European Parliament and of the Council of 21 May 2013 on a mechanism for monitoring and reporting

greenhouse gas emissions and for reporting other information at national and Union level relevant to climate change and repealing Decision No 280/2004/EC)

{SWD(2016) 349 final}

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1. GENERAL OVERVIEW

1.1. Ratification of the Paris Agreement

On 4 October 2016, the EU ratified the Paris agreement on climate change, thus enabling its entry into force on 4 November 2016. On 5 October 2015, the EU deposited its ratification instruments together with eight Member States which already completed their national ratification procedures: Hungary, France, Austria, Malta, Germany, Portugal, Poland and Slovakia. Greece and Sweden deposited their ratification instuments later in October 2016. The remaining Member States will continue their domestic ratification processes with a view to depositing their ratification instruments as soon as possible.

The Paris Agreement is a global milestone for enhancing collective action and accelerating the global transformation to a low-carbon and climate resilient society. The Commission presented its assessment of the Paris Agreement in March 2016. Based on this communication, European leaders underlined the EU's commitment to reduce greenhouse gas emissions domestically and to increase the share of renewable energies and improve energy efficiency as agreed in October 2014. Adapting the legislation in order to implement this framework remains a priority for the EU.

The Paris Agreement will replace the approach taken under the 1997 Kyoto Protocol, that contains commitments until the end of 2020. The second phase of the Kyoto Protocol serves as a bridge towards the post-2020 global climate change agreement. The EU is already delivering results of its 2020 legislation (Effort Sharing Decision, EU Emission Trading System, Monitoring Mechanism Regulation) and the EU and its Member States are well on track to jointly meet their target for the second commitment period of the Kyoto Protocol.

1.2. Progress towards the at least -40 % 2030 target As seen in Figure 1 below, in 2015, the EU greenhouse gas emissions were 22 % below the 1990 level. The EU's share of global emissions has also been declining over time. According to the latest available EDGAR database, this share stood at 8.8 % in 2012.

Figure 1: Progress towards meeting Europe 2020 targets

vs 1990 vs 2005-20% -14%

2015*/2014 2015*/19900,7% -22%

EU 2020 target

EU 2030 targetvs 1990

-40%

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1990 1995 2000 2005 2010 2015 2020 2025 2030

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Indicative Policy Trajectory

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20% reduction compared to 1990

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Emissions slightly increased (by 0.7 %) in 2015 after a significant drop of 4 % in 2014. Although it is widely acknowledged that the year 2015 was the warmest ever globally, the weather in Europe was colder in 2015 than in 2014 with an increase of 'heating degree days' of 4 %. Furthermore, the price of fossil fuels, notably propellant, also decreased in 2015 contributing to an increase in purchases compared to 2014. In the medium to long run, however, emissions are following a decreasing trend.

According to Member States' projections based on existing measures, in 2030, the total EU emissions are estimated to be 26 % below 1990 levels. New mitigation policies are being put in place so that the EU target at least a 40 % domestic reduction in greenhouse gas emissions by 2030 compared to 1990, agreed in Paris, is reached. As these policies are being implemented, EU emissions will follow the trajectory indicated on Figure 1 in green. A description of these legislative and non-legislative instruments is available in the following sections.

The EU continues to successfully decouple its economic growth from its emissions. During the 1990-2015 period, the EU’s combined GDP grew by 50 %, while total emissions (excluding LULUCF but including international aviation) decreased by 22 %. The EU’s greenhouse gas emissions intensity of the economy, defined as the ratio between emissions and GDP, decreased by almost half between 1990 and 2015.

Figure 2: Changes in GDP (in real terms), greenhouse gas (GHG) emissions, and emissions intensity of the economy (ratio between emissions and GDP) Index (1990 = 100)

1.3. Progress towards the 2020 targets

According to the projections based on existing measures provided by Member States in 2015, emissions are expected to be 24 % lower in 2020 compared to 1990. As part of its 2020

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Strategy, the EU committed to cut greenhouse gas emissions in 2020 by 20 % from 1990 levels. The EU is consequently on track to meet this domestic target.

The EU Emissions Trading System is a cornerstone of the EU's climate policy. It applies mainly to the industrial and power sectors. Between 2005 and 2015, emissions covered by the EU ETS, which represent slightly less than half of the total emissions in the EU, decreased by 24 %. During this period of time, the emissions outside the EU ETS decreased by 12 %. In 2015, greenhouse gas emissions from installations participating in the EU ETS are estimated to have decreased by just under 0.4 %. This confirms the decreasing trend over the last five years. Moreover, the surplus of emission allowances that has built up in the system since 2009 fell significantly to around 1.78 billion allowances as a result of the implementation of back-loading. The surplus is thus at the lowest level since the start of the current trading period in 2013. The back-loading postponed the auctioning of 400 million allowances in 2014, 300 million in 2015 and 200 million in 2016. These allowances will be transferred to the Market Stability Reserve (MSR) which will start operating as of January 2019 and will address the current surplus of allowances. A report on the functioning of the carbon market will be published later this year.

According to the Effort Sharing Decision (ESD), Member States need to meet binding annual greenhouse gas emission targets for the period 2013–2020 in sectors not covered by the ETS, for instance building, transport, waste and agriculture. According to the inventory for 2013 and 2014 and to the approximated inventory for 2015 (see Figure 2), 27 Member States have achieved their targets for the three-year 2013-2015 period. Only Malta's emissions have exceeded the target for each of these three years. Malta's emissions are consequently higher than originaly estimated in national projections. Therefore, the country needs to use flexibility provisions under the Effort Sharing Decision (for example buying units from other Member States) and may also have to update its projections for 2020 based on recent emissions data.

Figure 3 Estimated (2015) and projected (2020) relative gap between emissions and ESD targets (in % of 2005 base year emissions). Negative and positive values respectively indicate over-delivery and shortfall.

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Furthermore, in 2020 most Member States are expected to reach their ESD targets, according to national projections based on policies already implemented. According to their own projections, a few Member States still need to put in place additional measures or make use of flexibilities in 2020:

• In Ireland, emissions are expected to remain stable until 2020, with transport emissions expected to significantly increase by then. In June 2016, in the context of the European Semester (an annual cycle of macro-economic, budgetary and structural policy coordination in the EU), EU leaders recommended Ireland to further mitigate emissions by investing more in public transport.

• According to the most recent national projections, Luxembourg's emissions will exceed the national target by 5 % by 2020.

• Belgium is also expected to miss the 2020 target by 5 %. Further investment in transport infrastructure and energy generation capacity could however contribute to reducing emissions. The continued favourable treatment of company cars contributes to pollution, congestion and greenhouse gas emissions.

• According to their projections, Austria, Denmark and Finland could also fail to meet their 2020 emissions targets, but by a margin of less than 5 %. If their planned additional measures are implemented, however, Austria and Finland could still meet their targets.

1.4. Compliance with the Kyoto target for the first commitment period and progress towards the target for the second commitment period

On 2 August 2016, the UNFCCC published the final reports of the Parties of the Kyoto Protocol for the first commitment period ('CP1') which corresponds to the 2008-2012 period. 26 Member States and the EU as party made a commitment for this period. During CP1, the EU's emissions were 23.5 Gt CO2 eq. against a cumulative target of 26.7 Gt CO2 eq. This target was consequently met with a margin of 12 % as is explained in more details in Table 7 of the staff working document.

The EU as a whole used 21.8 billion Assigned Amount Units (AAU), 818 million Certified Emission Reduction (CERs), 1.6 million temporary CER, 508 million Emission Reduction Units (ERUs), and 390 million Removal Units (RMUs) for compliance. It carried over 4 billion AAUs, 1.5 billion CERs and 1.7 billion ERUs. Carried over units can be used for compliance with the second commitment period ('CP2') subject to the rules set out by the Doha amendment to the Kyoto Protocol. However, carried over AAUs cannot be used for compliance with the targets set by the EU climate and energy legislation and the use of CERs and ERUs is limited by quality and quantity.

In the second commitment period (2013-2020), all 28 Member States jointly committed to an EU wide target. According to Member States' projections, the EU and its 28 Member States are on track to overachieve this target.

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2. ACTING DOMESTICALLY AND INTERNATIONALLY THROUGH CLIMATE FINANCE

2.1. Mobilising the revenue from the auctioning of EU ETS allowances

Member States’ use of auctioning revenues

In 2015, the auctioning of ETS allowances generated € 4.9 billion of revenues for the Member States, of which 98 % came from fixed installations and 2 % from aviation. According to the information submitted to the Commission, the Member States spent or planned to spend 77 % of these revenues on climate related purposes.

As seen in Figure 4, these revenues have been spent based on Member States' priorities. For instance, Hungary recently decided to invest part of these revenues in e-mobility. France and the Czech Republic spend most of the revenues on energy efficiency. Spain's priority is still the development of renewable energy. More information on the use of auctioning revenues will be available in the next State of the Energy Union.

Figure 4: Use of the auctioning revenues spent in climate and energy in the Member States by sectors (EU weighted average) in 2015

SustainableTransport; 3%

Energy efficiency(excl. Transport); 19%

Renewableenergy; 33%

Adaptation; 0,3%

Management of ETS; 1%

Research; 7%

Mitigation (no specific use provided or use other than transport, energy efficiency,

renewable, management of the ETS and research); 37%

NER 300

NER 300 is one of the world's largest funding programmes for innovative low-carbon energy demonstration projects funded by the auctionning of 300 million ETS allowances. Under the NER 300 programme, 37 renewable energy projects and one Carbon Capture Storage (CCS) project were selected for funding in 19 Member States. Three of these are already operational and are producing clean energy. Total NER 300 funding awarded comes to € 2.1 billion, which is expected to leverage an additional € 2.7 billion of private investment.

