Climate change and environmental degradation are an existential threat to Europe and the world. The European Green Deal, approved in 2020, contains a set of policy initiatives by the European Commission with the overarching aim of making the European Union climate neutral in 2050. It is the EU’s roadmap for a socioecological transition to a low-carbon future.
The EU has recently raised its 2030 climate ambition and now pledges to cut emissions by at least 55% by 2030 – a substantial increase compared to the previous target of cutting emissions by at least 40% by 3030.
In July 2021, the European Commission presented to the EU Council the “Fit for 55” package, a set of legislative proposals to meet the new EU’s new emissions reduction 2030 objective. The package is part of the Commission’s European Green Deal, which aims to set the EU firmly on the path towards net zero GHG emissions (climate neutrality) by 2050.
“Fit for 55”
In short, the “Fit for 55” aims to bring EU legislation in line with the new goal of reducing net greenhouse gas emissions by at least 55% by 2030.
The package is a set of proposals to revise and update current EU legislation and put in place new initiatives to ensure that EU policies are in line with the climate goals agreed by the Council and the European Parliament. It provides a coherent framework for reaching the EU’s climate objectives.
Specifically, the package includes the following legislative proposals and policy initiatives (which MEPs will vote on tomorrow):
- EU emissions trading system;
- Member states’ emissions reduction targets;
- Emissions and removals from land use, land use change and forestry;
- Renewable energy;
- Energy efficiency;
- Alternative fuels infrastructure;
- CO2 emission standards for cars and vans;
- Energy taxation;
- Carbon border adjustment mechanism;
- Sustainable aviation fuels;
- Greener fuels in shipping;
- Social climate fund.
The Carbon Border Adjustment Mechanism (CBAM) regulation is one of the key elements of the European Union’s Fit for 55 package; it’s objective: “to prevent – in full compliance with international trade rules – that the emissions reduction efforts of the EU are offset by increasing emissions outside its borders through relocation of production to non-EU countries (where policies applied to fight climate change are less ambitious than those of the EU) or increased imports of carbon-intensive products.”
The CBAM will also encourage partner countries to establish carbon pricing policies to fight climate change.
In general, CBAM aims to align the EU’s climate ambitions with global trade in an effort to make the EU a global leader in the race towards climate neutrality.
The European Parliament will cast its final vote on the CBAM proposal tomorrow, June 8. This will mark the last opportunity for the Parliament and the Council of the EU to fine tune the Mechanism and ensure its ultimate objectives can be fulfilled.
CBAM functions in parallel with the EU’s Emissions Trading System (EU ETS), to mirror and complement its functioning on imported goods: “EU ETS is a cornerstone of the EU’s policy to combat climate change and its key tool for reducing greenhouse gas emissions cost-effectively. It is the world’s first major carbon market and remains the biggest one,” the European Comission stated.
In the light of the war in Ukraine and the EU’s goal to become independent from Russian energy, a well-functioning EU ETS is of critical importance. A liquid and resilient EU carbon market supports the decarbonisation of European power and industrial sectors, allowing them to implement cost-efficient emission reduction strategies.
Tomorrow, the European Parliament will effectively vote on whether to continue with a market-based EU ETS, which until now has been the world’s most successful carbon market.
“Fit for 55” also includes a regulation establishing a new Social Climate Fund (SCF). The aim of the SCF is to help vulnerable households, micro-businesses and transport users meet the costs of the green energy transition in the buildings and road transport sector. The SCF aims to provide over €72 billion in EU funding during the 2025-2032 period, to be paid for mainly by ETS credits.
The vote in Strasbourg
The European Parliament will vote this week on a range of ”Fit for 55” proposals, helping to define the extent to which the EU’s green ambitions can be realised.
MEPs will vote on the reform of the Emissions Trading System, including the carbon price on housing and transport; the carbon border tax; the revamped Effort Sharing Regulation that sets binding national emission reduction targets; the Social Climate Fund; the revision of the land-use and forestry (LULUCF) regulation, which sets targets for carbon sinks; emissions standards for cars and vans (cars/CO2); and two proposals governing aviation emissions under the ETS and the Carbon Offsetting and Reduction Scheme for International Aviation.
We've had floods, droughts, tornadoes and fires across 🇪🇺—the climate crisis is here, and no EU citizen needs to be convinced of this.
We need to put in place measures to uphold our climate targets.
— European Commission 🇪🇺 (@EU_Commission) June 7, 2022
One of the most controversial proposals in the “Fit for 55” package was taxing private citizens for their heating and transportation emissions, which, despite significant objections, European Commission President Ursula von der Leyen and Vice President Frans Timmermans ensured was included in the proposed ETS reforms.
There is also the key question of whether Member States will support ending the handout of free ETS permits (where free allowance allocation is used to safeguard the competitiveness of the regulated industries and to avoid carbon leakage), which the EU Parliament’s environment committee lawmakers already agreed upon on in May.
The votes will take place on Wednesday, June 8 – keep an eye on the Impakter website for more detailed updates as well as for the voting outcome tomorrow.
Editor’s Note: The opinions expressed here by Impakter.com columnists are their own, not those of Impakter.com — In the Featured Photo: Commission president Ursula von der Leyen addresses the European Parliament. Featured Photo Credit: The European Union, via Climate Home News.