The Fit for 55 package is a set of proposals to revise and update EU legislation and to put in place new initiatives with the aim of ensuring that EU policies are in line with the climate goals agreed by the Council and the European Parliament.
Why ‘Fit for 55’?
Fit for 55 refers to the EU’s target of reducing net greenhouse gas emissions by at least 55% by 2030. The proposed package aims to bring EU legislation in line with the 2030 goal.
The package of proposals aims at providing a coherent and balanced framework for reaching the EU’s climate objectives, which:
- ensures a just and socially fair transition
- maintains and strengthens innovation and competitiveness of EU industry while ensuring a level playing field vis-à-vis third country economic operators
- underpins the EU’s position as leading the way in the global fight against climate change
The Council as co-legislator
The proposals of the Fit for 55 package are first presented and discussed at technical level within the Council’s working parties responsible for the policy area concerned, before they land on the table of EU member states’ ambassadors in Coreper. Discussions are held to prepare the ground for an agreement on the proposals among the 27 member states.
EU member states, represented by their ministers within the Council of the EU, are responsible for adopting EU laws, based on legislative proposals presented by the European Commission. In most cases, laws are adopted together with the European Parliament following the ordinary legislative procedure.
EU ministers, in various Council configurations, then exchange views and seek to reach agreement on a common position on the proposals. This forms the basis on which the presidency of the Council then engages with the European Parliament in negotiations to find common agreement in view of the final adoption of the legislative acts.
The Fit for 55 package was submitted to the Council in July 2021 and it is being discussed across several policy areas, such as environment, energy, transport and economic and financial affairs.
The Slovenian presidency prepared a report on the progress made during its term on the whole Fit for 55 package.
What is included in the Fit for 55 package?
The Fit for 55 package includes the following legislative proposals and policy initiatives:
EU emission trading system
The Commission has proposed a comprehensive set of changes to the existing EU’s emissions trading scheme (EU ETS) that should result in an overall emission reduction in sectors concerned of 61% by 2030 compared with 2005.
The increased ambition is to be achieved by strengthening the current provisions and extending the scope of the scheme. The proposal notably aims to:
- include emissions from maritime transport in the EU ETS
- phase out free allocation of emission allowances to aviation and to the sectors that are to be covered by the carbon border adjustment mechanism (CBAM)
- implement the global carbon offsetting and reduction scheme for international aviation (CORSIA) through the EU ETS
- increase funding available from the modernisation fund and the innovation fund
- revise the market stability reserve in order to continue ensuring a stable and well-functioning EU ETS
In addition, the Commission proposes to create a new self-standing emissions trading system for buildings and road transport to support member states in meeting their national targets under the effort sharing regulation in a cost efficient way. With the proposal, emissions reductions of 43% should be achieved for these sectors by 2030, compared to 2005.
Member states’ emissions reduction targets
The effort sharing regulation currently sets binding annual greenhouse gas emissions targets for member states in sectors that are not covered by the EU emissions trading scheme or the regulation on land use, land use change and forestry (LULUCF).
The main change the Commission has proposed to the existing legislation concerns the targets to be achieved by 2030 in those sectors. The proposal increases the EU-level greenhouse gas emissions reduction target from 29% to 40%, compared with 2005 and updates the national targets accordingly. The calculation method for determining the national targets remains based on GDP per capita with a limited amount of targeted corrections to address cost-efficiency concerns.
EU environment ministers exchanged views on this proposal during the Environment Council meeting on 20 December 2021.
Emissions and removals from land use, land use change and forestry
The Commission’s proposal aims to strengthen the contribution of the land use, land-use change and forestry (LULUCF) sector to the EU’s increased overall climate ambition. It is necessary to reverse the current declining trend of carbon removals and enhance the natural carbon sink throughout the EU. Specifically, the revision of the current legislation proposes to:
- set an EU-level target for net removals of greenhouse gases of at least 310 million tonnes of CO2 equivalent by 2030, which is distributed among the member states as binding targets
- simplify the rules on accounting and compliance and enhance monitoring
- extend, from 2031, the scope of the regulation to include agriculture non-CO2 emissions
- set an EU-level objective of climate neutrality by 2035 for that new combined land sector
The Environment Council discussed this proposal on 20 December 2021.
The Fit for 55 package includes a proposal for a review of the renewable energy directive. The proposal is to increase the current EU-level target of at least 32% of renewable energy sources in the overall energy mix to at least 40% by 2030.
