5 Key Take away from “Fit for 55” Package

5 Key Take away from "Fit for 55" Package

On July 14th 2021, European Commission adopted a package of legislative proposals “Fit for 55”. An EU political pledge to reduce greenhouse gas emissions by 55% in 2030 compared to 1990 levels (previously target was 40% reduction) with European Green Deal as a blueprint for change under 2015 Paris agreement.

5 Key Take away are as follows:

Stricter emission caps for power plants and factories

Proposed changes to the current EU Emissions Trading System (ETS) law, that cover industries and flights within EU as well. ETS widened to include shipping, domestic hearing and road transport.

Stricter national limits on Green House Gas (GHG) emission from “non-ETS” sectors

Each EU country faces binding and varying targets for cutting their (Effort-sharing Regulation) ESR sectors’ emissions. Sectors such as surface transportation (road, rail, domestic maritime transport), buildings, agriculture and waste.

Stricter EU caps on CO2 from cars

Aligned with national measures, a law forcing automakers to cut CO2 discharges. An average about 55% reduction in 2030 compared to the 2021 limit and requirement that new cars be zero-emission as of 2035.

More Renewable Energy

EU-wide Renewable share in 2030 to be 40% (previous target was 32%, RED II). However, Members states: 1) to ensure that the amount of renewables in transport leads to a greenhouse-gas intensity reduction of at least 13% by 2030. 2) to increase the share of renewables in the heating and cooling sector by at least 1.1% points a year. 3) to aim for a minimum 49% share of renewables in buildings in 2030.

A new Carbon Border Adjustment Mechanism (CBAM))

CBAM proposed to start in 2026, CBAM a new EU tool to raise the prices of some imported goods that are spared the climate-protection costs faced by producers in the ETS.