The European Union continues the fight against climate change
The European Commission approved a new package of investments and legislative proposals for a 55% reduction in emissions by 2030, known as "Fit for 55". But what does it actually consist of?
After the launch of the European Green New Deal in December 2019 and the major recovery plans following the Covid-19 crisis, the European Union has decided to launch a new plan of investments and, above all, legislation that will change the way of life of European member states and contribute to a 55% reduction in greenhouse gas emissions by 2030. The project, known as Fit for 55, is the framework within which a new paradigm for future production and trade will have to be built. During the presentation of this project, Commission President Ursula von der Leyen stated that this plan aims to combine sustainability, production and labour with the primary objective of preserving nature.
The plan consists of 12 fundamental points, some of which had already been presented with the Green New Deal, but lacked a clear vision of the way forward. First of all, the member countries will have to reduce their energy expenditure by 39% by 2030, which will be possible through energy efficiency, especially in buildings, thus enhancing the Renovation Wave presented in October 2020. Most of the EU's building stock is old and inefficient, to the extent that buildings are responsible for around 40% of the total energy consumption in the EU and 36% of greenhouse gas emissions generated by energy production. Upgrading the building stock is therefore an essential measure for the decarbonisation of the region. Another important point concerns the maritime and aviation sectors, where the Emissions Trading System has been adopted, which enforces the payment of a tax depending on the amount of pollution that is produced. In order to adapt the European Emissions Trading System to the new EU targets, the legislative proposal sets the overall objective of the new EU ETS at -61% by 2030 compared to 2005 levels.
Equally at the European level, this new climate package has led to the creation of a Carbon Border Adjustment Mechanism, a CO2 tax on imports of cement, iron, steel, aluminium, fertilisers and electricity, if they are not produced in accordance with adequate emission standards. The aim is to protect industries from unfair competition with non-European producers that are not subject to environmental standards similar to those in the EU. The measure should prevent the relocation of certain types of production to countries with less stringent environmental standards. In addition to these regulatory adjustments, a fund of around 10 billion euros per year, named the Social Fund, has been created to cushion the impact of the transition in both energy and labour.
Fit for 55 is therefore part of the broader understanding of the Green New Deal (one of Brussels’ six European priorities), which also includes the circular economy packages on sustainable products and electronics circularity, biodiversity with numerous measures on water pollution and deforestation, and smart and sustainable mobility.
At the end of the presentation of the package, von der Leyen alongside Frans Timmermans, who is in charge of the Green Deal, stated that the Commission's aim is to create a healthy planet and to safeguard it, guaranteeing good jobs without damaging nature. It is also true that the benefits of the EU climate policies will clearly outweigh the costs of this transition in the long run. However, the social funds created to cushion the short-term costs are few and risk creating further pressure on households and on the costs of services, such as public transport. It is therefore necessary to intervene not only at the institutional level, but also in a more generalised manner, so as to ensure the efficiency of the energy transition and prevent the emergence of further risks of crisis.