Building on solid ground: why LULUCF target allocation in the EU needs two storeys, not one
How should the EU allocate LULUCF targets after 2030? We set out why a two-tier system could balance ambition with delivery.
The EU's land sink is shrinking just as LULUCF targets demand more
Europe is counting on its forests and soils to continue removing carbon from the atmosphere as it works towards climate neutrality. Yet, during the last decade, the land sink has moved in the opposite direction. The EU's land sink has declined by more than 30% between 2012 and 2022, soaking up just -212 MtCO₂e in 2024. This unwelcome trend stands in stark contrast to what is required with the EU's binding target under the Land Use, Land-Use Change and Forestry (LULUCF) Regulation, which requires net removals of 310 MtCO₂ by 2030.
The stakes go beyond the land sector alone. Under the EU's wider 2040 climate target, the overall emissions reduction goal can itself be adjusted downward if the land sink continues to underperform. LULUCF target allocation will decide how much of the EU's carbon removal burden each Member State carries. How Europe designs these targets won't just decide the fate of forests and soils, it could shape the ambition of EU climate policy as a whole.
Post-2030 LULUCF target allocation: the design choice facing the European Commission
At the end of 2026, the European Commission is expected to propose a new system for allocating post-2030 LULUCF targets across Member States. This crucial design choice will shape the trajectory of Europe's land sink for decades.
Push ambition too high and some Member States could face targets with no credible route to delivery. Set the bar too low and Europe risks locking in the decline of its natural carbon sink just when it needs it most.
The question isn't simply how ambitious Europe's land sink should be; it's whether a single target can realistically achieve two different objectives. Europe needs to guarantee a credible minimum contribution from every Member State while encouraging those with greater potential to go further. One could argue that perhaps the challenge isn't the target itself, but rather the structure holding it in place.
The allocation challenge: two intuitive approaches, two difficult trade-offs
Allocating an EU-wide LULUCF target for 27 Member States is no easy task. Countries differ enormously in their ecosystem types, land management strategies, and current sink capacity. When discussing Member State LULUCF targets, there are a couple of intuitive starting points worth examining, and each comes with its own trade-offs.
Option 1: Allocate LULUCF targets by natural capacity
One approach is to anchor countries’ targets to their land’s potential. Countries with greater natural capacity to grow and maintain their land sink would be expected to deliver correspondingly larger contributions.
A practical way of approximating a country's natural capacity is to calculate their share of managed land, on the logic that more land means more removal potential for the LULUCF sink. Since some land types, such as forests, contribute more to the overall LULUCF sink, it would also be logical to raise the targets of countries with more of these land types.
The dynamic figure below lets you see what this looks like in practice, allocating a hypothetical EU-wide target according to Member States' share of the area of managed land.
Current (2024) LULUCF performance per Member State (green bars) and hypothetical LULUCF net targets for 2040 (red bars) based on allocating an EU total target to Member States according to their area of managed land, approximated using LUCAS land categories (red bars) for the latest inventory year (2022). The following LUCAS land categories are summed to estimate the area of managed land: woodland, cropland, grassland, shrubland, wetland and artificial land. The targets are either allocated to Member State targets by weighting the different land categories equally, or by weighting land categories according to their relative contribution to the overall LULUCF sink, meaning categories like woodlands which contribute significantly to the land sink in 2019–2022 are given greater importance.
Managed land area is an imperfect measure, however. It says nothing about how healthy a forest is, for example. Only how much of it there is. More sophisticated resource mapping would capture a country's real removal potential more precisely. (For more detail on how this could work, see our country readiness assessments (CRRA) here.)
For example, Germany is currently the EU's largest net source of LULUCF emissions at around 50 Mt CO₂ a year (see figure above). It could be handed a target requiring it to become a substantial net sink almost overnight, with no credible pathway attached. This is reinforced by detailed resource mapping of Germany’s carbon removal potential, as part of our CRRA project. Germany only showed potential for over 30 Mt of CO₂ removals per year by 2035 from nature-based solutions like afforestation and ecosystem management.
