Regulation (EU) 2018/841 of the European Parliament and of the Council of 30 May 2018 on the inclusion of greenhouse gas emissions and removals from land use, land use change and forestry in the 2030 climate and energy framework, and amending Regulation (EU) No 525/2013 and Decision No 529/2013/EU (Text with EEA relevance)

REGULATION (EU) 2018/841 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL

of 30 May 2018

on the inclusion of greenhouse gas emissions and removals from land use, land use change and forestry in the 2030 climate and energy framework, and amending Regulation (EU) No 525/2013 and Decision No 529/2013/EU

(Text with EEA relevance)

Article 1

Subject matter

This Regulation sets out rules concerning:

(a) commitments of Member States for the land use, land use change and forestry (‘LULUCF’) sector that contribute to achieving the objectives of the Paris Agreement and meeting the greenhouse gas emission reduction target of the Union for the period from 2021 to 2025;

(b) accounting of greenhouse gas emissions and removals from the LULUCF sector and checking the compliance of Member States with the commitments referred to in point (a) for the period from 2021 to 2025;

(c) a 2030 Union target for net greenhouse gas removals in the LULUCF sector;

(d) targets for net greenhouse gas removals in the LULUCF sector for Member States for the period from 2026 to 2030.

Article 2

Scope

This Regulation applies to emissions and removals of the greenhouse gases listed in Section A of Annex I to this Regulation, reported pursuant to Article 26(4) of Regulation (EU) 2018/1999 of the European Parliament and of the Council (¹) and occurring on the territories of Member States in the period from 2021 to 2025 in any of the following land accounting categories:

(a) land use reported as cropland, grassland, wetlands, settlements or other land, converted to forest land (‘afforested land’);

(b) land use reported as forest land converted to cropland, grassland, wetlands, settlements or other land (‘deforested land’);

(c) land use reported as any of the following (‘managed cropland’): (i) cropland remaining cropland; (ii) grassland, wetland, settlement or other land, converted to cropland; (iii) cropland converted to wetland, settlement or other land;

(d) land use reported as any of the following (‘managed grassland’): (i) grassland remaining grassland; (ii) cropland, wetland, settlement or other land, converted to grassland; (iii) grassland converted to wetland, settlement or other land;

(e) land use reported as forest land remaining forest land (‘managed forest land’);

(f) where a Member State has notified to the Commission its intention to include managed wetland in the scope of its commitments pursuant to Article 4(1) of this Regulation by 31 December 2020, land use reported as one of the following (‘managed wetland’): — wetland remaining wetland; — settlement or other land, converted to wetland; — wetland converted to settlement or other land.

This Regulation also applies to emissions and removals of the greenhouse gases listed in Section A of Annex I to this Regulation, reported pursuant to Article 26(4) of Regulation (EU) 2018/1999 and occurring on the territories of Member States in the period from 2026 to 2030, in any of the following land reporting categories or sectors:

(a) forest land;

(b) cropland;

(c) grassland;

(d) wetlands;

(e) settlements;

(f) other land;

(g) harvested wood products;

(h) other;

(i) atmospheric deposition;

(j) nitrogen leaching and run-off.

Article 3

Definitions

For the purposes of this Regulation, the following definitions apply:

(1) ‘sink’ means any process, activity or mechanism that removes a greenhouse gas, an aerosol, or a precursor to a greenhouse gas from the atmosphere;

(2) ‘source’ means any process, activity or mechanism that releases a greenhouse gas, an aerosol or a precursor to a greenhouse gas into the atmosphere;

(3) ‘carbon pool’ means the whole or part of a biogeochemical feature or system within the territory of a Member State and within which carbon, any precursor to a greenhouse gas containing carbon, or any greenhouse gas containing carbon is stored;

(4) ‘carbon stock’ means the mass of carbon stored in a carbon pool;

(5) ‘harvested wood product’ means any product of wood harvesting that has left a site where wood is harvested;

