Policy Overview

The Effort Sharing Regulation 2018/842 (ESR) sets Member State-level reduction obligations for all GHG emissions from agriculture, transport, buildings and waste that are not included in the EU Emissions Trading Scheme (EU ETS) or Land use, land-use change, and forestry (LULUCF). These targets can be met through actual emissions reductions, or credits (flexibilities). Its review under the Green Deal, announced in September 2020, aims to update the 2030 ambition level for the effort sharing sectors to be consistent with the 2050 climate neutrality objective. The proposal was open to industry lobbying from October 2020 when the EU Commission launched a public consultation to gather stakeholder views.

Policy Making Mixed Progress

Corporate and industry lobbying on the policy has mostly been supportive of the Commission's proposed ambition level. However, the presence of flexibilities in the ESR, supported by both the Parliament and Council, could weaken its emissions reductions potential.

InfluenceMap Query

GHG Emission Regulation

Policy Status

Under consideration: proceeding to trilogues after votes in EU Parliament and Council.

  • European Parliament: Environment Committee
  • Rapporteur: Jessica Polfjärd (European People’s Party)
  • European Council: Working Party on the Environment and Environment Council

Evidence Profile

17121718

European Commission

European Parliament

European Council

Lobbying Overview

Overview of Corporate and Industry Lobbying

The aggregated evidence of corporate and industry lobbying on the update of the ESR shows supportive engagement from most sectors. However, some entities use their support for an increased ESR 2030 target as a way of arguing in tandem for lower ambition of the EU ETS 2030 emissions reductions target, which covers sectors including the steel and chemical industries.

Long-term Lobbying Trends

The buildings and transportation sector have lobbied positively on the ESR in 2020-21, CEMBUREAU supporting aligning the Member States’ national ESR targets and coordinating the directive with the EU’s increased 2030 GHG target. The Community of European Railway and Infrastructure Companies (CER) was strongly supportive of a binding emissions reduction target for transport.

Entities across European industry have supported maintaining the ESR alongside the potential expansion of the EU ETS to the road transportation and buildings sectors in 2020-21, including the Corporate Leaders Group (CLG) and EDF.

Heavy industry and cross-sector associations, including BusinessEurope, supported increasing the ambition of the 2030 ESR target, but this seems to be in order to reduce the ambition of the 2030 target for ETS sectors as Cefic advocated that industry is exposed to global competition and burden-sharing should be rebalanced.

Several entities advocated to weaken the ESR, thyssenkrupp suggesting that the policy must ensure that there are no additional burdens for sectors which are covered by the EU ETS. Furthermore, BusinessEurope advocated that flexibilities (banking, borrowing, trading and using ETS and LULUCF credits) for Member States to achieve their emission reduction targets should remain in the ESR.

Lobbying on the proposal since EU Commission adoption in July 2021

Actors from across EU industry supported the increased EU-level target and preserving the scope of the ESR to include road transportation and buildings, including the German Chemical Industry Association (VCI) and CLG.

Utilities companies have taken broadly supportive positions on the proposed reforms to the use of flexibilities to achieve ESR targets, although Iberdrola and Enel suggested they must have clear limits. Iberdrola supported removing LULUCF flexibilities, as net emissions removals in the land use sectors are not directly equivalent to emissions reductions in other sectors. Enel advocated for sub-sectoral targets to increase emissions reductions in the buildings and road transportation sector. Iberdrola proposed a mid-decade (2025) review of the EU’s carbon budget in order to take into account real emission levels in 2020 to ensure that overall ESR emissions reductions are not artificially inflated.

Lobbying Impacts on Policy Ambition

By considering the potential scenarios in the EU Commission's original Impact Assessment Report for ESR reform, and comparing this to the final proposal, a gauge of the impact of industry lobbying can be taken. In this case, supportive engagement across EU sectors appears to have strengthened the EU Commission and Council’s proposal for the ESR, although retaining a weaker position on flexibilities.

EU Commission Proposal

  • ESR Scope and Targets: The scope of the ESR has been retained, and it continues to set binding national targets. Furthermore, the increase in the target to 40% compared to 2005 values is in line with the ambition stated in the EU Commission’s inception impact assessment as necessary to reach 55% EU-wide emissions reduction target. However, lobbying on EU ETS ambition in relation to the ESR may have been partially successful (see EU ETS Reform policy page).

  • Flexibilities: The flexbilities which allow Member States to meet their targets with LULUCF and ETS credits remain in the proposal, and it introduces a new LULUCF reserve of credits from net GHG removals between 2026-2030 to be used to meet national targets.

EU Parliament Position

The EU Parliament adopted its position on the Effort Sharing Regulation, representing a minor increase in ambition relative to the EU Commission's proposal.

  • Overall ambition: The Parliament proposal maintained the 2030 target at 40% emissions reduction, however a process was introduced to set non-CO2 emissions targets for agriculture.

  • Flexibilities: It proposed the deletion of the new LULUCF reserve, however the separate EU ETS and LULUCF flexibilities remained.

  • Additional targets: The Parliament proposed that the Commission present EU-wide targets for the reduction of non-CO2 emissions.

EU Council Position

The EU Council adopted its position on the Effort Sharing Regulation , representing a minor weakening of ambition relative to the EU Commission’s proposal.

  • Overall ambition: The Council maintained the 2030 target at 40% emissions reduction, as in the Commission proposal.

  • Emissions trajectories: The proposal amended the Commission’s proposed review of emissions trajectories in 2025, so that this would only take place if it would lead to higher emissions caps.

  • Flexibilities: The Council preserved LULUCF and EU ETS flexibilities, as in the Commission proposal, but increased flexibilities so that more emissions quotas could be transferred between countries.

InfluenceMap Query

GHG Emission Regulation

Policy Status

Under consideration: proceeding to trilogues after votes in EU Parliament and Council.

  • European Parliament: Environment Committee
  • Rapporteur: Jessica Polfjärd (European People’s Party)
  • European Council: Working Party on the Environment and Environment Council

Evidence Profile

17121718

European Commission

European Parliament

European Council

Live Lobbying Alerts

Entities Engaged on Policy

The table below lists the entities found to be most engaged with the policy. InfluenceMap tracks over 350 companies and 150 industry associations globally. Each entity name links to its full InfluenceMap profile, where the evidence of its engagement can be found.

Influencemap Performance BandOrganizationEngagement Intensity
B+EDF60UtilitiesEurope
BEnel62UtilitiesEurope
D+BASF63ChemicalsEurope
BIberdrola59UtilitiesEurope
C-RWE41UtilitiesEurope
D-BusinessEurope53All SectorsEurope
C-European Chemical Industry Council (Cefic)58ChemicalsEurope
D+European Automobile Manufacturers Association (ACEA)40AutomobilesEurope
D-International Federation of Industrial Energy Consumers (IFIEC)35All SectorsEurope
DFederation of German Industries (BDI)59All SectorsEurope