Provisional text
JUDGMENT OF THE COURT (Second Chamber)
12 November 2026 (*)
( Action for annulment – Regulation (EU) 2023/839 – Amendment of Regulation (EU) 2018/841 – Account taken of greenhouse gas emissions and removals from land use, land use change and forestry in the 2030 climate and energy framework – Amendment of Regulation (EU) 2018/1999 – Governance of the Energy Union and Climate Action – Measures aimed at achieving climate neutrality in the European Union – Legal basis for Regulation 2023/839 – Determination – Account taken of the effects of that regulation – Article 192(1) TFEU – Improvement in the quality of the environment – Points (b) and (c) of the first subparagraph of Article 192(2) TFEU – Measures changing soil use, with the exception of waste management – Measures significantly affecting a Member State’s choice between different energy sources and the general structure of its energy supply – Principles of conferral of powers, proportionality and equality of Member States – Content and statement of reasons of an impact assessment )
In Case C‑442/23,
ACTION for annulment under Article 263 TFEU, brought on 14 July 2023,
Republic of Poland, represented by B. Majczyna, acting as Agent,
applicant,
supported by:
Hungary, represented by M.Z. Fehér and K. Szíjjártó, acting as Agents,
intervener,
v
European Parliament, represented by O. Denkov and W.D. Kuzmienko, acting as Agents,
Council of the European Union, represented initially by R. Boucquey, A. Maceroni, M. Moore and A. Sikora-Kalėda, acting as Agents, and subsequently by R. Boucquey, A. Maceroni and M. Moore, acting as Agents, and lastly by A. Maceroni, M. Moore and K. Pleśniak, acting as Agents,
defendants,
supported by:
European Commission, represented by B. De Meester, D. Milanowska, M. Owsiany-Hornung and K. Talabér-Ritz, acting as Agents,
intervener,
THE COURT (Second Chamber),
composed of K. Jürimäe, President of Chamber, K. Lenaerts, President of the Court, acting as a Judge of the Second Chamber, Z. Csehi, M. Gavalec (Rapporteur) and F. Schalin, Judges,
Advocate General: T. Ćapeta,
Registrar: V. di Bucci,
having regard to the written procedure,
having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,
gives the following
Judgment
1 By its application, the Republic of Poland asks the Court to annul Regulation (EU) 2023/839 of the European Parliament and of the Council of 19 April 2023 amending Regulation (EU) 2018/841 as regards the scope, simplifying the reporting and compliance rules, and setting out the targets of the Member States for 2030, and Regulation (EU) 2018/1999 as regards improvement in monitoring, reporting, tracking of progress and review (OJ 2023 L 107, p. 1; ‘the contested regulation’).
Legal context
The EU Treaty
2 Article 4(1) and (2) TEU provides:
‘1. In accordance with Article 5, competences not conferred upon the [European] Union in the Treaties remain with the Member States.
2. The Union shall respect the equality of Member States before the Treaties as well as their national identities, inherent in their fundamental structures, political and constitutional, inclusive of regional and local self-government. It shall respect their essential State functions, including ensuring the territorial integrity of the State, maintaining law and order and safeguarding national security. In particular, national security remains the sole responsibility of each Member State.’
3 Article 5(2) and (4) TEU provides:
‘2. Under the principle of conferral, the Union shall act only within the limits of the competences conferred upon it by the Member States in the Treaties to attain the objectives set out therein. Competences not conferred upon the Union in the Treaties remain with the Member States.
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4. Under the principle of proportionality, the content and form of Union action shall not exceed what is necessary to achieve the objectives of the Treaties.
The institutions of the Union shall apply the principle of proportionality as laid down in the Protocol on the application of the principles of subsidiarity and proportionality.’
The FEU Treaty
4 Article 191(2) and (3) TFEU provides:
‘2. Union policy on the environment shall aim at a high level of protection taking into account the diversity of situations in the various regions of the Union. It shall be based on the precautionary principle and on the principles that preventive action should be taken, that environmental damage should as a priority be rectified at source and that the polluter should pay.
In this context, harmonisation measures answering environmental protection requirements shall include, where appropriate, a safeguard clause allowing Member States to take provisional measures, for non-economic environmental reasons, subject to a procedure of inspection by the Union.
3. In preparing its policy on the environment, the Union shall take account of:
– – available scientific and technical data,
– – environmental conditions in the various regions of the Union,
– – the potential benefits and costs of action or lack of action,
– the economic and social development of the Union as a whole and the balanced development of its regions.’
5 Article 192(1) and points (b) and (c) of the first subparagraph of Article 192(2) TFEU is worded as follows:
‘1. The European Parliament and the [Council of the European Union], acting in accordance with the ordinary legislative procedure and after consulting the [European Economic and Social Committee (EESC)] and the [Committee of the Regions (CoR)], shall decide what action is to be taken by the Union in order to achieve the objectives referred to in Article 191.
2. By way of derogation from the decision-making procedure provided for in paragraph 1 and without prejudice to Article 114, the Council acting unanimously in accordance with a special legislative procedure and after consulting the [Parliament], the [EESC] and the [CoR], shall adopt:
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(b) measures affecting:
– – town and country planning,
– – quantitative management of water resources or affecting, directly or indirectly, the availability of those resources,
– – land use, with the exception of waste management;
(c) measures significantly affecting a Member State's choice between different energy sources and the general structure of its energy supply.’
Regulation (EU) 2018/1999
6 Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the Governance of the Energy Union and Climate Action, amending Regulations (EC) No 663/2009 and (EC) No 715/2009 of the European Parliament and of the Council, Directives 94/22/EC, 98/70/EC, 2009/31/EC, 2009/73/EC, 2010/31/EU, 2012/27/EU and 2013/30/EU of the European Parliament and of the Council, Council Directives 2009/119/EC and (EU) 2015/652 and repealing Regulation (EU) No 525/2013 of the European Parliament and of the Council (OJ 2018 L 328, p. 1), as amended by Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 (OJ 2021 L 243, p. 1) (‘Regulation 2018/1999’), includes, in the version thereof applicable to the present case, Articles 4 and 5, entitled ‘National objectives, targets and contributions for the five dimensions of the Energy Union’ and ‘Member States’ contribution setting process in the area of renewable energy’, respectively.
Regulation (EU) 2018/841
7 Recitals 1 to 8, 14, 16, 20, 21, 23, 24 and 36 of Regulation (EU) 2018/841 of the European Parliament and of the Council of 30 May 2018 on the inclusion of greenhouse gas emissions and removals from land use, land use change and forestry in the 2030 climate and energy framework, and amending Regulation (EU) No 525/2013 and Decision No 529/2013/EU (OJ 2018 L 156, p. 1), as amended by Commission Delegated Regulation (EU) 2021/268 of 28 October 2020 (OJ 2021 L 60, p. 21) (‘Regulation 2018/841’), state:
‘(1) The European Council in its conclusions of 23-24 October 2014 on the 2030 climate and energy policy framework endorsed a binding target of at least a 40% domestic reduction in economy-wide greenhouse gas emissions by 2030 compared to 1990 …
(2) The European Council conclusions of 23-24 October 2014 stated that the emissions reduction target of at least 40% should be delivered collectively by the Union in the most cost-effective manner possible, with the reductions in the European Union emissions trading system [(“EU ETS”)] laid down in Directive 2003/87/EC of the European Parliament and of the Council [of 13 October 2003 establishing a scheme for greenhouse gas emission allowance trading within the Community and amending Council Directive 96/61/EC (OJ 2003 L 275, p. 32)] and in non-ETS sectors amounting to 43% and 30%, respectively, by 2030 compared to 2005, with efforts distributed on the basis of relative [gross domestic product (GDP)] per capita.
(3) This Regulation forms part of the implementation of the Union’s commitments under the Paris Agreement adopted [on 12 December 2015 under the United Nations Framework Convention on Climate Change (OJ 2016 L 282, p. 4) (“the Paris Agreement”)]. The Paris Agreement was [approved] on behalf of the Union … by Council Decision (EU) 2016/1841 [of 5 October 2016 on the conclusion, on behalf of the European Union, of the Paris Agreement adopted under the United Nations Framework Convention on Climate Change (OJ 2016 L 282, p. 1)]. The commitment of the Union to economy-wide emission reductions was set out in the Intended Nationally Determined Contribution submitted in view of the Paris Agreement by the Union and its Member States to the Secretariat of the [United Nations Framework Convention on Climate Change (UNFCCC)] on 6 March 2015. The Paris Agreement entered into force on 4 November 2016. The Union should continue to decrease its greenhouse gas emissions and enhance removals in line with the Paris Agreement.
(4) The Paris Agreement, inter alia, sets out a long-term goal in line with the objective to keep the global temperature increase well below 2 °C above pre-industrial levels and to pursue efforts to keep it to 1.5 °C above pre-industrial levels. Forests, agricultural land and wetlands will play a central role in achieving this goal. … In order to achieve the objectives of the Paris Agreement, the Parties should increase their collective efforts. The Parties should prepare, communicate and maintain successive nationally determined contributions. … The Paris Agreement also calls for a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases in the second half of this century, and invites Parties to take action to conserve and enhance, as appropriate, sinks and reservoirs of greenhouse gases, including forests.
(5) The land use, land use change and forestry (“LULUCF”) sector has the potential to provide long-term climate benefits, and thereby to contribute to the achievement of the Union’s greenhouse gas emissions reduction target, as well as to the long-term climate goals of the Paris Agreement. The LULUCF sector also provides bio-materials that can substitute fossil- or carbon-intensive materials and therefore plays an important role in the transition to a low greenhouse-gas-emitting economy. As removals through LULUCF are reversible, they should be treated as a separate pillar in the Union climate policy framework.
(6) The European Council conclusions of 23-24 October 2014 stated that the multiple objectives of the agriculture and land use sector, with their lower mitigation potential as well as the need to ensure coherence between the Union food security and climate change objectives, should be acknowledged. The European Council invited the [European] Commission to examine what the best means of encouraging the sustainable intensification of food production are, while optimising the sector’s contribution to greenhouse gas mitigation and sequestration, including through afforestation, and to establish policy on how to include LULUCF in the 2030 greenhouse gas mitigation framework as soon as technical conditions allow and in any case before 2020.
(7) Sustainable management practices in the LULUCF sector can contribute to climate change mitigation in several ways, in particular by reducing emissions, and maintaining and enhancing sinks and carbon stocks. In order for measures aiming in particular at increasing carbon sequestration to be effective, the long-term stability and adaptability of carbon pools is essential. In addition, sustainable management practices can maintain the productivity, regeneration capacity and vitality of the LULUCF sector and thereby promote economic and social development, while reducing the carbon and ecological footprint of that sector.
(8) The development of sustainable and innovative practices and technologies, including agro-ecology and agro-forestry, can enhance the role of the LULUCF sector in relation to climate mitigation and adaptation, as well as strengthen the productivity and resilience of that sector. As the LULUCF sector is characterised by long timeframes for returns, long-term strategies are important to enhance research funding for the development of, and investments in, sustainable and innovative practices and technologies. Investments in preventive actions, such as sustainable management practices, can reduce the risks associated with natural disturbances.
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(14) To ensure the contribution of the LULUCF sector to the achievement of the Union’s emission reduction target of at least 40% and to the long-term goal of the Paris Agreement, a robust accounting system is needed. In order to obtain accurate accounts of emissions and removals in accordance with the 2006 [Intergovernmental Panel on Climate Change (“IPCC”)] Guidelines for National Greenhouse Gas Inventories …, the annually reported values … for land use categories and the conversion between land use categories should be utilised, thereby streamlining the approaches used …
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(16) Emissions and removals from forest land depend on a number of natural circumstances, dynamic age-related forest characteristics, as well as on past and present management practices that differ substantially between the Member States. The use of a base year would not make it possible to reflect those factors and resulting cyclical impacts on, or the interannual variation of, emissions and removals. The relevant accounting rules should instead provide for the use of reference levels to exclude the effects of natural and country-specific characteristics. Forest reference levels should take account of any unbalanced age structure of forests and should not unduly constrain future forest management intensity, so that long-term carbon sinks can be maintained or strengthened. …
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(20) Natural disturbances, such as wildfires, insect and disease infestations, extreme weather events and geological disturbances, that are beyond the control of, and not materially influenced by, a Member State, can result in greenhouse gas emissions of a temporary nature in the LULUCF sector, or cause the reversal of previous removals. As such reversal can also be the result of management decisions, such as decisions to harvest or plant trees, this Regulation should ensure that human-induced reversals of removals are always accurately reflected in LULUCF accounts. Moreover, this Regulation should provide Member States with a limited possibility to exclude emissions resulting from disturbances that are beyond their control from their LULUCF accounts. However, the manner in which Member States apply those provisions should not lead to undue under-accounting.
(21) Depending on national preferences, Member States should be able to choose adequate national policies for achieving their commitments in the LULUCF sector, including the possibility of balancing emissions from one land category with removals from another land category. They should also be able to cumulate net removals over the period from 2021 to 2030. Transfers to other Member States should continue to be available as an additional option, and Member States should be able to use annual emissions allocations established pursuant to Regulation (EU) 2018/842 of the European Parliament and of the Council [of 30 May 2018 on binding annual greenhouse gas emission reductions by Member States from 2021 to 2030 contributing to climate action to meet commitments under the Paris Agreement and amending Regulation (EU) No 525/2013 (OJ 2018 L 156, p. 26)] for compliance under this Regulation. The use of flexibilities set out in this Regulation will not compromise the overall ambition level of the Union’s greenhouse gas reduction targets.
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(23) Removals from managed forest land should be accounted against a forward-looking forest reference level. The projected future removals by sinks should be based on an extrapolation of forest management practices and intensity from a reference period. A decrease in a sink relative to the reference level should be accounted for as emissions. Specific national circumstances and practices, such as lower harvest intensity than usual or ageing forests during the reference period, should be taken into account.
(24) Member States should be granted some flexibility to temporarily increase their harvest intensity in accordance with sustainable forest management practices that are consistent with the objective set out in the Paris Agreement, provided that within the Union total emissions do not exceed total removals in the LULUCF sector. …
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(36) Since the objectives of this Regulation, in particular to set out the commitments of Member States for the LULUCF sector that contribute to achieving the objectives of the Paris Agreement and meeting the greenhouse gas emission reduction target of the Union for the period from 2021 to 2030, cannot be sufficiently achieved by the Member States but can rather, by reason of its scale and effects, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve those objectives.’
8 Article 1 of Regulation 2018/841, entitled ‘Subject matter’, provides:
‘This Regulation sets out the commitments of Member States for the land use, land use change and forestry (“LULUCF”) sector that contribute to achieving the objectives of the Paris Agreement and meeting the greenhouse gas emission reduction target of the Union for the period from 2021 to 2030. This Regulation also lays down the rules for the accounting of emissions and removals from LULUCF and for checking the compliance of Member States with those commitments.’
9 Article 2 of that regulation, entitled ‘Scope’, provides, in paragraph 1:
‘This Regulation applies to emissions and removals of the greenhouse gases listed in Section A of Annex I thereto, reported pursuant to Article 7 of Regulation (EU) No 525/2013 [of the European Parliament and of the Council of 21 May 2013 on a mechanism for monitoring and reporting greenhouse gas emissions and for reporting other information at national and Union level relevant to climate change and repealing Decision No 280/2004/EC (OJ 2013 L 165, p. 13)] and that occur in any of the following land accounting categories on the territories of Member States:
(a) During the periods from 2021 to 2025 and from 2026 to 2030:
…’
10 Article 4 of Regulation 2018/841, entitled ‘Commitments’, provides:
‘For the periods from 2021 to 2025 and from 2026 to 2030, taking into account the flexibilities provided for in Articles 12 and 13, each Member State shall ensure that emissions do not exceed removals, calculated as the sum of total emissions and total removals on its territory in all of the land accounting categories referred to in Article 2 combined, as accounted in accordance with this Regulation.’
11 Article 10 of that regulation, entitled ‘Accounting for natural disturbances’, provides, in paragraph 1:
‘At the end of each of the periods from 2021 to 2025 and from 2026 to 2030, Member States may exclude from their accounts for afforested land and managed forest land greenhouse gas emissions, resulting from natural disturbances, that exceed the average emissions caused by natural disturbances in the period from 2001 to 2020, excluding statistical outliers (“background level”). That background level shall be calculated in accordance with this Article and Annex VI.’
12 Article 11 of that regulation, entitled ‘Flexibilities’, provides, in paragraph 1:
‘A Member State may use:
(a) the general flexibilities set out in Article 12; and
(b) in order to comply with the commitment in Article 4, the managed forest land flexibility set out in Article 13.’
13 Article 12 of that regulation, entitled ‘General flexibilities’, provides:
‘1. Where total emissions exceed total removals in a Member State, and that Member State has chosen to use its flexibility, and has requested to delete annual emission allocations under Regulation [2018/842], the quantity of deleted emission allocations shall be taken into account with respect to the Member State’s compliance with its commitment pursuant to Article 4 of this Regulation.
2. To the extent that total removals exceed total emissions in a Member State and after subtraction of any quantity taken into account under Article 7 of Regulation [2018/842], that Member State may transfer the remaining quantity of removals to another Member State. The quantity transferred shall be taken into account when assessing the recipient Member State’s compliance with its commitment pursuant to Article 4 of this Regulation.
