Inclusion of the land use sector in the EU's climate objectives
Regulation (EU) 2018/841 on land use, land use change and forestry (LULUCF) defines accounting rules for how the sinks and emissions from land use, land use change and forest management are taken into account in the EU's climate targets for the period from 2021 to 2030. In July 2021, the European Commission will release their proposal for amending the LULUCF Regulation according to the European Climate Law.
The calculation includes emissions and sinks from forests, cropland, grassland and afforested land and forest land converted to other land use (deforestation). Emissions and sinks from wetland are reported for the period from 2021 to 2025 and they will be included in the LULUCF sector accounts for the period from 2026 to 2030. Different accounting rules are used for different types of land use.
The member state must ensure that no emissions are generated from the land use sector during the period from 2021 to 2025 and from 2026 to 2030 (no-debit rule). The accounting is carried out at the level of the states and will not apply to individual operators.
Forest reference level
According to the LULUCF Regulation, each member state sets a reference level for its forests for the 2021–2025 and 2026–2030 periods on the basis of the criteria defined in the Regulation. The calculation of the forest reference level must be based on the figures for forest use for the 2000–2009 period and on the assumption that management practices will continue to be similar also during the next commitment period. The calculation must also take into account the age class distribution of forests in such a way that the intensity of forest use is not unduly constrained, with the aim of maintaining or strengthening long-term carbon sinks. The estimates for sinks and emissions must be consistent with the methods used in the greenhouse gas inventory.
The reference level is the calculated level against which the actual development of sinks between 2021 and 2025 is assessed. If during the commitment period the actual sink is higher than the reference level, countries may benefit from a net removal in the accounts. However, the net carbon removals resulting from forests cannot exceed 3.5% of the total emissions of that member state in its base year. Finland can therefore make use of a forest sink that exceeds the reference level by up to 2.5 Mt CO2 annually.
The Regulation includes flexibilities that can be used if the sink is below the reference level during the commitment period. In this case, the sink becomes zero in the accounts, up to the level of forest land flexibility. The flexibility is specific to each member state. For the period from 2021 to 2030, Finland’s forest land flexibility will total 44 million tonnes of carbon dioxide. If the sink is lower than the reference level and the forest land flexibility, it results in an emission in the member state’s accounts. The use of forest land flexibility requires that forests are accounted for as sinks in the member state and that the state has drawn up a long-term low-carbon strategy.
Under the Regulation, forest accounting includes carbon removals resulting from harvested wood products and deadwood. They are taken into account in the calculation of the forest reference level. Net removals resulting from harvested wood products and deadwood are not subject to the cap.
The member states' reference levels will be estimated in accordance with the LULUCF Regulation. The estimation will involve representatives of the member states and independent experts appointed by the Commission, as well as experts from research institutes and stakeholders. The final reference levels will be set by the Commission in 2020.
Accounting for cropland and grassland
According to the LULUCF Regulation, emissions from cropland and grassland are calculated by comparing them to the emissions for the 2005–2009 period.
The measures defined in Finland’s Medium-term Climate Change Policy Plan will reduce emissions generated by agricultural land in the agricultural sector and the land use sector.
Deforestation and afforestation
Emissions and sinks from deforestation, i.e. forest land converted to other land use, and afforestation will be calculated in full in the 2021–2030 period.
Annually some 19,000 hectares of forest land is converted to other land use, such as agriculture, urban or transport construction or peat production. According to Finland's greenhouse gas inventory, deforestation has generated an annual net emission of approximately 3.6 million tonnes of CO2 equivalent between 2007 and 2016.
Between 2005 and 2014, afforestation or natural regeneration took place on less than 4,000 hectares of land on average per year. The annual sink generated by afforestation is less than 0.5 million tonnes of CO2 equivalent. Afforestation is usually carried out on cropland, grassland and peat production areas that are no longer in use. New forest land is naturally and slowly generated on emersion coasts.
The causes and magnitude of deforestation, the resulting emissions and the means we could use in Finland to prevent deforestation have been examined in the MISA project (opportunities for land use sector measures to achieve climate objectives).
Accounting under the LULUCF Regulation
Member states must ensure that the LULUCF sector does not generate net emissions in the accounts under the Regulation. If, having complied with the accounting rules, the LULUCF sector generates net emissions, the member state must compensate for the emissions either by additional measures in an effort-sharing sector or by acquiring LULUCF credits from another member state.
If, having complied with the accounting rules, the LULUCF sector is a carbon sink, the member state can make use of the credits generated by certain types of afforested land, cropland and grassland in order to meet the targets of the effort-sharing sector. The amount of this flexibility has been limited. To meet the targets of the effort-sharing sector, Finland can use credits of up to 4.5 million tonnes of carbon dioxide equivalent between 2021 and 2030.
In the negotiations, Finland received a special flexibility of 10 million tonnes of carbon dioxide for the period 2021–2030 as a richly forested country.
Compliance checks (accounting) under the Regulation will be carried out in 2027 for the 2021–2025 period and in 2032 for the 2026–2030 period.
The land use sector is highly significant in terms of Finland’s emission and carbon balances as the sinks correspond to about 20 to 50 per cent of the emissions of other sectors. In the EU, sinks account on average for about ten per cent of emissions.