ETS, ESR and LULUCF – open to revision

While waiting for agreement on a revised 2030 climate target, roadmap consultations related to important climate policies have taken place.  

The Swedish Forest Industries Federation (SFIF) supports ambitious climate targets and therefore eagerly awaits next week’s European Council meeting, where a revised 2030 climate target is on the agenda. Will an agreement be reached on –55 percent? Once agreed, relevant EU climate policies are to be revised and proposals are foreseen to be presented in June by the Commission. SFIF has participated in the recent roadmap consultations  related to the Emissions Trading System (ETS), Effort Sharing Regulation (ESR) and Land use, land-use change, and forestry (LULUCF).  

Emissions Trading System 

In the revision of the ETS system, EU should take the opportunity to strengthen the measures to avoid carbon leakage, also for the sectacaors that will not be included in a Carbon Border Adjustment Mechanism, Johan Bruce, Energy Policy Director at SFIF, points out.  

– We would also encourage the Commission to explore the possibility to harmonize the system for compensation of indirect effects. As of now the system benefits Members States which have yet to transform their power sector, he says. 

Johan Bruce also points out that negative emissions through technological removals of CO2 should not be included in ETS, as that would enable increased emissions from fossil fuels within ETS. 

Read SFIF reply on Inception Impact Assessment on ETS 

Effort Sharing Regulation 

SFIF strongly advices against phasing out the ESR and moving emissions to ETS and LULUCF.  

– If agricultural emissions were to be moved to the LULUCF sector, this would have to be balanced by higher forest removals. That could lead to demand for reduced harvesting rates in existing forests. And if other emissions from the ESR sector would be moved to ETS, this could lead to increased emissions from fossil fuels and decreased competitiveness of the European industry. Road transport and buildings do not face international competition and are less likely to face the risk of carbon leakage, says Johan Bruce.     

Read SFIF reply on Inception Impact Assessment on ESR 

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

The Swedish forest-based sector has a positive effect on the global climate equivalent to 93 million tons of carbon dioxide per year. For the European forest-based sector, the corresponding number is 806 million tons annually. Therefore, SFIF questions several parts of the description of the problem the roadmap aims to tackle. 

– EU climate policy must refrain from focusing on forests as carbon sinks and instead creating incentives for as high flow of carbon as possible from the atmosphere, into trees and further into products. This is best done by climate policy which recognizes and stimulates active forest management as a tool to positively affect sinks, storage and substitution. Additionally, EU climate policy must acknowledge and respect the importance of the forest-based sector for jobs and green growth, not at least in rural areas, says Anna Holmberg, Head of SFIF Brussels Office. 

Read SFIF reply on Inception Impact Assessment on LULUCF