The LULUCF sector is facing changes. Consultations of the Union Register are underway

The LULUCF (land use, land use change and forestry) sector is land use, land use change and forestry. A public consultation on the European Commission’s draft delegated regulation on a registry to establish accounting rules for emissions and removals for forested and deforested land is open until May 5, 2025.

Regulation (EU) 2018/841 also authorized the EC to adopt delegated acts to supplement the regulation by establishing provisions for the registration and proper conduct of operations in the Union Registry, which ensures proper accounting for land use, land use change and forestry operations.

New rules for the Union’s register – a key element in meeting the EU’s climate target

The consulted draft delegated act is intended to introduce the necessary provisions for Regulation (EU) 2019/1122 on the Union Registry, which aims, among other things, to ensure the contribution of the land use, land use change and forestry sector to reducing net greenhouse gas emissions by at least 55 percent by 2030, and to ensure that it makes a sustainable and predictable long-term contribution to the Union’s climate neutrality target.

The EC invites all interested parties to submit their opinions, comments and proposals until May 5, 2025 via the website. The results of the consultation will be published 8 weeks after the close of procedures and will be a valuable source of information for the EC in developing the final shape of the initiative.

Reducing greenhouse gas emissions

The United Nations Framework Convention on Climate Change set the framework for international cooperation on reducing emissions of greenhouse gases responsible for the phenomenon of global warming. Initially, it contained no binding obligations to reduce emissions. Over time, protocols were established to put limits on greenhouse gas emissions.

One of them is the Kyoto Protocol, which indicates the need to reduce emissions of 6 greenhouse gases: carbon dioxide (_CO2), methane (_CH4), nitrous oxide (_N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulfur hexafluoride (_SF6).

Another important milestone was the signing of the Paris Agreement at the Paris Climate Conference (COP21) in December 2015. This is the first legally binding climate agreement, with nearly 190 countries, including the EU and its member states, having joined. The EU formally ratified the Paris Agreement on October 5, 2016, allowing it to enter into force on November 4, 2016.

According to the agreement, the EU’s contribution initially set at the national level was to reduce greenhouse gas emissions by at least 40 percent by 2030 from 1990 levels. in December 2020. The EU submitted an updated and increased national-level contribution to reduce emissions by at least 55 percent by 2030 from 1990 levels.

LULUCF sector

The LULUCF sector is related to land use, land use change and forestry. It includes the management of soil, trees, plants, biomass and wood. Its special feature is that it not only generates greenhouse gas emissions, but can also absorb CO₂ from the atmosphere.

It is pointed out that the land use, land use change and forestry sector has the potential to provide long-term climate benefits and thus can contribute to the EU’s GHG reduction target, as well as the long-term climate goals of the Paris Agreement. It also provides biomaterials that can replace fossil or carbon-intensive materials, and therefore plays an important role in the transition to a low GHG-emitting economy.

Regulations relating to emissions from land use and forestry

Regulation (EU) 2018/841 incorporated greenhouse gas emissions and removals from land use, land use change and forestry activities into the climate and energy policy framework.

It indicates the EC’s obligation to adopt delegated acts to establish rules for recording and accurately performing the following operations in the Union Registry:

1. recording the amount of emissions and removals for each land accounting and land reporting category in each member state;
2. Making any methodological adjustments;
3. application of flexibility;
4. assessment of compliance with objectives.

Information on the implementation of the above-mentioned obligations is made available to the public, while the requirements for the operation and maintenance of the Union Registry and the Independent Transaction Log are set forth in Delegated Regulation (EU) 2019/1122.

Proposals for regulatory changes

The implementation of Regulation (EU) 2018/841 has been divided into two compliance periods: 2021-2025 and 2026-2030. During each period, member states have the option of applying certain flexibilities to meet the obligations imposed by the legislation.

The LULUCF regulation introduces two stages of liability settlement:

• In phase one, from 2021 to 2025, the no-debt rule applies, according to which each member state ensures that emissions from land use are offset by removals.
• In phase two, from 2026 to 2030, there is an EU-wide target of 310 Mt_CO2 equivalent of net removals by 2030 and individual targets for member states.

For the second LULUCF compliance period, there has been a change in the methodology used by member states, resulting in a difference between the existing GHG inventory data reported by states in 2020. (for 2016, 2017, 2018) and in 2025 (for 2021, 2022 and 2023). In 2032, the Union Registry should calculate the difference between the average GHG inventory data and ensure that the result is accurately reflected in the budget set for the member state in its LULUCF compliance account and the EU account.

In order to ensure an accurate assessment of compliance with the obligations under Regulation (EU) 2018/841 and to facilitate the entire reporting process, the Union Registry should be able to automatically check each transaction carried out in accordance with Regulation (EU) 2018/841 and, if necessary, block a transaction that does not comply with the requirements of the Regulation. To make this possible, Delegated Regulation (EU) 2019/1122 should be amended accordingly.

EC consults on draft registry regulations

In order to achieve the objectives of Regulation (EU) 2018/841, it is necessary to establish rules for clearing relevant operations in the Union Registry and tracking them.

The delegated act, which is being consulted until May 5, 2025, is expected to make the necessary changes to the provisions of Regulation (EU) 2019/1122 on the Union Registry. It will affect the existing requirements to include rules for the accounting of transactions in the recording and execution of transactions in the land use, land use change and forestry sectors.

The purpose of the consultation is to gather the opinions of all stakeholder groups in order to obtain information relating to the proposed changes to the existing regulations. It is assumed that the consulted draft regulation will enter into force on the 20th day after its publication in the Official Journal of the EU.