(6) ‘forest’ means an area of land defined by the minimum values for area size, tree crown cover or an equivalent stocking level, and potential tree height at maturity at the place of growth of the trees as specified for each Member State in Annex II. It includes areas with trees, including groups of growing, young, natural trees, or plantations that have yet to reach the minimum values for tree crown cover or an equivalent stocking level or minimum tree height as specified in Annex II, including any area that normally forms part of the forest area but on which there are temporarily no trees as a result of human intervention, such as harvesting, or as a result of natural causes, but which area can be expected to revert to forest;

(7) ‘forest reference level’ means an estimate, expressed in tonnes of CO2 equivalent per year, of the average annual net emissions or removals resulting from managed forest land within the territory of a Member State in the periods from 2021 to 2025 and from 2026 to 2030, based on the criteria set out in this Regulation;

(8) ‘half-life value’ means the number of years it takes for the quantity of carbon stored in a category of harvested wood products to decrease to one half of its initial value;

(9) ‘natural disturbances’ means any non-anthropogenic events or circumstances that cause significant emissions in the LULUCF sector, the occurrence of which is beyond the control of the relevant Member State, and the effects of which the Member State is objectively unable to significantly limit, even after their occurrence, on emissions;

(10) ‘instantaneous oxidation’ means an accounting method that assumes that the release into the atmosphere of the entire quantity of carbon stored in harvested wood products occurs at the time of harvest;

(11) ‘climate change’ means a change of climate which is attributed directly or indirectly to human activity that alters the composition of the global atmosphere and which is in addition to natural climate variability observed over comparable time periods.

Article 4

Commitments and targets

Each Member State shall ensure that the sum of the differences between the following points for each year in the period from 2026 to 2029 does not exceed the budget for 2026 to 2029:

(a) its greenhouse gas emissions and removals on its territory and in all of the land reporting categories referred to in Article 2(2), points (a) to (j); and

(b) the average value for its greenhouse gas inventory data for the years 2021, 2022 and 2023, as submitted in 2032.

The budget for 2026 to 2029 shall be defined as the sum of the differences for each year in the period from 2026 to 2029 for that Member State between:

(a) annual greenhouse gas emission and removal limit values for those years, established on the basis of a linear trajectory towards 2030; and

(b) the average value for its greenhouse gas inventory data for the years 2021, 2022 and 2023, as submitted in 2025.

The linear trajectory of a Member State shall start in 2022 at the average value for greenhouse gas inventory data for the years 2021, 2022 and 2023, and have as its end point for 2030 the value obtained by adding the value set out for that Member State in column C of Annex IIa to the average value for greenhouse gas inventory data for the years 2016, 2017 and 2018.

The budget for 2026 to 2029 shall be defined on the basis of the greenhouse gas inventory data submitted in 2025 and the compliance with this budget shall be assessed on the basis of the greenhouse gas inventory data submitted in 2032.

Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 16a of this Regulation. For the purpose of those implementing acts, the Commission shall carry out a comprehensive review of the most recent national inventory data submitted by Member States pursuant to Article 26(4) of Regulation (EU) 2018/1999.

Article 5

General accounting rules

Article 6

Accounting for afforested land and deforested land

Article 7

Accounting for managed cropland, managed grassland and managed wetland

During the period from 2021 to 2025, Member States that, pursuant to Article 2(2), have chosen not to include managed wetland in the scope of their commitments shall nevertheless report to the Commission on the emissions and removals from land use reported as:

(a) wetland remaining wetland;

(b) settlement or other land, converted to wetland; or

(c) wetland converted to settlement or other land.

Article 8

Accounting for managed forest land

Forest reference levels as determined in accordance with the first subparagraph shall take account of the future impact of dynamic age-related forest characteristics in order not to unduly constrain forest management intensity as a core element of sustainable forest management practice, with the aim of maintaining or strengthening long-term carbon sinks.

