On 14 July 2021, the European Commission published its ‘Fit for 55 package’ of legislative proposals to meet the EU’s goal of a 55% reduction in greenhouse gas (GHG) emissions by 2030 (compared to 1990 levels).
The package contains a number of individual proposals, including:
- Tightening the existing EU Emissions Trading Scheme (ETS), which places a price on GHG emissions generated in the EU, extending it to include emissions from shipping and introducing a separate carbon pricing scheme to cover emissions from buildings and road transport
- Introducing a Carbon Border Adjustment Mechanism (CBAM) to put a price on the GHG emissions ‘embedded’ in goods imported from outside the EU
- Ensuring more coherence in energy taxation
- Aligning the EU’s 2030 renewable energy and efficiency goals with the revised 2030 GHG emissions target
- Revised CO2 emissions standards for cars and vans and updated rules on the development of electric vehicle charging points and refuelling stations for alternative fuels
The Commission’s proposals will now be debated (and possibly amended) by the European Parliament and Council, before becoming EU law. The Commission will table further reform proposals, including for the gas market and for hydrogen, in the fourth quarter of 2021.
Frontier has recently advised clients on a range of EU climate and energy policy issues related to the Fit for 55 package, for example:
- Analysing the effects of different reform options for the EU ETS
- Evaluating the effects of CBAMs on industrial competitiveness
- Considering how to reform energy taxation
- Modelling the effect of electric vehicle charging needs on GHG emissions
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El impacto de la estrategia de descarbonización en las oportunidades de inversión del sector energético español