Effort Sharing Regulation (ESR)

Key points

• The EESC welcomes the proposal from the Commission to amend the Effort Sharing Regulation (ESR) - Regulation (EU) 2018/842 on binding annual greenhouse gas emission reductions by Member States – in order to align the ESR's contribution towards delivering the increased ambition for 2030 aimed at by the European Green Deal and translated by the rest of the Fit for 55 package into concrete action.
• Although the increased ambition of the EU emissions reduction targets is respectable by international comparison, even these enhanced efforts may fall short of a meaningful contribution from a rich economy and major historic emitter to a maximum 1.5°C warming scenario by the end of the century, given also the dramatic forecast set out in the recently published AR6 report by the IPCC (2021) . For this reason, it is  vital that the 55% EU-wide reduction target by 2030 is being implemented, and Member States' efforts are critical here. The EESC therefore acknowledges that having ambitious and binding ESR targets for Member States is key.
• The high level of climate ambition for the entire Fit for 55 package is thus unquestionable. At the same time, the distributional effects of this necessary climate action can be significant (both between and within Member States) and thus need to be addressed properly.
• The EESC therefore agrees with the view that differences between Member States have to be taken into account to ensure maximum fairness and cost-effectiveness. To achieve genuine cost-effectiveness in a fair way, effort-sharing calculations should ideally address both aspects at the same time and set the targets in a way that the relative emission reduction costs to GDP are the same for each country. In order to compensate for the shortcomings of effort-sharing, the EESC considers the role of flexibility mechanisms crucial, and these deserve special attention.
• The integration should take place in a way that enhances progress towards long-term climate neutrality and therefore both the reduction of emissions and the sequestration of carbon need to be taken into account, as do the challenges of adaptation and food security.
• With a view to establishing a new emissions trading system for road transport and buildings, the EESC supports the current Commission proposal to keep these sectors under the scope of the ESR even after a new emissions trading system for road transport and buildings is set up and takes note that the emission reductions resulting from emissions trading in those sectors will count towards Member States’ efforts to meet the ESR obligations. The EESC points to the need for the Commission and Member States to deal with the interface between the two systems in a smooth and transparent manner.
• The EESC believes that there needs to be an efficient, transparent system to monitor the outcome of the flexibilities. Therefore, the current monitoring framework operating through the registry established by the Commission Delegated Regulation (EU) 2019/1124 should be enhanced to make sure that transaction data, including the use of flexibilities, is fully available to the public.