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2.2. Mainstreaming climate policies into the EU budget

On average over the 2014-2020 period, at least 20 % of the EU budget is expected to be climate relevant expenditure. This is expected to be approximately € 200 billion. The situation varies across instruments:

- The European structural and investments funds (ESIFs) constitute more than 43 % of the EU budget. 28 partnership agreements and more than 530 fund-specific programmes contribute to financing climate policies. A common methodology has been set up to determine the level of support for climate change objectives. More than € 115 billion will support climate action objectives, corresponding to about 25 % of the total funds.

- Common agricultural policy (CAP). The European agricultural guarantee fund (EAGF) and the European agricultural fund for rural development (EAFRD) represent together 39 % of the EU budget. Since 1990, agriculture-related non-CO2 emissions have decreased by 24 % in the EU. Support for climate-friendly agriculture through the CAP has contributed to this decoupling. The CAP rural development policy, for instance, supports farm modernisation in order to cut energy consumption, produce renewable energy, improve input efficiency, and thereby reduce emissions. In 2015, it is estimated that €13.6 billion of the CAP budget was climate relevant.

- Horizon 2020. This EU funding programme for research, represents € 79 billion for the period 2014-2020 (which is 7 % of the total EU budget). At least 35 % of this funding is expected to be invested in climate-related projects. The latest data show that the research targeting societal challenges (i.e. energy, transport or food) are close to delivering this 35 % target. However, the bottom-up parts of Horizon 2020 (i.e. thematically open calls for proposals) are lagging behind. A higher level of ambition and corrective action will therefore be needed to reach the 35 % mainstreaming target. The industry and the European authorities have also launched several public private partnerships (PPP), such as 'Sustainable Process Industry through Resource and Energy Efficiency', to improve resource efficiency and reduce CO2 emissions in industry and buildings. Recent analysis show that these PPPs provide significant reductions in energy use and CO2 emissions. The results of COP21 and the innovation dimension of the Paris Agreement help to address the gap in upcoming work programmes covering the 2018-2020 period. Moreover, the integrated strategic energy technology (SET) plan is the very first research & innovation deliverable under the Energy Union, giving a new impetus to the development and deployment of low-carbon technologies by better coordinating and prioritising work. It focuses on ten key action lines aimed at delivering the Energy Union research & innovation priorities based on an assessment of the energy system needs, their importance for the energy system transformation and the potential to create growth and jobs in the EU. These actions address the whole innovation chain, from basic research to market uptake, both in terms of financing as well as in terms of regulatory framework It also proposes a new financial product, the "Energy Demo

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Projects facility" developed with the European Investment Bank (EIB) to target first-of-a-kind large-scale commercial demonstration projects.

- European fund for strategic investments (EFSI) is a € 16 billion guarantee from the EU budget, complemented by a € 5 billion allocation of the EIB’s own resources. This fund supports strategic investment in key areas such as infrastructure, education, research, innovation and risk finance for small businesses. It is capable of leveraging € 315 billion. The EFSI has already financed renewable energy demonstration projects, including RES-related transport, industry and energy storage. On 16 September 2016, the Commission proposed an extension of the fund to focus further on innovative, low-carbon projects for the 2018-2020 period. This proposal reinforces the concept of "additionality" to ensure that only projects that would not have happened without the EFSI are chosen. In view of their importance for the single market, cross-border infrastructure projects, including services, have been specifically identified as providing additionality. The proposal should deliver a total of at least half a trillion euro of investment by 2020. The Commission called on the co-legislators to consider its proposal as a matter of priority.

- The LIFE sub-programme for climate action, which in 2015 contributed to the implementation and development of climate policy and legislation through action grants and financial instruments. Under it, the Commission awarded € 56 million to 40 projects with European added value in terms of climate mitigation, adaptation or governance & information. Some 30 NGOs primarily active in the field of environment and climate action received funding in the order of € 10 million from operating grants. Progress was also made on the two Financial Instruments. Three PF4EE operations have been signed (Spain, France, the Czech Republic). Under NCFF a due diligence appraisal of two operations which could be signed in the autumn of 2016 was conducted.

- External action instruments. To follow up on the Paris Agreement and support developing and neighbouring countries in implementing their climate action plans, the EU aid budgets also integrate climate.

2.3. Supporting developing countries

Following the conclusion of the Paris Agreement, support for developing countries to implement their nationally determined contributions (NDCs) plays an important role in achieving the transformation to low emissions economies.

At the 2009 Climate Change Conference in Copenhagen, developed countries committed to a long-term goal of jointly mobilising USD 100 billion per year as from 2020 for meaningful mitigation actions and transparency of implementation. This funding will come from a wide variety of sources, including public and private, bilateral and multilateral, and alternative sources of finance. At the 2015 Paris Climate Change Conference, developed country parties agreed to continue their existing collective mobilisation goal through to 2025 and set a new collective quantified goal from a floor of USD 100 billion per year.

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The USD 100 billion pledge has helped to significantly scale up climate finance in the context of development cooperation and through multilateral and development banks. The EU and its Member States are the biggest providers of official development assistance to developing countries, delivering € 68 billion in 2014. In 2015, the EU, EIB and Member States provided € 17.6 billion to help developing countries tackle climate change.

3. MITIGATING EU EMISSIONS

In October 2014, the EU leaders reached an agreement on the main building blocks of the EU 2030 Climate and Energy Framework. The EU set a binding, economy-wide emissions reduction target of at least 40 % by 2030, compared to 1990 levels. This commitment is in line with a cost-effective pathway to reach the EU's long-term climate objective and became the basis for the EU's international commitment under the Paris Agreement on climate change and will be delivered by all Member States collectively.

To start implementing that commitment, in July 2015, the Commission presented a proposal to reform the EU Emissions Trading System (see section 3.1). In July 2016, the Commission presented measures to address the other main elements of the economy that will contribute to climate action: the sectors of buildings, transport, waste, agriculture, as well as land-use and forestry (see section 3.2).

The Commission is also rolling out the initiatives foreseen in the context of the Framework Strategy for a Resilient Energy Union with a Forward-Looking Climate Policy, to address renewable energy, energy efficiency, transport and research and development and to develop the governance of the Energy Union.

3.1. Revision of the EU ETS - phase 4 (2021-2030)

The Commission's legislative proposal of July 2015 on revising the EU ETS for phase 4 is now under consideration by the Council and the European Parliament. The proposal aims to achieve a 43 % reduction in EU ETS emissions by 2030, compared to 2005 levels.

3.2. Legislative proposals for an Effort Sharing Regulation and on Land Use for 2021-2030

In October 2014, EU leaders made a political commitment to reduce the emission of sectors of the economy not covered by the EU ETS by 30 % by 2030 compared to 2005. They also agreed that all sectors, including land use, should contribute to the EU's commitments under the Paris Agreement on climate change.

The current Effort Sharing Decision, which obliges Member States to meet binding annual greenhouse gas emission targets in sectors outside the ETS except for land use, is applicable for the 2013-2020 period. On 20 July 2016, the Commission presented a package of measures to accelerate the transition to low-carbon in all sectors of the economy in Europe for the 2021–2030 period in response to the 2014 political commitment. The first legislative proposal sets Member States binding annual greenhouse gas emission targets for 2021–2030 for sectors not regulated under the EU ETS including building, agriculture, waste management, transport and certain industrial activities.

The setting of national emissions reduction targets is based on fairness, solidarity, cost-effectiveness and environmental integrity. The proposal recognises Member States' varying

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capacities to take action by differentiating targets based on GDP per capita. This ensures fairness because higher income Member States take on more ambitious targets than lower income Member States. The 2030 targets range from 0 % to -40 % compared to 2005 levels.

EU leaders also recognised that an approach based solely on relative GDP per capita would result in relatively high compliance costs for certain high income Member States. The targets of high income Member States are consequently adjusted in the proposal to reflect cost-effectiveness. Two strictly limited new flexibilities are also proposed – eligible Member States could access allowances from the EU ETS, and all Member States are allowed to use enhanced action in the land use sectors to meet their binding targets.

The second legislative proposal concerns CO2 emissions and removals from agricultural land use and forestry (LULUCF), and sets out a binding commitment for each Member State and the accounting rules to determine compliance. The proposal requires each Member State to ensure that accounted greenhouse gas emissions from land use are entirely compensated by an equivalent removal of CO2 from the atmosphere through action in the sector. For example, if a Member State cuts down their forests (deforestation), it must compensate for the resulting emissions by planting new forest (afforestation), by improving the sustainable management of their existing forests, croplands and grasslands, or alternatively by further reductions in the Effort Sharing sectors.

The Commission's proposal is based on a careful balance between more incentives to capture carbon in soil and forests, and the need to maintain the environmental integrity of the EU climate framework, so as to incentivise emission reductions in the buildings, transport and agriculture sectors. It also includes the possibility for Member States to trade LULUCF credits.

Land use and forestry include use of soils, trees, plants, biomass and timber, and are in a unique position to contribute to an effective climate policy. This is because the sector not only emits greenhouse gases but can also remove CO2 from the atmosphere.

3.3. Road transport sector

On July 2016, the Commission adopted a European strategy for low-emission mobility, as part of a package of measures to accelerate the transition to a low-carbon economy in Europe. Transport accounts for almost a quarter of Europe's greenhouse gas emissions and is the main cause of air pollution in cities.

The strategy sets a clear ambition: by mid-century greenhouse gas emissions from transport will need to be at least 60 % lower than in 1990 and be firmly on the path towards zero. Emissions of air pollutants from transport are harmful to human health and need to be drastically reduced without delay. Facing these challenges will offer opportunities to modernise the European economy and strengthen its internal market.

