Iceland's 2020 Climate Action plan

Iceland’s 2020 Climate Action Plan October 2020 2 The Icelandic government presented a new Climate Action Plan in September 2018. The Plan was a watershed, as it was the first such long-term comprehensive plan that was fully funded, with substantial increase in government funding of key actions in climate mitigation. An updated version of the Climate Action Plan was presented in June 2020, presenting new and elaborated actions and increased funding. The updated Plan also contained significantly improved analysis to estimate the individual and collective mitigation gains of the actions presented. All in all, the 2020 Plan contained 48 actions – 15 new from the 2018 version – aimed at reducing greenhouse gas emissions and increasing carbon uptake from the atmosphere. The updated plan reflects comments and suggestions received, and the conclusions of a consultation process with stakeholders and civil society. Emphasis has been placed on implementing measures immediately; 28 actions out of 48 had already been set in motion at the publication of the 2020 version. The Climate Action Plan is Iceland’s main instrument to reach its commitment in the Paris Agreement, specifically its emissions reduction goals for 2030. It is also the main instrument to reach Iceland’s stated goal of carbon neutrality by 2040. Emphasis is put on a rapid clean energy transition in transport and increased efforts in the LULUCF sector, where Iceland has great mitigation potential in afforestation, revegetation and wetland reclamation. The Plan, however, addresses all major sources and sinks, and outlines climate mitigation actions in transport, fisheries, energy, industry, chemicals, agriculture, waste management and LULUCF. The Plan is organized by how the measures relate to Iceland’s commitments, as well as by sources of emissions. According to analysis, the actions in the updated version of the Climate Action Plan will lead to a decrease of emissions in 2030 by more than one million tonnes of CO2 equivalents compared to 2005 in sectors that fall under the EU effort sharing reg ulation - ESR (transport, agriculture, fisheries, waste management etc.). This means that Iceland should meet its climate commitments for a 29% reduction in ESR emis sions from 2005 levels, as analysis indicate that Iceland should be able to reduce emission in these sectors by 35% by implementing the actions in the Plan. In addition to this, actions currently in preparation are estimated to result in an additional cut in emissions of 5-11%, for a total decrease of 40-46%. The Icelandic government has signalled a willingness to achieve a reduction in emissions in ESR-sectors by 40%, or more than is currently demanded by Iceland’s present international commitments. A minimum of ISK 46 billion is expected to be spent on key climate action in the period 2020-2024. 3 Because climate change respects neither borders nor emissions accounting, it is important to address GHG emissions regardless of their sources and nature of commit ments. The Action Plan takes this into consideration and aims to address all significant sources and sinks. Figure 2 shows the expected success of the actions and how they relate to Iceland’s commitments. For instance, under Land use, carbon sequestration and wetlands restoration will lead to greatly increased benefits, more than 500% compared to 2005 levels. These measures play an important role in achieving Iceland’s goal of carbon neutrality by 2040. With the 2020 Climate Action Plan Iceland expects to achieve a substantial reduction in greenhouse gas emissions — still greater reduction is aimed at through additional measures currently in preparation Figure 1. Iceland’s historical greenhouse gas emissions that fall under the Effort Sharing Regulation to 2018, and projected emissions in 2030 without the Action Plan, with the Action Plan and plus measures currently in preparation. Iceland’s Effort Sharing emissions 2005-2030, 1000 tonnes CO2-equivalents Development from 2005 to 2030 1990 500 1.000 1.500 2.000 2.500 3.000 3.500 95 2000 05 10 15 20 25 2030 2005 2018 2030 Business as usual projection Projected emissions by implementing the Climate Action Plan Projected emissions by implementing measures in preparation 40% — Iceland’s reduction target 29% — Iceland’s binding Effort Sharing reduction target 20% 35% 40-46% 4 EU-ETS: EU - Emissions Trading System. LULUCF: Land Use, Land-Use Change, and Forestry. * Emissions from F-gases rose rapidly in a short period after they were introduced to replace ozone-depleting refrigerants. The Action Plan anticipates a 23% decrease in 2030 compared to 2018. Estimated reduction 2005-2030 in Iceland’s emissions under the Effort Sharing Regulation — carbon sequestration will be greatly increased through better land use Figure 2. Breakdown of greenhouse gas emissions and sequestration by category in the Action Plan. Emissions 2005: Greenhouse gas emissions in Iceland in 2005 – reference year for emission reduction according to commitments and targets. Projected emissions 2030: Projected emissions in 2030, after taking into account measures in the Plan and the baseline scenario. Annual greenhouse gas emissions and carbon sequestration by category, 1000 tonnes of CO2 equivalents EU-ETS LULUCF A. Land transport B. Ships and ports C. Energy production and