Hot ashes for trees

This is PFPI’s consultation response to the inception impact assessment for the LULUCF Regulation.  Please feel free to adapt for your own comments. Download the proposal (it’s short!) and submit your own comments here.  Comments are due Thursday November 26, 2020.  To submit comments you must establish log-in credentials at the EU “have your say” site, so if you’ve not done this before, please leave time for it. The EU prefers short comments (4000 characters). Ours went over.

Our take-home message: First, stop the bleeding of forest carbon in the EU. New forest reference levels should be set immediately by an independent scientific body that project the desired outcome – growing, healthy, natural forests sequestering carbon on a trajectory to at least triple the carbon sink by 2050. Second, EU policymakers should scour all forest-related policies, especially the RED, to remove any aspect that undermines efforts to build carbon in forests. It is absurd that EU Member States are paying out billions to log and burn forest wood. It is also absurd to pour even more incentives into wood as construction material, unless these encourage use of recycled wood. Last, the LULUCF regulation must advance the protection and restoration goals of the Biodiversity Strategy.

PFPI’s comments on the forest reference levels that are being set under the LULUCF Regulation are also relevant. Those are here. Overall, forest carbon sequestration is projected to decline by more than 11% in the EU as a whole, with much greater reductions for some member states.

Consultation submission

The Partnership for Policy Integrity appreciates the opportunity to comment on the inception impact assessment (IAA) for the Amendment of the Land Use, Land Use Change and Forestry Regulation (EU) 2018/841.

 The IAA states the initiative “aims to create stronger policy incentives that realise the EU’s potential to reduce land emissions, enhance substitution of fossil-based materials and enhance land-based sinks in the land use sector.”

Under the current LULUCF Regulation, Member States must ensure their forest carbon sink does not fall below a projected sink based on continuation of management practices in the 2000 – 2009 period. This always would have been inadequate to meet climate goals, but it was truly shocking to see the process for setting the Forest Reference Levels (FRLs) play out. In the end, half of member states (MS) projected that the way they plan to manage their forests will reduce their forest sink relative to the 2016-2018 average, and the majority of these plan to reduce their sink by 20% or more. Collectively, the EU’s 2021-2026 forest sink is projected to decline by 11% compared to the average forest sink from 2016 to 2018. 

Clearly, a drastic revision of this baseline, as well as the way FRLs are set, is required. Is the current proposal up to the task? 

Unfortunately, the answer appears to be no, as the document doesn’t recognize that enhancing land-based sinks and enhancing substitution of fossil-based materials essentially counteract each other. In fact it’s exactly such attempts to substitute fossil fuels with wood that are in large part responsible for the gutting of EU forests now underway (along with forests outside the EU that are logged to meet the EU’s growing appetite for imported wood fuel).

As the fundamental precepts that underpin this document are flawed, the suggested paths forward are accordingly not able to deliver the desired result.

The document recognizes that that reaching climate goals requires increasing carbon sequestration. It also correctly recognizes that forests “are projected to sequester less and less carbon in the next decade due to ageing forests, increasing biomass harvests, and events such as droughts, forest fires and pest outbreaks, which are caused or exacerbated by climate change.”

This is a stunning indictment of historic forest management and implies that radical change is required. Yet what does the proposal suggest? Essentially more of the same.  More harvesting.  More intensive use of forests to replace “fossil-based materials and energy with bio-based ones (e.g. use of wood products in construction, biomaterials, bioenergy, biofuels). And, according to the Communication on “stepping up Europe’s 2030 climate ambition,” more plantations, as this document calls for a “shift towards growing woody biomass on cropland in a sustainable manner, including as a feedstock for advanced biogas and biofuels.”

The document doesn’t recognize the likely outcome that increasing replacement of other materials with wood entails more logging and thus undermines what would actually help mitigate both the climate and biodiversity crises: protecting and restoring natural forests to store more carbon and provide more habitat.

Faith in harvested wood products (HWP) for climate mitigation is also misplaced due to the scale of benefits versus impacts. Current degradation of the EU’s forests is associated with sequestration in HWP (including in landfills) of about 40 Mt of CO2e per year.  How much more wood could realistically be used in construction? Along with the ecosystem degradation that increasing logging entails, all such uses come at far greater forest carbon loss than is actually measured (due e.g. to soil carbon loss and increasing ecosystem respiration in logged forests, among other factors).  Policymakers may think this invisible tradeoff is worth it, but this won’t restore ecosystems and it certainly won’t fool the atmosphere.

