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Fit For The Future
4th April 2024
The ‘Fit for 55’ package is a set of proposals for making the EU’s climate goal to reduce EU GHG emissions by at least 55% by 2030 a legal obligation.
EU countries are working on new legislation to achieve this goal and to make the EU climate-neutral by 2050.
Many steps have already been taken towards achievement of the European Green Deal and Fit for 55. These are identified in Appendix 1.
The package of proposals for Fit for 55 aims to provide a coherent and balanced framework for reaching the EU’s climate objectives, whilst:
- Ensuring a just and socially fair transition
- Maintaining and strengthening the innovation and competitiveness of EU industry whilst ensuring a level playing field with regards to third country economic operators
- Underpinning the EU’s position as leading the way in the global fight against climate change
Where did Fit for 55 begin?
The proposals relating to Fit for 55 were first presented and discussed at a technical level within the Council’s working parties responsible for the policy areas concerned.
Later, these were discussed by EU member states’ ambassadors in the Committee of the Permanent Representatives of the Governments of the Member States to the European Union (Coreper – Comité des représentants permanents), preparing the ground for agreements among the 27 EU member states.
In the ordinary legislative procedure, the Council then engages with the European Parliament in negotiations to find common agreement in advance of the final adoption of the legislative acts.
What falls within the scope of the Fit for 55 package?
- The EU emissions trading system
The EU emissions trading system (EU ETS) is a carbon market based on a system of cap-and-trade of emission allowances for energy-intensive industries and the power generation sector. It is the EU’s major tool in addressing emissions reductions. Since it was introduced in 2005, the EU’s emissions have decreased by 41% (Consilium. Europa.eu)
The Fit for 55 package aimed to reform the EU ETS by making it more ambitious, including new provisions:
- Its extension to emissions from maritime transport
- Faster reduction of emissions allowances in the system and gradual phasing-out of ‘free’ allowances for some sectors
- Implementation of the global carbon offsetting and reduction scheme for international aviation (CORSIA)
- Increase of funding for the modernisation fund and the innovation fund
- Revision of the market stability reserve
- A new self-standing emissions trading system created for buildings, road transport and fuels
- Social climate fund
The social climate fund proposal addresses the social and distributional impact of the new emissions trading system for buildings and road transport.
Based on the social climate plans being developed by member states, the fund aims to provide support and investments for the benefit of the vulnerable
- Households
- Micro-enterprises
- Transport users
The fund can also cover temporary direct income support.
The fund will be part of the EU budget and be fed by external assigned revenues to a maximum of €65 billion.
- Carbon Border Adjustment Mechanism (CBAM)
The carbon border adjustment mechanism aims to ensure (in full compliance with international trade rules) that the emissions reduction efforts of the EU are not offset by increasing emissions outside its borders through the relocation of production to non-EU countries, where climate change mitigation policies might be less ambitious than those of the EU.
- Member states’ emissions reduction targets
The effort sharing regulation (amended in 2018) sets binding annual greenhouse gas emissions targets for member states in sectors that are not covered by the EU ETS or the regulation on land use, land use change and forestry (LULUCF).
These sectors include:
- Road and domestic maritime transport
- Buildings
- Agriculture
- Waste
- Small industries
The new rules (as part of Fit for 55) will increase the EU-level greenhouse gas emissions reduction target for 2030 from 29% to 40% compared with 2005 in the sectors concerned.
- Emissions and removals from land use, land use change and forestry
The land use, land-use change and forestry (LULUCF) regulation binds the EU to reduce emissions and increase removals in the land use and forestry sectors.
With the Fit for 55 package, the provisions are more ambitious.
New rules set out an increased EU-level target of at least 310 million tonnes of CO2 equivalent net removals of greenhouse gases for 2030. Each member state has binding national targets.
- CO2 emission standards for cars and vans
Cars and vans account for 15% of the total EU carbon dioxide emissions. The EU, as part of the Fit for 55 package, adopted new rules regulating the CO2 emissions from these vehicles.
The regulation introduces progressive EU-wide emissions reduction targets for cars and vans for 2030 and beyond, including a 100% reduction target for 2035 for new cars and vans.
