The 2009 EU Effort Sharing Decision established binding annual greenhouse gas emission targets for Member States for the period 2013 to 2020. For the year 2020 itself, the target set for Ireland is that emissions should be 20% below their value in 2005. According to the Environmental Protection Agency’s latest projections published earlier this year, our 2020 emissions could be 2 to 4% below 2005 levels, and we will need to avail of flexibilities in order to comply with our obligations. Covid-19 will undoubtedly impact our 2020 emissions, and this is not reflected in these projections. Pre-Covid estimates of the additional costs of this compliance requirement were in the region of €6m to €13m, depending on the price and final quantity of credits required. The Department is currently in discussion with the NTMA in relation to purchasing additional carbon credits from the market to make up this expected shortfall.
The EU Renewable Energy Directive 2009/28/EC set Ireland a legally binding target of meeting 16% of our energy demand from renewable sources by 2020. This represented a 12.9% increase on Ireland's reference starting point of 3.1% in 2005, and is the third highest increase assigned to any of the 28 Member States of the European Union.
Ireland is committed to achieving this target and while good progress has been made to date it is accepted that Ireland will not meet the 16% target and the projected overall shortfall is between 1.7 and 3.7 percentage points by end 2020. It should be noted that reduced energy demand in 2020 as a result of COVID-19 may mean that this shortfall is slightly lower. Contingency planning has also commenced to explore the potential extent, mechanisms and cost of addressing our renewable energy 2020 target through statistical transfers with other Member States within the framework of the Renewable Energy Directive.
The Programme for Government sets out our commitment to further increase our ambition, and halve our national carbon emissions over the course of the coming decade. As Minister for Climate Action, I will lead on delivering our shared commitment to achieve an average 7% per annum reduction in overall greenhouse gas emissions from 2021 to 2030, and to achieving net zero emissions by 2050. The 2050 target will be set in law in the Climate Action Bill, which I will introduce in the Dáil within the first 100 days of government.