KEF, Alm.del - 2020-21 - Bilag 219: Orientering om regeringens høringssvar til Europa-Kommissionens offentlige høringer om revision af hhv. EU’s kvotehandelsdirektiv (ETS), byrdefordelingsforordning, LULUCF-forordning og forordning om CO2-standarder for lette køretøjer

Klima-, Energi- og Forsyningsudvalget 2020-21
KEF Alm.del Bilag 219
Offentligt

Annex II:

The Danish Government’s

response to the

European Commission’s

public consultation on the review of EU rules concerning Land Use, Land Use

Change & Forestry (LULUCF)

The

Danish Government’s

key priorities for the agriculture and LULUCF sectors



The Danish Government supports establishing an integrated Agriculture, Forestry

and Other Land Use (AFOLU) sector with ambitious EU sector regulation ensuring delivery of

an EU-wide climate target.

Ambitious and effective sector regulation would create a level playing field, increase cost-

effectiveness, and improve incentives for farmers to take action. Implementing EU-wide sec-

tor regulation could furthermore help drive innovation and cost reductions in mitigation tech-

nologies across all Member States.

Credible reporting and accounting are cornerstones of meaningful climate targets as well as

effective regulation. Member States should continuously work on strengthening monitoring,

reporting, and verification of emissions and removals from the AFOLU sector in general and

forests in particular.



The Danish Government supports establishing an AFOLU pillar

With the adoption of the revised target of reducing net greenhouse gas emissions

by at least 55 percent in 2030 compared to 1990, the land sector should play an in-

tegrated role in the EU climate architecture. Establishing a combined AFOLU pillar

could ensure an effective, climate-friendly, and competitive land sector across the

EU. In practice, sources, sinks and reservoirs in the agriculture and LULUCF sec-

tors are closely related. Treating these emissions and removals in the same regula-

tory regime, such as through an integrated AFOLU-sector, would allow for a more

integrated and cost-effective mitigation effort. For example, future instruments and

schemes

–

such as carbon farming and farm sustainability plans

–

should not differ-

entiate between mitigation efforts aiming at reducing nitrous oxide emissions from

applying manure on agricultural soils and reducing carbon dioxide emissions by re-

storing peat lands.

Both are relevant instruments at the farmer’s disposal, and they

should be treated as such.

The Danish Government encourages the Commission to work for a level playing

field by proposing an EU-wide reduction target for the AFOLU pillar rather than pro-

posing cost-inefficient national targets. This will benefit the climate as well as the

European economy. Costs of abating emissions vary considerably between Mem-

ber States; for example, the European Commission recently noted that the high cli-

mate efficiency of the Danish agricultural sector means that

‘there is no immediate

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KEF, Alm.del - 2020-21 - Bilag 219: Orientering om regeringens høringssvar til Europa-Kommissionens offentlige høringer om revision af hhv. EU’s kvotehandelsdirektiv (ETS), byrdefordelingsforordning, LULUCF-forordning og forordning om CO2-standarder for lette køretøjer

potential for further fast reduction.’

Differentiated national reduction targets and ef-

forts to regulate emissions and removals only exacerbate these imbalances and

therefore come with unnecessarily high costs. It is important to note that imple-

menting nationally differentiated targets comes with a significant risk of carbon

leakage internally in the EU in the absence of common EU sector regulation.

An EU-wide reduction target should be implemented through ambitious and effec-

tive sector regulation in order to incentivize climate-friendly activities at the farm-

level and to create a level playing field for European farmers. European farmers

and foresters should face the same set of incentives to make sustainable decisions

regardless of geographical location, thus ensuring that all Member States contrib-

ute to the

EU’s ambitious climate targets.

Implementing EU-wide regulation of agri-

cultural and land-related emissions and removals sends an important signal to the

relevant industries and research communities that new climate-friendly technolo-

gies and knowledge are much needed. Examples of EU-wide climate regulation are

highlighted in the final section of this document.

