Abstract: EU climate policy and AFOLU•Overall 2030 level of ambition agreed by European Council October 2014•Commission ESR proposal July 2016 – sharing of effort in NETS across MS plus trading mechanisms•Commission LULUCF proposal – integration of LULUCF into climate policy•AFOLU mitigation pursued through CAP as well as flanking environmental policies•No specific EU targets for agricultural mitigation in NETS•Ultimately, how AFOLU mitigation is pursued will depend on MS decisions2Implications of EU bubble•Commission has put in place trading mechanisms in NETS sectors to ensure least-cost fulfilment of overall EU targets•Challenge of MS ESR targets also depends on use MS make of trading mechanisms•MS have not to date made use of these mechanisms and prefer to meet targets domestically•A number of MS have domestic targets in addition to EU targets•ESR IA looked at adding central information site, central market place for AEA transfers or mandatory auctioning•Links with annual monitoring and 5-year legal compliance checks (2027 and 2032)