The strategy frames the actions that the Commission is planning in the coming years, focusing especially on road transport, which accounts for over 70 % of transport emissions and much of the air pollution. These actions address three key areas: (i) improved efficiency of the transport system, (ii) low-emission alternative energy for transport, and (iii) low- and zero-emission vehicles. In addition, horizontal enablers such as the Energy Union strategy,

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research and innovation, industrial and investment policy, the digital single market strategies and the skills agenda will support this transformation.

3.4. The monitoring, reporting and verification (MRV) system for EU shipping

The EU has been supporting a global approach to reducing emissions from international shipping, which is a large and growing source of emissions. In April 2015, it adopted a Regulation that set up an EU-wide MRV system for shipping as the first step in the EU strategy towards cutting emissions in this sector. This Regulation requires that large ships over 5 000 gross tons using EU ports after 1 January 2018 monitor and later report their annual verified CO2 emissions and other energy related data.

The EU’s MRV system for shipping emissions is designed to contribute to building an international system in the shipping sector. Discussions on this are ongoing at the International Maritime Organisation. The EU-shipping MRV system will also provide new opportunities to agree on efficiency standards for existing ships. Once a global system is adopted, the EU MRV legislation requires the Commission to make an assessment of it with a view of alignment of the EU system where appropriate.

3.5. Carbon Capture Storage

In the reports submitted to the Commission on the implementation of the CCS Directive, Member States have indicated that, despite the lack of positive assessment for technical and economic feasibility for CCS retrofitting, newly built power plants are generally going beyond the legal requirements and are setting aside land for possible retrofitting with CCS should the conditions change in the future. More information will follow in the Commission's second report on the implementation of the Directive on the geological storage of carbon dioxide planned to be published later this year. The report will also provide an overview of the latest developments related to the preparation of storage sites, exploration and permits, operation licences of large power plants, national plans to develop storage and CO2 transport infrastructure and research projects with relevance to the Directive.

3.6. F-gases

The new European Regulation to control gases from fluorinated greenhouse gases (F-gases) applies since 1st January 2015. It strengthens existing measures (i.e. containment of gases through the detection of leaks, installation of equipment by trained personnel, recovery of used gases, etc.) and introduces a phasing-out of hydrofluorocarbons (HFCs) that will help cut total EU emissions from F-gases by two-thirds by 2030 compared to 2014 levels. In 2016, the quotas needed for legally placing HFCs on the EU market were reduced to 93 % of 2015 levels. The F-gas Regulation also prohibits the placing of F-gases on the market in certain circumstances where alternatives are available. For instance, since 1st January 2016 a prohibition on fire equipment that uses HFC-23 is in force.

3.7. Governance

The Energy Union Framework Strategy, adopted by the EU Heads of State in February 2015, will ensure that Europe has secure, affordable and climate-friendly energy. It will require major investments in generation, networks and energy efficiency, estimated at some € 200 billion annually in the next decade. The objectives of this Strategy can only be achieved if

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national policies are coherent with those of other Member States and complement the EU energy and climate legislation.

For these reasons, EU leaders agreed that a reliable and transparent governance system without unnecessary administrative burden will be developed at the level of the EU. It further specified that such governance system will integrate strategic planning and reporting on the implementation of climate and energy policies. Before the end of 2016, the Commission will present a proposal for streamlining existing planning, reporting and monitoring obligations as well as on an Energy Union governance process. It is foreseen that from 2021 onwards, the report on the implementation of the Paris agreement will form part of the regular Commission monitoring report under the upcoming proposal for a Regulation on Energy Union Governance.

3.8. Carbon market initiatives and Partnership for Market Readiness (PMR)

The EU continues to support the implementation of market based instruments, such as the ETS, as key tools to drive cost effective domestic emission reductions. This is achieved through bilateral technical support and exchange, principally in China and South Korea, but also through multilateral initiatives undertaken by the World Bank such as the Partnership for Market Readiness (PMR) to which the EU is the main contributor. This year saw an extension of bilateral support to China, and a reorientation of funding within the PMR towards support to upfront policy analysis of carbon pricing to support implementation of commitments under the Paris Agreement. A focus on domestic action remains key objectives of international engagement on markets.

4. ADAPTATING TO CLIMATE CHANGE

The 2013 EU Strategy on adaptation to climate change aims to prepare the EU for current and future impacts of climate change. It promotes adaptation action throughout the EU, ensuring that adaptation is mainstreamed across all relevant EU policies and securing greater coordination, coherence and information sharing across Member-States. The Commission will report to the European Parliament and Council on the implementation of the adaptation strategy and will carry out an evaluation of the implementation.

The general trends include the following:

• Many Member States are addressing adaptation planning and are identifying the risks and vulnerabilities to climate change. National adaptation strategies have been adopted by 21 Member States and are under preparation in most of the remaining ones. However most Member States have yet to define and implement adaptation action plans.

• The most commonly identified sectors for the mainstreaming of adaptation are water management and water resources, forests and forestry, agriculture, biodiversity and ecosystems and human health. As mentioned in the global strategy on foreign policy and security presented to the European Council this summer, climate change amplifies situations of conflict in the EU.

• Less than half of the Member States are implementing adaptation in key sectors.

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• Development and implementation of monitoring and evaluation systems remains in the early stages in most Member States.

• Work at city level and urban policies on climate change adaptation intensified. Within the new Covenant of Mayors, adaptation has been merged with mitigation efforts in a European initiative involving nearly 7,000 cities around the world. Climate policy in cities has been supported by the Paris Agreement recognition of cities as key actors in implementation.

5. PARTICIPATING IN INTERNATIONAL CLIMATE POLICY

5.1. Aviation

Aviation policy

The EU has been supporting and involved in the development of a global measure to address CO2 emissions from international aviation. Since the agreement made at the 38th ICAO Assembly in 2013 to develop a global market-based measure, ICAO has been actively working on the design of such a measure together with its Member states. The ICAO has opted for a carbon offsetting scheme with the objective to stabilise the international aviation's emissions at 2020 levels. A Resolution on such a measure to be implemented as of 2020 was adopted at the 39th ICAO Assembly in early October 2016. Based on the level of participation in the first voluntary phase of the scheme running until 2027, the emission coverage is around 80 % of what is needed to achieve carbon neutrality from 2020. This first step will need to be complemented by other key design elements of the scheme, notably rules on the monitoring, reporting and verification of emissions and eligibility criteria for emissions units, as well as the set-up of a registry. These are key elements in terms of effectiveness and integrity, and they will all need to be in place ahead of 2020 for the scheme to start operating as planned.

Following the decision of the Assembly on a global market-based measure for aviation, the Commission will report to the European Parliament and to the Council on the Assembly's outcome and will propose, if appropriate, a proposal to review the scope of the EU ETS for aviation.

Aviation's overall impact on climate change

Total reported aviation emissions represented approximately 3.6 % of the EU's total greenhouse gas emissions in 2015. Most of these emissions come from international flights. Although the average burnt fuel per passenger kilometre flown went down by 19 % between 2005 and 2014, CO2 emissions increased by 5 % over this same period.

Emissions of nitrogen oxides (NOx), aerosols and aerosol precursors (soot and sulphate) and increased cloudiness are also contributing to climate change. The EU's Flightpath 2050 recognises such non-CO2 factors and calls for a 90 % reduction of NOx emissions by 2050, relative to 2000 levels. Efforts have been ongoing in recent years to assess the impacts of non-CO2 factors on climate change. A study partly financed by the EU research funding programme called 'QUANTIFY' attempted to estimate the overall aviation impacts. It concluded that in 2005 aviation represented around a 3.5 % share of total anthropogenic forcing (i.e. change in the Earth’s energy balance due to human economical activity).

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5.2. Phasing down hydrofluorocarbons under the Montreal Protocol

The EU was very active in the negotiations of an ambitious global goal under the Montreal Protocol to limit the global production and use of hydrofluorocarbons (HFCs). Science suggests that an ambitious phase-down of HFCs could prevent up to 0.5°C of global warming by the end of the century. The entry into force of the EU Regulation on fluorinated gases in 2015 and the EU amendment proposal submitted in 2015 helped building consensus on the Kigali Amendment, adopted on 15 October 2016, which is a significant step forward in implementing the Paris Agreement.

To facilitate early action on HFCs in Latin American and Caribbean countries, Africa, Southeast Asia and the Pacific, the European Commission continues to provide financial support for specific projects in these regions.

6. SHARING EXPERIENCE

European Commission regularly carries out ex-post evaluations of climate policies in order to better understand the main drivers behind emission reductions and to quantify the impact of climate policies on emissions. A first study based on decomposition analysis shows that the emission reductions observed since 1990 and the progress in terms of emission intensity of the economy (see Figure 2) have been mainly driven by technological change and innovation. The relative shift between economic sectors, including from industry to services, had a marginal effect across the EU on average. Hence, the decoupling seen in Figure 2 is predominantly explained by the technological developments which make it possible to increase GDP while emitting fewer greenhouse gases.

Two econometrics-based models were developed in 2016 to show how climate policy contributes to reducing emissions. Due to the constraints of the methodologies used, only CO2 emissions from combustion in 1990-2012 could be analysed. The first model provides a quantitative estimate of the impact of the EU-ETS on emissions. The second model, based on a different approach, quantifies the impact on emissions of national policies including energy and transportation taxes and renewable energy policies.

Figure 5 aims to provide a simplified illustration of the results of the above analysis over the 1990 - 2012 period. In this representation, the ETS abatement is shown in red. The abatement from energy and transportation taxes and renewable energy policies is also represented. These are compared with the actual emissions, shown at the bottom in blue. The total refers to the emissions that would have occurred in the absence of these policies.

