The European Commission published on 14 July 2021 an extensive legislative package (Fit for 55) that recasts EU climate and energy legislation for the decade. The aim of the package is to adjust the European legislation to the new, higher emission reduction target of 55% by 2030.
The package will strengthen the current EU ETS, extend it to the maritime sector and create a separate ETS for the road transport and building sectors. It will also develop the contribution of the LULUCF sector to the increased overall climate ambition for 2030, and strengthen the role of the bioeconomy. In addition, the proposal will increase funding for fair transition, innovation and modernisation of the European energy system, and create a Carbon Border Adjustment Mechanism to level the playing field between companies under the EU ETS and competitors in countries without corresponding climate policies.
After 1990, EU greenhouse gas emission have decreased by 1 400 Mt CO2eq (2018). The package aims to decrease greenhouses gases by a further 1 600 Mt CO2eq and to increase sinks by 40 Mt up to 310 Mt by 2030.
On 11 September 2019, CLC, representing 87 organisations developing and implementing solutions for climate mitigation, published a framework for an effective climate policy. The framework
- Secures emission reductions and enables carbon sinks,
- Covers a large share of emissions and factors in carbon sinks, storages and substitutions,
- Is predictable in the long term and withstands shifts in political power structures,
- Can be adjusted rapidly, when the need arises,
- Creates a sufficient carbon price,
- Ensures economically efficient progress, i.e. the cheapest solutions will be implemented first,
- Is market driven and technology neutral,
- Uses carbon price revenues to speed up low-carbon solutions and green business,
- Enables a fair transition towards climate neutrality,
- Can be integrated internationally and
- Provides a mechanism for preventing carbon leakage and enhances a level playing field for competition.
The package, together with the EU Climate Law, will offer improvements to all these criteria and thus enabling better circumstances for transition.
“CLC welcomes the Fit for 55 package and congratulates the Commission. The holistic approach and the extension of the ETS into the new sectors with almost doubling the size of the market-based scheme will improve incentives for low carbon investments and transition,” say Karl-Henrik Sundström and Jyrki Katainen, Chairmen of CLC.
The Climate Leadership Coalition is the largest climate business network in Europe. CLC is a non-profit association and its 87 organisational members employ 520 000 people globally. CLC’s corporate members represent almost 70% of the market cap of OMX Nasdaq Helsinki. CLC’s members believe that transitioning society towards a sustainable economy and consumption habits is not only possible but also economically viable.
More information: Jouni Keronen, CEO, Climate Leadership Coalition, +358 50 453 4881, firstname.lastname@example.org and Juha Turkki, Development Director, Climate Leadership Coalition, +358 45 346 1925, email@example.com