3. To the extent that total removals exceed total emissions in a Member State in the period from 2021 to 2025, and after subtraction of any quantity taken into account under Article 7 of Regulation [2018/842] or transferred to another Member State pursuant to paragraph 2 of this Article, that Member State may bank the remaining quantity of removals to the period from 2026 to 2030.
4. In order to avoid double counting, the quantity of net removals taken into account under Article 7 of Regulation [2018/842] shall be subtracted from that Member State’s quantity available for transfer to another Member State or for banking pursuant to paragraphs 2 and 3 of this Article.’
14 Article 13 of Regulation 2018/841, entitled ‘Managed forest land flexibility’, provides, in paragraph 1:
‘Where total emissions exceed total removals in the land accounting categories referred to in Article 2, accounted for in accordance with this Regulation, in a Member State, that Member State may use the managed forest land flexibility set out in this Article in order to comply with Article 4.’
Regulation 2018/842
15 Article 7 of Regulation 2018/842, entitled ‘Additional use of up to 280 million net removals from LULUCF’, provides, in paragraph 1:
‘To the extent that a Member State’s greenhouse gas emissions exceed its annual emission allocations for a given year, including any annual emission allocations banked pursuant to Article 5(3) of this Regulation, a quantity up to the sum of total net removals and total net emissions from the combined land accounting categories of afforested land, deforested land, managed cropland, managed grassland and, subject to the delegated acts adopted pursuant to paragraph 2 of this Article, managed forest land and managed wetland, as referred to in points (a) and (b) of Article 2(1) of Regulation [2018/841], may be taken into account for its compliance under Article 9 of this Regulation for that year, provided that:
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European Climate Law
16 Regulation (EU) 2021/1119 of the European Parliament and of the Council of 30 June 2021 establishing the framework for achieving climate neutrality and amending Regulations (EC) No 401/2009 and (EU) 2018/1999 (‘European Climate Law’) (OJ 2021 L 243, p. 1) states, in recital 27 thereof:
‘According to Commission assessments, the existing commitments under Article 4 of Regulation [2018/841] result in a net carbon sink of 225 million tonnes of [carbon dioxide (CO2)] equivalent in 2030. In order to ensure that sufficient mitigation efforts are deployed until 2030, it is appropriate to limit the contribution of net removals to the Union 2030 climate target to that level. This is without prejudice to the review of the relevant Union legislation in order to enable the achievement of the target.’
17 Article 2 of that law, entitled ‘Climate-neutrality objective’, provides:
‘1. Union-wide greenhouse gas emissions and removals regulated in Union law shall be balanced within the Union at the latest by 2050, thus reducing emissions to net zero by that date, and the Union shall aim to achieve negative emissions thereafter.
2. The relevant Union institutions and the Member States shall take the necessary measures at Union and national level, respectively, to enable the collective achievement of the climate-neutrality objective set out in paragraph 1, taking into account the importance of promoting both fairness and solidarity among Member States and cost-effectiveness in achieving this objective.’
18 Article 4 of that law, entitled ‘Intermediate Union climate targets’, provides:
‘1. In order to reach the climate-neutrality objective set out in Article 2(1), the binding Union 2030 climate target shall be a domestic reduction of net greenhouse gas emissions (emissions after deduction of removals) by at least 55% compared to 1990 levels by 2030.
When implementing the target referred to in the first subparagraph, the relevant Union institutions and the Member States shall prioritise swift and predictable emission reductions and, at the same time, enhance removals by natural sinks.
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2. By 30 June 2021, the Commission shall review relevant Union legislation in order to enable the achievement of the target set out in paragraph 1 of this Article and the climate-neutrality objective set out in Article 2(1) and consider taking the necessary measures, including the adoption of legislative proposals, in accordance with the Treaties.
Within the framework of the review referred to in the first subparagraph and future reviews, the Commission shall assess in particular the availability under Union law of adequate instruments and incentives to mobilise the investments needed, and propose measures as necessary.
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5. When proposing the Union 2040 climate target in accordance with paragraph 3, the Commission shall consider the following:
(a) the best available and most recent scientific evidence, including the latest reports of the IPCC and the [European Scientific Advisory Board on Climate Change];
(b) the social, economic and environmental impacts, including the costs of inaction;
(c) the need to ensure a just and socially fair transition for all;
(d) cost-effectiveness and economic efficiency;
(e) [competitiveness] of the Union’s economy, in particular small and medium-sized enterprises and sectors most exposed to carbon leakage;
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(h) fairness and solidarity between and within Member States;
(i) the need to ensure environmental effectiveness and progression over time;
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(l) international developments and efforts undertaken to achieve the long-term objectives of the Paris Agreement and the ultimate objective of the UNFCCC;
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7. The provisions of this Article shall be kept under review in light of international developments and efforts undertaken to achieve the long-term objectives of the Paris Agreement, including with regard to the outcomes of international discussions on common time frames for nationally determined contributions.’
19 Article 5 of that law, entitled ‘Adaptation to climate change’, provides:
‘1. The relevant Union institutions and the Member States shall ensure continuous progress in enhancing adaptive capacity, strengthening resilience and reducing vulnerability to climate change in accordance with Article 7 of the Paris Agreement.
2. The Commission shall adopt a Union strategy on adaptation to climate change in line with the Paris Agreement and shall regularly review it in the context of the review provided for in point (b) of Article 6(2) of this Regulation.
3. The relevant Union institutions and the Member States shall also ensure that policies on adaptation in the Union and in Member States are coherent, mutually supportive, provide co-benefits for sectoral policies, and work towards better integration of adaptation to climate change in a consistent manner in all policy areas, including relevant socioeconomic and environmental policies and actions, where appropriate, as well as in the Union’s external action. They shall focus, in particular, on the most vulnerable and impacted populations and sectors, and identify shortcomings in this regard in consultation with civil society.
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The contested regulation
20 Recitals 1 to 4, 6 to 14, 16, 22, 24 to 26 and 31 of the contested regulation state:
‘(1) The Paris Agreement, adopted on 12 December 2015 under the United Nations Framework Convention on Climate Change (UNFCCC) …, entered into force on 4 November 2016. …
(2) In its 2019 Global Assessment Report on Biodiversity and Ecosystem Services, the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) provided the latest scientific evidence on the ongoing worldwide erosion of biodiversity. The communication of the Commission of 20 May 2020 on an EU Biodiversity Strategy for 2030 – Bringing nature back into our lives (the “EU Biodiversity Strategy for 2030”) steps up the Union’s ambition regarding the protection and restoration of biodiversity and well-functioning ecosystems. Forests and healthy soils are extremely important for biodiversity, but also for the purification of air and water, carbon sequestration and storage, and the provision of sustainably sourced long-lived wood products. The nature and function of forests is highly variable across the Union, with certain types of forests being more vulnerable to climate change due to direct impacts, such as drought, temperature-induced forest dieback or changes in aridity. Deforestation and forest degradation contribute to the global climate crisis as they increase greenhouse gas emissions, inter alia through associated forest fires, thus permanently removing carbon sink capacities, decreasing the climate change resilience of the affected areas and substantially reducing their biodiversity.
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(3) The communication of the Commission of 11 December 2019 on the European Green Deal (the “European Green Deal”) provides a starting point for the achievement of the Union’s climate-neutrality objective at the latest by 2050 and the aim of achieving negative emissions thereafter laid down in Article 2(1) of [the European Climate Law]. It combines a comprehensive set of mutually reinforcing measures and initiatives aimed at achieving climate neutrality in the Union by 2050, and sets out a new growth strategy that aims to transform the Union into a fair and prosperous society, with a modern, resource-efficient and competitive economy where economic growth is decoupled from resource use. It also aims to protect, conserve and enhance the Union’s natural capital, and protect the health and well-being of citizens from environment-related risks and impacts. At the same time, that transition has gender equality aspects as well as particular impacts on some disadvantaged and vulnerable groups, such as older people, persons with disabilities and persons with a minority racial or ethnic background. It must therefore be ensured that the transition is just and inclusive, leaving no one behind.
(4) Tackling climate and environmental-related challenges and reaching the objectives of the Paris Agreement are at the core of the European Green Deal. The European Parliament called, in its resolution of 15 January 2020 on the European Green Deal …, for the necessary transition to a climate-neutral society by 2050 at the latest and, in its resolution of 28 November 2019 on the climate and environment emergency, declared a climate and environment emergency … The necessity and the value of the European Green Deal have only grown in light of the very severe effects of the COVID-19 pandemic on the health and economic well-being of the Union’s citizens.
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(6) The Union committed to reducing the Union’s economy-wide net greenhouse gas emissions by at least 55% compared to 1990 levels by 2030 in the updated nationally determined contribution submitted to the UNFCCC Secretariat on 17 December 2020.
(7) Through the adoption of [the European Climate Law], the Union has enshrined the objective of achieving a balance between anthropogenic economy-wide emissions by sources and removals by sinks of greenhouse gases domestically within the Union by 2050 and, as appropriate, of achieving negative emissions thereafter in legislation. That Regulation also establishes a binding Union domestic reduction target for net greenhouse gas emissions (emissions after deduction of removals) of at least 55% compared to 1990 levels by 2030. All sectors of the economy are expected to contribute to achieving that target, including the land use, land use change and forestry (“LULUCF”) sector. In order to ensure that sufficient mitigation efforts are deployed in other sectors up to 2030, the contribution of net removals to the 2030 Union climate target is limited to 225 million tonnes of CO2 equivalent. In the context of [the European Climate Law], the Commission reaffirmed in a corresponding statement its intention to propose a revision of Regulation [2018/841], in line with the ambition to increase net carbon removals to levels above 300 million tonnes of CO2 equivalent in the LULUCF sector by 2030.
(8) In order to contribute to the increased ambition to reduce greenhouse gas net emissions from at least 40% to at least 55% compared to 1990 levels, and to ensure that the LULUCF sector makes a sustainable and predictable long-term contribution to the Union climate neutrality objective, binding targets for the increase of net greenhouse gas removals should be set out for each Member State in the LULUCF sector in the period from 2026 to 2030, resulting in a target of 310 millions of tonnes of CO2 equivalent of net removals for the Union as a whole in 2030. The methodology used to establish the national targets for 2030 should take into account the gap between the Union target and the average greenhouse gas emissions and removals from the years 2016, 2017 and 2018, reported by each Member State in its 2020 submission, and reflect the current mitigation performance of the LULUCF sector, and each Member State’s share of the managed land area in the Union, taking into account the capacity of that Member State to improve its performance in the sector via land management practices or changes in land use that benefit the climate and biodiversity. An overachievement by Member States would further contribute to meeting the Union’s climate objectives.
(9) The binding targets for the increased ambition of net greenhouse gas emissions and removals should be determined for each Member State by a linear trajectory. The trajectory should start in 2022 at the average of greenhouse gas emissions reported by that Member State during 2021, 2022 and 2023, and end in 2030 on the target set out for that Member State. In order to ensure the collective achievement of the 2030 Union target while taking into account the interannual variability of the greenhouse gas emissions and removals in the LULUCF sector, it is appropriate to set for each Member State a commitment to achieve a sum of net greenhouse gas emissions and removals for the period from 2026 to 2029 (the “budget for 2026 to 2029”) in addition to the national target for the year 2030.
(10) The accounting rules set out in Articles 6, 7, 8 and 10 of Regulation [2018/841] were designed to determine the extent to which mitigation performance in the LULUCF sector could contribute to the 2030 Union target for reduction of greenhouse gas net emissions of 40%, which did not include the LULUCF sector. In order to simplify the regulatory framework for that sector, the current accounting rules should not apply after 2025, and the compliance with national targets of the Member States should be verified on the basis of reported greenhouse gas emissions and removals. This would provide methodological consistency with Directive [2003/87], with Regulation [2018/842], and with the new target for reduction of greenhouse gas net emissions of at least 55%, which includes the LULUCF sector.
(11) On 16 June 2022, the Council adopted a Recommendation on ensuring a fair transition towards climate neutrality [OJ 2022 C 243, p. 35], where it highlighted the need for accompanying measures and for paying particular attention to supporting those regions, industries, micro, small and medium-sized enterprises, workers, households and consumers that will face the greatest challenges. That Recommendation encourages Member States to consider a set of measures in the areas of employment and labour market transitions, job creation and entrepreneurship, health and safety at work, public procurement, taxation and social protection systems, essential services and housing, as well as, inter alia, with a view to strengthening gender equality, education and training.
(12) Considering the specificities of the LULUCF sector in each Member State, as well as the fact that Member States need to increase their performance to achieve their national binding targets, a range of flexibilities should remain at the disposal of the Member States, including trading surpluses and the extension of forest-specific flexibilities, while respecting the environmental integrity of the targets.
(13) Alternative provisions for natural disturbances (abiotics and biotics) such as fires, pest outbreaks, storms and extreme flood events, in order to address uncertainties due to natural processes in the LULUCF sector, should be available in 2032 to Member States that have done their utmost to take account of any Commission opinion addressed to them in the context of corrective action introduced by this amending Regulation, provided that they have exhausted all other flexibilities at their disposal, put in place appropriate measures to reduce the vulnerability of their land to such disturbances and that the 2030 Union target for the LULUCF sector has been achieved.
(14) Additionally, the diffuse and long-term effects of climate change, as opposed to natural disturbances which are, in essence, more temporary and geographically localised, should be taken into account. This should also make it possible to take into account the legacy effects of past management measures linked to a proportion of organic soils on managed land that is exceptionally high compared to the Union average in a few Member States. The unused amounts of compensation available under Annex VII over the period 2021 to 2030 should be made available for that purpose, based on the submission of evidence to the Commission by the Member States concerned on the basis of the best available scientific knowledge and of objective, measurable and comparable indicators such as the aridity index, within the meaning of the United Nations Convention to combat desertification in those countries experiencing serious drought and/or desertification, particularly in Africa [OJ 1998 L 83, p. 3], defined as the ratio between mean annual precipitation and mean annual evapotranspiration. The allocation among Member States should be made, in the light of the evidence submitted, on the basis of the ratio between the amount of 50 [million tonnes of] CO2 equivalent available and the total amount of compensation requested by those Member States.
…
(16) The rules for governance should be set out in a manner promoting early action towards achieving the intermediate Union climate target for 2030 and the economy-wide climate neutrality objective of the Union, following the trajectory for the years 2026 to 2029 introduced by this amending Regulation. The principles laid down in Regulation [2018/842] should apply mutatis mutandis, with a multiplier calculated in the following way: 108% of the gap between a Member State’s budget for 2026 to 2029 and the corresponding net removals reported will be added to the figure reported for 2030 by that Member State. In addition, any deficit accumulated by 2030 by each Member State should be taken into account where the Commission submits proposals concerning the post-2030 period.
…
(22) … It stressed that reaching climate neutrality will require Union action to be significantly stepped up in all sectors of the economy. Carbon sinks play an essential role in the transition to climate neutrality in the Union, and, in particular, the agriculture, forestry and land use sectors can make an important contribution in that context. Where the Commission carries out an assessment of the operation of Regulation [2018/841] as part of the review introduced by this amending Regulation, and prepares a report for the European Parliament and for the Council, it should include the current trends and future projections of emissions of greenhouse gases from agriculture, on the one hand, and of emissions and removals of greenhouse gases from cropland, grassland and wetlands, on the other, and explore regulatory options to ensure that they are consistent with the objective of achieving long-term greenhouse gas emission reductions in all sectors of the economy in accordance with the Union’s climate-neutrality objective and the intermediate climate targets. In addition, the Commission should pay specific attention to the effects of the forest age structure, including where those effects are linked to specific wartime or post-war circumstances, in a scientifically robust, reliable and transparent way, and with a view to ensuring the long-term resilience and adaptive capacity of forests.
…
(24) In order to reach the target of climate neutrality by 2050 and to aim to achieve negative emissions thereafter, it is of the utmost importance that greenhouse gas removals within the Union increase continuously, while ensuring that their permanence is maintained. Technical solutions, such as bioenergy with carbon capture and storage (“BECCS”), as well as nature-based solutions for capturing and storing CO2 emissions may, where appropriate, be necessary. In particular, individual farmers, land and forest owners or forest managers need to be encouraged to store more carbon on their land and their forests, prioritising ecosystem-based approaches and biodiversity-friendly practices, such as close-to-nature forestry practices, set-aside areas, the restoration of forest carbon stocks, expansion of agroforestry coverage, soil carbon sequestration and restoration of wetlands as well as other innovative solutions. Such incentives enhance climate mitigation and overall emission reduction across sectors in the bio-economy, including through the use of durable harvested wood products, in full respect of ecological principles fostering biodiversity and the circular economy. …
(25) Given the importance of providing financial support to land and forest owners or managers to achieve the targets set out in this amending Regulation, the Commission should, when assessing the draft updates of the latest notified integrated national energy and climate plans under Regulation [2018/1999], ensure that the financial support, including the relevant share of revenues generated from the auctioning of [European Union Emissions Trading System – EU ETS] allowances under Directive [2003/87] and that are used for LULUCF, is directed to policies and measures that are tailor-made to achieve the budgets and targets of the Member States set out in this amending Regulation. …
(26) The setting of the 2030 Union target is framed by inventory data reported by Member States for the years 2016, 2017 and 2018. The robustness of the submitted inventory reports is of high importance. Therefore, the methodologies applied by Member States should be verified where the net removals have significantly decreased for the years 2016, 2017 and 2018. In accordance with the principle of transparency and to enhance confidence in progress made in reporting, the results of those verifications should be made publicly available. Based on those verifications, the Commission should, where appropriate, make proposals to ensure that the Union remains on track to meet its 310 [million tonnes of CO2 equivalent] net removal target.
