Half a year ago the approval in the European Union of 'Fit for 55' (“Target 55”, in its Spanish version). It is a legislative amendment proposal which aims for the EU to be prepared to achieve the objectives set by the so-called “European Climate Legislation” (Regulation (EU) 2021/1119): to reduce net greenhouse gas (GHG) emissions by at least 55% by 2030 (compared to 1990) and become a climate neutral continent by 2050.
The significance of the content of this proposal makes it convenient to remember its most relevant aspects, since 'Fit for 55' aims to direct a radical change in the economic, social and industrial fields that guarantee a fair, competitive and ecological transition. There is no doubt that if these legislative changes are applied, the changes will be broad and profound, and are expected to be positive for (i) innovation, investment and employment; (ii) reduce inequalities (between those who can afford clean and modern technologies based on renewable energies, and those who have no alternative to the old and polluting ones); and (iii) protect the rights of future generations.
'Fit for 55' specifies some aspects of the European Green Deal of 2019, fundamentally the achievement of the climate neutrality and clean, reliable and affordable energy. It constitutes a dense proposal, with multiple relevant aspects, of which we highlight the following:
- The emissions trading scheme (EU ETS) and its application is extended to maritime and road transport, and to buildings. By 2030, the sectors covered by the revised EU ETS (electricity production, energy-intensive industrial sectors, and air and maritime sectors) will have to reduce their GHG emissions by 61% (compared to 2005); in addition, it is proposed to phase out free allowances for the aviation sector. Road transport and buildings will have a separate system.
- Very relevant is the provision of a carbon emissions border adjustment mechanism, which seeks to prevent the transfer of EU production to other countries where emission reduction targets are less ambitious. This phased-in mechanism will set a price on imports of a limited number of goods based on their carbon content, and should ensure that domestic and imported products pay the same price for carbon and that, therefore, are non-discriminatory and compatible with WTO rules and other EU international obligations.
- Various standards are updated and revised, among other:
- The Directive on energy taxation, to harmonize the minimum tax rates for heating and transportation fuels, mitigating the social impact, eliminating exemptions and other incentives for the use of fossil fuels, and promoting the adoption of clean fuels.
- The Regulation of effort sharing, to empower Member States to adopt national measures on emissions in the sectors of construction, transport, agriculture, waste and small industry, and thus achieve a 40% reduction in emissions from these sectors in the EU between now and 2030 (compared to 2005).
- The Regulation on land use change and forestry, to reverse the current trend of reducing CO2 removals and increase the quality and quantity of the EU's forests and other natural carbon sinks.
- The Directive on renewable energy sources, to raise the global binding target from the current 32% to a new level of 40% renewables in the EU energy mix
It is also planned to establish standards on a new infrastructure for alternative fuels, on more sustainable aviation fuels (ReFuelEU) and on cleaner fuels for maritime transport (FuelEU), as well as stricter standards on CO2 emissions from cars and vans.
- To facilitate the implementation of these proposals, it is envisaged, as support measures, the revenue utilization, in particular through the new Social Climate Fund and improved Modernization and Innovation Funds, in addition to the long-term EU budget and the EU Recovery Plan ('NextGenerationEU').
- To conclude this brief reference to the content of this proposal, we highlight the recognition of three relevant facts:
- It is recognized that EU action alone is not enough to achieve an effective fight against climate change, it is made explicit that the EU remains fully committed to the multilateral world order, and an appeal is made to partners around the world for them to collaborate.
- Education and training are recognized as critical to raising awareness and building capacities for the green economy.
- It is recognized that climate and biodiversity crises cannot be dealt with separately and must therefore be resolved together.
In conclusion: the EU continues to take steps in the direction of achieving a decarbonised and sustainable economy. It is a radical change in the economic, social and industrial fields that involves the whole of society. Despite the difficulty of the objective, you have to think that it is a path of no return. It is necessary to adapt.
Carlos de Miguel Perales
Lawyer. Professor at the Faculty of Law at Comillas-Icade University. Co-director of the Working Group 'Climate emergency and water management' of Fide.
Article originally published in the Blog Fide of the withfideinitial