It also proposes the introduction or enhancement of sectorial sub-targets and measures across sectors, with a special focus on sectors where progress with integrating renewables has been slower to date, in particular in the fields of transport, buildings and industry. While some of those targets and provisions are binding, several others remain of an indicative nature.
EU energy ministers, during the December Energy Council, welcomed the progress made on the proposal within the Council, based on a report prepared by the Slovenian presidency. In particular, they discussed the balance between the need to support the potential of renewables as a cost-efficient source of energy and to recognise national circumstances and different starting points.
The Commission has proposed to revise the current energy efficiency directive by increasing the current EU-level target for energy efficiency from 32.5% to 36% for final, and 39% for primary energy consumption.
In addition, it put forward several provisions to accelerate energy efficiency efforts by member states, such as increased annual energy savings obligations and new rules aimed at decreasing the energy consumption of public sector buildings, as well as targeted measures to protect vulnerable consumers.
In December 2021, EU energy ministers reviewed progress on the proposed revision of the current legislation. They discussed the increased energy efficiency efforts required from member states and their contribution towards an EU-wide energy efficiency target. Ministers also discussed the possible need for flexibilities that reflect national circumstances and how these flexibilities could be used for public sector buildings.
Alternative fuels infrastructure
The Commission has presented a proposal for the revision of existing legislation aiming to accelerate the deployment of infrastructure for recharging or refuelling vehicles with alternative fuels and to provide alternative power supply for ships in ports and stationary aircraft.
The proposal concerns all modes of transport and includes targets for infrastructure deployment. It also tackles interoperability and improves user friendliness.
At the December Transport Council, EU ministers took note of the progress made in the Council on this file and discussed the proposed draft regulation. They expressed broad support for the regulation’s goals and approach.
CO2 emission standards for cars and vans
Within the Fit for 55 package, the Commission proposed to revise rules on CO2 emissions for cars and vans. The proposal introduces increased EU-wide reduction targets for 2030 and sets a new target of 100% for 2035. This means in practice that from 2035 it will no longer be possible to place cars or vans with an internal combustion engine on the market in the EU.
The proposed tightened CO2 standards for cars and vans aim at supporting member states in reaching their increased national targets under the effort sharing regulation while stimulating technological innovation in the sector.
The proposal was discussed within the Environment Council on 20 December 2021.
The proposal for a 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 proposal is currently under discussion within the Council. In December 2021, economic and financial ministers took note of the Slovenian presidency report on the progress reached on the Fit for 55 proposals which are in their remit.
Carbon border adjustment mechanism
The objective of the Commission’s proposal for a carbon border adjustment mechanism (CBAM) is 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 proposal is currently under discussion within the Council. In December 2021, economic and financial ministers took note without discussions of the Slovenian presidency report on the progress reached on the Fit for 55 proposals.
Sustainable aviation fuels
Sustainable aviation fuels (advanced biofuels and electrofuels) have the potential to significantly reduce aircraft emissions. However, this potential is largely untapped as such 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 footprint and enable it to help the EU achieve its climate targets.
The Commission proposal is being assessed by the Council. EU transport ministers held a first formal discussion on the proposal during the December Transport Council. Ministers expressed support for the proposal’s objectives.
Greener fuels in shipping
The goal of the proposal on the use of renewable and low-carbon fuels in maritime transport (FuelEU Maritime) is to reduce the greenhouse gas intensity of the energy used on-board by ships by up to 75% by 2050, by promoting the use of greener fuels by ships. Despite progress in recent years, the maritime sector still relies almost entirely on fossil fuels and constitutes a significant source of greenhouse gases and other harmful pollutant emissions.
The Council is currently discussing this proposal. The Transport Council held a policy debate on the proposal in December 2021. Ministers welcomed the proposed legislation and largely agreed on its objectives.
Social climate fund
The social climate fund proposal aims to address the social and distributional impact of the proposed new emissions trading system for buildings and road transport. It allocates a total of €72.2 billion over the 2025-2032 period through an allocation methodology that aims at tackling the uneven impact of the proposed separate emissions trading system for these two sectors, expected across and within member states.
Based on social climate plans to be developed by the member states, the fund aims to provide support measures and investments to the benefit of vulnerable:
- transport users
- the energy efficiency of buildings
- the decarbonisation of heating and cooling systems in buildings
- the integration of energy from renewable sources
- access to zero and low-emission mobility and transport
The fund can also cover temporary direct income support.