For reasons of methodological simplicity, it is assumed in the graph that the ETS had no effect on the use of renewable energy or on the other policies. A more detailed description of the methodologies and of their limits is provided on the website of DG Climate Action.

14

Figure 5: Ex-post evaluation of the impact of the EU-ETS, Renewable, Taxation and other policies on CO2 emissions from combustion

0

1

2

3

4

5

6

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

Transportation TaxesAbatmentEnergy Taxes Abatment

Renewables Abatment

Other Policies Abatment

EU ETS Abatement

CO2 emissions

CO2

emiss

ions

(GT)

Figure 5 above shows that without the climate policies listed above, in 2012, CO2 emissions would have been 30 % higher than what has been observed. Furthermore, it is clear that renewable energy development is a decisive factor in reducing emissions and that taxation and the ETS also have an impact on emissions. These ex-post evaluations conclude that climate policy works as it reduces emissions and stimulates the uptake of clean technologies. In July 2016, the Commission also published an evaluation of the implementation of the Effort Sharing Decision until 2015. The evaluation concluded that, although the Decision was still in the early stages of implementation, commitments under the Decision have contributed to stimulating new national policies aimed at reducing greenhouse gas emissions. The Decision also improved the coordination between national, regional and local governments. Policies which were part of the 2020 climate and energy package, in particular on energy efficiency and renewable energy, have also played a part.

15

EUROPEAN COMMISSION

Brussels, 8.11.2016 SWD(2016) 349 final

COMMISSION STAFF WORKING DOCUMENT

TECHNICAL INFORMATION TO THE REPORT "IMPLEMENTING THE PARIS AGREEMENT - PROGRESS OF THE EU TOWARDS THE AT LEAST -40%

TARGET"

Accompanying the document

Report from the Commission to the European Parliament and the Council

Implementing the Paris Agreement - Progress of the EU towards the at least -40% target

(required under Article 21 of Regulation (EU) No 525/2013 of the European Parliament and of the Council of 21 May 2013 on a mechanism for monitoring and reporting

greenhouse gas emissions and for reporting other information at national and Union level relevant to climate change and repealing Decision No 280/2004/EC)

{COM(2016) 707 final}

16

1. TECHNICAL REFERENCES TO MAIN DATA & FIGURES

Source of data: Emissions up to 2014 are based on data from the official 2016 inventory submissions by the Member States. They have been compiled according to the 2006 IPCC guidelines, and the new global warming potentials from the IPCC Fourth Assessment Report (AR4).

Emissions estimates for the year 2015 are based on approximated inventory data provided in 2016 by the Member States or estimated by the EEA on behalf of the Commission, where needed.

Projected emissions are based on Member States' submissions of 2015, and on the updated projections submitted by Member States in 2016 under the MMR. Projections have been quality-checked, gap-filled and adjusted where necessary by the EEA on behalf of the Commission. For the gap filling and ETS/non-ETS split estimation, data from the EU Reference Scenario based on the PRIMES and GAINS models have been used.1

Notes related to Figures presented in the Climate Action Progress Report: Figure 1: the scope of the emissions presented is as under the Climate and Energy Package (including international aviation). The quantification of the EU 2030 target is indicative.

Figure 2: The 2015 gap is the difference between 2015 estimates in the non-ETS sector and the 2015 targets as a percentage of ESD base-year emissions (i.e. 2005 emissions backwards calculated from the 2020 Annual Emission Allocations). The 2020 gap is the difference between projected non-ETS emissions and targets in 2020 as a percentage of base year emissions.

1 For Member States that did not submit new projections in 2015, the EU Reference scenario 2013 was used for gap-

filling purposes (http://ec.europa.eu/clima/policies/strategies/2030/docs/eu_trends_2050_en.pdf). For more information, see Trends and Projections in Europe 2015 : http://www.eea.europa.eu/publications/trends-and-projections-in-europe-2015.

17

2. OVERVIEW OF CLIMATE TARGETS Table 1: Overview of Climate targets

International commitments EU domestic legislation

2020 Climate and Energy Package 2030 Climate and Energy Framework

Kyoto Protocol Paris Agreement EU ETS ESD EU ETS (as proposal

COM(2015) 337 final) ESR (as proposal COM(2016) 482)

Target year of period

Second commitment period (2013-

2020) (target for EU-28)

Already in force – covers the period post 2020 2013-2020 2013-2020 2021-2030 2021-2030

-21% compared to 2005 for ETS emissions

Annual targets by MS. In 2020 -10% compared to 2005

for non-ETS emissions

-43% compared to 2005 for ETS

emissions

Annual targets by MS. In 2030 -30% compared to 2005

for non-ETS emissions

Emission reduction target

-20% at least -40% in 2030

Overall target: -20% GHG emissions reduction vs 1990"

Overall target: "at least -40% domestic GHG emissions reduction vs 1990"

Renewable Energy Directive: 20% share of renewable energy of gross final energy consumption;

At least 27% share of renewable energy in EU energy consumption;

Further targets -

• limiting global warming to well below 2°C.; • every 5 years to set more ambitious targets as required by science; • report on implementation/ track progress towards the long-term goal through a robust transparency and accountability system. • balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century

Energy Efficiency Directive : Increase energy efficiency by 20 %

At least 27% improvement in energy efficiency (to be reviewed by 2020, having in mind an EU level of 30%)

Base year

1990, but subject to flexibility

rules. 1995 or 2000 may be used as its base year for NF3

1990

1990 for overall emission reduction target; 2005 for targets broken down into ETS and non-ETS

emissions, 2007 projections of 2020 energy consumption for energy efficiency

1990 for overall emission reduction target; 2005 for targets broken down into ETS and

non-ETS emissions

18

International commitments EU domestic legislation

2020 Climate and Energy Package 2030 Climate and Energy Framework

Kyoto Protocol Paris Agreement EU ETS ESD EU ETS (as proposal

COM(2015) 337 final) ESR (as proposal COM(2016) 482)

LULUCF

Included ARD and forest

management, other activities if elected

(new accounting rules)

Included Excluded

Included: July 2016, the Comission launched a proposal for a regulation on the inclusion of GHG emissions and removals from LULUCF into the 2030 climate and enegy framework (COM/2016/0479 final) and the rules of its inclusion as of 2021.

Aviation***

Domestic aviation included. International aviation not

attributed.

Economy-wide action encouraged Domestic and some

international aviation included in EU ETS

Aviation generally excluded

Domestic and some international aviation included in EU ETS

Aviation generally excluded

Use of international credits

Use of KP flexible mechanisms

subject to KP rules Possible

Upper limit for credit use for period 2008-

2020 at a maximum of 50 % of the reduction

effort below 2005 levels

2Annual use of carbon credits is

limited to up to 3 % of each Member

State's ESD emissions in 2005

No No

Carry-over of units (*)from preceeding periods

Subject to KP rules including those

agreed in the Doha Amendment No

EU ETS allowances can be banked into

subsequent ETS trading periods since the second

trading period

No carry over from previous period

Indefinite validity of allowances not

limited to trading periods, no need to

carry over.

No

Gases covered

CO2, CH4, N2O, HFCs, PFCs, SF6, NF3

CO2, CH4, N2O, HFCs, PFCs, SF6, NF3 CO2, CH4, N2O, HFCs, PFCs, SF6 CO2, CH4, N2O,

HFCs, PFCs, SF6,

CO2, CH4, N2O, HFCs, PFCs, SF6,

NF3

2 Member States that do not use their 3 % limit for the use of international credits in any specific year can transfer the unused part of their limit to another Member State or bank it for their own use until 2020. Member States fulfilling additional criteria (Austria, Belgium, Cyprus, Denmark, Finland, Ireland, Italy, Luxembourg, Portugal, Slovenia, Spain and Sweden) may use credits from projects in Least Developed Countries (LDCs) and Small Island Developing States (SIDS) up to an additional 1 % of their verified emissions in 2005. These credits are not bankable and transferable. A maximum of approximately 750 Mt of international credits can be used during the period from 2013 to 2020 in the ESD.

19

International commitments EU domestic legislation

2020 Climate and Energy Package 2030 Climate and Energy Framework

Kyoto Protocol Paris Agreement EU ETS ESD EU ETS (as proposal

COM(2015) 337 final) ESR (as proposal COM(2016) 482)

Sectors included Energy, IPPU,

agriculture, waste, LULUCF

Energy, IPPU,

agriculture, waste,

LULUCF

Energy, IPPU, agriculture, waste, LULUCF

Power & heat generation, energy-intensive industry sectors, aviation

Transport (except aviation), buildings, non-ETS industry, agriculture (except forestry) and waste

Power & heat generation, energy-intensive industry sectors, aviation

Transport (except aviation),

buildings, non-ETS industry,

agriculture (except forestry) and

waste GWPs used IPCC SAR IPCC AR4 IPCC AR4 IPCC AR4 IPCC AR4

Applicable to number of MS

15 (additional KP targets for single

MS)

28 and Iceland

28 Member States + possibly Iceland and Norway 28 (**) 28

Source: European Commission

Note: (*) For the CP2 it refers to carry over from CP1. For the ETS it refers to carry-over from previous trading period under the scheme itself

(**) Iceland, Liechtenstein and Norway are also covered under the EU-ETS

(***) To be reviewed after the ICAO Assembly

.

20

3. EU WIDE TRENDS (INVENTORY) AND PROJECTIONS (MS WEM) PER SECTOR

3.1. EMISSION TRENDS IN THE MAIN SECTORS

3.1.1. CHANGE IN SECTORIAL EMISSIONS

In 2014, energy-related activities, such as energy production and final use including transport were responsible for 78 % of the greenhouse gas (GHG) emissions in the EU. Agriculture was responsible for 10 % of total emissions, followed by the sector Industrial Processes with 9 % and Waste with 3 %.

