EUU, Alm.del - 2023-24 - Bilag 681: Notat samt høringssvar vedr. evaluering af EU’s LULUCF-forordning

Europaudvalget 2023-24
EUU Alm.del Bilag 681
Offentligt

The Danish Government’s response to the European Commission’s call for

evidence on the LULUCF-regulation

Date

11 July 2024

Denmark welcomes the opportunity to comment on the European Commission’s

Public Evaluation on the LULUCF-regulation.

Denmark welcomed an ambitious revision of the LULUCF-regulation as an im-

portant part of the Fit-for-55 package. The Fit-for-55 agreement enables the EU

once fully implemented to reduce EUs net greenhouse gas emissions by 57% by

2030.

Looking ahead, land-based carbon removals should reach up to 320 MtCO2eq to

deliver a net reduction of EUs greenhouse gas emissions on 90% compared to

1990 levels in 2040, as recommended by the Commission. It is important that the

EU’s climate efforts are designed to incentivize this in the most cost-effective way.

Therefore, Denmark advocates for reviewing the climate architecture for the agri-

cultural sector and LULUCF to make it more fit for a climate neutral future.

National implementation of the LULUCF-regulation

On 24 June 2024, a green tripartite consisting of national stakeholders and the

Danish government reached an agreement on a holistic and long-term approach to

land management in Denmark. The Green Tripartite Agreement is estimated to re-

duce agriculture’s non-energy greenhouse gas emissions by 1,8-2.6 million tonnes

of CO2e in 2030. The agreement is expected to deliver on Denmark’s commitments

under the ESR and LULUCF-regulation.

Denmark has identified some difficulties in the implementation of the LULUCF-reg-

ulation which primarily involves the strengthened monitoring obligation and well as

the reference periods.

Monitoring

Since 2008, Denmark has been a frontrunner in providing LULUCF data, both un-

der the Kyoto Protocol and in an EU context, where the highest possible level of

methodology (“tier”) has been applied to the available and complementary data pro-

vided for the Danish greenhouse gas inventories.

The mandatory requirement to apply Tier 2 as minimum for all sources/sinks from

2028 and Tier 3 for specific sources/sinks from 2030 regardless of the size of emis-

sions/removals impacts the level of detail necessary in the identification of lands

and thereby require a significant change in the whole setup currently used for the

emission inventory for the LULUCF sector. In addition to this, there is, for Denmark

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EUU, Alm.del - 2023-24 - Bilag 681: Notat samt høringssvar vedr. evaluering af EU’s LULUCF-forordning

as well as other member states, a significant need for new research to be carried

out in order to establish national values for emission factors and other parameters.

The new requirements for even very small sources in LULUCF are thus a costly

challenge. The more precise scope of new data requirements and the costs of ob-

taining these data are currently being mapped by the Danish Centre for Environ-

ment and Energy (DCE) at Aarhus University and the Danish Ministry of Climate

Energy and Utilities and is expected to be finalised in 2024.

It is important to note that one of the basic principles for national emission invento-

ries in the IPCC Guidelines is that reporting resources should be focused on im-

portant sources/sinks identified using a key category analysis (KCA). As a general

rule, it is consistent with good IPCC practice to apply a Tier 1 methodology for cate-

gories that are not identified as key categories. The proposal for amended regula-

tion breaks with this practice and makes it mandatory to use a higher Tier regard-

less how insignificant the category may be in relation to the total national emis-

sions. This departure from IPCC good practice raises concerns, especially when

detailed estimation methodologies are required for insignificant sources/sinks.

Reference periods

The national consequences of the LULUCF-regulation are highly dependent on the

reference period established in the regulation and may create unintended or coinci-

dentally strict (or favourable) reduction targets on a national level. For instance,

Denmark’s LULUCF-emissions are highly dependent on forestry, and therefore the

high level of seasonality in tree-harvesting. Consequently, a reference period span-

ning over e.g. 3 years, risks to be either very strict or the opposite, depending on

whether or not the reference period is based in a “tree-harvesting-season” or not.

One way to resolve this issue could be, when relevant, to broaden the timespan of

reference periods used in future regulations.

Future of the LULUCF-regulation

Denmark finds that the LULUCF-regulation is not efficiently delivering net carbon

removals for several reasons:

1) Sectors regulated through national targets such as the LULUCF and the Ef-

fort Sharing Regulation have significant differences in the marginal reduc-

tion costs between Member States, which makes the transition more costly

than necessary.

2) Nationally binding sector targets have so far been less efficient in delivering

emission reductions and lack transparent and effective monitoring and

compliance mechanisms compared to EU-wide regulation.

3) The scope of the LULUCF sector is very heterogenous as it sets out to reg-

ulate all land-use. This complicates a focused, long-term approach on e.g.

forest management.

Denmark advocates for reviewing the climate architecture for the agricultural sector

and LULUCF to accommodate some of these challenges and to provide a better

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EUU, Alm.del - 2023-24 - Bilag 681: Notat samt høringssvar vedr. evaluering af EU’s LULUCF-forordning

baseline for regulation. Denmark proposes a new climate architecture constructed

as follows:

Emissions from agriculture and agricultural land

Denmark proposes an agricultural pillar with a common EU target for agricultural

emissions (including net emissions from agricultural land), achieved to the greatest

extent possible through emissions trading and underpinned by EU-wide climate and

environmental sectoral regulation and an EU common agricultural policy with a

greater focus on climate and environment. Agricultural non-CO

emissions and net

removals in agricultural soils should be considered together to allow for a more co-

herent regulation of the agricultural sector. Such a pillar, in which all farm emissions

are accounted for would encourage farmers to make more cost-efficient mitigation

efforts across the various emissions in the sector.

2. Forestry and other land use

The vast majority of the EU’s GHG removals occur on forest land and could be

handled in a separate pillar. With agricultural soils separated from this pillar, the

scope becomes more homogeneous than the scope of the current LULUCF-regula-

tion. Regulating emissions and removals from forest land in a separate forestry

sector would allow for a more focused approach and ensure an appropriate bal-

ance between short-term and long-term climate benefits.

The strengthened monitoring and reporting requirements from the LULUCF-regula-

tion and development of methodologies under the EU’s certification framework

(CRCF) could increase knowledge on how to best optimize a consistent, long-term

and sustainable contribution from forests. Moreover, the CRCF could turn out to be

a valuable tool by paving the way for efficient results-based payment schemes and

by facilitating private finance on the voluntary market for climate credits.

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