…
(31) Since the objectives of this Regulation, in particular to adjust, in light of [the European Climate Law], the commitments of Member States for the LULUCF sector that contribute to achieving the objectives of the Paris Agreement and meeting the greenhouse gas emission reduction target of the Union for the period from 2021 to 2030, cannot be sufficiently achieved by the Member States but can rather, by reason of its scale and effects, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 TEU. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve those objectives.’
21 Article 1 of the contested regulation, entitled ‘Subject matter’, provides, in paragraphs 1 to 4, 9 to 11 and 15:
‘Regulation [2018/841] is amended as follows:
(1) Article 1 is replaced by the following:
“Article 1
Subject matter
This Regulation sets out rules concerning:
(a) commitments of Member States for the land use, land use change and forestry (‘LULUCF’) sector that contribute to achieving the objectives of the Paris Agreement and meeting the greenhouse gas emission reduction target of the Union for the period from 2021 to 2025;
(b) accounting of greenhouse gas emissions and removals from the LULUCF sector and checking the compliance of Member States with the commitments referred to in point (a) for the period from 2021 to 2025;
(c) a 2030 Union target for net greenhouse gas removals in the LULUCF sector;
(d) targets for net greenhouse gas removals in the LULUCF sector for Member States for the period from 2026 to 2030.”
(2) Article 2 is replaced by the following:
“Article 2
Scope
1. This Regulation applies to emissions and removals of the greenhouse gases listed in Section A of Annex I to this Regulation, reported pursuant to Article 26(4) of Regulation [2018/1999] and occurring on the territories of Member States in the period from 2021 to 2025 in any of the following land accounting categories:
(a) land use reported as cropland, grassland, wetlands, settlements or other land, converted to forest land (‘afforested land’):
(b) land use reported as forest land converted to cropland, grassland, wetlands, settlements or other land (‘deforested land’);
(c) land use reported as any of the following (‘managed cropland’):
…
(d) land use reported as any of the following (‘managed cropland’):
…
(e) land use reported as forest land remaining forest land (‘managed forest land’);
(f) where a Member State has notified to the Commission its intention to include managed wetland in the scope of its commitments pursuant to Article 4(1) of this Regulation by 31 December 2020, land use reported as one of the following (‘managed wetland’):
…
2. This Regulation also applies to emissions and removals of the greenhouse gases listed in Section A of Annex I to this Regulation, reported pursuant to Article 26(4) of Regulation [2018/1999] and occurring on the territories of Member States in the period from 2026 to 2030, in any of the following land reporting categories or sectors:
…”
(3) Article 3 is amended as follows:
(a) point (9) is replaced by the following:
“(9) ‘natural disturbances’ means any non-anthropogenic events or circumstances that cause significant emissions in the LULUCF sector, the occurrence of which is beyond the control of the relevant Member State, and the effects of which the Member State is objectively unable to significantly limit, even after their occurrence, on emissions;
…”
(4) Article 4 is replaced by the following:
“Article 4
Commitments and targets
1. For the period from 2021 to 2025, taking into account the flexibilities provided for in Articles 12, 13 and 13a, each Member State shall ensure that greenhouse gas emissions do not exceed greenhouse gas removals, calculated as the sum of total emissions and total removals on its territory in all of the land accounting categories referred to in Article 2(1).
2. The 2030 Union target for net greenhouse gas removals shall be 310 million tonnes of CO2 equivalent as a sum of the values of the greenhouse gas net emissions and removals by Member States in 2030 set out in column D of Annex IIa, and shall be based on the average of its greenhouse gas inventory data for the years 2016, 2017 and 2018 as submitted in 2020.
3. Each Member State shall ensure that, taking into account the flexibilities provided for in Articles 12 and 13b, the sum of its greenhouse gas emissions and removals on its territory and in all of the land reporting categories referred to in Article 2(2), points (a) to (j), reported for the year 2030 in its greenhouse gas inventory submitted in 2032, compared to the average of its greenhouse gas inventory data for the years 2016, 2017 and 2018 as submitted in 2032, does not exceed the target set out for that Member State in column C of Annex IIa.
4. Each Member State shall ensure that the sum of the differences between the following points for each year in the period from 2026 to 2029 does not exceed the budget for 2026 to 2029:
(a) its greenhouse gas emissions and removals on its territory and in all of the land reporting categories referred to in Article 2(2), points (a) to (j); and
(b) the average value for its greenhouse gas inventory data for the years 2021, 2022 and 2023, as submitted in 2032.
The budget for 2026 to 2029 shall be defined as the sum of the differences for each year in the period from 2026 to 2029 for that Member State between:
(a) annual greenhouse gas emission and removal limit values for those years, established on the basis of a linear trajectory towards 2030; and
(b) the average value for its greenhouse gas inventory data for the years 2021, 2022 and 2023, as submitted in 2025.
The linear trajectory of a Member State shall start in 2022 at the average value for greenhouse gas inventory data for the years 2021, 2022 and 2023, and have as its end point for 2030 the value obtained by adding the value set out for that Member State in column C of Annex IIa to the average value for greenhouse gas inventory data for the years 2016, 2017 and 2018.
The budget for 2026 to 2029 shall be defined on the basis of the greenhouse gas inventory data submitted in 2025 and the compliance with this budget shall be assessed on the basis of the greenhouse gas inventory data submitted in 2032.
5. The Commission shall adopt implementing acts setting out the annual limit values based on the linear trajectory for net greenhouse gas removals for each Member State, for each year in the period from 2026 to 2029 in terms of tonnes of CO2 equivalent. Those national trajectories shall be based on the average greenhouse gas inventory data for the years 2021, 2022 and 2023, reported by each Member State.
Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 16a of this Regulation. For the purpose of those implementing acts, the Commission shall carry out a comprehensive review of the most recent national inventory data submitted by Member States pursuant to Article 26(4) of Regulation [2018/1999].
6. When adopting policies to comply with their commitments, targets and budgets as referred to in this Article, Member States shall consider the need to ensure a just and socially fair transition for all. The Commission may issue guidance to support Member States in that regard.”
…
(9) Article 10 is amended as follows:
(a) paragraph 1 is replaced by the following:
“1. At the end of the period from 2021 to 2025, Member States may exclude from their accounts for afforested land and managed forest land greenhouse gas emissions, resulting from natural disturbances, that exceed the average emissions caused by natural disturbances in the period from 2001 to 2020, excluding statistical outliers (‘background level’). That background level shall be calculated in accordance with this Article and Annex VI.”
(b) in paragraph 2, point (b), the year “2030” is replaced by “2025”[.]
(10) Articles 11, 12 and 13 are replaced by the following:
“Article 11
Flexibilities and governance
1. A Member State may use:
(a) the general flexibilities set out in Article 12; and
(b) in order to comply with the commitment, target and budget set in accordance with Article 4, the flexibilities set out in Articles 13 and 13b.
…
Article 12
General flexibilities
1. Where, in the period from 2021 to 2025, total emissions exceed total removals in a Member State, or, in the period from 2026 to 2030, the difference between the sum of the greenhouse gas emissions and removals on the territory of a Member State and the commitment, target or budget set for that Member State in accordance with Article 4 of this Regulation is positive, and that Member State has chosen to use its flexibility, and has requested to delete annual emission allocations under Regulation [2018/842], the quantity of deleted emission allocations shall be taken into account with respect to the Member State’s compliance with its commitment, target or budget, respectively, set in accordance with Article 4 of this Regulation.
2. To the extent that, in the period from 2021 to 2025, total removals exceed total emissions in a Member State, or, in the period from 2026 to 2030, the difference between the sum of the greenhouse gas emissions and removals on the territory of a Member State and the commitment, target or budget set for that Member State in accordance with Article 4 of this Regulation is negative, and after subtraction of any quantity taken into account under Article 7 of Regulation [2018/842], that Member State may transfer the remaining quantity of removals to another Member State. The quantity transferred shall be taken into account when assessing the recipient Member State’s compliance with its commitment, target or budget, respectively, set in accordance with Article 4 of this Regulation.
3. In order to avoid double counting, the quantity of net removals taken into account under Article 7 of Regulation [2018/842] shall be subtracted from that Member State’s quantity available for transfer to another Member State pursuant to paragraph 2 of this Article.
4. Member States should use revenues, or their equivalent in financial value, generated by transfers pursuant to paragraph 2 to tackle climate change in the Union or in third countries. Member States shall inform the Commission of any actions taken pursuant to this paragraph and shall make that information public in an easily accessible form.
5. Any transfer pursuant to paragraph 2 may be the result of a greenhouse gas mitigation project or programme carried out in the selling Member State and remunerated by the receiving Member State, provided that double counting is avoided and traceability is ensured.
Article 13
Managed forest land flexibility
1. Where, in the period from 2021 to 2025, total emissions exceed total removals in the land accounting categories referred to in Article 2(1), accounted for in accordance with this Regulation, in a Member State, that Member State may use the managed forest land flexibility set out in this Article in order to comply with Article 4(1).
2. Where, in the period from 2021 to 2025, the result of the calculation referred to in Article 8(1) is a positive figure, the Member State concerned shall be entitled to compensate emissions corresponding to the result of that calculation, provided that the following conditions are fulfilled:
(a) the Member State has included in its strategy submitted in accordance with Article 15 of Regulation [2018/1999] ongoing or planned specific measures to ensure the conservation or enhancement, as appropriate, of forest sinks and reservoirs, as well as information on the impact of such measures on relevant environmental objectives, including, inter alia, biodiversity protection and adaptation to natural disturbances; and
(b) total emissions within the Union do not exceed total removals in the land accounting categories referred to in Article 2(1) of this Regulation for the period from 2021 to 2025.
When assessing whether, within the Union, total emissions exceed total removals as referred to in the first subparagraph, point (b), of this paragraph, the Commission shall ensure that double counting is avoided by Member States, in particular in the exercise of the flexibilities set out in Article 12 of this Regulation and Article 7(1) or Article 9(2) of Regulation [2018/842].
3. The compensation referred to in paragraph 2 may only cover sinks accounted for as emissions against the forest reference level of that Member State and shall, for the period from 2021 to 2025, not exceed 50% of the maximum amount of compensation for the Member State concerned set out in Annex VII.
4. Member States shall submit evidence to the Commission concerning the impact of natural disturbances calculated pursuant to Annex VI and the measures they plan to adopt to prevent or mitigate similar impacts in the future in order to be eligible for compensation of remaining sinks accounted for as emissions against its forest reference level, up to the amount unused by other Member States of the full amount of compensation for the period from 2021 to 2025 set out in Annex VII. Where the demand for compensation exceeds the amount of unused compensation available, that unused compensation shall be distributed on a pro rata basis among the Member States concerned. The Commission shall make the evidence submitted by the Member States publicly available.”
(11) the following Articles are inserted:
“…
Article 13b
Land use mechanism for the period 2026 to 2030
1. A land use mechanism corresponding to a quantity of up to 178 million tonnes of CO2 equivalent shall be established in the Union Registry, subject to the fulfilment of the Union target referred to in Article 4(2). The land use mechanism shall be available in addition to the flexibilities provided for in Article 12.
2. Where, in the period from 2026 to 2030, after a Member State has done its utmost to take account of any Commission opinion addressed to it under Article 13d, the difference between the sum of the greenhouse gas emissions and removals on the territory of a Member State and in all of the land reporting categories referred to in Article 2(2), points (a) to (j), and the corresponding target set for that Member State in accordance with Article 4(3) or the budget set for that Member State in accordance with Article 4(4), is positive, accounted and reported in accordance with this Regulation, that Member State may use the mechanism set out in this Article in order to comply with its target set in accordance with Article 4(3) or its budget set in accordance with Article 4(4).
3. Where, in the period from 2026 to 2030, the result of one or both calculations referred to in paragraph 2 is positive, the Member State shall be entitled to use the mechanism set out in this Article to compensate net emissions or net removals, or both, accounted for as emissions against the target set for that Member State in accordance with Article 4(3) or against the budget set for that Member State in accordance with Article 4(4), or both, provided that the following conditions are fulfilled:
(a) the Member State has included in its updated integrated national energy and climate plan submitted pursuant to Article 14 of Regulation [2018/1999] ongoing or planned specific measures to ensure the conservation or enhancement, as appropriate, of all land sinks and reservoirs, and to reduce the vulnerability of the land to natural disturbances;
(b) the Member State has exhausted the flexibility available pursuant to Article 12(1) of this Regulation;
(c) the difference in the Union between the annual sum of all greenhouse gas emissions and removals on its territory and in all of the land reporting categories referred to in Article 2(2), points (a) to (j), and the Union target of 310 million tonnes of CO2 equivalent of net removals is negative, in 2030.
When assessing whether, within the Union, the condition as referred to in the first subparagraph, point (c), of this paragraph has been fulfilled, the Commission shall include up to 30%, but not more than 20 [million tonnes of] CO2 equivalent, of the unused surplus to the commitments of Member States under Article 4(1) from the period from 2021 to 2025, provided that one or more Member States submit evidence to the Commission concerning the impact of natural disturbances in accordance with paragraph 5 of this Article. The Commission shall ensure that double counting is avoided by Member States, in particular in the exercise of the flexibilities set out in Article 12 of this Regulation and Article 7(1) of Regulation [2018/842].
4. The amount of the compensation referred to in paragraph 3 of this Article may, for the period from 2026 to 2030, not exceed 50% of the maximum amount of compensation for the Member State concerned set out in Annex VII.
5. Member States shall submit evidence to the Commission concerning the impact of natural disturbances calculated pursuant to Annex VI, in order to be eligible for compensation of net emissions or net removals, or both, accounted for as emissions against the targets set for those Member States in accordance with Article 4(3), or against the budget set for those Member States in accordance with Article 4(4), up to the amount unused by other Member States of the full amount of compensation for the period from 2026 to 2030 set out in Annex VII. Where the demand for compensation exceeds the amount of unused compensation available, that unused compensation shall be distributed on a pro rata basis among the Member States concerned.
6. Member States shall be entitled to compensate net emissions or net removals, or both, accounted for as emissions against the targets set for those Member States in accordance with Article 4(3) or against the budget set for those Member States in accordance with Article 4(4), up to the amount unused by other Member States of the full amount of compensation for the period from 2021 to 2030 set out in Annex VII, after taking into account Article 13(4) and paragraph 5 of this Article, provided that those Member States:
(a) have exhausted the flexibilities available pursuant to Article 12(1), and paragraphs 3 and 5 of this Article; and
(b) have submitted evidence to the Commission concerning either:
(i) the long-term impact of climate change resulting in excess emissions or diminishing sinks that are beyond their control; or
(ii) the effects of an exceptionally high proportion of organic soils in their managed land area, compared to the Union average, resulting in excess emissions, provided that those effects are attributable to land management practices that occurred before the entry into force of Decision No 529/2013/EU [of the European Parliament and of the Council of 21 May 2013 on accounting rules on greenhouse gas emissions and removals resulting from activities relating to land use, land-use change and forestry and on information concerning actions relating to those activities (OJ 2013 L 165, p. 80)];
(c) have included in their latest integrated national energy and climate plans submitted pursuant to Article 14 of Regulation [2018/1999] specific measures to ensure the conservation or enhancement, as appropriate, of all land sinks and reservoirs, and to reduce the vulnerability of land to ecosystem perturbations driven by climate change.
7. The amount of compensation referred to in paragraph 6 shall not exceed 50 million tonnes of CO2 equivalent for the Union as a whole. Where the demand for compensation exceeds the maximum amount of compensation available, that compensation shall be distributed on a pro rata basis among the Member States concerned.
8. The evidence referred to in paragraph 6, point (b)(i), shall include a quantitative assessment of the effects on net emissions or net removals, in terms of million tonnes of CO2 equivalent for the affected area, and shall be based on comparable and reliable quantitative indices, on geographically explicit data and on the best scientific evidence available. Those indices and data and that evidence shall be based on observed changes covering at least the period 2001 to 2025, and on scientifically reviewed projections and observations for the period 2026 to 2030. Those indices and data and that evidence shall reflect background medium or long-term changes of climate characteristics relevant for the LULUCF sector, such as aridity, mean temperatures, mean precipitation, frost days, and the duration of meteorological or soil moisture droughts.
9. The evidence referred to in paragraph 6, point (b)(ii), shall include a justification to the effect that the proportion of organic soils on managed land area for the Member State concerned exceeds the Union average proportion for the year 2030. The evidence shall include a quantitative analysis, in million tonnes of CO2 equivalent, of the reported emissions due to the legacy effects on managed organic soils, based on reviewed observations for the period 2026-2030, comparable and reliable geographically explicit data and on the best scientific evidence available, in particular about similar sites in the Member State concerned. The evidence shall also be accompanied by a description of policy measures currently implemented that minimise the negative impacts of legacy effects on managed organic soils.
