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03 January 2022
roadmap
austria

The FIT for 55 package under the European Green Deal

Climate change is one of the greatest challenges of modern times. With the European Green Deal the EU is pursuing the goal of achieving the climate neutrality of Europe by 2050.

This requires a significant reduction of greenhouse gas emissions. The Fit for 55 package, being part of the European Green Deal, is one of the first steps towards achieving this target as it aims to cut emissions by at least 55 % compared to 1990 levels by 2030.

The Fit for 55 package was launched by the European Commission and includes numerous proposals to revise and update the EU legislation as well as to introduce new initiatives ensuring that EU policies are in line with agreed climate targets. The Fit for 55 package will enable a fair, green and prosperous future for the EU's economy and society and underpin the EU's position as a leader in the global fight against climate change. 

The Commission presented the package on 14 July 2021.

 

"The Fit for 55 package will enable a fair, green and prosperous future for the EU's economy and society and underpin the EU's position as a leader in the global fight against climate change."

 

What is included in the package?

The package is comprised of 13 proposals, eight being revisions to existing laws and five being new proposals. The revisions cover legislation especially on (i) effort sharing, assigning stronger reduction targets for each Member State in the building, road, domestic maritime transport, agriculture, waste and small industry sectors; (ii) renewable energy, setting a new  target of 40 % energy use from renewables by 2030 and strengthening bioenergy sustainability criteria; (iii) energy efficiency, setting a more ambitious binding annual target at the EU level, raised from 32.5 % to 36 %; (iv) emission standards for new cars and vans, requiring average CO2 emissions of new cars to come down by 55 % from 2021 to 2030 and to be net-zero by 2035; (v) Emission Trading System (ETS), lowering the overall emissions cap per economic sector; (vi) alternative fuels infrastructure, ensuring access to clean energy supply in major ports and airports for aircraft and ships; and (vii) the Energy Taxation Directive, aligning the taxation of energy products with climate policies. New proposals include (i) an EU Forest Strategy to improve the quality, quantity and resilience of EU forests and plant three billion trees by 2030, and (ii) a Social Climate Fund to help citizens finance investments in energy efficiency, clean mobility and renewable energy.

Emission Trading System

The ETS puts a price on carbon and provides for a limit on total emissions for certain sectors and an allocation of credits totalling this amount. The credits can be traded within the industry to reward low emitters and raise costs for polluters. The ETS has proven to be one of the most effective tools for reducing CO2 emissions and has successfully brought down emissions from power generation and energy-intensive industries by 42.8 % in the past 16 years. The Fit for 55 package aims to lower the total emission cap even further and increase its annual rate of reduction. The Commission has also proposed to phase out free emission allowances for aviation and to include shipping emissions for the first time. To address the lack of emissions reductions in road transport and buildings, a separate new ETS is established for fuel distribution for road transport and buildings.

The Social Climate Fund

The costs of the Fit for 55 will be financed by the new Climate Social Fund, which was introduced as a new initiative under the Fit for 55 package. The EUR 72.2m budget for the period from 2025 to 2032 will be generated by revenues from the new ETS on transport and buildings and will be allocated to the Member States to help citizens invest in energy efficiency, new heating and cooling systems as well as clean mobility. This should support especially vulnerable European citizens, helping to ensure that the green transition is fair and just.

author: Marta Katarzyna Krzystek

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Marta Katarzyna
Krzystek

Associate

austria vienna