ESR

The Effort Sharing Regulation covers sectors outside the European carbon market: domestic road transport excluding aviation, buildings, agriculture, small industry and waste, around 66 % of EU domestic emissions. The collective target was raised from -30 % to -40 % in 2030 relative to 2005 by Regulation (EU) 2023/857, revising Regulation (EU) 2018/842. France’s target rises from -37 % to -47.5 %. Four flexibilities exist: cancellation of EU-ETS allowances (France can use 2 % of its 2005 ESR emissions per year), land-use credits capped at 131 million for all States in each five-year period, banking and borrowing from subsequent years, and allocation trading between States. For a company, this determines the nature of the constraint: under the carbon market, it has an allowance, price and bill; under ESR, the constraint first falls on the French State and passes down through sector regulations, energy taxation or product standards, with two to three years’ notice. SNBC 3 quantifies this split at 278 Mt CO2e per year under ESR versus 60 Mt under the carbon market over 2024-2028.