10. By 12 May 2024, the Commission shall, by means of implementing acts, set out the structure, format, technical details and process for submission of the evidence referred to in paragraph 6, point (b), of this Article. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 16a.
11. The Commission shall make the evidence submitted by the Member States referred to in paragraph 6, point (b), publicly available, and may request a Member State to submit additional evidence if, after checking the information received from that Member State, it deems that information to be insufficiently justified or disproportionate.
Article 13c
Governance
If, as a result of the comprehensive review carried out in in 2032, the Commission finds that, taking into account the flexibilities used pursuant to Articles 12 and 13b, the budget for 2026 to 2029 referred to in Article 4(4) is not complied with, an amount equal to the amount in tonnes of CO2 equivalent of the excess greenhouse gas net emissions, multiplied by a factor of 1.08, shall be added to the greenhouse gas net emission figure reported by that Member State in 2030, in accordance with the measures adopted pursuant to Article 15.
Article 13d
Corrective action
1. If the Commission finds, in its annual assessment under Article 29 of [Regulation 2018/1999], that a Member State is not making sufficient progress towards meeting its target set in accordance with Article 4(3) of this Regulation, taking into account the trajectory and the budget set in accordance with Article 4(4) of this Regulation, as well as the flexibilities under this Regulation, that Member State shall, within three months, submit to the Commission a corrective action plan that includes:
(a) a detailed explanation of why it is not making sufficient progress;
(b) an assessment of how Union funding has supported its efforts towards complying with its target and budget and of how it intends to use such funding to make progress towards complying with them;
(c) additional actions, complementing the integrated national energy and climate plan of that Member State pursuant to Regulation [2018/1999] or reinforcing its implementation, that it will implement in order to comply with its target set in accordance with Article 4(3) or its budget set in accordance with Article 4(4) through domestic policies and measures and the implementation of Union action, accompanied by a detailed assessment, underpinned by quantitative data, where available, of the envisaged net greenhouse gas removals that would result from those actions;
(d) a strict timetable for implementing such actions, which enables the assessment of annual progress in implementation.
Where a Member State has established a national climate advisory body, it may seek that body’s advice to identify the necessary actions referred to in point (c).
2. In accordance with its annual work programme, the European Environment Agency shall assist the Commission in its work to assess any such corrective action plans.
3. The Commission may issue an opinion regarding the robustness of the corrective action plans submitted in accordance with paragraph 1 and shall in that case do so within four months of receipt of those plans. The Member State concerned shall take utmost account of the Commission’s opinion and may revise its corrective action plan accordingly. If the Member State concerned does not address the opinion or a substantial part thereof, that Member State shall provide a justification to the Commission.
4. Each Member State shall make its corrective action plan referred to in paragraph 1 and any justification referred to in paragraph 3 publicly available. The Commission shall make its opinion referred to in paragraph 3 publicly available.”
…
(15) Article 17 is replaced by the following:
“Article 17
Review
1. This Regulation shall be kept under review taking into account, inter alia:
(a) international developments;
(b) efforts undertaken to achieve the long-term objectives of the Paris Agreement; and
(c) Union law, including on nature restoration.
…
2. The Commission shall submit a report to the European Parliament and to the Council on the operation of this Regulation, no later than six months after the first global stocktake agreed under Article 14 of the Paris Agreement. The report shall be based on the most recent data available as provided by the Member States …
…
That report shall take into account, where relevant, the effects of the forest age structure, including where those effects are linked to specific wartime or post-war circumstances, in a scientifically robust, reliable and transparent way, and with a view to ensuring the long-term resilience and adaptive capacity of forests.
…”’
22 Annex III to the contested regulation, which amends the table in Annex IIa to Regulation 2018/841, is worded as follows:
‘The Union target (column D), the average greenhouse gas inventory data for the years 2016, 2017 and 2018 (column B) and the national targets of the Member States (column C) referred to in Article 4(3) to be achieved in 2030’
|
A |
B |
C |
D |
|
Member State |
The average greenhouse gas inventory data for the years 2016, 2017 and 2018 (kt of CO2 equivalent), 2020 submission |
Member State targets, 2030 (kt of CO2 equivalent) |
Value of the greenhouse gas net removals (kt of CO2 equivalent) in 2030, 2020 submission (Columns B+C) |
|
… |
… |
… |
… |
|
Poland |
-34 820 |
-3 278 |
-38 098 |
|
… |
… |
… |
… |
|
EU-27/Union |
-267 704 |
-42 296 |
-310 000 |
The Agreement on better law-making
23 The Interinstitutional Agreement between the European Parliament, the Council of the European Union and the European Commission on Better Law-Making (OJ 2016 L 123, p. 1; ‘the Agreement on better law-making’) contains a Chapter III, entitled ‘Tools for better law-making’, points 12 to 15 of which state the following:
‘12. The three Institutions agree on the positive contribution of impact assessments in improving the quality of Union legislation.
Impact assessments are a tool to help the three Institutions reach well-informed decisions and not a substitute for political decisions within the democratic decision-making process. Impact assessments must not lead to undue delays in the law-making process or prejudice the co-legislators’ capacity to propose amendments.
Impact assessments should cover the existence, scale and consequences of a problem and the question whether or not Union action is needed. They should map out alternative solutions and, where possible, potential short and long-term costs and benefits, assessing the economic, environmental and social impacts in an integrated and balanced way and using both qualitative and quantitative analyses. The principles of subsidiarity and proportionality should be fully respected, as should fundamental rights. Impact assessments should also address, whenever possible, the “cost of non-Europe” and the impact on competitiveness and the administrative burdens of the different options, having particular regard to [small and medium-sized enterprises (SMEs)] (“Think Small First”), digital aspects and territorial impact. Impact assessments should be based on accurate, objective and complete information and should be proportionate as regards their scope and focus.
13. The Commission will carry out impact assessments of its legislative and non-legislative initiatives, delegated acts and implementing measures which are expected to have significant economic, environmental or social impacts. The initiatives included in the Commission Work Programme or in the joint declaration will, as a general rule, be accompanied by an impact assessment.
In its own impact assessment process, the Commission will consult as widely as possible. The Commission’s Regulatory Scrutiny Board will carry out an objective quality check of its impact assessments. The final results of the impact assessments will be made available to the [Parliament], the Council and national parliaments, and will be made public along with the opinion(s) of the Regulatory Scrutiny Board at the time of adoption of the Commission initiative.
14. The [Parliament] and the Council, upon considering Commission legislative proposals, will take full account of the Commission’s impact assessments. To that end, impact assessments shall be presented in such a way as to facilitate the consideration by the [Parliament] and the Council of the choices made by the Commission.
15. The [Parliament] and the Council will, when they consider this to be appropriate and necessary for the legislative process, carry out impact assessments in relation to their substantial amendments to the Commission’s proposal. The [Parliament] and the Council will, as a general rule, take the Commission’s impact assessment as the starting point for their further work. The definition of a “substantial” amendment should be for the respective Institution to determine.’
Forms of order sought and procedure before the Court of Justice
24 The Republic of Poland claims that the Court should:
– annul the contested regulation in its entirety; and
– order the Parliament and the Council to pay the costs.
25 The Parliament contends that the Court should:
– dismiss the action; and
– order the Republic of Poland to pay the costs.
26 The Council contends that the Court should:
– dismiss the action in its entirety as unfounded; and
– order the Republic of Poland to pay the costs.
27 By decision of 15 November 2023, the Commission was granted leave to intervene in support of the form of order sought by the Parliament and the Council.
28 By decision of 15 November 2023, Hungary was granted leave to intervene in support of the form of order sought by the Republic of Poland.
The action
29 In support of its action, the Republic of Poland puts forward five pleas in law, alleging an infringement of, first, point (c) of the first subparagraph of Article 192(2) TFEU; second, the third indent of point (b) of the first subparagraph of Article 192(2) TFEU; third, the principle of conferral of powers referred to in Article 4(1) and Article 5(2) TEU; fourth, the principle of proportionality and the principle of equality of Member States, interpreted together with Article 191(2) TFEU; and, fifth, the obligation to carry out an adequate impact assessment of the contested regulation and Article 191(3) TFEU.
First plea in law: infringement of point (c) of the first subparagraph of Article 192(2) TFEU
Arguments of the parties
30 By its first plea in law, the Republic of Poland, supported by Hungary, submits that the contested decision ought to have been adopted not on the basis of Article 192(1) TFEU but rather point (c) of the first subparagraph of Article 192(2) TFEU, under which, by way of derogation from the decision-making procedure provided for in Article 192(1) TFEU, the Council, acting unanimously, is to adopt measures significantly affecting a Member State’s choice between different energy sources and the general structure of its energy supply.
31 Those Member States submit that the determination of the legal basis must of course rest on objective factors which are amenable to judicial review, such as the aim and content of the measure. However, those are not the only, or the most important, factors to be taken into consideration. An analysis of the general context of which such a measure forms part is also relevant. In the present case, it is apparent from point (c) of the first subparagraph of Article 192(2) TFEU that the effects resulting from the implementation of the environmental measures provided for by the contested regulation are to be taken into consideration, not the aims pursued at the time of its adoption. Only that interpretation is capable of enabling the Court to exercise its power of review.
32 The principal effect of the contested regulation is that it significantly affects Member States’ choice in the structure of their energy supply between the different energy sources available to them.
33 It is apparent from recitals 8, 9 and 31 of the contested regulation that it is aimed at adapting, in the light of the European Climate Law, Member States’ obligations in the LULUCF sector which contribute to achieving the objectives of the Paris Agreement and meeting the greenhouse gas emission reduction target for the period from 2021 to 2030.
34 Article 1(4) of that regulation amends Article 4 of Regulation 2018/841, inasmuch as the latter sets binding commitments and targets for each Member State reflecting the Union’s increased ambition for greenhouse gas net emissions and removals. It follows, first, that Article 4(1) of Regulation 2018/841, as amended by the contested regulation (‘Regulation 2018/841, as amended’), provides for the commitment undertaken by each Member State to ensure that, in view of the flexibilities provided for in Articles 12, 13 and 13a of that regulation, its total greenhouse gas emissions do not exceed its total greenhouse gas removals in the period from 2021 to 2025; secondly, Article 4(3) of that regulation provides for the obligation for each Member State to achieve a national target equal to the sum of net greenhouse gas emissions and removals by 2030; and, thirdly, Article 4(4) of that regulation provides for the obligation for each Member State to ensure that the sum of the differences between, on the one hand, the greenhouse gas emissions and removals on its territory and in all of the land reporting categories and, on the other, the average value for its greenhouse gas inventory data for the years 2021, 2022 and 2023, as submitted in 2032 for each year in the period from 2026 to 2029, does not exceed the budget for 2026 to 2029.
35 The implementation of those commitments and targets requires the Republic of Poland to make significant short-term LULUCF sector increases in greenhouse gas removal, which necessarily results in a significant reduction in forestry operations.
36 A direct consequence of the contested regulation is thus a reduction in the harvest of wood in Poland. However, given that wood is a raw material widely used for domestic heating by nearly a quarter of households in that Member State, a reduction in wood harvesting would affect not only the price of domestic heating but would also have a significant impact on that Member State’s energy supply. Consequently, the obligations and targets laid down in the contested regulation directly and significantly affect the Republic of Poland’s freedom to determine its energy mix, that is to say, the structure of its energy supply.
37 The fact that the contested regulation is intended to amend Regulation 2018/841, which was adopted on the basis of Article 192(1) TFEU, is irrelevant. The legal basis of an amending act does not necessarily have to be the same as the basis of the act it amends, as follows from the judgment of 21 June 2018, Poland v Parliament and Council (C‑5/16, EU:C:2018:483, paragraph 49).
38 The Parliament and the Council, supported by the Commission, contend that the first plea in law should be rejected as unfounded.
Findings of the Court
39 By its first plea in law, the Republic of Poland submits that the contested regulation should have been adopted on the basis of point (c) of the first subparagraph of Article 192(2) TFEU.
40 In that regard, it should be borne in mind that the selection of the first subparagraph of Article 192(2) TFEU as the legal basis for a measure is based on the same factors as those consistently taken into account by the Court in its case-law (judgment of 21 June 2018, Poland v Parliament and Council (C‑5/16, EU:C:2018:483, paragraphs 37 to 39).
41 The Court has repeatedly held, first, that the choice of the legal basis for a measure may not depend simply on an institution’s conviction as to the aim pursued but must rest on objective factors which are amenable to judicial review, such as the aim and content of the measure itself (see, to that effect, judgments of 26 March 1987, Commission v Council, 45/86, EU:C:1987:163, paragraph 11; of 29 April 2004, Commission v Council, C‑338/01, EU:C:2004:253, paragraph 54; and of 16 February 2022, Poland v Parliament and Council, C‑157/21, EU:C:2022:98, paragraph 121).
42 It should be borne in mind in that regard that, if the choice of the legal basis for a legislative measure depended on the assessment of its likely effects, which, by its nature, is speculative, only an ex post analysis would make it possible to ascertain the real and specific effects of such a measure. That assessment cannot therefore in any way constitute an objective factor amenable to judicial review (see, to that effect, judgment of 21 June 2018, Poland v Parliament and Council, C‑5/16, EU:C:2018:483, paragraph 41).
43 Furthermore, it is settled case-law that the legality of an EU act cannot depend on retrospective considerations of its efficacy (judgments of 7 February 1973, Schroeder, 40/72, EU:C:1973:14, paragraph 14; of 5 October 1994, Crispoltoni and Others, C‑133/93, C‑300/93 and C‑362/93, EU:C:1994:364, paragraph 43; and of 12 July 2001, Jippes and Others, C‑189/01, EU:C:2001:420, paragraph 84).
44 It follows that the assessment of the expected effect of an EU act on the energy policy of a Member State may be taken into consideration only in the context of the assessment of the aim or content of that act (see, to that effect, judgment of 21 June 2018, Poland v Parliament and Council, C‑5/16, EU:C:2018:483, paragraph 42).
45 Secondly, the choice of the legal basis for a measure may also be based on its context, provided that that context is capable of shedding light on the objective pursued by that measure (see, to that effect, judgments of 27 February 2014, United Kingdom v Council, C‑656/11, EU:C:2014:97, paragraph 50; of 3 December 2019, Czech Republic v Parliament and Council, C‑482/17, EU:C:2019:1035, paragraph 32; of 8 December 2020, Hungary v Parliament and Council, C‑620/18, EU:C:2020:1001, paragraph 39; and of 16 February 2022, Poland v Parliament and Council, C‑157/21, EU:C:2022:98, paragraph 122).
46 In that regard, a distinction must be drawn between an act analogous to a pre-existing act and an act which amends a pre-existing act. According to the Court of Justice’s settled case-law, the legal basis for a measure must be determined autonomously, having regard to its own aim and content, and not to the legal basis used for the adoption of other EU measures that might, in certain cases, display similar characteristics (judgments of 10 January 2006, Commission v Parliament and Council, C‑178/03, EU:C:2006:4, paragraph 55, and of 21 June 2018, Poland v Parliament and Council, C‑5/16, EU:C:2018:483, paragraph 49). By contrast, in the case of a measure amending existing rules, it is important to take into account, for the purposes of identifying the legal basis for that measure, the existing rules which it amends and, in particular, their objective and content (judgments of 3 December 2019, Czech Republic v Parliament and Council, C‑482/17, EU:C:2019:1035, paragraph 42, and of 8 December 2020, Hungary v Parliament and Council, C‑620/18, EU:C:2020:1001, paragraph 40).
47 Thirdly, if the examination of an EU measure reveals that it pursues several purposes or that it comprises several components and if one of those purposes or components is identifiable as the main or predominant purpose or component, whereas the others are merely incidental or are only extremely limited in scope, the legal basis for adopting that measure must be determined in accordance with that main purpose or component (see, to that effect, judgments of 23 February 1999, Parliament v Council, C‑42/97, EU:C:1999:81, paragraphs 39 and 40; of 8 December 2020, Hungary v Parliament and Council, C‑620/18, EU:C:2020:1001, paragraph 38; and of 21 March 2024, Landeshauptstadt Wiesbaden, C‑61/22, EU:C:2024:251, paragraph 47).
48 Fourthly, a broad interpretation of the first subparagraph of Article 192(2) TFEU would risk having the effect of turning recourse to the special legislative procedure into the general rule, whereas the FEU Treaty intended it to be an exception. In accordance with the principle that exceptions must be interpreted strictly, point (c) of the first subparagraph of Article 192(2) TFEU can form the legal basis of an EU measure only if it follows from the aim and content of that measure that the primary outcome sought by that measure is significantly to affect a Member State’s choice between different energy sources and the general structure of the energy supply of that Member State (judgment of 21 June 2018, Poland v Parliament and Council, C‑5/16, EU:C:2018:483, paragraphs 44 to 46).
49 Those are the considerations which must guide the Court in its response to the arguments put forward by the Republic of Poland.
50 In the present case, the contested regulation amends Regulation 2018/841, in particular by inserting new provisions into it, with the result that the latter forms the legal context of which the contested regulation forms part. Accordingly, it is necessary, in accordance with the case-law referred to in paragraph 46 of the present judgment, to identify the legal basis on which the contested regulation had to be adopted, taking into account both the context established by Regulation 2018/841 and the legislation resulting from the amendments made to it by the contested regulation.