Member States shall demonstrate consistency between the methods and data used to determine the proposed forest reference level in the national forestry accounting plan and those used in the reporting for managed forest land.

The Commission shall, where necessary, issue technical recommendations to the Member States reflecting the conclusions of the technical assessment to facilitate the technical revision of the proposed forest reference levels. The Commission shall publish those technical recommendations.

Article 9

Accounting for harvested wood products

In the accounts provided pursuant to Articles 6(1) and 8(1) relating to harvested wood products, Member States shall reflect emissions and removals resulting from changes in the carbon pool of harvested wood products falling within the following categories using the first order decay function, the methodologies and the default half-life values specified in Annex V:

(a) paper;

(b) wood panels;

(c) sawn wood.

Article 10

Accounting for natural disturbances

Where a Member State applies paragraph 1, it shall:

(a) submit to the Commission information on the background level for the land accounting categories referred to in paragraph 1 and on the data and methodologies used in accordance with Annex VI; and

(b) exclude from accounting until  2025 all subsequent removals on the land affected by natural disturbances.

Article 11

Flexibilities and governance

A Member State may use:

(a) the general flexibilities set out in Article 12; and

(b) in order to comply with the commitment, target and budget set in accordance with Article 4, the flexibilities set out in Articles 13 and 13b.

Finland may, besides the flexibilities referred to in the first subparagraph, use additional compensation pursuant to Article 13a.

Article 12

General flexibilities

Article 13

Managed forest land flexibility

Where, in the period from 2021 to 2025, the result of the calculation referred to in Article 8(1) is a positive figure, the Member State concerned shall be entitled to compensate emissions corresponding to the result of that calculation, provided that the following conditions are fulfilled:

(a) the Member State has included in its strategy submitted in accordance with Article 15 of Regulation (EU) 2018/1999 ongoing or planned specific measures to ensure the conservation or enhancement, as appropriate, of forest sinks and reservoirs, as well as information on the impact of such measures on relevant environmental objectives, including, inter alia, biodiversity protection and adaptation to natural disturbances; and

(b) total emissions within the Union do not exceed total removals in the land accounting categories referred to in Article 2(1) of this Regulation for the period from 2021 to 2025.

When assessing whether, within the Union, total emissions exceed total removals as referred to in the first subparagraph, point (b), of this paragraph, the Commission shall ensure that double counting is avoided by Member States, in particular in the exercise of the flexibilities set out in Article 12 of this Regulation and Article 7(1) or Article 9(2) of Regulation (EU) 2018/842.

Article 13a

Additional compensation

Finland may compensate up to an additional 5 million tonnes of CO2 equivalent accounted emissions under the land accounting categories managed forest land, deforested land, managed cropland and managed grassland, in the period from 2021 to 2025, provided that the following conditions are fulfilled:

(a) Finland included in its strategy submitted in accordance with Article 15 of Regulation (EU) 2018/1999 ongoing or planned specific measures to ensure the conservation or enhancement, as appropriate, of forest sinks and reservoirs;

(b) total emissions within the Union do not exceed total removals in the land accounting categories referred to in Article 2(1) of this Regulation in the period from 2021 to 2025.

When assessing whether, within the Union, total emissions exceed total removals as referred to in the first subparagraph, point (b), of this paragraph, the Commission shall ensure that double counting is avoided by Member States, in particular in the exercise of the flexibilities set out in Articles 12 and 13 of this Regulation and Article 7(1) or Article 9(2) of Regulation (EU) 2018/842.

The additional compensation shall be limited to:

(a) the amount exceeding the managed forest land flexibility available to Finland in the period from 2021 to 2025 pursuant to Article 13;

(b) the emissions created by historical change from forest land to any other land use category that occurred no later than 31 December 2017;

(c) the amount necessary for compliance with Article 4.