The physical reality is that logging increases emissions and the calculated benefits of substituting carbon-intensive products with wood come largely from subtracting out “avoided” emissions. If policymakers want to use less fossil fuels and different construction materials to avoid emissions, then they should enact more policies to reduce demand and promote greater use of recycled wood in construction – don’t rob Peter to pay Paul. 

The goal of this revision is to get MS to implement better policies. But the LULUCF Regulation is more stick than carrot. Policymakers should leave incentives to other legislation and use the LULUCF Regulation to set an ambitious land sink goal and impose meaningful consequences for failure. The IAA document states “the sector will have to undergo a transformation.” PFPI agrees and suggests to start with reforming the FRL’s which by definition are an extension of business as usual, and worse, are rooted in a period when exploitation of forests for fuel was increasing steeply. The current approach has “baked in” to the baseline a huge amount of ongoing forest harvesting that is now defined as having “zero” impact. However, these usual practices have caused forest carbon to decline. The IAA text seems to indicate that the plan for the future is more business as usual, which will not reverse this trend. Policymakers need to set a more stringent baseline – one that plans for a meaningful recovery in the forest carbon sink and penalizes MS if they don’t hit the target.

Next, fix the RED II. It’s intriguing to see the IAA state that “Increasing the rewards for climate-friendly action and applying better the ‘polluter-pays’ principle would trigger the price signals that are needed for the desired change at the level of producers and consumers.” PFPI agrees and suggests applying the polluter pays principle to biomass. Currently, EU policies literally pay people to pollute, as MS pay out several billion euro in subsidies for biomass burning each year. Why not turn that around to penalize biomass emissions and pay people to keep carbon in forests?  However, just as important, the EU should take forest biomass out of the RED altogether to eliminate the mis-match between supposed “penalties” to MS for forest carbon loss that are no match for the lucrative payouts to private companies that log and burn forest wood.

Regarding the options, we believe a separate land sector target (option 3) combined with a stronger option 1 would best highlight the need to rebuild land sector carbon.  But the targets need to be much more ambitious – a goal of -300 Mt/yr by 2030 is not going to get us to net zero by 2050.  The EU land sink sequestered more than 300 Mt of CO₂ in 2015 and fell to 272 just three years later in 2018.  The EU needs to leave it all on the road with policies to swiftly reverse this trend (and abandon the strategy of trying to do this with HWP, which is like pouring water into a leaky bucket).

Regarding trading of land sector carbon credits, we strongly oppose any expansion and believe that the current allowable limit should be set to zero. The document discusses limits on trading of land sector carbon credits as if they are a bad thing. But land carbon is impermanent as the hemorrhaging of the EU’s forest carbon sink makes clear. A separate target with enforceable consequences is the cleanest way for the EU to signal it is serious about rebuilding the land carbon sink, with the important caveat that all measures taken must be strictly compliant with the precepts and goals of the Biodiversity Strategy.  Any revision of the LULUCF Regulation should in fact explicitly acknowledge and counter the dangers to biodiversity.  Additionally, whether or not a separate target is set, the permanence issue is extremely important and addressing it is essential (one potential solution could be a discounting of LULUCF reductions).

Finally, we agree there is an enormous need to track and report carbon sinks in a more accurate way, including with satellite data.

Conclusions
PFPI believes that beyond amending the regulation, several deep revisions are needed.

First, the FRL process fundamentally failed. New forest reference levels should be set immediately by an independent scientific body, and should be based on either a true comparison of forest levels against 1990 levels, or better, a projection of the desired outcome – i.e., an expansion of growing, healthy natural forests that are sequestering carbon on a trajectory to an ambitious target for 2050. That “ambitious target” should least plan to triple the current carbon sink – a mere doubling is not enough. There should be serious consequences for failure to achieve benchmarks.

Second, EU policymakers should scour all policies impinging on forests, and especially the RED, to remove any aspect that undermines efforts to build carbon in forests. It is absurd that EU Member States are paying out billions to log and burn forest wood. It is also absurd to pour even more incentives into wood as construction material, unless these go to enhancing use of recycled wood. 

EU environment ministers recently endorsed the protection and restoration goals of the Biodiversity Strategy. Therefore, related policies must be made congruent. The LULUCF Regulation accordingly requires a major revision.

Thank you for the opportunity to comment.
Mary S. Booth, Director
Partnership for Policy Integrity