The European Commission published its Fit for 55 packages on 14th July 2021; comprising new legislative proposals and amendments to set the path to implementing the EU’s 2030 greenhouse gas (GHG) emissions reduction target of 55% (versus 1990 levels) – from the previous 40%.
It is likely to take 18-24 months for any new proposals to pass through the negotiation and legislative phases.
The Fit for 55 packages does not include the EU Forest Strategy which was published separately.
If you are interested in the specifics of the Fit for 55 packages, we have summarised the details in a separate report. Please contact us if you would like either to receive a copy or if you wish to speak with a member of our team.
We include an overview of the main proposals below:
Revisions to the EU ETS
These included various amendments relating to the granting and supply of free allocation allowances with extensions into new sectors – shipping, road transport and buildings.
Introduction of a Carbon Border Adjustment Mechanism (CBAM)
This is effectively a carbon border levy on imported goods from non-EU countries that carry embedded carbon. This excludes imports from European Free Trade Association – EFTA – countries.
Only certain sectors are to be covered by the levy, but others may be added over time.
Approval will be needed by the World Trade Organization (WTO).
Other key proposals relate to the following:
The Effort Sharing Regulation (ESR)
Aviation and maritime fuel initiatives (including ReFuelEU Aviation and FuelEU Maritime)
Alternative Fuels Infrastructure Directive (DAFI)
Energy Efficiency Directive (ECEEE)
Renewable Energy Directive (RED II)
The Land Use, Land Use Change and Forestry (LULUCF) Regulation