51 In that regard, recitals 1, 3, 4, 6 to 9 and 31 of the contested regulation confirm that it pursues the same purpose as the regulation it amends, namely to contribute to achieving the objectives of the Paris Agreement by reducing net greenhouse gas emissions by 2030 compared to 1990 levels and defining Member States’ commitments in the LULUCF sector.
52 Indeed, just as Regulation 2018/841 was intended to implement the commitments made by the Union under the Paris Agreement, as stated in recitals 3, 4 and 36 thereof, recitals 1, 3, 4 and 31 of the contested regulation state that it is intended to contribute to the achievement of the objectives pursued by that agreement, within a framework renewed by the European Climate Law which, in Article 2(1) thereof, set a target for the Union to achieve climate neutrality by 2050.
53 Whilst recitals 1 and 14 of Regulation 2018/841 set out the Union’s binding target of reducing greenhouse gas emissions across all sectors by at least 40% by 2030 compared with 1990 levels, recitals 6 to 8 of the contested regulation refer to the Union’s ambition, set out in particular in Article 4(1) of the European Climate Law, to increase that reduction target to at least 55% compared with 1990 levels, stating that ‘all sectors of the economy are expected to contribute to achieving that target, including the [LULUCF] sector’. In that context, as stated in recital 8 of the contested regulation, in order to ensure that the LULUCF sector makes ‘a sustainable and predictable long-term contribution to the Union climate neutrality objective, binding targets for the increase of net greenhouse gas removals should be set out for each Member State in the LULUCF sector in the period from 2026 to 2030, resulting in a target of 310 millions of tonnes of CO2 equivalent of net removals for the Union as a whole in 2030’. Recital 9 of that regulation also emphasises that the binding targets for the increased ambition of net greenhouse gas emissions and removals should be determined for each Member State by a ‘linear trajectory’, starting in 2022 and ending in 2030 at the level of the target set out for the Member State concerned and, moreover, that, in order to ensure the collective achievement of the 2030 Union target while taking into account the interannual variability of the greenhouse gas emissions and removals in the LULUCF sector, it is appropriate also to set a commitment to achieve a sum of net greenhouse gas emissions and removals for the period from 2026 to 2029, in addition to the national target for the year 2030.
54 It follows that the contested regulation, which forms part of a regulatory framework updated by the adoption of the European Climate Law, Article 4(1) of which sets the binding target of reducing, within the Union, net greenhouse gas emissions in the Union by at least 55% by 2030 compared with 1990 levels, seeks to further the objectives of the Paris Agreement and is fully in line with Regulation 2018/841 in aiming to address climate and environmental challenges, as the Republic of Poland moreover acknowledges, in essence, in paragraph 11 of its application.
55 As regards the content of the contested regulation. the Court finds that the provisions thereof are not, in themselves and primarily, intended to lay down measures significantly affecting a Member State’s choice between different energy sources and the general structure of its energy supply, but have, at most, indirect and incidental effects on the general structure of the energy supply of the Member States (see, by analogy, judgment of 23 February 1999, Parliament v Council, C‑42/97, EU:C:1999:81, paragraph 63).
56 In the first place, it is clear from Article 1 of Regulation 2018/841, as amended, as from Article 1 of Regulation 2018/841, that that amended regulation sets out the Member States’ commitments in the LULUCF sector in terms of the greenhouse gas emission reductions set by the Union for the period from 2021 to 2025, and that it lays down rules on the accounting of greenhouse gas emissions and removals relating to activities in that sector, as well as on the verification of Member States’ compliance with those commitments for that period.
57 It should be noted, however, that Article 1(1) of the contested regulation amends Article 1 of Regulation 2018/841 by limiting the implementation of the commitments and rules referred to in the preceding paragraph of the present judgment to the period from 2021 to 2025, whereas that regulation originally provided that those commitments and rules were to apply during the period from 2021 to 2030. That difference is justified, however, by the introduction, in Article 1(c) and (d), of Regulation 2018/841, as amended, of a Union target for net greenhouse gas removals in the LULUCF sector for 2030 and targets for net greenhouse gas removals in that sector for Member States for the period from 2026 to 2030, respectively. Consequently, the purpose of the contested regulation, as set out in Article 1(1) thereof, differs from that of Regulation 2018/841 only in terms of the increased ambition of the EU legislature, which revised the targets initially set for the LULUCF sector for 2030, without however adopting measures that significantly affect a Member State’s choice between different energy sources or the general structure of its energy supply.
58 In the second place, as regards the scope of Regulation 2018/841, as amended, Article 2 thereof provides that the commitments and targets set in that regulation apply to a number of accounting categories during the periods from 2021 to 2025 and from 2026 to 2030, in line with what was, in essence, provided for in Article 2 of Regulation 2018/841.
59 In the third place, the commitments and targets set in Article 4 of Regulation 2018/841, as amended, take into account, for the period from 2021 to 2025, the flexibilities provided for in Articles 12, 13 and 13a of that regulation in the same way as was done in Article 4 of Regulation 2018/841. In order to implement the EU legislature’s increased ambition to boost the Union’s net greenhouse gas removals by 2030, Article 4(2) of Regulation 2018/841, as amended, now sets a net removal target for the Union for 2030 at 310 million tonnes of CO2 equivalent, whereas it was previously estimated, in recital 27 of the European Climate Law, at 225 million tonnes of CO2 equivalent. Article 4(3) and (4) of Regulation 2018/841, as amended, read in conjunction with Column C of Annex IIa to that regulation, sets binding national targets to be achieved by 2030, as well as the method for achieving them, in the form of a linear trajectory to be followed for the period from 2022 to 2030 and a budget not to be exceeded for the period from 2026 to 2029.
60 It is, moreover, clear that those amendments merely give concrete form to the EU legislature’s heightened ambition to reduce greenhouse gas emissions and increase greenhouse gas removals, by involving the LULUCF sector and revising the targets initially set for that sector for 2030, without however introducing measures that significantly affect a Member State’s choice between different energy sources or the general structure of its energy supply. In that regard, the Court notes that the EU legislature did not prescribe any specific practical measures for Member States with a view to achieving the objectives set in Article 4 of Regulation 2018/841, as amended, meaning that those Member States are free to determine the measures to be adopted for their LULUCF sector.
61 It is thus apparent from both its purpose and its content that the contested regulation is not intended to lay down measures which significantly affect a Member State’s choice between different energy sources or the general structure of its energy supply. It follows that the choice of Article 192(1) TFEU as the legal basis for that regulation is not incorrect.
62 It should also be borne in mind that, in accordance with the principle that exceptions must be interpreted strictly, and as observed in paragraph 48 of the present judgment, point (c) of the first subparagraph of Article 192(2) TFEU can form the legal basis of an EU measure only if it follows from the aim and content of that measure that the primary outcome sought by that measure is significantly to affect a Member State’s choice between different energy sources and the general structure of its energy supply.
63 By focusing on the anticipated effect of the contested regulation on reducing wood production and, consequently, on the supply of energy biomass, and by disregarding the objective actually pursued by that regulation as well as its content, the Republic of Poland’s analysis amounts to precluding the adoption, on the basis of Article 192(1) TFEU, of any measure liable to affect how land is managed by a Member State. Such an analysis of the contested regulation runs counter to the principle that exceptions are to be interpreted strictly.
64 It follows that point (c) of the first subparagraph of Article 192(2) TFEU could not serve as the legal basis on which the contested regulation had to be adopted.
65 In view of the foregoing considerations, the first plea in law put forward by the Republic of Poland must be rejected as unfounded.
Second plea in law: infringement of the third indent of point (b) of the first subparagraph of Article 192(2) TFEU
Arguments of the parties
66 By its second plea in law, the Republic of Poland, supported by Hungary, submits that the contested regulation should have been adopted not on the basis of Article 192(1) TFEU but rather the third indent of point (b) of the first subparagraph of Article 192(2) TFEU, since that regulation concerns land use in the Member States.
67 Indeed, it appears from the content of that regulation and, more specifically, from Article 1(1) thereof, which amends Article 1 of Regulation 2018/841, that the purpose of the contested regulation is to govern the obligations of Member States in the LULUCF sector.
68 It is apparent, inter alia, from recital 8 of that regulation that the method used to set the national targets for 2030 takes account of each Member State’s share of the managed land area in the Union, taking into account the capacity of that Member State to improve its performance in the LULUCF sector via land management practices or changes in land use that benefit the climate and biodiversity.
69 The EU legislature thus sought to get the Member states to change their land management practices or make changes in land use. To meet the targets set for 2030, which is a very short timeframe, the Republic of Poland is forced not only to change its forestry practices by reducing wood harvesting, but also to convert land currently used for crop production into woodland, and to restore peatlands currently used for agriculture to their natural wetland state.
70 It follows that, having regard to the objective of the contested regulation and its expected effects on land use in the Member States, that regulation should have been adopted on the basis of the third indent of point (b) of the first subparagraph of Article 192(2) TFEU.
71 The fact that the contested regulation is intended to amend Regulation 2018/841, which was adopted on the basis of Article 192(1) TFEU, is irrelevant. The legal basis of an amending act does not necessarily have to be the same as the basis of the act it amends, as follows from the judgment of 21 June 2018, Poland v Parliament and Council (C‑5/16, EU:C:2018:483, paragraph 49).
72 The Parliament and the Council, supported by the Commission, contend that the second plea in law should be rejected as unfounded.
Findings of the Court
73 As a preliminary point, it should be borne in mind that the considerations set out in paragraphs 40 to 48 of the present judgment are relevant for the examination of the second plea in law.
74 It should also be noted that the Court has provided guidance as to the measures affecting land use and town and country planning that may be adopted on the basis of Article 130s(2) of the EC Treaty (now point (b) of the first subparagraph of Article 192(2) TFEU). In that regard, it has held those are measures which, just like those based on the provision of the EC Treaty that has been replaced by Article 192(1) TFEU, are intended to attain the objectives referred to in the provision of the EC Treaty that has been replaced by Article 191 TFEU, but which regulate the use of the territory of the Member States, such as measures relating to regional, urban or rural management plans or the planning of various projects concerning the infrastructure of a Member State (see, to that effect, judgment of 30 January 2001, Spain v Council, C‑36/98, EU:C:2001:64, paragraph 51).
75 In the present case, as is apparent from paragraphs 51 to 60 above, Regulation 2018/841, as amended, merely defines the Member States’ commitments in the LULUCF sector and sets binding targets for net greenhouse gas removals in order to achieve the binding target for a reduction, within the Union, of net greenhouse gas emissions by at least 55% by 2030 compared with 1990 levels.
76 Contrary to the Republic of Poland’s assertions, that regulation is limited to updating Regulation 2018/841 so that the LULUCF sector contributes to that objective, and does not contain any provisions aimed at regulating land use in the Member States, such as measures relating to regional, urban or rural development plans or to the planning of various infrastructure projects within a Member State.
77 In that regard, although recital 8 of the contested regulation uses the wording ‘land management practices or changes in land use’, it is in the light of the specific objective of increasing net greenhouse gas removals that the EU legislature intended to take into account the specific capacity of each Member State to improve its performance in the LULUCF sector in setting the national targets in that regard for 2030.
78 It should also be noted that no provision of Regulation 2018/841, as amended, is intended to regulate land use in the Member States, such as measures relating to regional, urban or rural development plans or the planning of various projects concerning a Member State’s infrastructure; and nor does it define the arrangements for agricultural land and forest management, or provide for measures requiring Member States to adopt specific plans or projects affecting forested areas. As observed in paragraph 59 of the present judgment, that regulation is limited to setting binding national targets for Member States for 2030, as well as a trajectory to be followed and a budget to be adhered to, whilst leaving it to the Member States to determine the appropriate means of achieving the national target set in Article 4(3) and (4) and in Annex IIa to that regulation.
79 Thus, the Court finds that the provisions of Regulation 2018/841 are not, in themselves and primarily, intended to lay down measures significantly affecting land use in a Member State. They may have, at most, indirect and incidental effects on that use (see, by analogy, judgment of 23 February 1999, Parliament v Council, C‑42/97, EU:C:1999:81, paragraph 63).
80 As is apparent, mutatis mutandis, from paragraph 48 of the present judgment and from the judgment of 30 January 2001, Spain v Council (C‑36/98, EU:C:2001:64, paragraph 51), the third indent of point (b) of the first subparagraph of Article 192(2) TFEU may constitute the legal basis for a Union act only if it is apparent from the purpose and content of that act that the primary objective pursued by it is to regulate the use of the territory of the Member States, such as measures relating to regional, urban or rural development plans or to the planning of various projects concerning the infrastructure of a Member State.
81 It follows that the third indent of point (b) of the first subparagraph of Article 192(2) TFEU could not serve as the legal basis on which the contested regulation had to be adopted.
82 In view of the foregoing considerations, the second plea in law put forward by the Republic of Poland must be rejected as unfounded.
Third plea in law: infringement of the principle of conferral of powers referred to in Article 4(1) and Article 5(2) TEU
Arguments of the parties
83 By its third plea in law, the Republic of Poland, supported by Hungary, submits that the contested regulation amounts to significant interference in how the Member States run their sustainable forestry operations, with the result that the EU legislature infringed the principle of conferral of powers laid down in Article 4(1) TEU and Article 5(2) TEU.
84 By the amendments it makes to Regulation 2018/841, Article 1(4) of the contested regulation has the effect of significantly restricting Member States’ ability to engage in sustainable forestry operations and requires the Republic of Poland to make significant changes to its forestry practices by limiting wood harvesting and excluding large areas of forest from any form of forestry operation. However, the Treaties do not confer any competence on the Union in the field of forestry, with the result that the Republic of Poland retains exclusive decision-making competence in this area to determine the principles governing forestry operations.
85 It is true that, in its judgment of 25 February 1999, Parliament v Council (C‑164/97 and C‑165/97, EU:C:1999:99), the Court confirmed that Article 192(1) TFEU is a valid legal basis for adopting legal measures relating to forestry where they pursue environmental purposes. The contested regulation, however, leads to a different situation, since it affects the very essence of forestry operations, such as the determination of the age structure of forest stands, expanding the area of forest plantations, and wood harvesting.
86 Scientific studies show that excluding or restricting the use of forest areas would lead to an increase in the age of forest stands and an acceleration of forest dieback and, consequently, to a reduction in the amount of CO2 absorbed by those forests. By preventing active forest management, the contested regulation accelerates the degradation of certain vulnerable forests, such as mountain forests or those affected by drought or insect pests, and deprives the Member States of the opportunity to adapt them to environmental and climatic changes.
87 The Parliament and the Council, supported by the Commission, contend that the third plea in law should be rejected as unfounded.
Findings of the Court
88 By its third plea in law, the Republic of Poland submits, in essence, that the contested regulation infringes the principle of conferral of powers under which the Union is to act only within the limits of the competences conferred upon it by the Member States in the Treaties to attain the objectives set out therein, since Article 3(1) TFEU, Article 4(2) TFEU and Article 6 TFEU do not confer exclusive, shared, support, coordination or supplementary competence in the field of forestry. Yet the contested regulation has a direct effect on forestry operations, which is however exclusively within the competence reserved for the Member States.
89 In that regard, it should be noted that, as is apparent from paragraphs 51 to 60 of the present judgment, the contested regulation, by amending Regulation 2018/841, pursues an environmental objective consisting in giving concrete expression to the EU legislature’s heightened ambition to reduce greenhouse gas emissions, by involving the LULUCF sector as a whole.
90 Article 4 of Regulation 2018/841, as amended, is thus essentially limited to setting quantitative greenhouse gas absorption targets for Member States, which they must achieve by 2030 by following a specific trajectory and adhering to a given budget, whilst leaving those Member States free to choose the specific means and concrete measures to achieve that result.
91 In that regard, contrary to the Republic of Poland’s contention, that regulation does not require it to adopt a measure, such as reducing wood harvesting, in order to achieve the quantitative target assigned to it under Article 4(3) of that regulation, read in conjunction with Annex IIa thereto. First, as is apparent, inter alia, from recital 24 of the contested regulation, the EU legislature considered that ‘technical solutions, such as bioenergy with carbon capture and storage (“BECCS”), as well as nature-based solutions for capturing and storing CO2 emissions may, where appropriate, be necessary’. That recital further states that ‘in particular, individual farmers, land and forest owners or forest managers need to be encouraged to store more carbon on their land and their forests, prioritising ecosystem-based approaches and biodiversity-friendly practices, such as close-to-nature forestry practices, set-aside areas, the restoration of forest carbon stocks, expansion of agroforestry coverage, soil carbon sequestration and restoration of wetlands as well as other innovative solutions’.
92 Secondly, it is apparent from Commission Staff Working Document of 14 July 2021, entitled ‘Impact Assessment Report Accompanying the document Proposal for a Regulation of the European Parliament and the Council amending Regulations (EU) 2018/841 as regards the scope, simplifying the compliance rules, setting out the targets of the Member States for 2030 and committing to the collective achievement of climate neutrality by 2035 in the land use, forestry and agriculture sector, and (EU) 2018/1999 as regards improvement in monitoring, reporting, tracking of progress and review’ (‘the impact assessment’), in particular section 4.2.2 thereof, entitled ‘A fair, flexible and integrated climate policy framework for the land sector’, that the EU Legislature wished to adopt a ‘flexible policy framework [that] should allow Member States to choose which mitigation actions to prioritise across the economy, and … to ensure that action happens where it is the most cost-effective’. Moreover, in section 6.1.1 of the impact assessment, entitled ‘Environmental impacts’, it is stated that ‘all proposed targets are attainable by implementing a range of different actions, from peatland restoration to improved forest management, from afforestation to the promotion of long-lasting wood products (e.g. in construction)’.
