Under the Effort Sharing Decision, Member States are required to limit their greenhouse gas emissions between 2013 and 2020 by meeting binding annual limits which are set according to a linear path. The annual targets – known as annual emission allocations (AEAs) - follow a straight line between a defined starting point in 2013 and the target for 2020.
Member States which have taken on an emissions reduction target have to ensure that their emissions in 2013 do not exceed their average annual emissions for the period 2008-2010. Member States which are allowed to increase their emissions must ensure that their emissions in 2013 do not exceed a level defined by a linear path starting in 2009. This is based on the Member State's average annual emissions for the period 2008-2010 and ends with its 2020 target.
The AEAs for each Member State and year were approved by the EU Climate Change Committee on 17 October 2012. The European Parliament and Council have three months to scrutinise the text, after which the Commission will adopt it.
To increase the cost-effectiveness of their emissions path, Member States are allowed certain flexibility in meeting their AEAs.
A strong monitoring and compliance system has been put in place to monitor Member States' action and help them take corrective measures if they fail to meet their targets.
Member States will have to report on their annual emissions; the use, geographical distribution and types of JI/CDM credits and qualitative criteria applied; projected progress towards meeting their emission limits in 2013-2020; and information on planned additional national policies and measures to meet commitments beyond those in the Decision.
If a Member State's emissions exceed its annual emission allocation even when the flexibilities are taken into account, they will need to take corrective measures.