As part of the European Green Deal, the EU has set itself a binding target of achieving climate neutrality by 2050. As an intermediate step towards climate neutrality, the EU has committed to cutting emissions by at least 55% by 2030.

To align current laws with the 2030 and 2050 ambitions, the EU is working on the revision of its climate, energy and transport-related legislation under the so-called ‘Fit for 55 package’. On 14 July 2021 the European Commission published drafts of the legislative package (LINK) that will be discussed and amended in the European Council and European Parliament over the coming months. The timing of the adoption of the published drafts, therefore, will heavily depend on the political process and the willingness of the political actors to reach agreement.

In summary, the ‘Fit for 55 package’ combines:

• extension of emissions trading to new sectors and a tightening of the existing EU Emissions Trading System;
• requirements for increased use of renewable energy and greater energy efficiency;
• promotion of low emission transport modes and the infrastructure and fuels to support them;
• amendment of taxation policies to achieve alignment with the European Green Deal objectives; and
• measures to prevent carbon leakage.

Against this background, it is fair to say that the dynamic of the legislative initiatives at the EU-level, but also across EU member states, is unprecedented. The proposed ‘Fit for 55 package’ underscores that the legislative focus is on decarbonising large parts of carbon-intensive sectors, while at the same time preventing carbon-leakage. A holistic overhaul of the current framework for carbon-pricing, carbon-quotas, furthering and further enhancement of decarbonisation more broadly seems more and more inevitable to achieve the 2030 and 2050 ambitions.

In the following, we provide synopses of the legislatives acts due for revision. The synopses may serve as a helpful tool for those wanting to better understand what changes are discussed, what to consider for future industries and business cases as well as to focus potential lobbying efforts.

Synopses of proposed amendments (available for download below):

• EU-ETS Directive
• Renewable Energy Directive II
• Energy Efficiency Directive
• Energy Taxation Directive
• Effort Sharing Regulation
• Regulation on Land Use, Forestry and Agriculture
• Directive on the deployment of alternative fuels infrastructure
• Directive on setting CO2 emission performance standards for new passenger cars and for new light commercial vehicles

Further to the revision of the abovementioned legislative acts, the European Commission also proposed the introduction of new legislative acts. The proposal includes the regulation for a new Carbon Border Adjustment Mechanism (CBAM) as well as regulations for ensuring a level playing field for sustainable air transport (ReFuelEU Aviation Initiative) and on the use of renewable and low-carbon fuels in maritime transport (ReFuelEU Maritime Initiative).

Synopsis - Fit for 55 -  EU-ETS Directive

Synopsis - Fit for 55 - Renewable Energy Directive II

Synopsis - Fit for 55 - Energy Efficiency Directive

Synopsis - Fit for 55 - Energy Taxation Directive

Synopsis - Fit for 55 - Package

• Effort Sharing Regulation
• Regulation on Land Use, Forestry and Agriculture
• Directive on the deployment of alternative fuels infrastructure
• Directive on setting CO2 emission performance standards for new passenger cars and for new light commercial vehicle