Fit for 55

Briefing

Question: What is "Fit for 55" about?
Answer: In September 2020, the European Union decided to raise the EU climate target: by 2030, the European Union's greenhouse gas emissions are to be reduced by 55 per cent compared to the amount emitted in 1990. Previously, a reduction of 40 percent was planned. On 14 July 2021, the EU Commission will present a comprehensive package of measures to adapt the legal framework of European energy and climate policy to this new target, the first part of the so-called "Fit for 55 Package". The second part of the package, which is linked to the European Green Deal, is to be presented in December 2021.

Question: Which projects are included in the "Fit for 55 Package" of the European Commission?
Answer: The "Fit for 55 Package" is intended to fundamentally revise the EU's energy policy framework and thus adapt it to the updated climate targets. While the focus in December 2021 will be on decarbonised gas and the buildings sector, ten initiatives are planned for 14 July 2021. Overall, the "Fit for 55 Package" with the initiatives listed below is the central measures package of the European Green Deal:

Revision of the EU Emissions Trading System (ETS), including maritime transport, aviation and CORSIA
Carbon Border Adjustment Mechanism (CBAM)
Revision of the Effort Sharing Regulation (ESR)
Revision of the Energy Tax Directive (ETD)
Amendments to the Renewable Energy Directive (RED) to implement the ambition of the new 2030 climate target
Amendments to the Energy Efficiency Directive (EED) to implement the ambition of the new 2030 climate target
Reduction of methane emissions in the energy sector
Revision of the regulation on the inclusion of greenhouse gas emissions and removals from land use, land use change and forestry (LULUCF)
Revision of the Directive on the Deployment of Alternative Fuels Infrastructure
Revision of the Regulation setting CO2 standards for new passenger cars and for new light commercial vehicles
Revision of the Third Energy Package for gas (Directive 2009/73/EU and Regulation 715/2009/EU) to regulate competitive decarbonised gas markets in Q4 2021
Revision of the energy performance of Buildings Directive (EPBD) in Q4 2021

Question: Which projects are of particular importance for the energy industry?
Answer: Of the twelve initiatives that will be introduced by the end of 2021, the majority is of great importance for the energy industry. In particular, the Commission plans to revise and tighten the EU Emissions Trading System and to adjust the effort sharing between the individual Member States. The revision of the Renewable Energy Directive (RED II) aims to increase the share of renewable energies in all sectors over the next ten years through a faster corresponding expansion as well as an increasing integration of the energy system. The introduction of a new carbon border adjustment mechanism as well as the revisions of the Directive on the Deployment of Alternative Fuels Infrastructure, the Energy Efficiency Directive, the Regulation on Emissions from Land Use (LULUCF) and the Energy Taxation Directive also directly affect the energy industry.
With the amendment of the Internal Gas Market Directive and the Internal Gas Market Regulation (suggestions will follow in December 2021), hydrogen in particular is to be included in the legal framework in order to reduce greenhouse gas emissions. Both questions of infrastructure planning and market regulation play a role here. Even though this regulation is likely to be a blueprint for the regulations for a hydrogen infrastructure that are currently also being discussed in Germany, questions of financing and standardisation (avoiding market segmentation, for example, through differences in the quality of hydrogen and different national quotas for admixture) will also play a role at the European level, in addition to proprietary questions.

Question: How is the process likely to continue?
Answer: Vice-President Franz Timmermans will present the plans in Brussels on 14 July 2021. This marks the beginning of what is likely to be a long process, at the end of which the Commission, the Parliament and the Member States will have to reach agreement. This will be a challenge, especially due to the new focus of the package: According to the current state of the drafts, the focus is no longer exclusively on what the European Union or individual Member States can afford in terms of climate protection. The focus now seems to be on achieving the reduction targets and thus on the question of what adjustments are necessary to achieve them. An additional challenge that makes it difficult to agree on the contents of the overall package relates to the question how to support industries and companies that compete internationally, often with companies from countries where the financial burden of environmental protection is lower. Maintaining international competitiveness will be instrumental in gaining the required support for the Commission's initiatives. –For now, these are, however, only draft initiatives. It is not yet possible to predict when the implementation phase will begin in the individual Member States and what specific content the parties involved will have agreed on at that time.

Do you have any questions or are you interested in an (interdisciplinary) exchange with our Energy & Infrastructure team? We look forward talking to you!

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