Article 13b

Land use mechanism for the period 2026 to 2030

Where, in the period from 2026 to 2030, the result of one or both calculations referred to in paragraph 2 is positive, the Member State shall be entitled to use the mechanism set out in this Article to compensate net emissions or net removals, or both, accounted for as emissions against the target set for that Member State in accordance with Article 4(3) or against the budget set for that Member State in accordance with Article 4(4), or both, provided that the following conditions are fulfilled:

(a) the Member State has included in its updated integrated national energy and climate plan submitted pursuant to Article 14 of Regulation (EU) 2018/1999 ongoing or planned specific measures to ensure the conservation or enhancement, as appropriate, of all land sinks and reservoirs, and to reduce the vulnerability of the land to natural disturbances;

(b) the Member State has exhausted the flexibility available pursuant to Article 12(1) of this Regulation;

(c) the difference in the Union between the annual sum of all greenhouse gas emissions and removals on its territory and in all of the land reporting categories referred to in Article 2(2), points (a) to (j), and the Union target of 310 million tonnes of CO2 equivalent of net removals is negative, in 2030. When assessing whether, within the Union, the condition as referred to in the first subparagraph, point (c), of this paragraph has been fulfilled, the Commission shall include up to 30 %, but not more than 20 Mt CO2 equivalent, of the unused surplus to the commitments of Member States under Article 4(1) from the period from 2021 to 2025, provided that one or more Member States submit evidence to the Commission concerning the impact of natural disturbances in accordance with paragraph 5 of this Article. The Commission shall ensure that double counting is avoided by Member States, in particular in the exercise of the flexibilities set out in Article 12 of this Regulation and Article 7(1) of Regulation (EU) 2018/842.

Member States shall be entitled to compensate net emissions or net removals, or both, accounted for as emissions against the targets set for those Member States in accordance with Article 4(3) or against the budget set for those Member States in accordance with Article 4(4), up to the amount unused by other Member States of the full amount of compensation for the period from 2021 to 2030 set out in Annex VII, after taking into account Article 13(4) and paragraph 5 of this Article, provided that those Member States:

(a) have exhausted the flexibilities available pursuant to Article 12(1), and paragraphs 3 and 5 of this Article; and

(b) have submitted evidence to the Commission concerning either: (i) the long-term impact of climate change resulting in excess emissions or diminishing sinks that are beyond their control; or (ii) the effects of an exceptionally high proportion of organic soils in their managed land area, compared to the Union average, resulting in excess emissions, provided that those effects are attributable to land management practices that occurred before the entry into force of Decision No 529/2013/EU;

(c) have included in their latest integrated national energy and climate plans submitted pursuant to Article 14 of Regulation (EU) 2018/1999 specific measures to ensure the conservation or enhancement, as appropriate, of all land sinks and reservoirs, and to reduce the vulnerability of land to ecosystem perturbations driven by climate change.

Article 13c

Governance

If, as a result of the comprehensive review carried out in in 2032, the Commission finds that, taking into account the flexibilities used pursuant to Articles 12 and 13b, the budget for 2026 to 2029 referred to in Article 4(4) is not complied with, an amount equal to the amount in tonnes of CO2 equivalent of the excess greenhouse gas net emissions, multiplied by a factor of 1,08, shall be added to the greenhouse gas net emission figure reported by that Member State in 2030, in accordance with the measures adopted pursuant to Article 15.

Article 13d

Corrective action

If the Commission finds, in its annual assessment under Article 29 of Regulation (EU) 2018/1999, that a Member State is not making sufficient progress towards meeting its target set in accordance with Article 4(3) of this Regulation, taking into account the trajectory and the budget set in accordance with Article 4(4) of this Regulation, as well as the flexibilities under this Regulation, that Member State shall, within three months, submit to the Commission a corrective action plan that includes:

(a) a detailed explanation of why it is not making sufficient progress;

(b) an assessment of how Union funding has supported its efforts towards complying with its target and budget and of how it intends to use such funding to make progress towards complying with them;