- Reducing methane emissions in the energy sector
The Commission originally presented the proposal for the EU rules on methane emissions reduction in the energy sector in December 2021, as part of the Fit for 55 package.
The proposal aimed to track and reduce methane emissions in the energy sector. The text was the first of its kind and is a crucial contribution to climate action as methane is the second most important greenhouse gas after carbon dioxide.
The proposal followed the strategic vision set out in the EU Methane Strategy in 2020. At the COP26 UN Climate Conference in 2021 the EU launched the Global Methane Pledge in partnership with the United States, where over 100 countries committed to reducing their methane emissions by 30% by 2030 compared by 2020 levels.
- Sustainable aviation fuels
Sustainable aviation fuels include advanced biofuels and electrofuels, and have the potential to significantly reduce aircraft emissions. However, this potential is largely unrealised because these fuels represent only 0.05% of total fuel consumption in the aviation sector.
The ReFuelEU Aviation proposal aims to reduce the aviation sector’s environmental emissions footprint and enable it to help the EU achieve its climate targets.
- Decarbonised fuels in shipping
The maritime sector still relies almost entirely on fossil fuels and comprises a significant source of greenhouse gas emissions.
The aim of the FuelEU maritime initiative is to reduce greenhouse gas intensity of energy used on-board of ships by up to 80% by 2050. The rules promote the use of renewable and low-carbon fuels in shipping.
- Alternative fuels infrastructure
The regulation on alternative fuels infrastructure (AFIR) aims to ensure that citizens and businesses have access to a robust infrastructure network for recharging or refuelling road vehicles and ships with alternative fuels.
The rules will allow the transport sector to significantly reduce its carbon footprint.
Targets for 2025 or 2030 include:
- Recharging stations for cars and vans to be installed every 60 km
- Hydrogen refuelling stations serving both cars and lorries deployed from 2030 onwards in all urban nodes
- Users of electric or hydrogen-fuelled vehicles to be able to pay easily at recharging or refuelling points
- Renewable energy
The Fit for 55 package includes proposals for a revision to the renewable energy directive, to increase the EU-level target of at least 32% of renewable energy sources in the overall energy mix to at least 40% by 2030.
It also includes the introduction or enhancement of sectorial sub-targets and measures across sectors, with special focus on those where progress with integrating renewables has been slower to date, in particular transport, buildings and industry.
- Energy efficiency
The revised EU energy efficiency directive aims to reduce final energy consumption at an EU level by 11.7% in 2030, compared to 2020 projections.
The new rules will accelerate energy efficiency efforts by member states by increasing annual energy savings obligations and decreasing the energy consumption of public sector buildings.
- Energy performance of buildings
Buildings are responsible for 40% of energy consumed and 36% of energy-related direct and indirect greenhouse gas emissions in the EU.
New rules aim to achieve the following:
- All new buildings should be zero-emissions buildings by 2030
- Existing buildings should be transformed into zero-emissions buildings by 2050
- Hydrogen and decarbonised gas market package
The Hydrogen and decarbonised gas market package includes revised and new rules to lower the carbon footprint of the gas market.
The aim is to move from natural gas to renewable and low-carbon gases and to boost their uptake in the EU by 2030 and beyond.
The package comprises a regulation and a directive., setting common internal market rules for renewable and natural gases and hydrogen. They aim to create a regulatory framework for dedicated hydrogen infrastructure and markets and integrated network planning. They also set out to strengthen security of supply.
- Energy taxation
The proposed revision of the Council directive on the taxation of energy products and electricity aims to:
- Align the taxation of energy products and electricity with the EU’s energy, environment and climate policies
- Preserve and improve the EU internal market by updating the scope of energy products and the structure of rates and by rationalising the use of tax exemptions and reductions by member states
- Preserve the capacity to generate revenues for the budgets of the member states
The Fit for 55 package and the European Green Deal, together with the directives and rules that have been collaboratively agreed for each vertical sector, represent a significantly integrated approach that places the EU ahead of other continents and nation states.
It is fast becoming the gold standard for addressing harmful emissions and tackling climate change for a sustainable future.