Figure 1: Share of emissions by IPCC sector category in the EU-28; 2014

Source: EEA, EU greenhouse gas inventory, 2016 inventory data

GHG emissions decreased in the majority of sectors between 1990 and 2014, with the notable exception of transport (see figure 2), including international transport and refrigeration and air conditioning.

21

Figure 2: Past change in EU-28 GHG emissions by IPCC sector categories.

Source: EEA, 2016 EU greenhouse gas inventory

Total emissions from energy supply fell by 6.5% in 2014 compared to 2013 levels, a total decrease by 28% in the period 1990-2014. Energy supply concerns the production of energy, such as electricity or fuels like gasoline, coal, etc. In terms of emissions, energy supply comprises mainly the emissions from public electricity and heat production (thermal power plants), which together with the other supply-side sources, namely petroleum refining and manufacture of solid fuels (coal), are responsible for the bulk of all energy-related emissions. The emissions from electricity and heat production decreased strongly since 1990 thanks to improvement in the transformation efficiency, in the context of lower heat production and higher electricity production between 1990 and 2014. In addition to improved energy efficiency there has been a move towards less carbon intensive fuels and higher generation of electricity from renewable sources. Renewable energy production in the EU reached 25.4 % share of total primary energy production in 2014.

Emissions from energy use (manufacturing industries and construction, residential and service sectors) fell by 36% between 1990 and 2014. Manufacturing industries and construction was the sector responsible for largest emission reductions in the EU, in particular due to substantial improvements in carbon intensity, with emissions from solid fuels more than halving over the period, improved energy efficiency in restructured iron and steel plants and structural changes in the economy, with higher share of services and lower share of energy intensive industries in the GDP. Emissions in the residential sector also substantially decreased since 1990, notably due to energy efficiency improvements from better insulation standards in buildings and less carbon intensive fuel mix. 2014 was the hottest year on record in Europe, and the milder temperatures of autumn/winter months have partly contributed to the lower heat demand by households and therefore lower GHG emissions.

Transport, responsible for around 21% of the total EU emissions in 2014 (about 23% of the total emissions if international aviation is included) is the only sector where emissions have increased over

22

the period 1990-2014, by approximately 13 %. Transport emissions have been on a decreasing trend since 2007 but again increased in 2014. The biggest emission source within transport was by far road transport (around 95% share of the emissions in transport sector in 2014). The overall net increase in emissions was accounted for by a strong uptake of diesel and decline of gasoline use. Energy efficiency improvements and to a lesser extent increased use of less carbon intensive fuels such as LPG and biodiesel blends have led to levels of road transport emissions that would have otherwise been higher.

Emissions from Agriculture in the EU have also shown a steady decline since 1990 levels, with an overall decrease of 21% in 2014. The largest reductions in emissions in the sector occurred due to decreasing use of fertiliser and manure and to declining cattle numbers.

Industrial Processes, covering non-energy (i.e. non-combustion) emissions that stem from chemical processes where greenhouse gases are released were responsible for 9 % of the EU total emissions in 2014. While overall emissions from the sector were cut by 30% since 1990, due to industrial emissions policy and gains in energy efficiency in industrial processes, emissions from hydrofluorocarbons (HFCs) almost quadrupled since 1990 levels, due to their use as substitutes to the ozone-depleting substances banned under the Montreal Protocol. HFCs are mostly used in refrigeration and air conditioning and the increase in emissions is consistent with both warmer climatic conditions in Europe and higher standards of comfort demanded.

The Waste sector is responsible for 3% of total EU emissions and is also one of the sectors with largest emission cuts of 40% from 1990 levels. Emissions from managed waste disposal on land account for almost two thirds of total waste emissions, and showed the greatest decrease of all waste-related emissions, due to reduction of the amount of biodegradable waste going to landfills and to increase of CH4 recovered and utilised (combustion of biogas for electricity and/or heat generation) or flared.

3.2. PROJECTIONS This section presents Member State projections of GHG emissions under the “with existing measures scenario” (WEM), differentiated by sector and aggregated to EU-28 level. Projections are presented for the years 2015, 2020, 2025, 2030 and 2035, and are displayed in CO2 equivalents. It should be noted that the projections of emissions related to fuel sold to ships and aircrafts engaged in international transport are not included in the totals reported in this section.

The GHG WEM projections of the European Union represents a business-as-usual scenario aggregated from 28 national WEM projections where only policies and measures that have been adopted or already implemented in the Member State are considered, as far as covered by national projections. With regard to EU policy coverage the WEM projection is thus a conservative scenario. The 2016 data set of projections is based on last year's 2015 projections submissions (for Member States that did not submit new projections in 2015, the EU Reference scenario 2013 was used for gap-filling purposes3) and it has been updated with the 2016 submission updates provided by some Member States4.

According to the WEM projections, emissions are estimated to be 23% lower in 2020 and 26% lower in 2030, as compared to 1990. When additional measures are taken into account (projections that also encompass planned policies and measures; "WAM"), projections submitted by Member States lead to a reduction of emissions by 25% in 2020 and 29% in 2030, compared to 1990. The aggregated 3 As refered to in Article 14 (3) of the MMR (EU No 525/2013) 4 Eight MS updated their projections in 2016 updates submissions (AT, CY, DK, FR, EL, HU, IE, LU)

23

projection for 2020 is broadly consistent with the results of the new EU Reference Scenario 20165 published by the European Commission, while for 2030 the latter projects a stronger decline of -35% in 2030 compared to 1990.

3.2.1. TOTAL AGGREGATE GHG EMISSION PROJECTIONS PER SECTOR From a sectoral perspective, the largest share of emission reductions comes from the energy sector (supply and use, excluding transport). 'Energy supply' and 'energy use' are the two sectors which contribute the most to emissions (57%). These emissions are projected to decrease by approximately 34 % for energy use, and 32% in the case of energy supply in 2020, reaching further reductions in 2030 of 38% and 37%, respectively (vs. 1990). In absolute terms, the 'energy supply' sector is expected to contribute quantitatively more to emissions reduction in the next decades.

Transport is the most important sector where emissions are expected to increase between 1990 and 2020. They will be 13 % higher in 2020 than in 1990 and stay at about this level until 2030. The LULUCF emissions present a slightly increasing trend, foreseen to reach 2% in 2020 and 3% in 2030 (vs. 1990).

The rest of the sectors are projected to decrease significantly their GHG emissions in the next decades, the majority of them by 2020. The industry sector is projected to decrease its emissions by approximately 28 % in 2020 and 31% in 2030 (vs. 1990). Agriculture is projected to fall 18% and 16% in 2020 and 2030, respectively. Finally, the sector that foresees the biggest decrease (not in absolute terms but relative to its emissions) is the 'waste sector' with a cut of 44% in 2020 and projects to reduce its emissions by half in 2030 (vs. 1990).

Figure 3: EU- 28 GHG emissions per sector: inventory and WEM projections scenario

Source: EEA, European Commission

Notes: *sectors in the legend include indication of respective(s) IPCC sectoral codification.

**The observed discrepancy between 2014 projections and inventory is explained by the fact that there was no major projections update in 2016 submission under Article 14 of MMR. This means that for most MS the reference year used for projections remains 2013 (or a year before), not being possible to update their models with the most recent inventory data

5 http://ec.europa.eu/clima/policies/strategies/analysis/models/docs/full_referencescenario2016report_en.pdf

24

(up to the year 2014). The projections data set therefore remains significantly close to the previous one of 2015. Nevertheless, as part of the QA/QC process carried out by the European Topic Centre on Air and Climate Change (ETC/ACC) supporting the European Environmental Agency (EEA), the reference year used in MS projections has been checked against the GHG emissions for that same year from the latest inventory submission. This is done to ensure that projections are calibrated with the reference year used by MS for preparing their projections.

25

3.3. CONVERGENCE IN GHG EMISSIONS INTENSITY AND EMISSIONS PER CAPITA All Member States have experienced an improvement in GHG emissions intensity with the average annual reduction rate ranging from 0.8 % to 5.1 %. This has led to a convergence of performances between Member States (Figure 4).

Figure 4:GHG emissions intensity per GDP in the EU; 1990, 2005 and 2015. Percentages reflect annual average reduction between 2015-1990.

Source: Commission, EEA

Note: approximated 2015 data.

26

Furthermore, as shown in Figure 5, emissions per capita have been decreasing and converging since 1990 in all Member States except for Portugal and Spain. Nevertheless for these two countries the emissions per capita are well below EU average. Figure 5: GHG emissions per capita in the EU; 1990, 2005, and 2015. Percentages reflect annual average reduction between 2015-1990.

Source: Commission, EEA.

Note: approximated 2015 data

27

3.4. COMPARISON OF THE EU-28 GHG TOTAL EMISSIONS AND PROJECTIONS UNDER THE KYOTO PROTOCOL AND UNDER THE CLIMATE AND ENERGY PACKAGE

The EU 20 % reduction commitment by 2020 under the Climate and Energy package covers EU CO2 emissions to the extent aviation is covered under the EU ETS. Since 2012 emissions that means all flights from international flights departing from, to and within the EU. The Kyoto Protocol includes GHG emissions from domestic aviation only (inventory category).

The table below presents the quantitative differences between the scopes of the Kyoto Protocol and of the Climate and Energy Package. Reductions achieved by the EU-28, in 2014, when the emissions from international aviation are also taken into account, amount to -23 % compared to 1990 levels. When excluding international aviation, the reduction amounts to -24%.