It is clear that extending the current separation between agriculture and LULUCF in

the EU climate architecture will neither be an effective nor cost-efficient path to

achieving EU climate targets. This is particularly true in the case that the ETS is ex-

tended to road transport and heating in buildings, thus leaving agriculture as the

primary sector regulated through nationally differentiated targets under the ESR.

Maintaining the environmental integrity of greenhouse gas accounting

Establishing an AFOLU pillar with an EU-wide reduction target circumvents a num-

ber of issues regarding accounting of national reduction targets, not least concern-

ing national accounting of changes in the net carbon sink of existing forests against

Forest Reference Levels (FRLs). Existing forests are characterised by large report-

ing uncertainties, large natural variability, abrupt events like forest fires and pests,

as well as climate change-induced effects like longer growing seasons and CO

-fer-

tilisation. These elements contribute to the Danish Government’s

position of cau-

tiousness when it comes to apposing emissions and removals from existing forests

with other land-related emissions and removals from soils and agriculture in na-

tional greenhouse gas accounts.

At the same time, the Danish Government recognizes the important role of forests

in achieving climate neutrality. It is essential that EU member states continuously

work to strengthen monitoring, reporting, and verification of greenhouse gas emis-

sions and removals from the AFOLU sector in general and forests in particular, in

order to maintain the environmental integrity of reporting as well as climate targets.

Commission recommendations for Denmark’s CAP strategic plan,

18.12.2020

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New and additional efforts to increase carbon removals must be supported by

measurement, reporting, and verification to track carbon flows and, potentially, fi-

nancial flows for CO

removal, e.g. in a future carbon farming scheme. The Com-

mission is encouraged to develop policies to incentivise business models for large-

scale CO

removal through natural solutions.

Examples of potential EU-wide regulation of agriculture and LULUCF

The AFULO pillar should be accompanied by a coherent enabling framework of EU

policies that can drive cost-effective climate action. Listed below are illustrative ex-

amples:

Greening the Common Agricultural Policy (CAP): Common EU-wide measures

should contribute to ensuring the delivery of the EU-wide climate target, including

the future CAP that should contribute to climate change mitigation for example by

providing better incentives for farmers to deliver ecosystem services.

Best Available Technology (BAT) requirements: A number of existing and develop-

ing technologies such as feed and fertiliser additives can contribute to reducing

emissions from agricultural production. Yet, the highly competitive nature of the Eu-

ropean market for agricultural products discourages Member States from passing

on additional costs to farmers by implementing national BAT requirements. A

shared common EU reduction target establishes a level playing field and further fa-

cilitates common EU BAT requirements to agriculture, e.g. regarding on-farm me-

thane emissions from livestock production or manure management. In addition, this

may encourage competition and spark innovation in climate-friendly agriculture

technologies. Relevant BAT requirements could be implemented through the Indus-

trial Emissions Directive (IED).

Strengthen sustainability criteria for biomass: Sustainable forest management is in-

timately linked to the regulation of biomass for energy. To contribute to reversing

the trend of a declining net sink in the forest sector, the EU should strengthen its

sustainability criteria for forest biomass. For an elaboration of this position, please

see the

Danish Government’s response to the public consultation on the Renewa-

ble Energy Directive.

Business models for carbon dioxide removal: An EU methodology to certify carbon

dioxide removals at the level of farmers as mentioned in the Circular Economy Ac-

tion Plan and Farm to Fork Strategy should be considered. This could pave the way

for implementing a payment scheme for incentivising the preservation of carbon

stocks in agricultural soils, e.g. through the CAP or by means of a new market

mechanism. The environmental integrity of such a business model should be en-

sured by robust and transparent carbon accounting to monitor and verify the au-

thenticity of carbon removals.

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Fertiliser accounts: Greenhouse gas emissions from nitrogen turnover on agricul-

tural land account for a large proportion of total emissions from the agricultural sec-

tor in EU. The Commission could develop common requirements for the documen-

tation of nitrogen fertilisers’ flows to and from all holdings, thus creating an over-

view of its use and a level playing field among Member States in optimising the use

of nitrogen fertilisers.

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