93 It follows that, contrary to the Republic of Poland’s contentions, Regulation 2018/841, as amended, does not prescribe any specific measures for achieving the primary objective of the contested regulation, which is, as observed in the examination of the first and second pleas in law and as acknowledged by the Republic of Poland in its written pleadings, the need to meet the targets of the Paris Agreement, which is the centrepiece of the European Green Deal. Regulation 2018/841, as amended, is thus limited to stating which measures the Member States may adopt with a view to achieving the objectives set for them.
94 It follows from the foregoing that the third plea in law should be rejected as unfounded.
Fourth plea in law: infringement of the principle of proportionality, laid down in Article 5(4) TEU, and the principle of equality of Member States, laid down in Article 4(2) TEU, interpreted together with Article 191(2) TFEU
95 By its fourth plea in law, the Republic of Poland, supported by Hungary, submits, in essence, that the contested regulation infringes the principle of proportionality laid down in Article 5(4) TEU, and the principle of equality of Member States, laid down in Article 4(2) TEU, interpreted together with Article 191(2) TFEU.
First part of the fourth plea in law
– Arguments of the parties
96 By the first part of the fourth plea in law, alleging infringement of the principle of proportionality, interpreted together with Article 191(2) TFEU, the Republic of Poland submits that the measures introduced by the contested regulation do not make it possible to achieve the objectives referred to in that provision and seek to ensure an excessively high level of environmental protection.
97 While Article 191(2) TFEU, as interpreted by the Court in its judgment of 21 December 2016, Associazione Italia Nostra Onlus (C‑444/15, EU:C:2016:978), requires that the European Union’s policy on the environment aim at a high level of protection, that does not necessarily have to be the highest level possible.
98 That provision precludes the EU legislature from adopting measures such as those introduced by the contested regulation which, whilst aiming to achieve a high level of reduction in greenhouse gas emissions and an increase in greenhouse gas removals by 2030, would entail economic and social costs that would significantly exceed the expected benefits of those measures. Pursuing such an objective risks causing seriously detrimental economic and social consequences for the wood sector in Poland, as it would lead to a significant reduction in wood harvesting and, consequently, a substantial rise in the price of that material, which would in turn cause a sharp decline in the profitability of the wood processing industry in that Member State. A reduction in wood harvesting could therefore lead to the loss of a great many jobs in that sector.
99 The contested regulation is also detrimental to biodiversity and the ability of forests to adapt to climate change. The environmental benefit resulting from raising the EU’s greenhouse gas removal target from 225 to 310 million tonnes of CO2 equivalent by 2030 would therefore be merely apparent, as active forest operations would be impeded. In the absence of such operations, forest stand dieback in Poland would accelerate, which would reduce the capacity of those stands to absorb CO2. At the same time, the lack of active forest operations would lead to an increase in wood imports and heighten the risks of deforestation and pressure on species threatened with extinction. The contested regulation does not, therefore, enable the stated objective to be achieved.
100 The Republic of Poland further submits that the contested regulation does not contain any measures to ensure the protection of disadvantaged groups. Whilst recital 3 of that regulation establishes the protection of those groups as one of its objectives, there are no direct incentives for farmers and forestry operators aimed at increasing their CO2 removals or reducing their CO2 emissions.
101 Furthermore, the EU legislature made a manifest error of assessment in Article 1(4) of the contested regulation, which amends Article 4 of Regulation 2018/841, by requiring Member States to comply with annual obligations for the period from 2026 to 2029 (‘the accounting period’) in the form of a linear trajectory. It failed to take into account the fact that the growth of forest stands is subject to significant annual fluctuations. A more reasonable solution would have been to keep an accounting of greenhouse gas emissions and removals across that whole period. Furthermore, starting the linear trajectory in 2022 on the basis of the average removals for the period from 2021 to 2023 also results in a disproportionate distribution of obligations for that period, particularly as, under Article 10 of Regulation 2018/841, as amended, Member States may no longer, during that same period, exclude from their accounts for afforested land and managed forest land greenhouse gas emissions, resulting from natural disturbances, that exceed the average emissions caused by natural disturbances in the period from 2001 to 2020.
102 The Republic of Poland further submits that the flexibility mechanisms already established by Regulation 2018/841 and the additional mechanisms introduced by Regulation 2018/841, as amended, do not enable the objectives set out in the latter regulation to be achieved.
103 In that regard, first of all, the mechanism set out in Article 10 of Regulation 2018/841, as amended, does not enable the objectives to be achieved. In the event of natural disturbances during the accounting period which increase the risk of tree and forest dieback, it is impossible for Member States to exclude from their accounts for afforested land and managed forest land greenhouse gas emissions resulting from exogenous factors.
104 Next, the flexibility mechanism established in Article 12 of Regulation 2018/841, as amended, resulting from Article 1(10) of the contested regulation, is inadequate in that it permits the use of surplus emission allowances under Regulation 2018/842 or the transfer to another Member State of the remaining quantity of removals after offsetting emissions, given that, at present, it is impossible to use such surpluses or to know whether, and in what quantity, other Member States will accumulate surpluses that could be purchased.
105 Lastly, the flexibility mechanism for managed forest land, referred to in Article 13(2)(b) of Regulation 2018/841, as amended, and the land use mechanism for the period from 2026 to 2030, provided for in Article 13b(6) and (7) thereof, are disadvantageous to the Republic of Poland. Its use of those mechanisms is in fact conditional upon the achievement of the Union’s objective as a whole, namely that the difference between the annual sum of all greenhouse gas emissions and removals within the Union, and also the Union’s target of 310 million tonnes of CO2 equivalent of net removals, be negative in 2030.
106 Furthermore, the contested regulation has lowered the national greenhouse gas absorption target level for certain Member States compared with the baseline determined on the basis of data collected between 2016 and 2018 (‘the reference period’), whilst it has raised that level for other Member States, such as the Republic of Poland. That is the result of an arbitrary choice made by the Commission to take account of the average removal figures for the reference period. Those figures do not reflect the actual removal capacity of Polish forests, however. During that period, those forests experienced exceptionally strong growth and were hit by natural disasters, such as storms, droughts or pest infestations, which led to an increase in wood harvesting, thereby distorting not only the data for the reference period but also the national target set for that Member State for 2030. Thus, already in 2019, those forests absorbed half as much CO2 as previously, and the growth rate of raw wood fell by about half after 2018. The result was an unfair distribution of the burden, to the detriment of the Republic of Poland.
107 The Republic of Poland further submits that Article 13c of Regulation 2018/841, as amended, which was introduced by Article 1(11) of the contested regulation, establishes a ‘sanctions scheme’ that is manifestly disproportionate. That scheme goes beyond what is necessary to achieve the Union’s target of a 55% reduction in net greenhouse gas emissions compared with 1990 levels, pursued by the contested regulation. Under that provision, if a Member State fails to meet its 2030 target by the end of the accounting period, despite making use of the available flexibility mechanisms, 108% of the difference between its budget for the period from 2026 to 2029 and the corresponding net removal levels submitted by it are added to the amount it reports for 2030. Rather than effectively encouraging Member States to increase their greenhouse gas removals, that scheme exacerbates the situation for those Member States that are already struggling to meet their targets. This is all the more so, given that the scheme is ill-suited to the specific characteristics of the LULUCF sector, as it leads to a build-up of unmet commitments, which in turn necessitates an even greater quantity of CO2 removals, irrespective of the nature and condition of the forests. Ultimately, the sanctions scheme also has serious financial consequences for the Republic of Poland. Regulation 2018/841, as amended, suffers from shortcomings in failing to provide for a means of offsetting any accumulated arrears.
108 The Parliament and the Council, supported by the Commission, contend that the first part of the fourth plea in law should be rejected as unfounded.
– Findings of the Court
109 By the first part of the fourth plea in law, the Republic of Poland submits that the contested regulation infringes the principle of proportionality laid down in Article 5(4) TEU, read in in conjunction with Article 191(2) TFEU.
110 In the first place, it should be borne in mind that Article 191(2) TFEU provides that Union policy on the environment is to aim at a ‘high level of protection’ taking into account the diversity of situations in the various regions of the Union.
111 In paragraph 44 of its judgment of 21 December 2016, Associazione Italia Nostra Onlus (C‑444/15, EU:C:2016:978), the Court held that whilst it is undisputed that that provision requires EU policy in environmental matters to aim for a high level of protection, such a level of protection, to be compatible with that provision, does not necessarily have to be the highest that is technically possible, since Article 193 TFEU authorises the Member States to maintain or introduce more stringent protective measures.
112 It is clear from that wording that, whilst Article 191(2) TFEU allows the EU legislature to opt for a level of environmental protection which need not necessarily be the highest technically possible, that provision does not, however, in any way prevent it from setting an objective corresponding to such a level of environmental protection.
113 In those circumstances, the EU legislature cannot be criticised for having disregarded Article 191(2) TFEU.
114 In the second place, as regards the infringement of the principle of proportionality, it should be borne in mind that the first subparagraph of Article 5(4) TEU provides that, under the principle of proportionality, the content and form of Union action is not to exceed what is necessary to achieve the objectives of the Treaties.
115 That principle requires that measures implemented through provisions of EU law should be appropriate for attaining the legitimate objectives pursued by the legislation at issue and not go beyond what is necessary to achieve them. Thus, when there is a choice between several appropriate measures, recourse must be had to the least onerous, and the disadvantages caused must not be disproportionate to the aims pursued (judgments of 13 November 1990, Fedesa and Others, C‑331/88, EU:C:1990:391, paragraph 13; of 13 March 2019, Poland v Parliament and Council, C‑128/17, EU:C:2019:194, paragraph 94; and of 3 December 2019, Czech Republic v Parliament and Council, C‑482/17, EU:C:2019:1035, paragraph 76).
116 With regard to judicial review of compliance with that principle, the Court has recognised that, in the exercise of the powers conferred on it, the EU legislature must be allowed a broad discretion in areas in which its action involves political, economic and social choices and in which it is called upon to undertake complex assessments and evaluations, a fortiori where they are of an evolving nature. That broad discretion of the EU legislature applies to the determination of the nature and scope of the measures which it adopts and, to some extent, to the establishment of the basic facts (see, to that effect, judgments of 8 July 2010, Afton Chemical, C‑343/09, EU:C:2010:419, paragraphs 28, 33 and 46; of 21 June 2018, Poland v Parliament and Council, C‑5/16, EU:C:2018:483, paragraphs 150, 151 and 170; and of 4 October 2024, Lithuania and Others v Parliament and Council (Mobility Package), C‑541/20 to C‑555/20, EU:C:2024:818, paragraphs 219 and 242).
117 Consequently, the legality of a measure adopted in one of those areas can be affected only if the measure is manifestly inappropriate having regard to the objective which the EU legislature is seeking to pursue. Therefore, the question is not whether a measure adopted in such an area was the only or the best possible measure, since the EU judicature cannot substitute its assessment of scientific and technical facts for that of the EU legislature on which the Treaties have placed that task (see, to that effect, judgments of 12 July 2001, Jippes and Others, C‑189/01, EU:C:2001:420, paragraphs 82 and 83, and of 4 October 2024, Lithuania and Others v Parliament and Council (Mobility Package), C‑541/20 to C‑555/20, EU:C:2024:818, paragraph 242).
118 However, even where it has broad discretion, the EU legislature is required to base its choice on objective criteria and examine whether the aims pursued by the measure chosen are such as to justify even substantial negative economic consequences for certain operators. The EU institutions which have adopted the act in question must therefore be able to show before the Court that in adopting that act they actually exercised their discretion, which presupposes that consideration was taken of all the relevant factors and circumstances of the situation the act was intended to regulate. It follows that those institutions must at the very least be able to produce and set out clearly and unequivocally the basic facts which had to be taken into account as the basis of the contested measures of that act and on which the exercise of their discretion depended. In that regard, the validity of an EU measure must be assessed in the light of the information available to the EU legislature at the time of the adoption of the legislation in question and cannot depend on retrospective considerations concerning its efficacy (see, to that effect, judgments of 7 February 1973, Schroeder, 40/72, EU:C:1973:14, paragraph 14; of 12 July 2001, Jippes and Others, C‑189/01, EU:C:2001:420, paragraph 84; and of 21 June 2018, Poland v Parliament and Council, C‑5/16, EU:C:2018:483, paragraphs 152 and 153).
119 Furthermore, the EU legislature does not have to take into consideration the particular situation of a Member State where the EU measure concerned has an impact in all Member States and requires that a balance between the different interests involved be ensured, taking account of the objectives of that measure. Therefore, the attempt to strike such a balance taking into account not the particular situation of a single Member State but that of all the Member States of the European Union cannot, in itself, be regarded as contrary to the principle of proportionality (judgments of 18 June 2015, Estonia v Parliament and Council, C‑508/13, EU:C:2015:403, paragraph 39; of 21 June 2018, Poland v Parliament and Council, C‑5/16, EU:C:2018:483, paragraph 167; and of 4 October 2024, Lithuania and Others v Parliament and Council (Mobility Package), C‑541/20 to C‑555/20, EU:C:2024:818, paragraph 246).
120 That case-law must guide the Court in its examination of the first part of the fourth plea in law.
121 In the present case, the Republic of Poland submits that the measures introduced into Regulation 2018/841, as amended by the contested regulation, namely the increase in the Union’s net greenhouse gas removal target to 310 million tonnes of CO2 equivalent in 2030 and the setting of a national net greenhouse gas removal target for that same year at a level higher than that resulting from the application of Regulation 2018/ 841, would entail economic and social consequences that are seriously detrimental and disproportionate in relation to the expected benefits of those measures and the objectives they pursue.
122 It should be noted at the outset that, given the particularly complex economic and technical choices involved in a changing context, as observed in paragraph 117 of the present judgment, the EU legislature undoubtedly enjoyed a wide margin of discretion when adopting the contested regulation. The legality of that regulation can be affected only if the measures adopted by the EU legislature are manifestly inappropriate having regard to the objective which it is seeking to pursue. Therefore, the question is not whether those measures were the only or the best possible measures, since the EU judicature cannot substitute its assessment of scientific and technical facts for that of the EU legislature on which the Treaties have placed that task.
123 That said, it should be noted that, as stated in paragraphs 53 and 54 of the present judgment, Regulation 2018/841, as amended, aims to ensure that the LULUCF sector contributes in a sustainable and predictable manner to the achievement of the target set out in Article 4(1) of the European Climate Law, namely to reduce net greenhouse gas emissions by at least 55% by 2030 compared with 1990 levels, and to achieve the Union’s climate neutrality objective by 2050, as set out in Article 2(1) of that law.
124 In order to determine whether the measures introduced by Article 1(4) of the contested regulation, namely the increase in the Union’s net greenhouse gas removal target to 310 million tonnes of CO2 equivalent in 2030 and the setting of a national net greenhouse gas removal target for that same year at a higher level, may be held to be proportionate, it must be ascertained whether those targets are manifestly inappropriate in relation to the objective referred to in the preceding paragraph of the present judgment.
125 As regards, first, the increase in the Union’s 2030 net greenhouse gas removal target to 310 million tonnes of CO2 equivalent, which corresponds to the total of the Member States’ net greenhouse gas emissions and removals in 2030, it is apparent from recital 7 of the contested regulation that the EU legislature had initially set the net removal target for the LULUCF sector at a lower level, namely 225 million tonnes of CO2 equivalent, in order to ensure that sufficient mitigation efforts were made in other sectors by 2030.
126 However, as is apparent from section 2.1.1 of the impact assessment, that net removal level proved to be insufficient, since the pursuit of the climate neutrality target requires that the net removals of the LULUCF sector go from 264 million tonnes of CO2 equivalent in 2018 to approximately 400 million tonnes of CO2 equivalent in 2050. As a result, setting an intermediary objective of 310 million tonnes of CO2 equivalent for 2030 does not seem to be manifestly inappropriate for achieving the climate neutrality objective.
127 Moreover, as is apparent from the individual and comparative analysis carried out in sections 5, 6 and 7 of the impact assessment, it appears that the EU legislature considered various options, including setting a lower level of net greenhouse gas removal under option 2 (section 6.3 of the impact assessment), or merely making changes to the accounting rules applicable to managed forest land under option 1.1 (section 6.2.1 of the impact assessment), or setting a single target for the LULUCF and agriculture sectors under option 3 (section 6.4). Nevertheless, it was only after weighing up the environmental, distributional, economic and administrative implications that the Commission was able to identify, as the preferred option in section 8.3 of the impact assessment, the one involving, on the one hand, setting a target of over 300 million tonnes of CO2 equivalent in net LULUCF sector removal at EU level by 2030 and, on the other hand, more ambitious national targets.
