Fit For 55

The road to cutting greenhouse gas emissions by 2030 will require effort from across society and sectors. To stay on a steady path for the next ten years and with the European Green Deal as a blueprint for change, the European Union finalised its master plan against greenhouse gas emissions: the ‘Fit for 55’ package.

Released in two batches in July and December 2021, the “Fit for 55” package includes drafts of EU climate and energy legislation to underpin the bloc’s political pledge to cut greenhouse-gas emissions by at least 55% in 2030 compared with 1990 levels. This target, a more ambitious one than the previously agreed 40% reduction goal for 2030, is part of the EU’s aim to become climate-neutral by 2050 – and to spur the rest of the world to act under the 2015 Paris Agreement to fight climate change.

A first scan of the package

The package is the biggest revision of climate and energy legislation to date. As a set of interconnected proposals, the industrial objectives of the package are:

  • to reduce reliance on fossil fuels, including coal, oil and natural gas;
  • to expand the use of renewable energy sources, including solar, wind and hydropower;
  • to accelerate the development of electric cars;
  • and to spur clean-energy options for aviation and shipping.

Five key elements

Tougher EU emission caps for power plants and factories

The package includes proposed changes to the current EU Emissions Trading System (ETS) law, which covers industries that account for 40% of EU greenhouse-gas emissions as well as flights within Europe.

Besides a faster cut in the number of emission permits for these two sectors, the proposed revision of the ETS law addresses how many of these industries can be allocated for free, as opposed to by auction, and aims to widen the scope of the ETS to include shipping as well.

The European Commission is also suggesting putting in place a carbon price on domestic heating and road transport to accelerate the transition. To cushion against negative effects, a social climate fund would be created targeting the most vulnerable segments of societies.

Stricter national limits on GHG from “non-ETS” sectors

The package also looks at revising the EU’s Effort-Sharing Regulation law, or ESR, which covers “non-ETS” sectors and industries such as surface transport (road, rail and shipping), buildings, agriculture and waste that are responsible for 60% of EU greenhouse-gas emissions.

Each EU country faces binding, and varying, targets for cutting their ESR sectors’ emissions. To this extent, the European Commission is proposing tougher 2030 reduction targets for all Member States except Malta.

Stricter EU caps on CO2 from cars

The package seeks to sharpen an EU tool that complements national measures to curb road emissions: a law forcing automakers to cut CO2 discharges. On the one hand, the Commission is seeking an average 55% reduction in 2030 compared to the 2021 limit; and, on the other hand, a requirement that new cars be zero-emission as of 2035.

Renewable energy

In another planned change to existing European legislation, the Commission is proposing a more ambitious EU-wide goal for renewable-energy sources’ share of energy consumption in 2030: while the previously agreed target for 2030 was 32%, the proposed new one is 40%. 

The existence of such a target reflects the view that the development of clean-energy technologies depends not only on mandatory cuts in emissions from fossil fuels but also on active government steps to promote renewable sources. Additionally, member countries have varying indicative renewable goals that reflect their particular energy mixes and that are meant to ensure the bloc achieves its target. These national goals would have to be more ambitious as indicated in the Commission’s proposal. Furthermore, every member state would, under the proposal:

  • ensure that the amount of renewables in transport leads to a greenhouse-gas intensity reduction of at least 13% by 2030;
  • increase the share of renewables in the heating and cooling sector by at least 1.1% points a year;
  • aim for a minimum 49% share of renewables in buildings in 2030.

Carbon Border Adjustment Mechanism (CBAM)

The Carbon Border Adjustment Mechanism, also known as CBAM, is a new EU tool that consists of raising the prices of some imported goods that are spared the climate-protection costs faced by producers in the ETS. The aim is to prod non-EU countries to put their own prices on CO2 and assure the bloc’s manufacturers that the ETS won’t unduly hurt them.

As such, the Commission is proposing that CBAM start in 2026, following a 2023-2025 transitional period that would involve reporting requirements on EU importers.

The ECF approach

The ECF network has been working to encourage the European Commission to propose solid, integrated, and ambitious policies that incorporate solidarity with people and sensitivity to both regional politics and global repercussions. 

Following on our successful work to build momentum for a green recovery, the ECF has taken an integrated and cross-cutting approach to work on this extensive and complex set of laws and regulations, collaborating across sectoral and country teams and integrating communications from the outset. Like the package itself, our approach recognizes the interdependencies between files and gets ahead of the potential for them to reinforce – or undermine – each other. The ECF network has been engaged in the following efforts, among others:

  • Continuous monitoring and politics tracking led ECF partners to produce well-timed research and analysis to support a genuinely green package, defending good proposals and challenging weak ones.
  • Working across multiple countries, the grantee network coordinated cross-society support, sparked public debate and followed the package’s reception at the EU, national and grassroots levels to foster broad understanding, acceptance and support for the transition and the tools to enable it. To this end, ECF country-based communications teams in France, Germany, Poland, Spain, Czechia and Hungary got a head start on the ‘Fit For 55’ package, coordinating closely with EU teams in Brussels and communications colleagues to encourage a constructive public debate.
  • For months, ECF partners amplified voices demonstrating how the Green Deal can be a good deal for social justice, identified distinct flashpoints such as electric vehicles in Germany, Poland and Spain or ETS expansion in South-eastern Europe, and drew from context-specific data and analysis by grantee partners to develop and share evidence-based messages.

Looking ahead

Together with the European Climate Law, the package of proposals aims to make the EU ‘Fit for 55’ the means by which to ensure a fair, competitive and green transition by 2030 and beyond. The global profile of the package sends a strong message that the EU is committed to decarbonising its economy and that those wishing to do business with it would be wise to do the same.