Table 2: Emissions (Mt CO2 eq) covered by the Kyoto Protocol

1990 2005 2014 2020

Total GHG emissions 5,665 5,217 4,282

Of which domestic aviation 14 20 15

Projections as compilation of MS data, WEM scenario 4,235

-20% compared to Kyoto base year(1) 4,641

Note: (1) The Kyoto base year emissions is different from 1990 emissions level and it is estimated at 5,798 Mt CO2 eq.; 5,802 Mt CO2

eq. including Iceland

Table 3: Emissions (MtCO2eq) covered by the Climate and Energy Package

1990 2005 2014 2020

Total GHG emissions 5,735 5,348 4,419

of which domestic aviation 14 20 15

of which international aviation 70 132 137

Projections as compilation of MS data, WEM scenario 4,387

-20 % compared to 1990 4,588

28

4. MEMBER STATES PROGRESSES TOWARDS EFFORT SHARING DECISION TARGETS A strong monitoring and compliance system has been put in place to monitor Member States' action and help them take corrective measures if they fail to meet their ESD targets. Inventory data submitted by the Member States needs to undergo a detailed Union review, before ESD emissions are officially determined by the European Commission. Last year technical problems with UNFCCC reporting software did not allow Member States to submit their inventories in time for the review to take place. Thus in 2016 emissions had to be reviewed both for 2013 and 2014. The 2016 review was exceptionally comprehensive – the whole inventories of all Member States had to undergo detailed 'second step' checks, ensuring inter alia proper transition of inventory reporting to 2006 IPCC guidelines. The reviewed inventory data is based on updated IPCC inventory guidelines, of which only the change of global warming potentials is reflected in the absolute ESD targets set in 2013.

Table 4 below shows that Malta is the only Member State with historic ESD emissions above its targets. Malta will now have four months to use flexibility provisions under ESD (e.g. trading ESD units with other Member States), in order to comply with ESD and avoid compliance procedures.

Table 4 : RELATIVE gap between historic emissions and ESD targets for 2013 and 2014 (in % of 2005 base year emissions)

2013 2014

A) B) C*)= B - A D) E) F*)= E – D

Country 2013 ESD target

compared to 2005 2013 ESD emissions

data compared to 2005 Relative gap 2013 vs.

ESD 2013 target 2014 ESD target

compared to 2005 2014 ESD emissions

data compared to 2005 Relative gap 2014 vs.

ESD 2014 target

Austria -9% -14% -4% -10% -17% -7%

Belgium -2% -7% -5% -3% -12% -9%

Bulgaria 12% -7% -20% 13% -5% -18%

Croatia 4% -20% -24% 5% -22% -27%

Cyprus -5% -37% -32% -5% -37% -32%

Czech Republic 1% -1% -2% 2% -7% -9%

Denmark -3% -12% -8% -6% -14% -9%

Estonia 8% -1% -9% 8% 4% -4%

Finland -6% -6% -1% -7% -11% -3%

France -6% -12% -7% -7% -15% -9%

29

2013 2014

A) B) C*)= B - A D) E) F*)= E – D

Country 2013 ESD target

compared to 2005 2013 ESD emissions

data compared to 2005 Relative gap 2013 vs.

ESD 2013 target 2014 ESD target

compared to 2005 2014 ESD emissions

data compared to 2005 Relative gap 2014 vs.

ESD 2014 target

Germany -5% -7% -2% -6% -12% -6%

Greece -8% -31% -23% -7% -30% -23%

Hungary -5% -27% -23% -3% -27% -25%

Ireland -4% -13% -10% -6% -14% -8%

Italy -9% -19% -10% -10% -22% -12%

Latvia 9% 4% -6% 11% 7% -4%

Lithuania -4% -12% -9% -1% -9% -8%

Luxembourg -6% -8% -2% -8% -13% -5%

Malta 6% 14% 7% 6% 17% 11%

Netherlands -4% -15% -12% -5% -23% -18%

Poland 9% 5% -4% 10% 2% -8%

Portugal -3% -24% -21% -2% -23% -21%

Romania 2% -2% -4% 4% -2% -7%

Slovakia 2% -10% -13% 4% -16% -20%

Slovenia 2% -9% -12% 3% -13% -16%

Spain -4% -16% -11% -5% -16% -11%

Sweden -7% -21% -14% -8% -23% -15%

United Kingdom -8% -13% -5% -9% -17% -8%

* Negative gap indicates over delivery, while positive gap indicate shortfall towards ESD targets.

Note: The 2005 base year ESD emissions are not readily available from emission inventories and registries because the ETS scope and hence also the ESD scope has undergone several changes between 2005 and today. Thus 2005 ESD emissions consistent with the latest ETS scope were re-constructed using the following formula: 2005 ESD emissions = 2020 absolute ESD target / (1 + % 2020 ESD target).

30

Table 5 below presents the calculations underpinning Figure 2 of the Climate Action Progress Report.

Table 5 : Estimated (2015) and projected (2020) RELATIVE gap between emissions and ESD targets (in % of 2005 base year emissions)

2015 2020

A) B) C*)= B - A D) E) F*)= E – D

Country 2015 ESD target

compared to 2005

2015 ESD proxy emissions data

compared to 2005

Relative gap 2015 proxy vs. ESD 2015 target

2020 national target (ESD target)

compared to 2005

Projected 2020 non-ETS emissions compared to 2005

(with existing measures)

Gap between projected 2020 non-ETS emissions versus

2020 ESD targets

Austria -11% -15% -4% -16% -12% 4%

Belgium -5% -8% -3% -15% -10% 5%

Bulgaria 14% -3% -17% 20% -5% -25%

Croatia 6% -25% -31% 11% -9% -20%

Cyprus -5% -31% -25% -5% -43% -38%

Czech Republic 3% -9% -12% 9% -8% -17%

Denmark -8% -15% -7% -20% -19% 1%

Estonia 9% -3% -11% 11% -2% -13%

Finland -9% -11% -2% -16% -16% 0%

France -8% -13% -5% -14% -17% -3%

Germany -7% -9% -2% -14% -15% -1%

Greece -7% -30% -24% -4% -26% -22%

Hungary -1% -23% -22% 10% -28% -38%

Ireland -8% -11% -2% -20% -8% 12%

Italy -10% -19% -9% -13% -18% -5%

Latvia 12% 9% -3% 17% 7% -10%

Lithuania 2% -10% -11% 15% -3% -18%

Luxembourg -10% -14% -3% -20% -15% 5%

31

2015 2020

A) B) C*)= B - A D) E) F*)= E – D

Country 2015 ESD target

compared to 2005

2015 ESD proxy emissions data

compared to 2005

Relative gap 2015 proxy vs. ESD 2015 target

2020 national target (ESD target)

compared to 2005

Projected 2020 non-ETS emissions compared to 2005

(with existing measures)

Gap between projected 2020 non-ETS emissions versus

2020 ESD targets

Malta 6% 25% 19% 5% -16% -21%

Netherlands -7% -20% -13% -16% -21% -5%

Poland 10% 2% -8% 14% 6% -8%

Portugal -2% -24% -22% 1% -25% -26%

Romania 7% -6% -12% 19% 4% -15%

Slovakia 5% -14% -19% 13% -4% -17%

Slovenia 3% -12% -14% 4% -8% -12%

Spain -6% -16% -10% -10% -12% -2%

Sweden -10% -24% -14% -17% -28% -11% United Kingdom -10% -16% -5% -16% -19% -3%

* Negative gap indicates over delivery, while positive gap indicate shortfall towards ESD targets.

32

Table 6: Historic (2013-2014), estimated (2015) and projected (2016-2020) ABSOLUTE gaps between emissions and annual limits under the Effort Sharing Decision (in Mt CO2 eq)

ESD reviewed Proxy emissions WEM projections

2013 2014 2015 2016 2017 2018 2019 2020

Country Mt CO2 eq.

emissions/

target

absolute gap to target

emissions/

target

absolute gap to target

emissions/

target

absolute gap to target

emissions/

target

absolute gap to target

emissions/

target

absolute gap to target

emissions/

target

absolute gap to target

emissions/

target

absolute gap to target

emissions/

target

absolute gap to target

emissions 50,1 48,2 49,2 51,5 51,4 51,3 51,3 51,0

Austria target 52,6 -2,5 52,1 -3,9 51,5 -2,3 51,0 0,5 50,4 1,0 49,9 1,5 49,3 1,9 48,8 2,2

emissions 74,3 70,1 73,0 72,6 72,4 72,2 71,9 71,6

Belgium target 78,4 -4,1 76,9 -6,8 75,3 -2,3 73,8 -1,1 72,3 0,2 70,7 1,5 69,2 2,7 67,7 4,0

emissions 22,2 22,9 23,3 23,3 23,2 23,0 22,8 22,7

Bulgaria target 26,9 -4,7 27,2 -4,3 27,5 -4,2 27,7 -4,4 28,0 -4,8 28,3 -5,3 28,5 -5,7 28,8 -6,1

emissions 15,1 14,7 14,1 16,8 16,9 17,0 17,1 17,2

Croatia target 19,6 -4,5 19,8 -5,1 20,0 -5,9 20,2 -3,3 20,4 -3,4 20,6 -3,5 20,8 -3,6 21,0 -3,7

emissions 3,9 3,9 4,3 3,7 3,7 3,7 3,6 3,6

Cyprus target 5,9 -2,0 5,9 -2,0 5,9 -1,6 5,9 -2,2 5,9 -2,2 5,9 -2,3 5,9 -2,3 5,9 -2,4

emissions 61,5 57,6 56,6 60,4 59,6 58,8 58,0 57,2 Czech Republic target 62,5 -1,0 63,2 -5,6 64,0 -7,3 64,7 -4,3 65,4 -5,8 66,2 -7,4 66,9 -8,9 67,7 -10,5

emissions 33,7 32,6 32,4 32,4 31,6 31,2 31,0 30,8

Denmark target 36,8 -3,1 35,9 -3,3 35,0 -2,6 34,1 -1,8 33,2 -1,6 32,3 -1,1 31,4 -0,4 30,5 0,3

emissions 5,8 6,1 5,7 5,6 5,6 5,7 5,7 5,7

Estonia target 6,3 -0,5 6,3 -0,2 6,3 -0,7 6,4 -0,7 6,4 -0,7 6,4 -0,8 6,4 -0,8 6,5 -0,8

emissions 31,6 30,1 30,0 29,8 29,4 29,2 28,8 28,4

Finland target 31,8 -0,2 31,3 -1,1 30,8 -0,8 30,3 -0,5 29,8 -0,4 29,3 -0,2 28,8 -0,1 28,4 0,0

emissions 366,1 353,5 365,1 356,5 353,8 351,2 348,5 345,8

France target 394,1 -28,0 389,5 -35,9 384,4 -19,3 379,4 -22,9 374,4 -20,5 369,3 -18,2 364,3 -15,9 359,3 -13,5