128 Secondly, as regards setting national targets for net greenhouse gas removals for 2030 at a higher level than that initially set, it follows from Article 1 of Regulation 2018/841, as amended, that the achievement of that target remains a progressive and gradual process, given that those national targets are determined across two periods, the first running from 2021 to 2025 and the second from 2026 to 2030. Thus, in Article 4 of Regulation 2018/841, as amended, the EU legislature distinguished between the objectives relating to each of those two periods. On the one hand, in Article 4(1), for the period from 2021 to 2025, taking into account the flexibilities provided for in Articles 12, 13 and 13a of that regulation, each Member State is required to ensure that greenhouse gas emissions do not exceed greenhouse gas removals on its territory in all of the land accounting categories. On the other hand, in order for each Member State to achieve the target now set for it for 2030 in Article 4(3) of that regulation, read in conjunction with Annex IIa thereto, the EU legislature provided, in Article 4(4), for the period from 2026 to 2030, for a mechanism requiring Member States to follow a linear trajectory. That trajectory period commenced in 2022 at the average value for greenhouse gas inventory data for the years 2021, 2022 and 2023, and has as its end point the target value set for each Member State in Annex IIa. Thus, in Article 4(4) of Regulation 2018/841, as amended, the EU legislature took account of the updated greenhouse gas inventory data to be submitted by Member States in 2025 and set a budget for them for the period from 2026 to 2029. That budget is defined as the sum of the differences for each year during that period between the annual greenhouse gas emission and removal limit values for those years, established on the basis of a linear trajectory towards 2030, and the average value for the greenhouse gas inventory data for the Member State concerned for the years 2021, 2022 and 2023, as submitted in 2025.
129 The decision by the EU legislature to raise the national net greenhouse gas removal targets for 2030 and to modify the Member States’ obligations for the period from 2026 to 2029, by requiring them, in essence, to adhere to a budget and a trajectory in order to achieve the national target set for 2030, is not manifestly inappropriate. Indeed, adherence to that budget and that trajectory is intended to set Member States on the path towards an overall and sustainable reduction in their greenhouse gas emissions, bearing in mind the ultimate objective of achieving climate neutrality by 2050. As stated in section 2.1.1 of the impact assessment, land-based mitigation action ‘can have very long lead times, which means that it can take years or decades for it to deliver the desired mitigation outcome’, so that, ‘afforestation put in place now will only provide significant carbon removals in the next decade(s)’. In addition, ‘the next decade will be crucial to take the actions needed to put the LULUCF sector on the right trajectory towards a climate-neutral EU’. Similarly, in section 4.2.1 of that assessment, it is stated that ‘because nature-based actions have long lead times, notably for improved land use management practices, the development of large scale sustainable afforestation and the restoration of habitats’, a ‘mid- to long-term policy orientation’ is necessary. In that section, it is also stated that ‘planning certainty for the land sector appears even more important when one considers that this sector is projected to become the largest one in the EU GHG flux profile in 2050’, to the point where it is ‘crucial to anchor it to a trajectory that can effectively deliver the long-term objective of EU-wide climate neutrality in 2050’.
130 It is in that context that Article 4 of Regulation 2018/841, as amended, read in conjunction with recital 9 of the contested regulation, sets out binding national net greenhouse gas emission and removal targets on a linear trajectory and lays down a commitment for each Member State to achieve a sum of net greenhouse gas emissions and removals for the period from 2026 to 2029, taking into account the year-on-year variability of greenhouse gas emissions and removals in the LULUCF sector.
131 Consequently, the setting of a net greenhouse gas removal target for the Union at 310 million tonnes of CO2 equivalent in 2030, as well as the raising of the national net greenhouse gas removal target for 2030 to a higher level, by Article 4 of Regulation 2018/841, as amended, are not manifestly inappropriate in relation to the objectives referred to in paragraph 123 of the present judgment.
132 Thirdly, by merely putting forward vague and general allegations, the Republic of Poland has not in any way substantiated its argument alleging significant negative economic and social effects of Regulation 2018/841, as amended, on the wood sector and on biodiversity. It is also clear that that line of argument is based on the incorrect premiss that that regulation imposes measures on Member States which prevent them from engaging in active operations with their forests. However, as observed in paragraphs 60 and 90 of the present judgment, that regulation does not prescribe any specific actual measures for Member States with a view to achieving the targets set out in Article 4 of that regulation, with the result that Member States are free to determine the measures to be adopted for their LULUCF sector in order to comply with the targets of Regulation 2018/841, as amended.
133 Fourthly, recital 3 of that regulation refers to the EU legislature’s intention to ensure that the ‘transition is just and inclusive, leaving no one behind’, given that that transition has ‘particular impacts on some disadvantaged and vulnerable groups’. As observed by the Republic of Poland, that regulation does not contain any measures aimed at ensuring the protection of those disadvantaged groups.
134 However, the EU legislature was not required to take such measures in the contested regulation. In recital 3 thereof, the EU legislature placed that regulation in the broader context of the European Green Deal and the European Climate Law. The European Climate Law established the framework for achieving the EU climate neutrality objective by 2050 and requires the adoption of a comprehensive set of mutually reinforcing measures and initiatives. Thus, as observed by the Parliament and the Council, the contested regulation is aimed at setting new greenhouse gas emission and removal targets for the UTCATF sector and, therefore, encouraging Member States to develop more ambitious strategies for mitigating greenhouse gas emissions, whilst leaving it to them to define the direct incentives and support measures they deem necessary for the social groups affected by the environmental transition. Furthermore, as set out in sections 6.1.3 and 10.7 of the impact assessment, the Common Agricultural Policy (CAP), the future regulatory framework for the certification of carbon removals, the Circular Economy Action Plan, launched in March 2020 by the Commission, and the flexibility mechanisms established in the contested regulation all constitute potential means of supporting foresters and farmers.
135 Moreover, it is apparent from sections 6.1.3 and 10.6.2 of the impact assessment that, in assessing the economic impacts of the scenarios set out in that assessment, it was noted that higher targets for the LULUCF sector could encourage a transition within the bioeconomy sectors towards sustainable and circular uses of natural resources, thereby generating jobs and growth in those sectors. Furthermore, it is also stated that the CAP offers Member States considerable flexibility in designing support schemes, and that farmers and foresters could also generate additional income from the sale of ‘carbon credits’ on the market.
136 It follows that the argument put forward by the Republic of Poland, referred to in paragraph 100 of the present judgment, criticising the EU legislature for failing to provide in Regulation 2018/841, as amended, for any means of ensuring the protection of disadvantaged groups by not providing for any direct incentives for farmers and foresters, must be rejected.
137 Fifthly, as regards the argument alleging the arbitrariness of how national targets are set having regard to the greenhouse gas inventory data for the years 2016 to 2018, the Court finds that that reference period, chosen by the EU legislature in Article 4(4) of Regulation 2018/841, as amended, corresponds to the period for which the most recent data were available at the time of the Commission’s adoption, on 14 July 2021, of the proposal COM(2021) 554 final for a Regulation of the European Parliament and of the Council amending Regulation (EU) 2018/841 as regards the scope, simplifying the compliance rules, setting out the targets of the Member States for 2030 and committing to the collective achievement of climate neutrality by 2035 in the land use, forestry and agriculture sector, and (EU) 2018/1999 as regards improvement in monitoring, reporting, tracking of progress and review, and aims to reflect the most recent performance of the LULUCF sector. Furthermore, as observed by the Parliament, the Council and the Commission, that reference period was also chosen in order to implement the flexibility mechanisms provided for in Article 12 of Regulation 2018/841, as amended, in conjunction with Article 7 of Regulation 2018/842, thereby essentially allowing Member States to offset any under-performance against the targets set by Regulation 2018/841, as amended, by over-performance against the targets set out in Regulation 2018/842. It follows that, contrary to the Republic of Poland’s assertions, the EU legislature’s decision to take into account the period from 2016 to 2018, rather than subsequent years, is not arbitrary, but rather indeed stems from a political choice that is not vitiated by a manifest error of assessment.
138 Sixthly, the Republic of Poland argues that Article 10 of Regulation 2018/841, as amended, is inappropriate and insufficient in that it does not allow Member States, for the period from 2026 to 2029, to exclude from their accounts relating to afforested land and managed forest land greenhouse gas emissions resulting from natural disturbances which exceed the level of those occurring during the period from 2001 to 2020, with the result that it is not possible to exclude emissions resulting from exogenous factors. However, the choice made by the EU legislature in that regard reflects the EU’s heightened ambition in environmental matters, namely to achieve climate neutrality by 2050, by encouraging Member States to put in place a strategy to mitigate greenhouse gas emissions for the period from 2026 to 2029. The Republic of Poland has not adduced any evidence demonstrating that that choice is vitiated by a manifest error of assessment.
139 Seventhly, the Republic of Poland puts forward an argument alleging the inadequacy and insufficiency of the flexibility mechanisms set out in Articles 12, 13 and 13b of Regulation 2018/841, as amended, which comprises two complaints.
140 On the one hand, the argument alleging the inadequacy of the mechanism provided for in Article 12 of Regulation 2018/841, as amended, entitled ‘General flexibilities’, which, in particular, allows a Member State that so wishes to transfer a surplus of greenhouse gas removals to another Member State or, conversely, to receive a surplus of greenhouse gas removals from another Member State, for the period from 2026 to 2029, appears to be speculative and cannot be taken as evidence of a manifest error of assessment on the part of the EU legislature.
141 On the other hand, and for the same reasons, the argument directed at the flexibility mechanism for managed forest land provided for in Article 13 of Regulation 2018/841, as amended, and that directed at the land use mechanism for the period from 2026 to 2030, provided for in Article 13b(6) and (7) thereof, must be rejected. It is, moreover, clear that, by those arguments, the Republic of Poland is merely claiming that there is an alleged particular situation. However, as noted in paragraph 119 of the present judgment, given that the contested regulation has an impact in all Member States and requires that a balance be ensured between the interests involved, such a situation, even if it were established, could not be regarded as contrary to the principle of proportionality.
142 Eighthly, the Republic of Poland submits that the scheme established in Article 13c of Regulation 2018/841, as amended, is disproportionate in that, where a Member State fails to meet the national target set for it for 2030 in Article 4(4) of that regulation, at the end of the period from 2026 to 2029, despite the use of the available flexibility mechanisms, it is penalised by the addition of an amount equal to the quantity, in tonnes of CO2 equivalent of net excess greenhouse gas emissions, multiplied by a factor of 1.08, to the quantity of net greenhouse gas emissions reported by that Member State in 2030.
143 In that regard, it is clear from the structure of Regulation 2018/841, as amended, and, in particular, from Articles 11 to 13c thereof, that the purpose of the latter article is not punitive. That purpose consists in promoting coordinated and swift action by Member States to enable the Union as a whole to achieve the greenhouse gas emission reduction target for 2030 set out in Article 4(2) of that regulation.
144 As observed by the Council, the mechanism provided for in Article 13c of that regulation forms part of the broader system of flexibilities provided for in that regulation. It is aimed at providing a framework for the use of those flexibilities while imposing a cost on Member States for postponing measures to reduce greenhouse gas emissions or for postponing measures to increase greenhouse gas removals.
145 Indeed, as suggested by the title of Article 11 of Regulation 2018/841, as amended, Articles 11 to 13c of that regulation regulate the flexibility and governance mechanisms necessary for the proper functioning of the commitments and objectives laid down by the contested regulation. As provided for by Article 13c of Regulation 2018/841, as amended, it is only if, as a result of the comprehensive review that will be carried out in in 2032, the Commission finds that, taking into account the flexibilities used pursuant to Articles 12 and 13b of that regulation, the budget for 2026 to 2029 referred to in Article 4(4) thereof is not complied with, an amount equal to the amount in tonnes of CO2 equivalent of the excess greenhouse gas net emissions, multiplied by a factor of 1.08, is to be added to the greenhouse gas net emission figure reported by that Member State in 2030.
146 In view of such a mechanism, the Court does not find that the EU legislature made a manifest error of assessment, given that Member States have a sufficiently long transition period to adopt the measures necessary to comply with the objectives set out in Article 4(3) and (4) of that regulation.
147 It follows from the foregoing that the first part of the fourth plea in law must be rejected as unfounded.
Second part of the fourth plea in law
– Arguments of the parties
148 By the second part of its fourth plea in law, the Republic of Poland submits, first, that the size of the budget allocated to it under the available flexibilities for the period from 2021 to 2025, set at a level which it estimates to be 11.25 million tonnes of CO2 equivalent, is contrary to the principle of equality of Member States laid down in Article 4(2) TEU. It takes the view that it requires greater flexibility in order to contend with the likely occurrence of adverse weather events.
149 Second, the Republic of Poland submits that the commitments and targets set for the Member States pursuant to Article 1(4) of the contested regulation, read in conjunction with Annex III thereto, fail to take account of the differences in circumstances between the various regions of the Union. Annex III sets national targets for 2030 at very different levels for each Member State, when those targets are expressed per hectare of national forest area. Thus, the contested regulation reduced the level of CO2 absorption targets for certain Member States compared with those set by Regulation 2018/841 and increased them for others, such as the Republic of Poland, in that the CO2 absorption target set for it, calculated per hectare of national forest area, is one of the highest in the Union. Apart from the fact that the Republic of Poland must face prohibitive costs, the EU legislature has not justified that discrepancy, either in the contested regulation or in the explanatory memorandum to the proposal that led to the adoption of the contested regulation. It cannot therefore be ruled out that such a discrepancy may stem from the use of an incorrect formula to define Member States’ commitments.
150 The Council contends that the second part of the fourth plea in law should be rejected as inadmissible due to the lack of sufficient clarity. The Council and the Parliament, both supported by the Commission, submit that, in any event, the second part should be dismissed as unfounded.
– Findings of the Court
151 As a preliminary point, it should be recalled that the principle of equal treatment is a general principle of EU law, enshrined in Article 20 of the Charter of Fundamental Rights of the European Union, which requires that comparable situations must not be treated differently and that different situations must not be treated in the same way unless such treatment is objectively justified. The comparability of the respective situations must be assessed not in a global and abstract manner, but in a specific and concrete manner having regard to all the elements which characterise them. Those elements must, in particular, be determined and assessed in the light of the subject matter and purpose of the EU act which makes the distinction in question. The principles and objectives of the field to which the act concerned relates must also be taken into account (see, to that effect, judgments of 16 December 2008, Arcelor Atlantique et Lorraine and Others, C‑127/07, EU:C:2008:728, paragraphs 23, 25 and 26; of 12 May 2011, Luxembourg v Parliament and Council, C‑176/09, EU:C:2011:290, paragraphs 31 and 32; and of 4 October 2024, Lithuania and Others v Parliament and Council (Mobility Package), C‑541/20 to C‑555/20, EU:C:2024:818, paragraphs 308 and 309).
152 By its argument, alleging the insufficiency of the budget allocated to it under the flexibilities, the Republic of Poland merely disputes, in a general and unsubstantiated manner, the lack of sufficient flexibility to ensure a ‘higher buffer threshold’ in the event of the likely occurrence of fortuitous events arising from climate change.
153 Under the first paragraph of Article 21 of the Statute of the Court of Justice of the European Union and Article 120(c) of the Rules of Procedure of the Court of Justice, in a direct action before the Court, an application initiating proceedings must state, inter alia, the subject matter of the dispute and a summary of the pleas in law on which the application is based. That statement must be sufficiently clear and precise to enable the defendant to prepare his or her defence and the Court to rule on the application. It is therefore necessary for the essential points of law and of fact on which a case is based to be indicated coherently and intelligibly in the application itself and for the heads of claim to be set out unambiguously so that the Court does not rule ultra petita or fail to rule on a claim (see, to that effect, judgments of 9 January 2003, Italy v Commission, C‑178/00, EU:C:2003:7, paragraph 6; of 30 April 2014, United Kingdom v Council, C‑209/13, EU:C:2014:283, paragraph 30; and of 3 June 2021, Hungary v Parliament, C‑650/18, EU:C:2021:426, paragraph 78).
154 Since no argument capable of establishing an infringement of the principle of proportionality has been put forward by the Republic of Poland in support of the second part of the fourth plea in law, the second part must be dismissed as inadmissible.
155 In any event, the Court finds that, contrary to the Republic of Poland’s contention, the argument alleging that national commitments and targets have been set at very different levels for each Member State in Article 4 of Regulation 2018/841, as amended, read in conjunction with Annex IIa thereto, must be rejected since the national target thus set for it does not infringe the principle of equal treatment.
156 In that regard, it should certainly be noted, as observed by the Republic of Poland, that the EU legislature has set the Member States’ commitments and targets in Article 4 of Regulation 2018/841, as amended, at different levels, to the extent that the target levels for the LULUCF sector vary between Member States and carbon removal levels per hectare of national forest area also vary.
157 However, that variation can be explained, as is apparent both from recitals 2 and 8 of the contested regulation and from sections 2.1.2, 5.1, 5.2, 10.4.1 and 10.4.2 of the impact assessment, by the fact that the EU legislature took account of the specific characteristics of the LULUCF sector in each Member State. Thus, the national targets for 2030 have been set on the basis of two variables: first, the average of the greenhouse gas emissions and removals submitted by each Member State in 2020 for the years 2016 to 2018; and, secondly, the share of the Union’s managed land area attributed to each Member State. Whereas the first variable reflects the LULUCF sector’s current greenhouse gas mitigation performance over a three-year period, the second reflects each Member State’s capacity to improve its performance in the LULUCF sector, given that it is closely linked to the available forest area. As those two variables are specific to each Member State, it follows that the national targets set for each one vary. That variation reflects the EU legislature’s intention to tailor the additional efforts to the respective capacities of the Member States. It follows that the Member States are not in a comparable situation for the purposes of setting those targets, and that setting national commitments and targets at different levels does not constitute an infringement of the principle of equality.