Basing target allocation on countries’ natural capacities has an important advantage. It does not reward Member States for having let their sink decline in the past. Yet, if modelled maximum natural capacity alone sets the target, it can produce goals with no credible route to delivery.
Option 2: Allocate LULUCF targets by current performance
Rather than asking Member States to reach a modelled maximum level of carbon removals, targets could instead require each country to strengthen its existing land sink. This builds on what countries are already achieving, producing targets that are generally more achievable.
This route implies a different choice. Should every country be asked to improve by the same margin, regardless of its current size or circumstances? Or should countries be asked to improve based on their current sink intensity, i.e., how much carbon they absorb per hectare of managed land, so that the weakest performers are asked to close the gap fastest?
Current (2024) LULUCF performance per Member State (green bars) and hypothetical LULUCF net targets for 2040 (red bars) by requiring individual Member States to grow their current LULUCF sink. Member States are either assigned the same flat % improvement from current levels or improve their current sink performance by a percentage proportional to their sink intensity. Sink intensity is calculated as current LULUCF sink relative to their managed land area.
One of the problems of starting from current performance is that it can lock in past damage and unfairly punish Member States. The approach does not distinguish between scenarios where underperformance is genuinely due to drought, pests or ageing forests, or where it's due to poor management decisions. Countries that let their sinks decline are essentially rewarded with lower targets. The question becomes how to distinguish avoidable versus unavoidable losses to the land sink. In truth, there is no clean answer, and it requires country by country assessment.
The scale of the challenge is significant either way. Reaching an EU-wide sink of 250 Mt CO₂ would require up to a 23% improvement from current performance by the worst-placed Member State when basing this on sink intensity. Push the ambition to 350 Mt (closer to genuinely restoring the sink's lost capacity) and that requirement climbs past 80% in some countries, raising real questions about what's deliverable by 2040.
Neither approach is wrong. The problem is that each tries to make a single target achieve two different objectives at the same time. One objective is to ensure every Member State delivers a credible minimum contribution to restoring Europe's land sink. The other is encouraging countries with greater natural capacity to go further. A single target inevitably must compromise between these objectives.
A two-tier structure for LULUCF target allocation: build the foundation before adding another storey
Rather than asking one target to do two different jobs, the objectives can be separated into two levels of the same structure.
The Foundation: A Binding Minimum LULUCF Target
The first tier is the foundation: a binding minimum contribution every Member State is expected to deliver, with only narrow, verified exemptions for genuine natural disturbances. It would establish a credible level of removals that the EU can confidently rely upon, while recognising the different starting points across Member States.
Take Germany again. Under a two-tier structure, its core target would ask for credible, near-term improvement on its current sink, not the overnight reversal into a substantial net sink that a pure natural-capacity target would demand. That's a target Germany could plausibly work towards, rather than one where it's set up to fail.
Every building needs a solid foundation before additional storeys can be added. Climate policy is no different.
The Second Storey: A Higher-ambition LULUCF Target
The second tier constitutes a higher ambition target, broadly aligned with the EU's existing 2030 LULUCF commitment. Rather than reflecting current performance alone, this storey can draw on countries' natural capacity, including their share of managed land and long-term removal potential.
Importantly, this higher tier is not tied to legal obligation for Member States, but rather incentives to move beyond the foundation target towards higher ambition. For example, funding linked to KPI's, and the ability to bank or transfer surplus removals. These incentives are designed to reward genuine effort, not to compensate for shortfalls.
The real strength of a two-tier architecture is that it separates two objectives that have been competing within a single target. The foundation ensures every Member State delivers a credible minimum contribution, and the second storey rewards countries capable of delivering more. Instead of forcing ambition and deliverability into a single number, each objective is given its own place within the overall structure.
Looking beyond LULUCF: what target design means for EU climate ambition
The decisions made on LULUCF over the coming months will shape far more than Europe's forests. They will test whether the EU can design climate targets that are both ambitious and deliverable, combining environmental integrity with political credibility.
A two-tiered approach to LULUCF targets could help lay the policy foundations for rebuilding the land sink, placing Europe in a stronger position to secure a lasting role for carbon removals within its climate framework.