33

ESD reviewed Proxy emissions WEM projections

2013 2014 2015 2016 2017 2018 2019 2020

Country Mt CO2 eq.

emissions/

target

absolute gap to target

emissions/

target

absolute gap to target

emissions/

target

absolute gap to target

emissions/

target

absolute gap to target

emissions/

target

absolute gap to target

emissions/

target

absolute gap to target

emissions/

target

absolute gap to target

emissions/

target

absolute gap to target

emissions 460,2 436,8 448,7 440,0 435,4 430,9 426,3 421,7

Germany target 472,5 -12,3 465,8 -29,0 459,1 -10,4 452,4 -12,4 445,7 -10,3 439,0 -8,2 432,3 -6,1 425,6 -4,0

emissions 44,2 44,4 44,5 47,5 47,5 47,5 47,5 47,4

Greece target 59,0 -14,8 59,3 -14,9 59,6 -15,1 59,9 -12,4 60,3 -12,8 60,6 -13,1 60,9 -13,5 61,2 -13,8

emissions 38,4 38,4 41,0 38,6 38,5 38,5 38,4 38,4

Hungary target 50,4 -12,0 51,5 -13,1 52,6 -11,6 53,8 -15,2 54,9 -16,3 56,0 -17,5 57,1 -18,7 58,2 -19,9

emissions 42,2 41,7 43,6 43,8 44,0 44,4 44,7 45,0

Ireland target 46,9 -4,7 45,8 -4,1 44,6 -1,0 43,5 0,3 42,4 1,7 41,2 3,2 40,1 4,6 39,0 6,0

emissions 273,3 265,3 272,4 272,8 273,7 274,5 275,4 276,2

Italy target 308,2 -34,8 306,2 -40,9 304,2 -31,8 302,3 -29,4 300,3 -26,6 298,3 -23,8 296,4 -21,0 294,4 -18,2

emissions 8,8 9,0 9,2 8,7 8,8 8,9 9,0 9,1

Latvia target 9,3 -0,5 9,4 -0,3 9,4 -0,2 9,5 -0,9 9,6 -0,9 9,7 -0,8 9,8 -0,8 9,9 -0,8

emissions 11,8 12,3 12,1 12,7 12,8 12,9 12,9 13,0

Lithuania target 12,9 -1,2 13,3 -1,0 13,7 -1,5 14,0 -1,3 14,4 -1,6 14,7 -1,9 15,1 -2,2 15,5 -2,5

emissions 9,4 8,9 8,8 8,6 8,6 8,6 8,6 8,6

Luxembourg target 9,5 -0,2 9,3 -0,5 9,1 -0,3 8,9 -0,4 8,7 -0,2 8,5 0,0 8,3 0,2 8,1 0,5

emissions 1,3 1,3 1,4 0,9 0,9 0,9 0,9 0,9

Malta target 1,2 0,1 1,2 0,1 1,2 0,2 1,2 -0,2 1,2 -0,2 1,2 -0,2 1,2 -0,2 1,2 -0,2

emissions 108,3 97,9 102,0 106,7 105,4 104,0 102,6 101,2

Netherlands target 122,9 -14,7 120,7 -22,8 118,4 -16,4 116,1 -9,4 113,9 -8,5 111,6 -7,6 109,3 -6,7 107,0 -5,8

emissions 186,1 181,5 181,6 188,3 188,5 188,7 188,8 189,0

Poland target 193,6 -7,5 194,9 -13,3 196,1 -14,5 197,4 -9,0 198,6 -10,1 199,9 -11,2 201,1 -12,3 202,3 -13,4

emissions 38,6 38,8 38,6 39,8 39,4 38,9 38,5 38,1

Portugal target 49,3 -10,7 49,6 -10,8 49,9 -11,3 50,1 -10,4 50,4 -11,1 50,7 -11,8 51,0 -12,4 51,2 -13,1

34

ESD reviewed Proxy emissions WEM projections

2013 2014 2015 2016 2017 2018 2019 2020

Country Mt CO2 eq.

emissions/

target

absolute gap to target

emissions/

target

absolute gap to target

emissions/

target

absolute gap to target

emissions/

target

absolute gap to target

emissions/

target

absolute gap to target

emissions/

target

absolute gap to target

emissions/

target

absolute gap to target

emissions/

target

absolute gap to target

emissions 72,7 72,5 70,0 71,6 72,9 74,3 75,7 77,0

Romania target 75,6 -2,9 77,5 -4,9 79,3 -9,3 81,1 -9,5 82,9 -10,0 84,7 -10,4 86,6 -10,9 88,4 -11,3

emissions 21,1 19,8 20,2 22,4 22,5 22,5 22,6 22,6

Slovakia target 24,0 -2,9 24,4 -4,6 24,7 -4,6 25,1 -2,7 25,5 -3,0 25,8 -3,3 26,2 -3,6 26,5 -3,9

emissions 10,9 10,5 10,7 11,2 11,1 11,1 11,1 11,0

Slovenia target 12,3 -1,4 12,4 -1,9 12,4 -1,7 12,4 -1,2 12,4 -1,3 12,5 -1,4 12,5 -1,4 12,5 -1,5

emissions 200,3 199,8 199,4 201,1 202,9 204,8 206,8 208,4

Spain target 227,6 -27,3 225,6 -25,9 223,7 -24,3 221,8 -20,7 219,9 -17,0 218,0 -13,2 216,1 -9,2 214,2 -5,8

emissions 35,3 34,5 34,0 33,7 33,3 32,9 32,5 32,1

Sweden target 41,7 -6,4 41,0 -6,5 40,4 -6,4 39,8 -6,0 39,1 -5,8 38,5 -5,6 37,8 -5,3 37,2 -5,1

emissions 339,5 324,4 328,7 337,8 333,1 327,9 323,3 315,6 United Kingdom target 358,7 -19,3 354,2 -29,8 349,7 -21,0 345,2 -7,4 340,7 -7,6 336,1 -8,2 331,6 -8,3 327,1 -11,5

Note: Negative gap indicates over delivery, while positive gap indicate shortfall towards ESD targets.

Source: EEA, European Commission.

(1) 2013 and 2014 ESD emissions from the 2016 ESD comprehensive review of inventory data.

(2) 2015 emissions data are approximated inventory data (Art. 8 of the MMR)

(3) 2016-2020 projected emissions in effort sharing sectors from MS with existing measures

35

5. KEY FIGURES FOR KYOTO CP1 COMPLIANCE

Table 7: Initial Assigned Amount units, GHG emissions 2008-2012 (tCO2eq), and Kyoto Protocol units in the retirement account

