The European Union is likely to achieve its 2020 emission reduction target ahead of schedule in non-ETS sectors.
A foresight study by VTT Technical Research Centre of Finland indicates that this outcome, which is more positive than expected, will mean that not all emission quotas will need to be used. In turn, this will mean that quota values remain low. The VTT estimates that the EU’s cumulative surplus for 2013-2020 emission quotas in non-ETS sectors will total 160-2000 megatonnes of carbon dioxide. Annually, this would correspond to up to 5 per cent of all emissions within the EU.
Emissions for the non-ETS sector show a trend similar to that of the ETS sector. Researcher Tomi J. Lindroos of the VTT estimates that the likely surplus will increase the pressure to introduce stricter targets in the days to come.
“The EU Commission has initiated a discussion on future climate and energy policy objectives, but this is difficult due to diverging opinions among Member States,” says Lindroos. “Member States should still be prepared for stricter targets. It now seems that the 2020 target will be achieved surprisingly easily, but in the long term, we will face very strict targets, since the emission reduction objective by 2050 is 80-95 per cent.”
According to Lindroos, emissions have been reduced by implemented policy measures and the EU’s weak economic performance. Recent calculations show that the target would be achieved even if economic growth were to return to its normal curve. The non-ETS sector aims at a 10 per cent reduction in emissions by 2020, compared to 2005 levels. According to the EU Commission’s Low-Carbon Economy Roadmap, emissions from the non-ETS sector in 2030 will be around 24-36 per cent lower than in 2005.
Targets for Member States are defined in the EU’s effort-sharing decision, but not all Member States will necessarily achieve them. Denmark, Ireland and Luxembourg are experiencing most difficulties in this regard.
The VTT’s foresight study was commissioned by the Ministry of the Environment. Non-ETS sector emissions include emissions from buildings, transport and agriculture, which account for 60 per cent of all emissions in the EU. EU Member States hold the emission quotas for this sector, whereas in the ETS-sector, companies buy and sell emissions allowances. Member States are bound by restrictions of the non-ETS sector in 2013-2020. Emissions trading between businesses began back in 2005.
VTT Technical Research Centre of Finland is a leading multitechnological applied research organization in Northern Europe. VTT creates new technology and science-based innovations in co-operation with domestic and foreign partners. Every third Finnish technology innovation contains VTT expertise. VTT’s turnover is EUR 320 million and its personnel totals 2,900.