“Fit for 55”: an overview of the European Commission's climate battle plan

The European Commission unveils on Wednesday its battle plan for the climate, a colossal legislative package dubbed "Fit for 55" ("Ready for 55") in reference to the EU's objective of reducing its carbon emissions by 55% by here 2030.

Here are the main proposals expected, which will then be negotiated at length between States and the European Parliament.

Extended carbon market

According to a project seen by AFP, the Commission wants to expand the current European carbon market, where companies in certain sectors - industry, electricity, air flights in the EU - can buy or exchange carbon allowances. greenhouse gas emissions to which they are subjected. This system, known by the acronym ETS ("Emissions trading system"), would be extended to maritime transport, for ships bound for or departing from EU ports, to weigh on the cost of maritime freight.

Above all, the principle would also be applied to road transport and the heating of buildings (suppliers of fuel and heating oil would therefore also have to buy "rights to pollute"), in a parallel carbon market but subject to the same price of CO ₂ . A “separate but adjacent” market to “avoid disrupting” the current ETS, according to the European executive. A merger between the two systems could be envisaged "after a few years".

End of free quotas

For the sectors currently concerned by the ETS, i.e. 40% of EU emissions, the "rights to pollute" required are largely covered by allocations of free quotas offered to companies to enable them to face competition from imports from from third countries.

However, the Commission will propose on Wednesday to subject imports in five sectors (steel, aluminium, cement, fertilizers, electricity) to the rules of the European ETS, by imposing on them "emission certificates" calculated on the price of a tonne of carbon in the EU. By treating imports and local production on an equal footing, Brussels believes that it remains within the rules of the World Trade Organization (WTO) and counters the accusations of "protectionism".

In the sectors targeted by this “border adjustment”, Brussels plans in return to gradually eliminate free quotas for EU companies, as the mechanism penalizing imports increases. The date of application of the new system remains uncertain. According to the information site Context, it could not start until 2026, against 2023 mentioned in a Commission project in June, with a transition over ten years.

In the other sectors, the distribution of free allowances would be maintained but subject to stricter criteria, to encourage companies to emit less. The volume of allowances in circulation would also be reduced from year to year.

The use of ETS revenues would be better targeted, to no longer support investments in gas, even in the name of energy transition, and to finance companies' clean technology projects more easily - by rewarding their reductions in energy consumption. emissions based on a fixed CO ₂ price disconnected from market variations.

End of petrol cars

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According to several sources, the Commission is considering the complete elimination of automotive emissions from 2035. Since battery electric vehicles are the only ones to meet this requirement, they will de facto become the only ones authorized on the new market.

Air Transport

According to several sources, the Commission is considering a tax on kerosene for flights within the EU, by phasing out the exemption from which aviation fuel benefits. Business aviation (private jets) and freight (cargo planes) would remain spared.

A specific directive will also propose more demanding criteria on the minimum use of "greener" fuel mixtures (containing a share of biofuels) to companies. This is enough to alarm certain States as well as European companies which fear a distortion of competition with the rest of the world.

Energetic efficiency

According to the project consulted by AFP, the EU's energy efficiency target would be significantly raised: European final energy consumption should fall by "at least 36-37%" by 2030 (compared to a current target of 32.5%), according to the Commission.

The levels of State contributions would remain "indicative", but an obligation would be imposed on the public sector to reduce its consumption (transport and public buildings, waste, etc.).

Forests and "carbon sinks"

Brussels will propose to introduce a carbon absorption target via natural "carbon sinks" (forests, meadows, etc.), set at 310 million tonnes of CO ₂ equivalent by 2030 at EU level according to a project seen by AFP, with binding objectives by State from 2026.

The idea is to ensure that the absorption of carbon by natural areas more than offsets emissions from deforestation, agriculture and other land uses.

Social funds

To curb the effects of regulations on the poorest households and to fight against energy poverty or social inequalities in transport, Brussels will propose, in a specific legislative text, the establishment of a "social action mechanism for the climate ". This fund would be fed by revenue from the new carbon market created for transport and construction.