158 It follows that the second part of the fourth plea in law must be dismissed as being in the main inadmissible and in any event unfounded.
159 The fourth plea in law, comprising its two parts, must accordingly be dismissed as being in part inadmissible and in part unfounded.
Fifth plea in law: infringement of the obligation to carry out an adequate impact assessment of the contested regulation and Article 191(3) TFEU
Arguments of the parties
160 By its fifth plea in law, the Republic of Poland, supported by Hungary, submits that, given the scale of the economic and social consequences expected to result from the greenhouse gas emission and removal targets and commitments set in the contested regulation for the economies and societies of the Member States, the impact assessment was insufficient, which constitutes an infringement of Article 191(3) TFEU, and of the requirements set out in point 12 of the Agreement on better law-making.
161 Carrying out an impact assessment is a means of implementing Article 191(3) TFEU, under which, in preparing its policy on the environment, the Union is to take account of available scientific and technical data, environmental conditions in the various regions of the Union, the potential benefits and costs of action or lack of action of the Union, and the economic and social development of the Union as a whole.
162 Carrying out such an assessment also facilitates judicial review of the broad discretion conferred on the EU legislature to adopt highly complex technical provisions. In such cases, the EU judicature should verify not only the factual accuracy of the evidence adduced, and the reliability and consistency thereof, but also whether that evidence constitutes the full range of relevant information to be taken into account in assessing the situation and whether it is capable of substantiating the inferences drawn therefrom by the EU legislature.
163 In the present case, four factors illustrate how the impact assessment was insufficient.
164 First, the three-year period between the preparation of the impact assessment and the adoption of the contested regulation is so long that it cannot be ruled out that the data contained in that assessment may be out of date.
165 Secondly, the assessment is very superficial in failing to examine in sufficient depth the impact of greenhouse gas emission and removal commitments and targets on the situation of Member States and their societies, as well as on the forestry, wood industry and agricultural sectors.
166 Thirdly, not all the available scientific and technical data on forestry was taken into account. Yet at least two scientific publications show that ceasing wood harvesting would lead to the ageing of forest stands and, consequently, to accelerated forest dieback. The only way to avoid that ageing and dieback is to rejuvenate the age structure of those stands by lowering the age at which they are felled, which would also result in an increase in wood harvesting. Furthermore, the impact assessment did not take into account the varying vulnerability of forests depending on their geographical growth area. Certain tree species are more susceptible to damaging factors than others, so that failure to take that factor into account means that the objectives and commitments set in the contested regulation do not reflect the forests’ actual greenhouse gas absorption capacity.
167 Fourthly, the impact assessment appears not to have taken into account the potential benefits and costs to Member States arising from a reduction in, or absence of, wood harvesting. In particular, that assessment fails to address the costs associated with the reduced availability of wood in the wood sector, even though the Republic of Poland is the world’s sixth-largest exporter of furniture.
168 The Parliament and the Council, supported by the Commission, contend that the present plea in law should be rejected as unfounded.
Findings of the Court
169 By its fifth plea, the Republic of Poland submits, in essence, that the contested regulation disregards Article 191(3) TFEU and point 12 of the Agreement on better law-making on the ground that it is based on an impact assessment that is insufficiently in-depth and is founded on outdated information.
170 In the first place, it should be borne in mind that Article 191(3) TFEU provides that, in preparing its policy on the environment, the Union is to take account of available scientific and technical data, environmental conditions in the various regions of the Union, the potential benefits and costs of action or lack of action, and the economic and social development of the Union as a whole and the balanced development of its regions.
171 However, in view of the need to strike a balance between certain of those objectives and principles, and in view of the complexity of the implementation of those criteria, review by the Court must necessarily be limited to the question whether the EU legislature committed a manifest error of assessment as regards the conditions for the application of Article 191 TFEU (judgments of 14 July 1998, Safety Hi-Tech, C‑284/95, EU:C:1998:352, paragraph 37, and of 13 March 2019, Poland v Parliament and Council, C‑128/17, EU:C:2019:194, paragraph 135 and the case-law cited).
172 It follows that, whilst Article 191(3) TFEU obliges the EU legislature to ‘take account’ of certain aspects, it enjoys a broad discretion not only as regards the nature and scope of the provisions to be taken, but also as regards the relevance of the basic data on the basis of which those provisions were adopted (judgment of 4 October 2024, Lithuania and Others v Parliament and Council (Mobility Package), C‑541/20 to C‑555/20, EU:C:2024:818, paragraph 219 and the case-law cited).
173 However, it is clear from the Court’s settled case-law that, in the context of that broad discretion, the EU legislature must nevertheless must be able to establish before the Court that it adopted the act at issue having exercised its discretion correctly. To that end, it must, at the very least, be able to produce and set out clearly and unequivocally the basic data on the basis of which that act was adopted and on which the exercise of its discretion depended (see, by analogy, judgments of 7 September 2006, Spain v Council, C‑310/04, EU:C:2006:521, paragraphs 121 to 123; of 21 June 2018, Poland v Parliament and Council, C‑5/16, EU:C:2018:483, paragraphs 152 and 153; and of 4 October 2024, Lithuania and Others v Parliament and Council (Mobility Package), C‑541/20 to C‑555/20, EU:C:2024:818, paragraph 218).
174 In that regard, it is settled case-law that the form in which such basic data are recorded is irrelevant. The EU legislature is entitled to take into account not only the impact assessment, but also any other source of information (judgments of 13 March 2019, Poland v Parliament and Council, C‑128/17, EU:C:2019:194, paragraph 31, and of 4 October 2024, Lithuania and Others v Parliament and Council (Mobility Package), C‑541/20 to C‑555/20, EU:C:2024:818, paragraph 220).
175 Thus, the Court has held that the obligation to carry out an impact assessment in every circumstance does not follow from the terms of points 12 to 15 of the Agreement on better law-making (see, to that effect, judgments of 3 December 2019, Czech Republic v Parliament and Council, C‑482/17, EU:C:2019:1035, paragraph 82, and of 4 October 2024, Lithuania and Others v Parliament and Council (Mobility Package), C‑541/20 to C‑555/20, EU:C:2024:818, paragraph 221).
176 Although point 14 of that agreement provides that, upon considering Commission legislative proposals, the Parliament and the Council must take full account of the Commission’s impact assessments, that agreement states, in point 12, that such assessments ‘are a tool to help the three Institutions reach well-informed decisions and not a substitute for political decisions within the democratic decision-making process’. Therefore, while the Parliament and the Council are required to take account of the Commission’s impact assessments, the content of such assessments is not binding on them, in particular as regards the evaluations contained therein (see, to that effect, judgments of 21 June 2018, Poland v Parliament and Council, C‑5/16, EU:C:2018:483, paragraph 159, and of 4 October 2024, Lithuania and Others v Parliament and Council (Mobility Package), C‑541/20 to C‑555/20, EU:C:2024:818, paragraph 222 and the case-law cited).
177 Similarly, it is apparent from the case-law of the Court that, where the EU legislature amends substantial elements of the proposal submitted by the Commission, point 15 of the Agreement on better law-making does not impose any firm obligation on that legislature to carry out an update of the Commission’s impact assessment, since that point provides only for the possibility of such an update where the Parliament and the Council ‘consider this to be appropriate and necessary for the legislative process’ (see, to that effect, judgments of 13 March 2019, Poland v Parliament and Council, C‑128/17, EU:C:2019:194, paragraph 43, and of 4 October 2024, Lithuania and Others v Parliament and Council (Mobility Package), C‑541/20 to C‑555/20, EU:C:2024:818, paragraph 224).
178 It follows that, although the preparation of impact assessments is a step in the legislative process that, as a rule, must take place if a legislative initiative is liable to have a significant economic, environmental or social impact, the omission of such an impact assessment cannot, however, be classified as an infringement of the principle of proportionality where the EU legislature is in a particular situation requiring that an impact assessment be dispensed with and has sufficient information enabling it to assess the proportionality of an adopted measure (judgments of 3 December 2019, Czech Republic v Parliament and Council, C‑482/17, EU:C:2019:1035, paragraphs 84 and 85, and of 4 October 2024, Lithuania and Others v Parliament and Council (Mobility Package), C‑541/20 to C‑555/20, EU:C:2024:818, paragraph 225).
179 Those are the considerations which must guide the Court in its response to the arguments put forward by the Republic of Poland.
180 As regards its argument alleging that the data contained in the impact assessment had become outdated due to the time that had elapsed between the preparation of that assessment and the adoption of the contested regulation, the Court notes that, as observed in paragraphs 175 to 177 of the present judgment, the EU legislature is not required, in all circumstances, to carry out such an assessment, nor, a fortiori, to update it.
181 In that regard, the Republic of Poland merely engages in speculation that it cannot be ruled out that the data underpinning the impact assessment may be out of date, without providing any evidence whatsoever to show that data more recent than that from the LULUCF inventory for the years 2016 to 2018 existed at the time the contested regulation was adopted or that, even if such data did exist, it would have justified opting for other solutions proposed in the impact assessment. It follows that that line of argument must be rejected.
182 Similarly, the Republic of Poland’s argument alleging that that assessment was superficial in that it fails to examine in sufficient depth the economic and social impact of the greenhouse gas emission and removal commitments and targets on the situation of the Member States and, more specifically, on their forestry, wood industry and agricultural sectors, must be rejected.
183 Section 3.3 of that assessment, entitled ‘Subsidiarity: Added value of EU action’, states that an ‘increase in the 2030 target for EU GHG reductions will impact most, if not all, sectors across the EU economy’, which could require ‘policy responses in many fields, including beyond climate, forestry and land use policy’. The ‘impacts of such ambition increase and related policies on growth and jobs creation, fairness and cost-effectiveness are examples of elements that can be better considered at the EU level’.
184 It is further stated in that section of the impact assessment that Regulation 2018/841 ‘sets a framework to ensure that Member States take the necessary actions related to land use and forestry’. It is also stated that the reduction in greenhouse gas emissions throughout the Union ‘depends on action by Member States’ and ‘has strong linkages with other policies, in particular agriculture, biodiversity and habitat protection, adaptation, and also energy policy due to the renewable energy aspects’.
185 Furthermore, in section 5 of that assessment, the Commission set out three options, one of which comprised two sub-options, before going on to assess, in section 6 thereof, the environmental impacts, distributional impacts, economic impacts and administrative impacts of each option and sub-option, before choosing the preferred option in section 8 of that same assessment. More specifically, in section, 6.1.3, entitled ‘Economic impacts’, it is stated that the impact assessment focuses on, first, the expected revenues from land-based climate action and, second, the ‘overall costs of achieving the targets [which] are mainly associated with the actions put in place by the actors of the bio-economy, and in particular: forest management …, avoided deforestation, afforestation, and fallowing of histosols’. In that regard, it is stated that ‘the choice of the best pathway to achieve the national targets should depend not only on cost considerations, but also on the interconnected need to protect the biodiversity and promote a sustainable bio-economy’ and that ‘higher LULUCF targets could promote a shift of the bio-economy sectors towards sustainable, long-lasting and circular uses of natural resources, leading to jobs and growth in these sectors’. Moreover, as regards revenues, in sections 6.1.3, 6.5, 10.6.3 and 10.7 the impact assessment underscores the key role of the CAP in financing farmers and foresters.
186 In section 6.1.1, the impact assessment also takes account of the positive implications of the 55% reduction in greenhouse gas emissions in 2030 for air pollution, with positive impacts in human health.
187 It follows that, contrary to the Republic of Poland’s assertion, the EU legislature did take account of the economic and social impact of the greenhouse gas emission and removal commitments and targets on the situation of the Member States and, more specifically, on their forestry, wood industry and agricultural economic sectors, and also the bio-economy.
188 As regards the Republic of Poland’s argument alleging a failure to take account of the available scientific and technical data on forestry, referred to in paragraph 166 of the present judgment, the Court finds that, on the contrary, the impact assessment did take into account the issue of the ageing of forest stands and their vulnerability.
189 First, as part of the process of identifying the specific issues relating to the LULUCF sector’s contribution to the EU legislature’s increased ambition for 2030, section 2.1.1 of the impact assessment finds that, between 2013 and 2018, the LULUCF sector saw a net decline of around 19% in its greenhouse gas removals, which ‘is driven by a mix of factors, including an increase in wood demand, an increasing share of forests reaching maturity in terms of production management, and an increase in natural disturbances such as insect infestations, storms, droughts and forest fires’.
190 Secondly, section 5.1 of the impact assessment explains the effect of forest age dynamics on the determination of the baseline from which the various options were assessed, in that the rationale of taking those dynamics into account was ‘to avoid penalising Member States for choices taken decades or centuries ago that have affected the age structure of their forests’ and the resulting wood harvest from those forests.
191 Thirdly, in the assessment of the first option envisaged in sections 5.2.1, 6.2.1 and 6.2.2 of the impact assessment, the Commission also takes account of the issues relating to age class structure of forests.
192 Fourthly, it is also apparent from section 10.8.2 of that assessment that national forest inventories carried out periodically provide a range of statistical sample data designed to provide estimates on a ‘range of parameters (e.g. forest type and tree species, age class distribution, dead wood, etc.) at a national or regional level’.
193 It follows from the foregoing that, contrary to the Republic of Poland’s assertions, the EU legislature did take account of the issue of ageing forest stands and accelerated forest dieback.
194 Moreover, it should also be noted that, by Articles 11, 12 and 13 of Regulation 2018/841, as amended, read in the light of recital 12 of the contested regulation, the EU legislature introduced a certain number of flexibility mechanisms that the Member States may use to ensure that specific national circumstances are taken into account. Similarly, it follows from Article 17 of Regulation 2018/841, as amended, read in conjunction with recital 22 of the contested regulation, that, in the review of Regulation 2018/841, as amended, the Commission must take into account ‘the effects of the forest age structure’.
195 Lastly, as regards the argument put forward by the Republic of Poland, alleging, in essence, that the impact assessment failed to take into account the potential costs to the wood sector arising from the reduction in, or cessation of, wood harvesting, imposed on Member States, even though that sector is particularly important in Poland, which is the world’s sixth-largest exporter of furniture, it should be noted that that argument is based on the premiss that the contested regulation affects only the forestry sector and that it imposes an obligation on Member States to reduce or cease wood harvesting.
196 That premiss is incorrect, however, since the contested regulation merely sets out, in Article 4 of Regulation 2018/841 as amended, a national target to be achieved by Member States in respect of greenhouse gas removals in the LULUCF sector, and does not prescribe any specific forest management measure, such as reducing or ceasing wood harvesting with a view to achieving that target.
197 On the contrary, whilst the LULUCF sector is not limited solely to forestry, it should be noted that, as set out in paragraphs 60 and 90 of the present judgment, Member States are free to choose the means and measures to be adopted at national level to achieve the national target set for them in Article 4 of Regulation 2018/841, as amended, so that they are free to allocate the necessary efforts across one or more of their economic sectors. In that context, given that the decision to draw on a particular economic sector, such as the forestry sector, rests with the Member States, the EU legislature cannot be criticised for failing to quantify, in the impact assessment, the potential benefits and costs associated with reducing or ceasing wood harvesting for each of the national wood sectors. That line of argument must therefore be rejected.
198 As is apparent from paragraphs 180 to 197 of the present judgment, the EU legislature adopted the contested regulation, taking into account a wide range of factors, including, in particular, the economic and social effects of the commitments and targets set for the Member States, the cost of implementing those commitments and targets, and the resulting benefits. It also made a choice from among a number of options in order to select the one most likely to generate the greatest net benefit, whilst ensuring a just and balanced distribution of the efforts amongst the Member States.
199 In so doing, the EU legislature fulfilled its obligation under Article 191(3) TFEU, by taking into account, on the basis of available scientific and technical data, environmental conditions in the various regions of the Union, the potential benefits and costs of action or lack of action, and the economic and social development of the Union as a whole and the balanced development of its regions, which may result from the implementation of the objectives pursued by the contested regulation.
200 It follows from the foregoing that the fifth plea in law must be rejected as unfounded.
201 As none of the pleas put forward by the Republic of Poland in support of its action for annulment of the contested regulation has been upheld, the action must be dismissed in its entirety.
Costs
202 Under Article 138(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the Parliament and the Council have applied for costs to be awarded against the Republic of Poland, and since the latter has been unsuccessful, the Republic of Poland must be ordered to bear its own costs and to pay those incurred by the Parliament and the Council.
203 In accordance with Article 140(1) of those rules, which provides that the institutions which have intervened in the proceedings are to bear their own costs, Hungary and the Commission shall bear their own costs.
On those grounds, the Court (Second Chamber) hereby:
1. Dismisses the action;
2. Orders the Republic of Poland to bear its own costs and to pay the costs incurred by the European Parliament and the Council of the European Union;
3. Orders Hungary and the European Commission to bear their own costs.
[Signatures]
* Language of the case: Polish.