small industry D. F-gases and chemical use E. Agriculture F. Waste management G. Transition incentives H. EU-ETS: Aviation and heavy industry I. Land use Carbon sequestration and reduction in emissions from land 776 -161 615 449 189 +13 30 217 1.048 -1.252 113 320 384 769 571 127 605 330 1.307 204 140 575 21% 42% 67% 35% +11%* 5% 66% 43% +515% Consists of actions encouraging transition in the society not aimed at specific emission sources Target for the EU-ETS is to reduce emissions in the system by 43% from 2005 to 2030 2005 emissions Expected change with the Action Plan Change 2005-2030 Projected 2030 emissions Eff or t S ha ri ng (E SR ) 5 Should the actions listed in the Climate Action Plan not prove sufficient, new mea sures will be introduced or more resources put into actions that have not delivered as expected. In addition, many parties other than the government at national level have taken initiatives in combating climate change: municipalities, private sector companies and other actors. These initiatives are expected to result in a reduction in greenhouse gas emissions in Iceland’s emissions accounting. Supporting such initiatives is important as government actions alone will not suffice to successfully counter climate change. The Action Plan takes into account the United Nations’ Sustainable Development Goals, which were universally adopted in September 2015, and require the participa tion and co-operation of numerous and diverse stakeholders. As technology advances rapidly, new and more cost-effective ways to reduce emissions can be expected to emerge. The Climate Action Plan must therefore be in continuous development. Evaluation of actions will be continually improved, the development of greenhouse gas emissions and carbon sequestration closely monitored, and actions further revised. The Plan will be assessed in terms of its impact on different income groups and analysed in terms of costs and benefits, including the macroeconomic impacts of actions. It is important to ensure that climate action supports efforts to increase equality and equal rights. Doing so will ensure a just transition. The Climate Action Plan also states that should estimates indicate that future emissions will exceed the commitments undertaken, the Minister of the Environment and Natural Resources is responsible for taking appropriate measures in response. It is proposed that this responsibility will be defined with amendments to climate legislation. 6 The Climate Action Plan includes a total of 48 actions, divided into three parts Figure 3. Summary of measures in the Plan, indicating whether they are new and whether they are being implemented or in preparation. Actions aiming to reduce emissions that fall under the EU Effort Sharing Regulation (ESR)1 Actions to reduce emissions in connection with EU-ETS2 Actions to reduce emissions and increase carbon sequestration through improved land use, land use change and forestry (LULUCF)3 A. Land transport B. Ships and ports H. EU-ETS: Aviation and heavy industry I. LULUCF C. Energy production and small industry E. Agriculture D. F-gases and chemical use F. Waste management G. Transition incentives A.1 Infrastructure for active mobility F.1 Landfill tax C.1 Carbon capture from geothermal energy plants D.1 Regulation on F-gases E.4 Improved use and handling of fertilisers C.3 Climate impact of the construction industry A.8 Energy transition in heavy transport E.1 Climate-friendly agriculture A.4 Incentives for low- and zero emissions vehicles G.1 Carbon tax B.1. Energy transi tion in fisheries I.1 Enhanced action in forestry B.2 Electrical infra structure in ports I.2 Enhanced action in land reclamation B.3 Ban on use of heavy fuel oil I.3 Recovery of wetlands B.4 Energy transi tion of ferries I.4 Wetlands conservation I.5 Improved mapping of grazing land and land use B.5 Energy transi tion of state-owned vessels A.5 Infrastructure for low- and zero emissions vehicles G.2 Climate fund A.6 Energy transition legislation and regulations G.3 Environmental data reporting G.7 Issuing of green bonds G.5 Climate education in schools A.7 Ban on new registration of diesel and gasoline vehicles after 2030 G.4 Information on climate change for the public G.8 Sustainable public procurement G.6 Climate impact assess ment of legislation A.2 Incentives for active mobility F.2 Ban on the landfilling of organic waste C.2 Electrification of fishmeal production plants D.2 Taxation of F-gases E.5 Improved feeding of livestock to reduce enteric fermentation C.4 Domestic renewable fuels A.9 Low emission rental cars E.2 Carbon-neutral beef production A.3 Encouraging public transport F.3 Reduction in food waste A.10 Low emission vehicles in government and state enterprises E.3 Increased domestic vegetable production G.11 Climate action planning H.3 Participation in international system for reducing aviation emissions G.10 Climate strategy of other public agencies H.2 Updated Regulation under the Emission Trading System G.9 Climate strategy of Government Offices H.1 Carbon capture from heavy industry 15 new 20 in preparation 28 implemented 1 ESR: Effort Sharing Regulation. Regulation on joint fulfilment. Effort Sharing emissions with binding annual greenhouse gas reduction targets for each state. 2 EU-ETS: EU - Emissions Trading System. 3 LULUCF: Land Use, Land-Use Change, and Forestry.