Total quantity of Kyoto Protocol units in the retirement account

IAA GHG emissions 2008-2012 AAUs ERUs RMUs CERs tCERs lCERs Total

Eu-15 19621381509 18822263095

17.368.888.639

445.838.157

302.009.951

725.166.210

1.615.811

-

18.843.518.768

Total quantity of Kyoto Protocol units in the retirement account

IAA GHG emissions 2008-2012

(tCO2eq) AAUs ERUs RMUs CERs tCERs

lCERs Total

Austria 343.866.009 414.658.054

362.501.669

11.975.750

6.786.726

33.393.909

-

-

414.658.054

Belgium 673.995.528 626.308.776

590.701.837

9.451.546

-

26.162.846

-

-

626.316.229

Denmark 276.838.955 297.947.591

257.813.160

14.510.576

8.654.523

17.005.884

-

-

297.984.143

Finland 355.017.545 338.353.531

304.541.813

4.088.755

17.449.492

12.273.471

-

-

338.353.531

France 2.819.626.640 2.538.856.531

2.425.839.655

24.706.979

23.648.026

64.661.871

-

-

2.538.856.531

Germany 4.868.096.694 4.706.574.671

4.245.979.938

194.764.982

39.728.163

226.101.588

-

-

4.706.574.671

Greece 668.669.806 598.504.091

568.566.201

11.322.449

2.052.032

16.563.409

-

-

598.504.091

Ireland 314.184.272 308.508.846

280.189.478

4.294.121

16.291.152

6.512.114

1.221.981

-

308.508.846

Italy 2.416.277.898 2.479.638.840

2.258.521.514

46.715.521

75.276.599

98.993.939

131.267

-

2.479.638.840

Luxembourg 47.402.996 60.116.132

53.190.972

395.536

373.279

5.893.782

262.563

-

60.116.132

Netherlands 1.001.262.141 997.119.267

928.949.317

29.763.371

-

38.406.579

-

-

997.119.267

36

Total quantity of Kyoto Protocol units in the retirement account

IAA GHG emissions 2008-2012

(tCO2eq) AAUs ERUs RMUs CERs tCERs

lCERs Total

Portugal 381.937.527 362.098.075

302.650.818

4.567.634

44.760.045

10.119.578

-

-

362.098.075

Spain 1.666.195.929 1.791.980.049

1.568.312.827

65.062.121

52.780.585

105.824.516

-

-

1.791.980.049

Sweden 375.188.561 305.573.749

295.466.371

2.113.323

-

7.994.055

-

-

305.573.749

United Kingdom 3.412.080.630

3.017.236.560

2.925.663.069

22.105.493

14.209.329

55.258.669

-

-

3.017.236.560

Total quantity of Kyoto Protocol units in the retirement account

IAA GHG emissions 2008-

2012 AAUs ERUs RMUs CERs tCERs lCERs Total

Bulgaria 610.045.827

312.859.911

285.924.659

13.587.718

3.563.874

9.783.660

312.859.911

Croatia 148.778.503

144.820.156

139.023.568

487.493

5.090.172

218.923

-

-

144.820.156

Czech Republic

893.541.801

680.149.966

626.791.646

25.128.765

6.584.129

21.645.426

680.149.966

Estonia 196.062.637

95.304.517

90.835.022

4.255.338 -

214.157

-

-

95.304.517

Hungary 542.366.600

335.956.338

325.001.828

1.172.944

7.277.911

2.503.655

335.956.338

Latvia 119.182.130

56.453.901

48.478.397

490.531

6.233.333

1.251.640

56.453.901

Lithuania 227.306.177

109.786.321

97.066.552

3.477.985

5.893.563

3.348.131

-

-

109.786.321

Poland 2.648.181.038

2.006.265.534

1.947.596.833

2.061.462

27.766.419

28.840.820

2.006.265.534

Roumania 1.279.835.099

615.929.959

584.842.690

4.479.948

17.988.730

8.618.591

-

-

615.929.959

Slovakia 331.433.516

227.690.025

209.505.856

2.327.557

1.394.152

14.462.460

-

-

227.690.025

Slovenia 93.628.593

98.542.441

85.504.459

4.695.634

6.600.000

1.742.348

-

-

98.542.441

37

IAA GHG emissions 2008-

2012 AAUs ERUs RMUs CERs tCERs lCERs Total

EU (26) 26.711.003.052 23.527.233.832

21.809.460.149

508.003.532

390.402.234

817.796.021

1.615.811

-

23.527.277.837

Source: UNFCC, European Commission.

Note: IIA: Initial Assigned Amount, AAU: Assigned Amount Unit, ERU: Emission Reduction Unit, RMU: Removal Unit, CER:Certified Emission reduction, tCER:temporary Certified

Emission Reduction, lCER:long-term Certified Emission Reduction.

Table 8: Total quantity of Kyoto Protocol units requested to be carried over from first to the second commitment period

AAUs ERUs CERs

EU15 2.124.109.368,00 0 0

AAUs ERUs CERs Austria 4.945 360 2.322.185 Belgium 1.706.252 3.267.881 16.822.907 Denmark - - - Finland 14.018.572 2.917.220 6.798.242 France 187.377.092 - - Germany - - - Greece 37.224.272 3.493.262 4.392.299 Ireland 7.816.073 74.964 5.255.000 Italy 795.601 1.108.946 2.138.152 Luxembourg 59 - 527.006 Netherlands - - 3.684.180 Portugal 40.608.686 595.005 4.149.718 Spain 16.062.657 2.171.080 14.742.035

38

AAUs ERUs CERs Sweden 262.565 1.225.069 7.845.487 United Kingdom 1.162.710 85.302.015 27.524.671

AAUs ERUs CERs Bulgaria 259.659.629 2.284.921 913.430 Croatia 9.048.519 - - Czech republic 48.272.014 - - Estonia 19.868.929 2.127.338 440.523 Hungary 166.996.521 3.876.894 5.336.676 Latvia 28.249.726 5.317 21.550 Lithuania 71.822.887 2.327.000 246.966 Poland 411.095.255 42.388.889 42.968.220 Romania 532.594.270 17.870.726 8.692.621 Slovakia 28.624.050 - - Slovenia 1.248.230 - -

AAUs ERUs CERs

EU (26) 4.008.628.882 171.036.887 154.821.868

Source: UNFCC, European Commission.

Note: AAU: Assigned Amount Unit, ERU: Emission Reduction Unit, CER: Certified Emission reduction.

6. MEMBER STATES CLIMATE FINANCE In 2015, EU Member States submitted to the European Commission their third annual reports on financial and technology support provided to developing countries pursuant to Article 16 of the Monitoring Mechanism Regulation (MMR) with information for the year 2014. The information submitted by EU Member States is in accordance with the relevant provisions of the UNFCCC, including the common formats agreed under UNFCCC for the biennial reports. In 2014, the EU and its Member States contributed EUR 14.5bn in climate finance.6 Table 9 : Climate finance provided to developing countries (2014).

EU and Member States Climate finance (€ million) Austria 141,27 Belgium 142,74 Bulgaria 0,07 Croatia 0,03 Cyprus 0,00 Czech Republic 10,80 Denmark 222,04 Estonia 0,53 Finland 132,25 France 2921,43 Germany 5130,61 Greece 0,04 Hungary 2,71 Ireland 41,44 Italy 143,23 Latvia 0,42 Lithuania 0,26 Luxembourg 36,26 Malta 0,08 Netherlands 339,98 Poland 4,19 Portugal 9,52 Romania 0,03 Slovakia 1,23 Slovenia 2,35 Spain 498,75 Sweden 384,75 United Kingdom 1551,43 European Commission 677,01 European Investment Bank 2098,50 EU total 14493,94

6 http://www.consilium.europa.eu/en/press/press-releases/2015/11/10-conclusions-climate-finance/

40

Source: Reporting submitted by MS under Monitoring Mechanism Regulation (EU) n 525/2013; OECD data on imputed multilateral climate related finance.

This figure includes climate finance sources from public budgets and other development financial institutions. The 2014 figure also includes climate finance from the EIB of EUR 2.1bn and OECD data on imputed multilateral contributions. The data is reported on the basis of technical guidance from the European Commission for reporting under Article 16, as discussed with Member States. Differences in reporting methodologies and in the scope of the data still exist, despite efforts by the EU and its Member States to harmonise reporting methodologies.

Types of activities

The EU and its Member States supported both activities that reduce greenhouse gas emissions (mitigation) and adaptation to the consequences of climate change. Of all climate funding, approximately 58% was devoted to mitigation and 14% to adaptation. The remaining 28% was multi-purpose climate finance with both adaptation and mitigation objectives, including the fight against deforestation and forest degradation in developing countries (REDD+).

41

7. ADAPTATION TO CLIMATE CHANGE The 2013 EU strategy on adaptation to climate change aims at making Europe more climate-resilient. It promotes adaptation action across the EU, ensuring that adaptation considerations are addressed in all relevant EU policies (mainstreaming), promoting greater coordination, coherence and information-sharing.

In 2017, the European Commission will report to the EU Parliament and Council on the implementation of the Adaptation Strategy. This report will also include an assessment of the progress made by Member States in terms of adaptation action and hence preparedness. Progress will be assessed, inter alia, on the basis of the reports provided in 2015 by Member States within the framework of the Monitoring Mechanism Regulation. Some general trends are described below:

Adaptation planning and the identification of general risks and vulnerabilities are developed in many Member States. National adaptation strategies/actions plans have been adopted in 21 Member States and most of those who do not yet have a strategy are preparing one. In addition, several Member States are in the process reviewing their adaptation strategies and action plans. Effective horizontal coordination between relevant Ministries was beneficial in many cases: for example, in Austria, Belgium, and Hungary it has facilitated the planning for adaptation. Coordination between different levels of governance (local, regional, national) is still weak in the majority of Member States. However, there are some efforts to develop political, regulatory and technical frameworks for cities to implement adaptation measures in different Member States. Several countries have included urban adaptation in their national strategies, or have made it a standard part of priority sectors under consideration . At EU level, adaptation has been merged with mitigation efforts through the new Covenant of Mayors in a European initiative of nearly 7,000 cities. Stakeholder involvement is considered key to have a transparent, inclusive and well-informed planning process. Some countries have yet to explore in-depth involvement and increase the commitment to adaptation of private sector and civil society stakeholders. Progress, in this direction, has been achieved in some Member States, for example the UK, the Netherlands and France.

In the Member States, earmarked financing for adaptation is still more the exception than the rule. While over half of the MS have financial resources available for preliminary adaptation action (e.g. climate services, vulnerability assessments and climate research), only few (for instance Denmark, Germany and Malta) have a dedicated budget to implement adaptation action in vulnerable sectors. Public funding for adaptation often focuses on water, agriculture, forestry and human health.

The definition of solid adaptation actions and their strategic implementation is still an outstanding issue for many Member States. Further comprehensive sector vulnerability assessments should be carried out. Only few countries have specific projects/programs to implement adaptation measures as such. Due to insufficient awareness, technical capacity and resources, measures are often implemented ad hoc. Providing information to relevant stakeholders (e.g. on adaptation tools, education, guidelines) and integrating adaptation concerns into priority policies are the main instruments in this regard. Priority sectors for adaptation implementation cover a broad spectrum and include: water management and water resources, forests and forestry, agriculture, biodiversity and ecosystems, and human health.

Monitoring and Evaluation systems of adaptation have only been developed or are under development in less than half the Member States . This is partly explained by the relatively early stage in implementation of adaptation actions. The few MS that are more advanced with M&E, have mostly focused on processes as in the case of Spain and Finland, while outcome-based indicators (e.g. reductions in vulnerability to climate change) were developed by Austria and Germany.

42

Challenges in this regard include developing outcome-based indicators and addressing knowledge gaps, such as on cost and benefits of adaptation and vulnerability at local level.